NEW YORK, Nov. 04, 2024 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE: VNO) reported today:
Quarter Ended September 30, 2024 Financial Results
NET LOSS attributable to common shareholders for the quarter ended September 30, 2024 was $19,154,000, or $0.10 per diluted share, compared to net income attributable to common shareholders of $52,846,000, or $0.28 per diluted share, for the prior year's quarter.
FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended September 30, 2024 was $99,256,000, or $0.50 per diluted share, compared to $119,487,000, or $0.62 per diluted share, for the prior year's quarter. Adjusting for the items that impact period-to-period comparability listed in the table on the following page, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarter ended September 30, 2024 was $102,755,000, or $0.52 per diluted share, and $127,241,000, or $0.66 per diluted share, for the prior year's quarter.
Nine Months Ended September 30, 2024 Financial Results
NET INCOME attributable to common shareholders for the nine months ended September 30, 2024 was $7,072,000, or $0.04 per diluted share, compared to $104,391,000, or $0.54 per diluted share, for the nine months ended September 30, 2023.
FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the nine months ended September 30, 2024 was $352,914,000, or $1.79 per diluted share, compared to $382,658,000, or $1.97 per diluted share, for the nine months ended September 30, 2023. Adjusting for the items that impact period-to-period comparability listed in the table on the following page, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the nine months ended September 30, 2024 was $324,860,000, or $1.65 per diluted share, and $384,371,000, or $1.98 per diluted share, for the nine months ended September 30, 2023.
The following table reconciles FFO attributable to common shareholders plus assumed conversions (non-GAAP) to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP):
(Amounts in thousands, except per share amounts)For the Three Months Ended
September 30, For the Nine Months Ended
September 30, 2024 2023 2024 2023 FFO attributable to common shareholders plus assumed conversions (non-GAAP)(1)$99,256 $119,487 $352,914 $382,658 Per diluted share (non-GAAP)$0.50 $0.62 $1.79 $1.97 Certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions: Deferred tax liability on our investment in the Farley Building (held through a taxable REIT subsidiary)$4,164 $3,115 $10,897 $8,196 Our share of the gain on the discounted extinguishment of the 280 Park Avenue mezzanine loan - - (31,215) - After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units - - (13,069) (6,173)Other (365) 5,330 2,896 (167) 3,799 8,445 (30,491) 1,856 Noncontrolling interests' share of above adjustments on a dilutive basis (300) (691) 2,437 (143)Total of certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions, net$3,499 $7,754 $(28,054) $1,713 Per diluted share (non-GAAP)$0.02 $0.04 $(0.14) $0.01 FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP)$102,755 $127,241 $324,860 $384,371 Per diluted share (non-GAAP)$0.52 $0.66 $1.65 $1.98 ________________________________
(1)See page 14 for a reconciliation of net (loss) income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and nine months ended September 30, 2024 and 2023. FFO, as Adjusted Bridge - Q3 2024 vs. Q3 2023
The following table bridges our FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2023 to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2024:
(Amounts in millions, except per share amounts)FFO, as Adjusted Amount Per ShareFFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2023$127.2 $0.66 (Decrease) increase in FFO, as adjusted due to: Lease expirations, net of rent commencements, and other tenant related items (16.7) Change in interest expense, net of interest income (11.4) Other, net 1.4 (26.7) Noncontrolling interests' share of above items and impact of assumed conversions of convertible securities 2.3 Net decrease (24.4) (0.14) FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2024$102.8 $0.52 See page 14 for a reconciliation of net (loss) income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and nine months ended September 30, 2024 and 2023. Reconciliations of FFO attributable to common shareholders plus assumed conversions to FFO attributable to common shareholders plus assumed conversions, as adjusted are provided above.
Financing Activity
280 Park Avenue
On April 4, 2024, a joint venture, in which we have a 50% interest, amended and extended the $1,075,000,000 mortgage loan on 280 Park Avenue. The maturity date on the amended loan was extended to September 2026, with options to fully extend to September 2028, subject to certain conditions. The interest rate on the amended loan remains at SOFR plus 1.78%. On July 8, 2024, the joint venture swapped the interest rate to a fixed rate of 5.84% through September 2028. Additionally, on April 4, 2024, the joint venture amended and extended the $125,000,000 mezzanine loan, and subsequently repaid the loan for $62,500,000. In connection with the repayment of the mezzanine loan, we recognized our $31,215,000 share of the debt extinguishment gain which is included in "income from partially owned entities” on our consolidated statements of income.
435 Seventh Avenue
On April 9, 2024, we completed a $75,000,000 refinancing of 435 Seventh Avenue, of which $37,500,000 is recourse to the Operating Partnership. The interest-only loan bears a rate of SOFR plus 2.10% and matures in April 2028. The interest rate on the loan was swapped to a fixed rate of 6.96% through April 2026. The loan replaces the previous $95,696,000 fully recourse loan, which bore interest at SOFR plus 1.41%.
Unsecured Revolving Credit Facility
On May 3, 2024, we extended one of our two unsecured revolving credit facilities to April 2029 (as fully extended). The new $915,000,000 facility replaced the $1.25 billion facility that was due to mature in April 2026. The new facility currently bears interest at a rate of SOFR plus 1.20% with a facility fee of 25 basis points. Our $1.25 billion revolving credit facility matures in December 2027 (as fully extended) and has an interest rate of SOFR plus 1.15% and a facility fee of 25 basis points.
640 Fifth Avenue (Fifth Avenue and Times Square JV)
On June 10, 2024, the Fifth Avenue and Times Square JV completed a $400,000,000 refinancing of 640 Fifth Avenue. The non-recourse loan matures in July 2029, bears interest at a fixed rate of 7.47% and amortizes at $7,000,000 per annum. The loan replaces the previous $500,000,000 loan, which the joint venture paid down by $100,000,000. The previous loan was fully recourse to the Operating Partnership and bore interest at SOFR plus 1.11%.
606 Broadway
On September 5, 2024, the $74,119,000 non-recourse mortgage loan on 606 Broadway, in which we hold a 50% interest, matured and was not repaid, at which time the lender declared an event of default. As of September 30, 2024, the property has a carrying value of $54,196,000, which is after an impairment charge recorded in the fourth quarter of 2023. We consolidate the joint venture. The loan currently bears interest at a floating rate of SOFR plus 1.91% (7.02% as of September 30, 2024) and provides for additional default interest of 3.00%.
85 Tenth Avenue
On September 24, 2024, a joint venture, in which we have a 49.9% interest, modified the terms of the $625,000,000 mortgage loan on 85 Tenth Avenue. Per the original loan agreement, the mortgage loan is comprised of a (i) $396,000,000 3.82% senior note, (ii) $129,000,000 5.20% mezzanine A note and (iii) $100,000,000 6.60% mezzanine B note. The modification provides for the interest payments due under the mezzanine notes to be deferred until the December 2026 loan maturity. The deferred amounts will not accrue additional interest. The cash available from the deferred interest payments will be used to fund leasing costs at the property. At loan maturity, if there is no event of default, repayment of 50% of the accrued mezzanine interest will be waived.
Alexander's, Inc. ("Alexander's")
On September 30, 2024, Alexander's, in which we own a 32.4% common equity interest, completed a $400,000,000 refinancing of the office condominium portion of 731 Lexington Avenue, the Bloomberg LP headquarters building. The interest-only loan carries a fixed rate of 5.04% and matures in October 2028. The loan is prepayable, at Alexander's option, with no penalty, beginning in October 2026. The loan replaces the previous $490,000,000 loan on the office condominium, that bore interest at the Prime Rate and was scheduled to mature in October 2024.
Financing Activity - continued
Interest Rate Swap and Cap Arrangements
We entered into the following interest rate swap and cap arrangements during the nine months ended September 30, 2024:
(Amounts in thousands) Notional Amount
(at share) All-In Swapped Rate Expiration Date Variable Rate SpreadInterest rate swaps: 280 Park Avenue (50.0% interest) $537,500 5.84% 09/28 S+178PENN 11(1) 250,000 6.21% 10/25 S+206435 Seventh Avenue 75,000 6.96% 04/26 S+210 Index Strike Rate Interest rate caps: 61 Ninth Avenue (45.1% interest) $75,543 4.39% 01/26 S+146 ________________________________
(1)Together with the existing $250,000 swap arrangement on the $500,000 PENN 11 mortgage loan, the loan will bear interest at an all-in swapped rate of 6.28% through October 2025. Acquisitions
On August 6, 2024, we purchased a $50,000,000 B-Note secured by a Midtown Manhattan property at par. The B-Note, together with the $35,000,000 A-Note, is in default. The B-Note accrues interest at 5.25% plus 4.00% default interest. The $50,000,000 B-Note investment was recorded to "other assets” on our consolidated balance sheets.
Dispositions
220 Central Park South
During the nine months ended September 30, 2024, we closed on the sale of two condominium units at 220 CPS for net proceeds of $31,605,000, resulting in a financial statement net gain of $15,175,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, $2,106,000 of income tax expense was recognized on our consolidated statements of income. Four units remain unsold.
50-70 West 93rd Street
On May 13, 2024, we sold our 49.9% interest in 50-70 West 93rd Street to our joint venture partner. We received net proceeds of $2,000,000 after deducting our share of the existing $83,500,000 mortgage loan, which was scheduled to mature in December 2024, resulting in a net gain of $873,000. The net gain is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.
Alexander's
On May 3, 2024, Alexander's, in which we own a 32.4% common equity interest, and Bloomberg L.P. reached an agreement to extend the leases covering approximately 947,000 square feet at 731 Lexington Avenue that were scheduled to expire in February 2029 for a term of eleven years to February 2040.
Leasing Activity
The leasing activity and related statistics below and on the following page are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America ("GAAP”). Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period.
(Square feet in thousands) New York 555 California
Street
Office Retail THE MART Three Months Ended September 30, 2024 Total square feet leased 454 97 239 46 Our share of square feet leased: 292 92 239 33
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