Vornado Announces PENN 1 Ground Rent Reset Determination
Vornado Realty Trust (NYSE:VNO) has received a determination regarding the ground rent for its PENN 1 land parcel. A panel has set the annual rent at $15 million for the 25-year term starting June 17, 2023. However, ongoing litigation in New York County Supreme Court could impact this determination.
If the fee owner prevails in the litigation, the annual rent would increase to $20.22 million, applied retroactively to June 17, 2023. As a result of the panel's determination, Vornado will reverse approximately $17.2 million of previously accrued rent expense and will continue to accrue based on the $15 million annual rent until the litigation is resolved.
Vornado Realty Trust (NYSE:VNO) ha ricevuto una decisione riguardante il canone di locazione del terreno per il suo lotto PENN 1. Un panel ha fissato il canone annuale a 15 milioni di dollari per il periodo di 25 anni a partire dal 17 giugno 2023. Tuttavia, una causa in corso presso la Corte Suprema della Contea di New York potrebbe influenzare questa decisione.
Se il proprietario del terreno avrà ragione nella causa, il canone annuale aumenterebbe a 20,22 milioni di dollari, con effetto retroattivo dal 17 giugno 2023. In seguito alla decisione del panel, Vornado annullerà circa 17,2 milioni di dollari di spese di canone precedentemente maturate e continuerà ad accumulare spese basandosi sul canone annuale di 15 milioni di dollari fino alla risoluzione della controversia.
Vornado Realty Trust (NYSE:VNO) ha recibido una resolución sobre la renta del terreno de su parcela PENN 1. Un panel ha establecido la renta anual en 15 millones de dólares para un período de 25 años a partir del 17 de junio de 2023. Sin embargo, un litigio en curso en la Corte Suprema del Condado de Nueva York podría afectar esta resolución.
Si el propietario del terreno gana el litigio, la renta anual aumentaría a 20,22 millones de dólares, aplicándose de manera retroactiva desde el 17 de junio de 2023. Como resultado de la decisión del panel, Vornado revertirá aproximadamente 17,2 millones de dólares en gastos de renta previamente acumulados y continuará acumulando gastos basados en la renta anual de 15 millones de dólares hasta que se resuelva el litigio.
Vornado Realty Trust (NYSE:VNO)는 PENN 1 토지 구획의 지상권 임대료에 관한 판정을 받았습니다. 패널은 2023년 6월 17일부터 시작하는 25년 기간 동안 연간 임대료를 1,500만 달러로 책정했습니다. 다만, 뉴욕 카운티 대법원에서 진행 중인 소송이 이 판정에 영향을 미칠 수 있습니다.
만약 토지 소유주가 소송에서 승소할 경우, 연간 임대료는 2,022만 달러로 인상되며, 2023년 6월 17일부터 소급 적용됩니다. 패널의 판정에 따라 Vornado는 이전에 발생한 약 1,720만 달러의 임대료 비용을 환입하고, 소송이 해결될 때까지 연간 1,500만 달러를 기준으로 비용을 계속 누적할 예정입니다.
Vornado Realty Trust (NYSE:VNO) a reçu une décision concernant le loyer foncier de sa parcelle PENN 1. Un panel a fixé le loyer annuel à 15 millions de dollars pour une durée de 25 ans à partir du 17 juin 2023. Toutefois, un litige en cours devant la Cour suprême du comté de New York pourrait affecter cette décision.
Si le propriétaire du terrain l’emporte dans ce litige, le loyer annuel passerait à 20,22 millions de dollars, avec effet rétroactif au 17 juin 2023. Suite à la décision du panel, Vornado annulera environ 17,2 millions de dollars de charges de loyer précédemment comptabilisées et continuera à comptabiliser les charges sur la base du loyer annuel de 15 millions de dollars jusqu’à la résolution du litige.
Vornado Realty Trust (NYSE:VNO) hat eine Entscheidung bezüglich der Bodenmiete für sein Grundstück PENN 1 erhalten. Ein Gremium hat die jährliche Miete für die 25-jährige Laufzeit ab dem 17. Juni 2023 auf 15 Millionen US-Dollar festgesetzt. Allerdings könnte ein laufendes Gerichtsverfahren am Supreme Court des New York County diese Entscheidung beeinflussen.
Wenn der Grundstückseigentümer im Rechtsstreit gewinnt, würde die jährliche Miete auf 20,22 Millionen US-Dollar steigen, rückwirkend zum 17. Juni 2023. Als Folge der Entscheidung des Gremiums wird Vornado etwa 17,2 Millionen US-Dollar an zuvor aufgelaufenen Mietaufwendungen zurückbuchen und weiterhin auf Basis der 15-Millionen-US-Dollar-Jahresmiete bis zur Klärung des Rechtsstreits aufwenden.
- Ground rent determined at $15 million annually, lower than the potential $20.22 million
- Company will reverse $17.2 million in previously accrued rent expense
- Ongoing litigation could increase annual rent to $20.22 million retroactively
- Court denied Vornado's motion to dismiss the legal action
Insights
Vornado secures favorable $15M annual ground rent for PENN 1, reversing $17.2M in expenses, but faces litigation that could increase costs significantly.
The panel's determination on Vornado's PENN 1 ground lease represents a positive financial development for the REIT. The established annual ground rent of
This immediate
However, investors should note the significant contingent liability presented by the ongoing litigation. The court has denied Vornado's subsidiary's motion to dismiss the action brought by the fee owner, though Vornado has filed an appeal. If the fee owner ultimately prevails, the annual ground rent would increase to
The
Despite this uncertainty, the favorable determination relative to Vornado's previous accrual approach suggests management had been conservatively accounting for a worse outcome, making this announcement a net positive for the company's financial outlook.
NEW YORK, April 22, 2025 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE:VNO) announced today that the panel appointed to determine the ground rent payable by Vornado’s subsidiary for the PENN 1 land parcel for the 25-year period beginning June 17, 2023 has determined that the annual rent payable during the current 25-year term will be
Further, litigation is currently pending between the parties in New York County Supreme Court relating to the matter. To date, the court denied the Vornado subsidiary’s motion to dismiss the action and Vornado’s subsidiary has filed a notice of appeal. The panel’s decision provides that if the fee owner prevails in a final judgment in the ongoing litigation, the annual rent for the 25-year term will be
In connection with the panel’s determination, Vornado will reverse approximately
Vornado Realty Trust is a fully-integrated equity real estate investment trust.
CONTACT
Thomas J. Sanelli
(212) 894-7000
Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this press release. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024. Currently, some of the factors are the increased interest rates and inflation on our business, financial condition, results of operations, cash flows, operating performance and the effect that these factors have had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general.
FAQ
What is the new annual ground rent determined for Vornado's PENN 1 property?
How much could VNO's PENN 1 ground rent increase if the fee owner wins the litigation?
What is the financial impact of the PENN 1 ground rent determination on VNO?
What is the duration of the new ground rent term for VNO's PENN 1 property?
