Vornado Announces Second Quarter 2024 Financial Results

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Insights

Vornado's Q2 2024 results show mixed performance. Net income decreased to $35.26 million ($0.18 per share) from $46.38 million ($0.24 per share) year-over-year. However, FFO increased slightly to $148.94 million ($0.76 per share) from $144.06 million ($0.74 per share).

The adjusted FFO of $0.57 per share for Q2 2024 was down significantly from $0.72 in Q2 2023, primarily due to lease expirations and the loss of a one-time tenant settlement. This 20.8% year-over-year decline in adjusted FFO is concerning and indicates challenges in the core business.

On a positive note, Vornado completed several refinancing transactions, including a $400 million refinancing of 640 Fifth Avenue at a fixed rate of 7.47%. The company also reported $31.6 million in proceeds from condo sales at 220 Central Park South. However, leasing activity remains mixed, with positive rent spreads in office but some weakness in retail and THE MART segments.

Vornado's Q2 results reflect ongoing challenges in the commercial real estate market, particularly in New York City. The occupancy rates are concerning, with New York office at 88.3% and retail at 77.0%. These figures suggest continued softness in demand for commercial space.

The company's same-store NOI declined by 9.0% year-over-year, with significant drops across all segments. This broad-based decline indicates persistent headwinds in the market. The 46.4% decrease in 555 California Street's NOI is particularly alarming, even accounting for a one-time tenant settlement in the prior year.

On a positive note, Vornado's leasing activity shows some resilience, with positive GAAP mark-to-market rents in New York office (+8.2%) and retail (+26.9%). However, the high tenant improvement costs, ranging from $6.54 to $12.56 per square foot annually, suggest that landlords are still offering significant concessions to attract and retain tenants in a competitive market.

Vornado's Q2 results present a mixed picture for investors. The decline in adjusted FFO and same-store NOI are red flags, indicating ongoing operational challenges. However, the company's active development pipeline, particularly in the PENN District, offers potential for future growth.

The PENN 2 redevelopment, with a $750 million budget and projected 9.5% cash yield, could be a significant catalyst if executed successfully. Similarly, the Sunset Pier 94 Studios project, targeting a 10.3% yield, demonstrates Vornado's efforts to diversify and capitalize on emerging opportunities.

Investors should closely monitor Vornado's ability to lease up these new developments and improve occupancy rates across its portfolio. The company's success in refinancing activities, such as the 280 Park Avenue and 640 Fifth Avenue transactions, demonstrates continued access to capital markets, which is important for funding ongoing projects and managing debt maturities.

Overall, while Vornado faces near-term headwinds, its strategic positioning in prime markets and development pipeline offer potential for long-term value creation. However, the path to recovery may be prolonged, requiring patience from investors.

08/05/2024 - 04:20 PM

NEW YORK, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE: VNO) reported today:

Quarter Ended June 30, 2024 Financial Results

NET INCOME attributable to common shareholders for the quarter ended June 30, 2024 was $35,260,000, or $0.18 per diluted share, compared to $46,377,000, or $0.24 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 June 30, 2024 was $148,944,000, or $0.76 per diluted share, compared to $144,059,000, or $0.74 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 June 30, 2024 was $112,766,000, or $0.57 per diluted share, and $140,737,000, or $0.72 per diluted share, for the prior year's quarter.

Six Months Ended June 30, 2024 Financial Results

NET INCOME attributable to common shareholders for the six months ended June 30, 2024 was $26,226,000, or $0.13 per diluted share, compared to $51,545,000, or $0.27 per diluted share, for the six months ended June 30, 2023.

FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the six months ended June 30, 2024 was $253,068,000, or $1.29 per diluted share, compared to $263,149,000, or $1.35 per diluted share, for the six months ended June 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 six months ended June 30, 2024 was $221,608,000, or $1.13 per diluted share, and $257,032,000, or $1.32 per diluted share, for the six months ended June 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 June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
FFO attributable to common shareholders plus assumed conversions (non-GAAP)⁽¹⁾	$	148,944		$	144,059		$	253,068		$	263,149
Per diluted share (non-GAAP)	$	0.76		$	0.74		$	1.29		$	1.35

Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions:
Our share of the gain on the discounted extinguishment of the 280 Park Avenue mezzanine loan	$	(31,215	)	$	—		$	(31,215	)	$	—
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units		(13,069	)		—			(13,069	)		(6,173	)
Deferred tax liability on our investment in the Farley Building (held through a taxable REIT subsidiary)		2,599			2,206			6,733			5,081
Other		2,252			(5,785	)		3,261			(5,497	)
		(39,433	)		(3,579	)		(34,290	)		(6,589	)
Noncontrolling interests' share of above adjustments		3,255			257			2,830			472
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net	$	(36,178	)	$	(3,322	)	$	(31,460	)	$	(6,117	)
Per diluted share (non-GAAP)	$	(0.19	)	$	(0.02	)	$	(0.16	)	$	(0.03	)

FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP)	$	112,766		$	140,737		$	221,608		$	257,032
Per diluted share (non-GAAP)	$	0.57		$	0.72		$	1.13		$	1.32

________________________________

(1) See page 9 for a reconciliation of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and six months ended June 30, 2024 and 2023.

FFO, as Adjusted Bridge - Q2 2024 vs. Q2 2023

The following table bridges our FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2023 to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2024:

(Amounts in millions, except per share amounts)	FFO, as Adjusted
	Amount			Per Share
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2023	$	140.7		$	0.72

(Decrease) increase in FFO, as adjusted due to:
Lease expirations, net of rent commencements, and other tenant related items		(15.1	)
345 Montgomery Street tenant settlement proceeds, net of legal expenses in 2023		(14.1	)
Change in interest expense, net of interest income		(7.0	)
Variable businesses (primarily signage)		3.9
Other, net		3.7
		(28.6	)
Noncontrolling interests' share of above items and impact of assumed conversions of convertible securities		0.7
Net decrease		(27.9	)		(0.15	)

FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2024	$	112.8		$	0.57

See page 9 for a reconciliation of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and six months ended June 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%.

Interest Rate Swap and Cap Arrangements

We entered into the following interest rate swap and cap arrangements during the six months ended June 30, 2024:

(Amounts in thousands)	Notional Amount (at share)		All-In Swapped Rate		Expiration Date	Variable Rate Spread
Interest rate swaps:
PENN 11⁽¹⁾	$	250,000	6.21	%	10/25	S+206
435 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.

Dispositions

220 Central Park South

During the three and six months ended June 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 Inc. (“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 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.

For the Three Months Ended June 30, 2024:

1,322,000 square feet of New York Office space (598,000 square feet at share) at an initial rent of $131.37 per square foot and a weighted average lease term of 9.7 years. The changes in the GAAP and cash mark-to-market rent on the 518,000 square feet of second generation space were positive 8.2% and positive 3.4%, respectively. Tenant improvements and leasing commissions were $6.54 per square foot per annum, or 5.0% of initial rent.
4,000 square feet of New York Retail space (all at share) at an initial rent of $301.14 per square foot and a weighted average lease term of 5.0 years. The changes in the GAAP and cash mark-to-market rent on the 4,000 square feet of second generation space were positive 26.9% and positive 14.8%, respectively. Tenant improvements and leasing commissions were $10.99 per square foot per annum, or 3.6% of initial rent.
32,000 square feet at THE MART (all at share) at an initial rent of $56.39 per square foot and a weighted average lease term of 7.2 years. The changes in the GAAP and cash mark-to-market rent on the 19,000 square feet of second generation space were negative 3.5% and negative 4.3%, respectively. Tenant improvements and leasing commissions were $7.86 per square foot per annum, or 13.9% of initial rent.
66,000 square feet at 555 California Street (47,000 square feet at share) at an initial rent of $99.14 per square foot and a weighted average lease term of 9.8 years. The changes in the GAAP and cash mark-to-market rent on the 47,000 square feet of second generation space were positive 32.4% and positive 13.3%, respectively. Tenant improvements and leasing commissions were $12.56 per square foot per annum, or 12.7% of initial rent.

For the Six Months Ended June 30, 2024:

1,613,000 square feet of New York Office space (848,000 square feet at share) at an initial rent of $118.96 per square foot and a weighted average lease term of 10.1 years. The changes in the GAAP and cash mark-to-market rent on the 613,000 square feet of second generation space were positive 7.6% and positive 3.3%, respectively. Tenant improvements and leasing commissions were $8.64 per square foot per annum, or 7.3% of initial rent.
40,000 square feet of New York Retail space (37,000 square feet at share) at an initial rent of $258.76 per square foot and a weighted average lease term of 3.9 years. The changes in the GAAP and cash mark-to-market rent on the 31,000 square feet of second generation space were positive 7.2% and negative 14.5%, respectively. Tenant improvements and leasing commissions were $26.92 per square foot per annum, or 10.4% of initial rent.
83,000 square feet at THE MART (all at share) at an initial rent of $61.09 per square foot and a weighted average lease term of 5.5 years. The changes in the GAAP and cash mark-to-market rent on the 62,000 square feet of second generation space were positive 3.5% and negative 1.4%, respectively. Tenant improvements and leasing commissions were $8.17 per square foot per annum, or 13.4% of initial rent.
107,000 square feet at 555 California Street (76,000 square feet at share) at an initial rent of $87.03 per square foot and a weighted average lease term of 8.1 years. The changes in the GAAP and cash mark-to-market rent on the 76,000 square feet of second generation space were positive 10.9% and negative 4.4%, respectively. Tenant improvements and leasing commissions were $10.40 per square foot per annum, or 11.9% of initial rent.

Occupancy

(At Vornado's share)	New York						THE MART		555 California Street
	Total		Office		Retail		THE MART		555 California Street
Occupancy as of June 30, 2024	88.3	%	89.3	%	77.0	%	76.9	%	94.5	%

Same Store Net Operating Income ("NOI") At Share:	Total		New York		THE MART		555 California Street⁽¹⁾
Same store NOI at share % (decrease) increase⁽²⁾:
Three months ended June 30, 2024 compared to June 30, 2023	(9.0	)%	(4.4	)%	(4.6	)%	(46.4	)%
Six months ended June 30, 2024 compared to June 30, 2023	(7.0	)%	(4.5	)%	(7.3	)%	(31.0	)%
Three months ended June 30, 2024 compared to March 31, 2024	3.6	%	3.3	%	11.0	%	1.6	%

Same store NOI at share - cash basis % (decrease) increase⁽²⁾:
Three months ended June 30, 2024 compared to June 30, 2023	(6.6	)%	(2.7	)%	(1.3	)%	(38.2	)%
Six months ended June 30, 2024 compared to June 30, 2023	(5.9	)%	(3.9	)%	(2.2	)%	(26.2	)%
Three months ended June 30, 2024 compared to March 31, 2024	4.0	%	2.3	%	12.8	%	17.8	%

____________________

(1) 2023 includes our $14,103,000 share of the receipt of a tenant settlement, net of legal expenses.
(2) See pages 11 through 16 for same store NOI at share and same store NOI at share - cash basis reconciliations.

NOI At Share & NOI At Share - Cash Basis:

The elements of our New York and Other NOI at share and NOI at share - cash basis for the three and six months ended June 30, 2024 and 2023 and the three months ended March 31, 2024 are summarized below.

(Amounts in thousands)	For the Three Months Ended						For the Six Months Ended June 30,
	June 30,				March 31, 2024		For the Six Months Ended June 30,
		2024		2023	March 31, 2024			2024		2023
NOI at share:
New York:
Office⁽¹⁾	$	178,338	$	186,042	$	167,988	$	346,326	$	360,312
Retail		48,392		47,428		47,466		95,858		94,624
Residential		6,220		5,467		5,968		12,188		10,925
Alexander's		9,203		9,429		11,707		20,910		18,499
Total New York		242,153		248,366		233,129		475,282		484,360
Other:
THE MART		16,060		16,462		14,486		30,546		31,871
555 California Street⁽²⁾		16,800		31,347		16,529		33,329		48,276
Other investments		5,158		5,464		4,980		10,138		10,615
Total Other		38,018		53,273		35,995		74,013		90,762
NOI at share	$	280,171	$	301,639	$	269,124	$	549,295	$	575,122

NOI at share - cash basis:
New York:
Office⁽¹⁾	$	176,915	$	181,253	$	166,370	$	343,285	$	363,334
Retail		44,700		44,956		43,873		88,573		88,990
Residential		5,947		5,129		5,690		11,637		10,180
Alexander's		10,272		10,231		14,861		25,133		20,092
Total New York		237,834		241,569		230,794		468,628		482,596
Other:
THE MART		16,835		16,592		14,949		31,784		31,267
555 California Street⁽²⁾		19,956		32,284		16,938		36,894		50,002
Other investments		4,965		5,624		4,932		9,897		10,739
Total Other		41,756		54,500		36,819		78,575		92,008
NOI at share - cash basis	$	279,590	$	296,069	$	267,613	$	547,203	$	574,604

________________________________
(1) Includes Building Maintenance Services NOI of $7,926, $6,797, $7,217, $15,143 and $13,086 for the three months ended June 30, 2024 and 2023 and March 31, 2024 and the six months ended June 30, 2024 and 2023, respectively.
(2) 2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.

Active Development/Redevelopment Summary as of June 30, 2024:

(Amounts in thousands, except square feet)
		(at Vornado’s share)								Projected Incremental Cash Yield
New York segment:	Property Rentable Sq. Ft.	Budget			Cash Amount Expended		Remaining Expenditures		Stabilization Year	Projected Incremental Cash Yield
PENN District:
PENN 2	1,795,000	$	750,000		$	675,504	$	74,496	2026		9.5%
Districtwide Improvements	N/A		100,000			60,493		39,507	N/A		N/A
Total PENN District			850,000	⁽¹⁾		735,997		114,003

Sunset Pier 94 Studios (49.9% interest)	266,000		125,000	⁽²⁾		19,494		105,506	2026		10.3%

Total Active Development Projects		$	975,000		$	755,491	$	219,509

________________________________
(1) Excluding debt and equity carry.
(2) Represents our 49.9% share of the $350,000 development budget, excluding the $40,000 value of our contributed leasehold interest and net of an estimated $9,000 for our share of development fees and reimbursement for overhead costs incurred by us. $34,000 will be funded via cash contributions, of which $19,494 has been funded as of June 30, 2024.

There can be no assurance that the above projects will be completed, completed on schedule or within budget. In addition, there can be no assurance that the Company will be successful in leasing the properties on the expected schedule or at the assumed rental rates.

Conference Call and Audio Webcast
As previously announced, the Company will host a quarterly earnings conference call and an audio webcast on Tuesday, August 6, 2024 at 10:00 a.m. Eastern Time (ET). The conference call can be accessed by dialing 888-317-6003 (domestic) or 412-317-6061 (international) and entering the passcode 8799771. A live webcast of the conference call will be available on Vornado’s website at www.vno.com in the Investor Relations section and an online playback of the webcast will be available on the website following the conference call.

Contact
Thomas J. Sanelli
(212) 894-7000

Supplemental Data

Further details regarding results of operations, properties and tenants can be accessed at the Company’s website www.vno.com. Vornado Realty Trust is a fully - integrated equity real estate investment trust.

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 future 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. We also note the following forward-looking statements: in the case of our development and redevelopment projects, the estimated completion date, estimated project cost, projected incremental cash yield, stabilization date and cost to complete; estimates of future capital expenditures, dividends to common and preferred shareholders and operating partnership distributions. 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, 2023. Currently, some of the factors are the increased interest rates and effects of 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.

VORNADO REALTY TRUST
CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)	As of						Increase (Decrease)
	June 30, 2024			December 31, 2023			Increase (Decrease)
ASSETS
Real estate, at cost:
Land	$	2,434,209		$	2,436,221		$	(2,012	)
Buildings and improvements		10,228,821			9,952,954			275,867
Development costs and construction in progress		1,156,060			1,281,076			(125,016	)
Leasehold improvements and equipment		133,755			130,953			2,802
Total		13,952,845			13,801,204			151,641
Less accumulated depreciation and amortization		(3,899,475	)		(3,752,827	)		(146,648	)
Real estate, net		10,053,370			10,048,377			4,993
Right-of-use assets		678,670			680,044			(1,374	)
Cash, cash equivalents, and restricted cash
Cash and cash equivalents		872,609			997,002			(124,393	)
Restricted cash		244,245			264,582			(20,337	)
Total		1,116,854			1,261,584			(144,730	)
Tenant and other receivables		71,213			69,543			1,670
Investments in partially owned entities		2,711,080			2,610,558			100,522
Receivable arising from the straight-lining of rents		706,157			701,666			4,491
Deferred leasing costs, net		354,395			355,010			(615	)
Identified intangible assets, net		122,414			127,082			(4,668	)
Other assets		396,028			333,801			62,227
Total assets	$	16,210,181		$	16,187,665		$	22,516
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Liabilities:
Mortgages payable, net	$	5,672,086		$	5,688,020		$	(15,934	)
Senior unsecured notes, net		1,194,894			1,193,873			1,021
Unsecured term loan, net		795,254			794,559			695
Unsecured revolving credit facilities		575,000			575,000			—
Lease liabilities		741,762			732,859			8,903
Accounts payable and accrued expenses		363,457			411,044			(47,587	)
Deferred revenue		30,805			32,199			(1,394	)
Deferred compensation plan		108,553			105,245			3,308
Other liabilities		316,906			311,132			5,774
Total liabilities		9,798,717			9,843,931			(45,214	)
Redeemable noncontrolling interests		593,465			638,448			(44,983	)
Shareholders' equity		5,626,300			5,509,064			117,236
Noncontrolling interests in consolidated subsidiaries		191,699			196,222			(4,523	)
Total liabilities, redeemable noncontrolling interests and equity	$	16,210,181		$	16,187,665		$	22,516

VORNADO REALTY TRUST
OPERATING RESULTS

(Amounts in thousands, except per share amounts)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
Revenues	$	450,266		$	472,359		$	886,641		$	918,282

Net income	$	40,099		$	62,733		$	33,826		$	73,931
Less net loss (income) attributable to noncontrolling interests in:
Consolidated subsidiaries		13,890			2,781			25,872			12,709
Operating Partnership		(3,200	)		(3,608	)		(2,414	)		(4,037	)
Net income attributable to Vornado		50,789			61,906			57,284			82,603
Preferred share dividends		(15,529	)		(15,529	)		(31,058	)		(31,058	)
Net income attributable to common shareholders	$	35,260		$	46,377		$	26,226		$	51,545

Income per common share - basic:
Net income per common share	$	0.19		$	0.24		$	0.14		$	0.27
Weighted average shares outstanding		190,492			191,468			190,460			191,668

Income per common share - diluted:
Net income per common share	$	0.18		$	0.24		$	0.13		$	0.27
Weighted average shares outstanding		194,405			194,804			194,518			194,364

FFO attributable to common shareholders plus assumed conversions (non-GAAP)	$	148,944		$	144,059		$	253,068		$	263,149
Per diluted share (non-GAAP)	$	0.76		$	0.74		$	1.29		$	1.35

FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP)	$	112,766		$	140,737		$	221,608		$	257,032
Per diluted share (non-GAAP)	$	0.57		$	0.72		$	1.13		$	1.32

Weighted average shares used in determining FFO attributable to common shareholders plus assumed conversions per diluted share		196,339			194,878			196,405			194,543

FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of certain real estate assets, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. In addition to FFO attributable to common shareholders plus assumed conversions, we also disclose FFO attributable to common shareholders plus assumed conversions, as adjusted. Although this non-GAAP measure clearly differs from NAREIT’s definition of FFO, we believe it provides a meaningful presentation of operating performance. Reconciliations of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions are provided on the following page. Reconciliations of FFO attributable to common shareholders plus assumed conversions to FFO attributable to common shareholders plus assumed conversions, as adjusted are provided on page 2 of this press release.

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS

The following table reconciles net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions:

(Amounts in thousands, except per share amounts)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
Net income attributable to common shareholders	$	35,260		$	46,377		$	26,226		$	51,545
Per diluted share	$	0.18		$	0.24		$	0.13		$	0.27

FFO adjustments:
Depreciation and amortization of real property	$	97,897		$	94,922		$	194,680		$	189,714
Net gains on sale of real estate		(873	)		(260	)		(873	)		(260	)
Our share of partially owned entities:
Depreciation and amortization of real property		26,458			26,666			52,621			54,135
Net gain on sale of real estate		—			(16,545	)		—			(16,545	)
		123,482			104,783			246,428			227,044
Noncontrolling interests' share of above adjustments		(10,191	)		(7,510	)		(20,362	)		(16,256	)
FFO adjustments, net	$	113,291		$	97,273		$	226,066		$	210,788

FFO attributable to common shareholders	$	148,551		$	143,650		$	252,292		$	262,333
Impact of assumed conversion of dilutive convertible securities		393			409			776			816
FFO attributable to common shareholders plus assumed conversions	$	148,944		$	144,059		$	253,068		$	263,149
Per diluted share	$	0.76		$	0.74		$	1.29		$	1.35

Reconciliation of weighted average shares outstanding:
Weighted average common shares outstanding		190,492			191,468			190,460			191,668
Effect of dilutive securities:
Share-based payment awards		3,913			32			4,058			23
Convertible securities		1,934			3,378			1,887			2,852
Denominator for FFO per diluted share		196,339			194,878			196,405			194,543

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the three and six months ended June 30, 2024 and 2023 and the three months ended March 31, 2024.

(Amounts in thousands)	For the Three Months Ended									For the Six Months Ended June 30,
	June 30,						March 31, 2024			For the Six Months Ended June 30,
		2024			2023		March 31, 2024				2024			2023
Net income (loss)	$	40,099		$	62,733		$	(6,273	)	$	33,826		$	73,931
Depreciation and amortization expense		109,774			107,162			108,659			218,433			213,727
General and administrative expense		38,475			39,410			37,897			76,372			81,005
Transaction related costs and other		3,361			30			653			4,014			688
Income from partially owned entities		(47,949	)		(37,272	)		(16,279	)		(64,228	)		(53,938	)
Interest and other investment income, net		(10,511	)		(13,153	)		(11,724	)		(22,235	)		(22,737	)
Interest and debt expense		98,401			87,165			90,478			188,879			173,402
Net gains on disposition of wholly owned and partially owned assets		(16,048	)		(936	)		—			(16,048	)		(8,456	)
Income tax expense		5,284			4,497			6,740			12,024			9,164
NOI from partially owned entities		68,298			70,745			70,369			138,667			138,842
NOI attributable to noncontrolling interests in consolidated subsidiaries		(9,013	)		(18,742	)		(11,396	)		(20,409	)		(30,506	)
NOI at share		280,171			301,639			269,124			549,295			575,122
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other		(581	)		(5,570	)		(1,511	)		(2,092	)		(518	)
NOI at share - cash basis	$	279,590		$	296,069		$	267,613		$	547,203		$	574,604

NOI at share represents total revenues less operating expenses including our share of partially owned entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We consider NOI at share - cash basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI at share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the three months ended June 30, 2024 compared to June 30, 2023.

(Amounts in thousands)	Total			New York			THE MART			555 California Street			Other
NOI at share for the three months ended June 30, 2024	$	280,171		$	242,153		$	16,060		$	16,800		$	5,158
Less NOI at share from:
Dispositions		(620	)		(633	)		13			—			—
Development properties		(9,637	)		(9,637	)		—			—			—
Other non-same store income, net		(6,094	)		(936	)		—			—			(5,158	)
Same store NOI at share for the three months ended June 30, 2024	$	263,820		$	230,947		$	16,073		$	16,800		$	—

NOI at share for the three months ended June 30, 2023	$	301,639		$	248,366		$	16,462		$	31,347		$	5,464
Less NOI at share from:
Dispositions		(696	)		(1,082	)		386			—			—
Development properties		(4,391	)		(4,391	)		—			—			—
Other non-same store income, net		(6,730	)		(1,266	)		—			—			(5,464	)
Same store NOI at share for the three months ended June 30, 2023	$	289,822		$	241,627		$	16,848		$	31,347		$	—

Decrease in same store NOI at share	$	(26,002	)	$	(10,680	)	$	(775	)	$	(14,547	)	$	—

% decrease in same store NOI at share	(9.0)		%	(4.4)		%	(4.6)		%	(46.4)		%		0.0	%

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, THE MART, 555 California Street and other investments for the three months ended June 30, 2024 compared to June 30, 2023.

(Amounts in thousands)	Total			New York			THE MART			555 California Street			Other
NOI at share - cash basis for the three months ended June 30, 2024	$	279,590		$	237,834		$	16,835		$	19,956		$	4,965
Less NOI at share - cash basis from:
Dispositions		(620	)		(633	)		13			—			—
Development properties		(7,353	)		(7,353	)		—			—			—
Other non-same store income, net		(6,880	)		(1,915	)		—			—			(4,965	)
Same store NOI at share - cash basis for the three months ended June 30, 2024	$	264,737		$	227,933		$	16,848		$	19,956		$	—

NOI at share - cash basis for the three months ended June 30, 2023	$	296,069		$	241,569		$	16,592		$	32,284		$	5,624
Less NOI at share - cash basis from:
Dispositions		(860	)		(1,337	)		477			—			—
Development properties		(4,554	)		(4,554	)		—			—			—
Other non-same store income, net		(7,061	)		(1,437	)		—			—			(5,624	)
Same store NOI at share - cash basis for the three months ended June 30, 2023	$	283,594		$	234,241		$	17,069		$	32,284		$	—

Decrease in same store NOI at share - cash basis	$	(18,857	)	$	(6,308	)	$	(221	)	$	(12,328	)	$	—

% decrease in same store NOI at share - cash basis	(6.6)		%	(2.7)		%	(1.3)		%	(38.2)		%		0.0	%

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the six months ended June 30, 2024 compared to June 30, 2023.

(Amounts in thousands)	Total			New York			THE MART			555 California Street			Other
NOI at share for the six months ended June 30, 2024	$	549,295		$	475,282		$	30,546		$	33,329		$	10,138
Less NOI at share from:
Dispositions		(1,419	)		(1,425	)		6			—			—
Development properties		(17,595	)		(17,595	)		—			—			—
Other non-same store income, net		(11,910	)		(1,772	)		—			—			(10,138	)
Same store NOI at share for the six months ended June 30, 2024	$	518,371		$	454,490		$	30,552		$	33,329		$	—

NOI at share for the six months ended June 30, 2023	$	575,122		$	484,360		$	31,871		$	48,276		$	10,615
Less NOI at share from:
Dispositions		(1,030	)		(2,100	)		1,070			—			—
Development properties		(8,722	)		(8,722	)		—			—			—
Other non-same store (income) expense, net		(8,146	)		2,469			—			—			(10,615	)
Same store NOI at share for the six months ended June 30, 2023	$	557,224		$	476,007		$	32,941		$	48,276		$	—

Decrease in same store NOI at share	$	(38,853	)	$	(21,517	)	$	(2,389	)	$	(14,947	)	$	—

% decrease in same store NOI at share	(7.0)		%	(4.5)		%	(7.3)		%	(31.0)		%		0.0	%

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, THE MART, 555 California Street and other investments for the six months ended June 30, 2024 compared to June 30, 2023.

(Amounts in thousands)	Total			New York			THE MART			555 California Street			Other
NOI at share - cash basis for the six months ended June 30, 2024	$	547,203		$	468,628		$	31,784		$	36,894		$	9,897
Less NOI at share - cash basis from:
Dispositions		(1,419	)		(1,425	)		6			—			—
Development properties		(13,323	)		(13,323	)		—			—			—
Other non-same store income, net		(13,253	)		(3,356	)		—			—			(9,897	)
Same store NOI at share - cash basis for the six months ended June 30, 2024	$	519,208		$	450,524		$	31,790		$	36,894		$	—

NOI at share - cash basis for the six months ended June 30, 2023	$	574,604		$	482,596		$	31,267		$	50,002		$	10,739
Less NOI at share - cash basis from:
Dispositions		(1,263	)		(2,514	)		1,251			—			—
Development properties		(8,699	)		(8,699	)		—			—			—
Other non-same store income, net		(13,132	)		(2,393	)		—			—			(10,739	)
Same store NOI at share - cash basis for the six months ended June 30, 2023	$	551,510		$	468,990		$	32,518		$	50,002		$	—

Decrease in same store NOI at share - cash basis	$	(32,302	)	$	(18,466	)	$	(728	)	$	(13,108	)	$	—

% decrease in same store NOI at share - cash basis	(5.9)		%	(3.9)		%	(2.2)		%	(26.2)		%		0.0	%

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

(Amounts in thousands)	Total			New York			THE MART			555 California Street			Other
NOI at share for the three months ended June 30, 2024	$	280,171		$	242,153		$	16,060		$	16,800		$	5,158
Less NOI at share from:
Dispositions		(620	)		(633	)		13			—			—
Development properties		(9,637	)		(9,637	)		—			—			—
Other non-same store income, net		(6,094	)		(936	)		—			—			(5,158	)
Same store NOI at share for the three months ended June 30, 2024	$	263,820		$	230,947		$	16,073		$	16,800		$	—

NOI at share for the three months ended March 31, 2024	$	269,124		$	233,129		$	14,486		$	16,529		$	4,980
Less NOI at share from:
Dispositions		(799	)		(792	)		(7	)		—			—
Development properties		(7,958	)		(7,958	)		—			—			—
Other non-same store income, net		(5,816	)		(836	)		—			—			(4,980	)
Same store NOI at share for the three months ended March 31, 2024	$	254,551		$	223,543		$	14,479		$	16,529		$	—

Increase in same store NOI at share	$	9,269		$	7,404		$	1,594		$	271		$	—

% increase in same store NOI at share		3.6	%		3.3	%		11.0	%		1.6	%		0.0	%

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED

(Amounts in thousands)	Total			New York			THE MART			555 California Street			Other
NOI at share - cash basis for the three months ended June 30, 2024	$	279,590		$	237,834		$	16,835		$	19,956		$	4,965
Less NOI at share - cash basis from:
Dispositions		(620	)		(633	)		13			—			—
Development properties		(7,353	)		(7,353	)		—			—			—
Other non-same store income, net		(6,675	)		(1,710	)		—			—			(4,965	)
Same store NOI at share - cash basis for the three months ended June 30, 2024	$	264,942		$	228,138		$	16,848		$	19,956		$	—

NOI at share - cash basis for the three months ended March 31, 2024	$	267,613		$	230,794		$	14,949		$	16,938		$	4,932
Less NOI at share - cash basis from:
Dispositions		(799	)		(792	)		(7	)		—			—
Development properties		(5,970	)		(5,970	)		—			—			—
Other non-same store income, net		(6,013	)		(1,081	)		—			—			(4,932	)
Same store NOI at share - cash basis for the three months ended March 31, 2024	$	254,831		$	222,951		$	14,942		$	16,938		$	—

Increase in same store NOI at share - cash basis	$	10,111		$	5,187		$	1,906		$	3,018		$	—

% increase in same store NOI at share - cash basis		4.0	%		2.3	%		12.8	%		17.8	%		0.0	%

FAQ

What were Vornado's Q2 2024 earnings?

Vornado reported a net income of $35.26 million, or $0.18 per diluted share, and FFO of $148.94 million, or $0.76 per diluted share for Q2 2024.

Did Vornado's net income increase or decrease in Q2 2024?

Vornado's net income decreased to $35.26 million in Q2 2024 from $46.38 million in Q2 2023.

What was Vornado's FFO for the first six months of 2024?

For the first six months of 2024, Vornado's FFO was $253.07 million, or $1.29 per diluted share.

How much New York Office space did Vornado lease in Q2 2024?

Vornado leased 1.32 million square feet of New York Office space in Q2 2024 at an initial rent of $131.37 per square foot.

What refinancing activities did Vornado report in Q2 2024?

Vornado refinanced and extended loans at properties including 280 Park Avenue and 435 Seventh Avenue during Q2 2024.

Vornado Announces Second Quarter 2024 Financial Results

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What were Vornado's Q2 2024 earnings?

Did Vornado's net income increase or decrease in Q2 2024?

What was Vornado's FFO for the first six months of 2024?

How much New York Office space did Vornado lease in Q2 2024?

What refinancing activities did Vornado report in Q2 2024?

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Vornado Announces Second Quarter 2024 Financial Results

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FAQ

What were Vornado's Q2 2024 earnings?

Did Vornado's net income increase or decrease in Q2 2024?

What was Vornado's FFO for the first six months of 2024?

How much New York Office space did Vornado lease in Q2 2024?

What refinancing activities did Vornado report in Q2 2024?

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