Vornado Realty Trust's Quarterly Report for the Period Ended March 31, 2024
Vornado Realty Trust's Quarterly Report for the Period Ended March 31, 2024
The financial report for the quarter ended March 31, 2024, provides a concise overview of the company’s financial performance and developments. The report highlights key events and trends, using clear and straightforward language to ensure brevity and clarity.
Overview
Vornado Realty Trust is a fully-integrated real estate investment trust (REIT) that conducts business through the Vornado Realty L.P. operating partnership, in which Vornado owns a 91% stake. Vornado competes with other real estate investors and its success depends on economic trends, tenant financial health, capital availability, and other factors.
In Q1 2024, Vornado had a net loss attributable to common shareholders of $9 million ($0.05 per share), compared to net income of $5 million ($0.03 per share) in Q1 2023. Funds from operations (FFO) plus assumed conversions was $104 million ($0.53 per share) in Q1 2024, down from $119 million ($0.61 per share) in Q1 2023. FFO was impacted by certain expense and income items in both periods.
Same store net operating income (NOI) decreased 4.8% at share and 5.0% on a cash basis compared to Q1 2023. By segment, New York same store NOI decreased 4.6% at share and 5.1% on a cash basis; THE MART decreased 10.0% at share and 3.3% on a cash basis; 555 California Street decreased 2.4% at share and 4.4% on a cash basis.
Financings
Vornado executed several financings in Q1 2024:
Amended $1.2 billion mortgage on 280 Park Ave to extend maturity to 2026-2028 at SOFR + 1.78%
$75 million refinancing of 435 Seventh Ave at SOFR + 2.10%, swapped to fixed 6.96%
Extended $915 million credit facility to 2029 at SOFR + 1.20%
Development
Development projects currently underway include:
PENN 2 renovation ($659M spent of $750M budget)
PENN District improvements ($53M spent of $100M budget)
Sunset Pier 94 Studios JV (Vornado share of budget $74M)
Potential office tower at 350 Park Ave site (Vornado budget $900M if built)
Leasing Activity
| Property | Square Feet | Initial Rent | Term |
|---|---|---|---|
| NY Office | 250,000 | $89.23 | 11.1 years |
| NY Retail | 33,000 | $253.83 | 3.8 years |
| THE MART | 51,000 | $64.02 | 4.5 years |
| 315 Montgomery | 29,000 | $67.57 | 5.4 years |
Square Feet and Occupancy
| Portfolio | 3/31/2024 SF | 3/31/2024 Occupancy | 12/31/2023 SF | 12/31/2023 Occupancy |
|---|---|---|---|---|
| NY Office | 15,909,000 | 89.3% | 16,001,000 | 90.7% |
| NY Retail | 1,685,000 | 75.0% | 1,684,000 | 74.9% |
| NY Residential | 745,000 | 97.5% | 745,000 | 96.8% |
| Alexander’s | 750,000 | 92.5% | 755,000 | 92.6% |
| THE MART | 3,679,000 | 77.6% | 3,679,000 | 79.2% |
| 555 California | 1,274,000 | 94.5% | 1,274,000 | 94.5% |
| Other | 1,202,000 | 87.2% | 1,202,000 | 91.9% |
| Total | 25,244,000 | 25,340,000 |
Results of Operations
Revenues decreased $9.5 million or 2.1% compared to Q1 2023, primarily due to:
- $13.7 million lower same store revenues
- Partially offset by $3.3 million more development and redevelopment revenue
Expenses decreased $3.4 million or 0.9% primarily due to:
- $2.5 million lower same store operating expenses
- $1.3 million lower depreciation
Liquidity and Capital Resources
As of March 31, 2024, Vornado had:
- $1.1 billion of cash and restricted cash
- $1.9 billion available on credit facilities, increased to $2.7 billion after an extension
Key cash flow items in Q1 2024:
- $31 million cash provided by operating activities
- $129 million cash used in investing activities
- $16 million cash used in financing activities
Development expenditures in Q1 2024 included $75 million for PENN 2 and $51 million for real estate additions.
FFO
FFO attributable to common shareholders was $104 million ($0.53 per share) in Q1 2024 compared to $119 million ($0.61 per share) in Q1 2023. The decrease was primarily due to certain expense and income items that impact comparability between periods.
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