UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 13, 2017
VORNADO REALTY TRUST
(Exact Name of Registrant as Specified in Charter)
Maryland | No. 001-11954 | No. 22-1657560 | ||
(State or Other | (Commission | (IRS Employer | ||
Jurisdiction of Incorporation) | File Number) | Identification No.) | ||
VORNADO REALTY L.P.
(Exact Name of Registrant as Specified in Charter)
(Exact Name of Registrant as Specified in Charter)
Delaware | No. 001-34482 | No. 13-3925979 | ||
(State or Other | (Commission | (IRS Employer | ||
Jurisdiction of Incorporation) | File Number) | Identification No.) | ||
888 Seventh Avenue New York, New York | 10019 | |
(Address of Principal Executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (212) 894-7000
Former name or former address, if changed since last report: N/A
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 7.01. Regulation FD Disclosure.
On November 13, 2017, Vornado Realty Trust, the general partner of Vornado Realty L.P., posted an investor presentation to its website at www.vno.com on the “Investor Relations” page. A copy of the investor presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure.
Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Vornado Realty Trust or Vornado Realty L.P. under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits. |
The following exhibit is being furnished as part of this Current Report on Form 8-K:
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VORNADO REALTY TRUST | |||
(Registrant) | |||
By: | /s/ Matthew Iocco | ||
Name: | Matthew Iocco | ||
Title: | Chief Accounting Officer (duly authorized officer and principal accounting officer) | ||
Date: November 13, 2017
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VORNADO REALTY L.P. | |||
(Registrant) | |||
By: | VORNADO REALTY TRUST, | ||
Sole General Partner | |||
By: | /s/ Matthew Iocco | ||
Name: | Matthew Iocco | ||
Title: | Chief Accounting Officer of Vornado Realty Trust, sole General Partner of Vornado Realty L.P. (duly authorized officer and principal accounting officer) | ||
Date: November 13, 2017
3
N O V E M B E R 2 0 1 7
FORWARD LOOKING STATEMENTS
Certain statements contained in this investor presentation constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. Consequently, the future results, financial condition and business of Vornado
Realty Trust (“Vornado”), 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 similar expressions in this presentation. We also note the following
forward-looking statements: in the case of our development and redevelopment projects, the estimated completion date, estimated project cost and cost to complete; and
stabilized yields, estimates of future capital expenditures, dividends to common and preferred shareholders and operating partnership distributions. Many of the factors that will
determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. These factors include, among others: the timing of and
costs associated with property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome
of our forward-looking statements and other risks and uncertainties, see “Risk Factors” in Vornado’s Annual Report on Form 10-K, as amended, for the year ended December 31,
2016 and subsequent quarterly periodic reports filed with the SEC.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are
cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or any person acting on
our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly
any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this presentation.
Market Data
Market data and industry forecasts are used in this presentation, including data obtained from publicly available sources. These sources generally state that the information they
provide has been obtained from sources believed to be reliable but the accuracy and completeness of the information are not assured. Vornado has not independently verified
any of such information.
Non-GAAP Financial Measures
This presentation includes non-GAAP measures. Management uses these non-GAAP measures as supplemental performance measures for its assets and believes they provide
useful information to investors, but they may not be comparable to other real estate companies’ similarly captioned measures. Additional information about these non-GAAP
measures, including a reconciliation to the most comparable GAAP measure, can be found on pages 29-32.
I
NON-GAAP FINANCIAL MEASURES
This investor presentation contains certain non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net operating income (“NOI”).
EBITDA represents “Earnings Before Interest, Taxes, Depreciation and Amortization.” NOI represents “Net Operating Income” on a cash basis. EBITDA and NOI are calculated on an Operating
Partnership basis which is before allocation to the noncontrolling interest of the Operating Partnership. We consider EBITDA 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 EBITDA and
NOI, we utilize these measures to make investment decisions as well as to compare the performance of our assets to that of our peers. We also consider NOI a key non-GAAP financial measure. NOI
is before general and administrative expenses, straight-line rental income and expense, amortization of acquired below and above market leases, net, acquisition and transaction related costs, our
share of net realized and unrealized gains or losses from our real estate fund investments, impairment losses, gains on disposal of assets and other non-cash adjustments. EBITDA and NOI should not
be considered as substitutes for net income. EBITDA and NOI may not be comparable to similarly titled measures employed by other companies. A reconciliation of EBITDA and NOI to net income, the
most directly comparable GAAP measure, is provided on pages 29-32.
These non-GAAP financial measures are used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because
they exclude 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. These metrics do not represent cash generated from operating activities and are not necessarily indicative of cash available
to fund obligations and should not be considered as an alternative to net income as performance measures or cash flow as liquidity measures. These non-GAAP metrics may not be comparable to
similarly titled measures employed by other companies.
II
• Focused, pure-play Northeastern shopping
center business with strong growth profile
• Irreplaceable portfolio of properties
concentrated in dense, high barrier to entry
markets with attractive demographics
• Embedded growth opportunities from
redevelopment and anchor repositioning
projects
• Proven management team
• Vornado combined its Washington, DC business
with The JBG Companies
• Vornado shareholders owned ~74% at time
of spin
• Largest1, pure-play, mixed-use operator focused
solely on Washington, DC
• Best-in-class Washington, DC focused
management team with proven record
of success
• Premier portfolio of mixed-use (office,
multifamily and retail) assets in Metro-served,
urban infill submarkets
• Significant near-term embedded growth
prospects as well as substantial pipeline of
future development opportunities
• Peerless NYC focused real estate company with
premier office assets and the only publicly
investable high street retail portfolio of unique
quality and scale
• Trophy assets in best NYC submarkets
• Attractive built-in growth from recently
signed leases
• Best-in-class management team, now with
singular NYC focus, with proven record of
value creation
• Fortress balance sheet
P RO P E RT I E S
WE HAVE SIMPLIFIED AND FOCUSED IN THE RELENTLESS
PURSUIT OF SHAREHOLDER VALUE
In the past few years, we have exited multiple business lines and non-core holdings - $15.7 billion of total transactions
• Disposed of $6.1 billion of non-core assets including regional malls, the Mart business (retaining theMART building in Chicago) and other non-core investments
• Spun off strip shopping centers into Urban Edge Properties (NYSE: UE) in a $3.6 billion transaction
• With the recent completion of the DC spin-merger ($6.0 billion transaction value at share), we have created three best-in-class, highly focused REITs
1. Based on Commercial SF as reported per latest financial statements for public office REITs with Washington, DC exposure
1
• Following the Washington, D.C. spin-off, Vornado RemainCo will be a pure-play New York City
real estate company, with an irreplaceable NYC portfolio generating 89% of the Company’s pro
forma EBITDA1
• In addition, Vornado RemainCo will continue to own the prime franchise assets in San Francisco
(555 California Street totaling 1.8 MM SF) and Chicago (theMART spanning 3.7 MM SF) - 11% of
Vornado RemainCo EBITDA1
• 10 year track record of same-store NOI growth superior to peers – reflects the quality of
Vornado RemainCo’s portfolio and strength of management team
• Own 82 properties totaling 24.0MM SF2 in New York City with blue chip tenant roster
• NYC high street retail is amongst the scarcest and most valuable real estate in the world – 30%
of Vornado RemainCo EBITDA (97.1% occupancy)3
– Portfolio encompasses 3.1 MM SF2 in 72 properties
– 55% of NOI comes from upper Fifth Avenue & Times Square (the two premier submarkets),
both locked up with high-quality tenants
– 20% of NOI comes from Penn Plaza, prime for redevelopment
Peerless NYC focused real estate company with premier office assets and
the only publicly investable high street retail portfolio of scale
Vornado RemainCo EBITDA1
1. Refers to 1Q17 trailing twelve months adjusted EBITDA excluding the Real Estate Fund.
2. Square footage (“SF”) at share.
3. Occupancy as of 1Q17, reflects VNO share.
3
V O R N A D O R E M A I N C O
59%
30%
11%
NYC
Office
NYC High
Street Retail
theMART /
555 California
VORNADO
Peerless NYC focused real estate company with premier office assets and
the only publicly investable high street retail portfolio of scale
• Vornado is a pure-play New York City real estate company, with an irreplaceable NYC portfolio generating
89% of the Company’s EBITDA1
• Own 88 properties totaling 28.4MM SF* (22.5MM SF at share*) in New York City with blue chip tenant roster
• NYC office business includes trophy assets in best submarkets – portfolio encompasses 20.2MM SF (17.0MM
SF* at share) in 37 properties (97.0% occupancy)2
- Well positioned with over 50% of office portfolio in fast growing west side of Manhattan
• NYC high street retail is amongst the scarcest and most valuable real estate in the world – 30% of Vornado
EBITDA (95.7% occupancy)2
- Portfolio encompasses 2.7MM SF* (2.5MM SF at share*) in 72 properties
- Over 50% of NOI comes from Upper Fifth Avenue and Times Square (the two premier
submarkets), leased for term with high quality tenants
- 19% of NOI comes from Penn Plaza, primed for redevelopment
• Once-in-a-lifetime redevelopment opportunity with Penn Plaza holdings
• Fortress balance sheet with investment grade credit rating
• 10 year track record of same-store NOI growth superior to peers – reflects the quality of Vornado's
portfolio and strength of management team
• In addition, Vornado owns the prime franchise assets in San Francisco (555 California Street totaling
1.7MM SF* (1.2 MM SF at share*) and Chicago (theMART spanning 3.7 MM SF owned and at share*) - 11%
of Vornado EBITDA1
Vornado EBITDA1
1. Refers to EBITDA, as adjusted for the trailing twelve months ended
September 30, 2017,excluding corporate G&A, our Real Estate Fund, and other
2. Occupancy as of September 30, 2017, at share
* In Service
2
VORNADO
SELECT NEW YORK CITY OFFICE PROPERTIES
PLAZA DISTRICT
PENN PLAZA DISTRICT
MIDTOWN SOUTH CHELSEA / MEATPACKING
666 FIFTH AVENUE 640 FIFTH AVENUE 689 FIFTH AVENUE888 SEVENTH AVENUE 650 MADISON AVENUE
280 PARK AVENUE 350 PARK AVENUE
330 W 34TH STREET ONE PENN / TWO PENN PLAZA7 WEST 34TH STREET 731 LEXINGTON AVENUE 1290 AVENUE OF THE AMERICAS
61 NINTH AVENUE 512 WEST 22ND STREET 85 TENTH AVENUE
330 MADISON AVENUE 90 PARK AVENUE
ONE PARK AVENUE 770 BROADWAY
MIDTOWN
11 PENN PLAZA MOYNIHAN OFFICE BUILDING
PARK AVENUE
GRAND CENTRAL
3
VORNADO
BLUE-CHIP OFFICE TENANT ROSTER
4
VORNADO
NEW YORK OFFICE - WELL POSITIONED BY SUBMARKET WITH STAGGERED LEASE EXPIRATIONS
Penn Plaza
39%
Midtown
24%
Plaza District
20%
Midtown South
9%
Chelsea/Meatpacking
3%
Other
5%
NEW YORK OFFICE SUBMARKET
BY SQUARE FOOT AS OF 9/30/2017
1%
6%
5%
9%
7%
5%
11%
8%
5%
8%
6%
29%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
T
ho
us
an
ds
o
f S
F
NEW YORK OFFICE EXPIRATIONS
BY SQUARE FOOT AS OF 9/30/2017
Weighted Average Lease Term: 7.90 Years
5
677 MADISON AVENUE
435 SEVENTH AVENUE
1535 & 1540 BROADWAY 640 FIFTH AVENUE
650 MADISON AVENUE 759-771 MADISON AVENUE
689 FIFTH AVENUE
595 MADISON AVENUE
666 FIFTH AVENUE
828-850 MADISON AVENUE
697 FIFTH AVENUE 478-486 BROADWAY655 FIFTH AVENUE 510 FIFTH AVENUE
VORNADO
SELECT NEW YORK CITY STREET RETAIL PROPERTIES
6
VORNADO
DOMINANCE OF THE KEY HIGH STREET RETAIL SUBMARKETS IN MANHATTAN
FIFTH
A
V
EN
U
E
59
58
57
56
55
54
53
52
51
50
C
EN
TR
A
L
PA
R
K
Bergdorf Men’s
Louis Vuitton
Apple
Bergdorf
Goodman
Bvlgari
Tif_fany & Co.
Trump Tower
Gucci
Armani
Dolce & Gabanna
Omega
Breguet
Ralph Lauren
ST. REGIS HOTEL
ST. THOMAS
CHURCH
PL A Z A HOTEL
ST. PATRICK’S CATHEDRAL
Valentino
MAC
Massimo
Dutti
Tommy Hilf_iger
St. John’s
Rolex
Lindt
Ermenegildo Zegna
Salvatore
Ferragamo
Cartier
Versace
Gant
H. Stern Jewelry
Armani Exchange
Piaget
Mikimoto
Prada
Abercrombie & Fitch
Harry Winston
Henri Bendel
Wempe
Peninsula
Hotel
University
Club
UNIQLO
Tissot
Hollister
Zara
Victoria’s Secret
Banana Republic
Fifth Avenue
Presbyterian
Van Cleef
& Arpels
Harry
Winston/
Swatch
Cartier
Coach/
Gap
Dyson
Microsoft
Stuart Weitzman
Nike
Hublot
Under Armour
UPPER FIFTH AVENUE TIMES SQUARE
CONTROL BOTH SIDES OF THE BOWTIE
1540 BROADWAY 1535 BROADWAY
OWN 23% OF FRONTAGE1
1. Excludes churches, clubs and retail owned by users
7
VORNADO
BLUE-CHIP RETAIL TENANT ROSTER
8
VORNADO
STREET RETAIL PORTFOLIO - LARGELY BUTTONED UP
Over 50% of Vornado street retail NOI comes from Upper Fifth Avenue and Times
Square. Both are locked up with high quality tenants:
TENANT YEAR OF EXPIRATION
Zara 2019
MAC Cosmetics 2024
Hollister 2024
Uniqlo 2026
Tissot 2026
Dyson 2027
Ferragamo 2028
Swatch 2031
Harry Winston 2031
Victoria’s Secret 2032
TENANT YEAR OF EXPIRATION
US Polo 2023
Sunglass Hut 2023
Planet Hollywood 2023
MAC Cosmetics 2025
T-Mobile 2025
Invicta 2025
Disney 2026
Levi's 2028
Sephora 2029
Swatch 2030
Forever 21 2031
Nederlander Theater 2050
UPPER FIFTH AVENUE TIMES SQUARE
1%
10%
8%
2% 3%
1%
8%
14%
4%
9%
5%
35%
-
$20
$40
$60
$80
$10 0
$12 0
$14 0
$16 0
$18 0
M
ill
si
on
s
of
D
ol
la
rs
1. Tenant has the right to cancel in 2023
2. Levi's lease signed November 2017. Tenant has the right to cancel in 2024
NEW YORK RETAIL EXPIRATIONS BY REVENUE
AS OF 9/30/2017
Weighted Average Lease Term: 8.06 Years
21
9
VORNADO
NEAR-TERM CATALYSTS FOR SHAREHOLDER VALUE CREATION
1. Inclusive of $170MM in dividends already paid to shareholders through 9/30/2017
• Recent spin-merger of the DC Business with JBG SMITH creates the premier NYC pure-play REIT
• Spotlights Vornado’s unique NYC franchise and irreplaceable portfolio
• Significant near-term embedded NOI growth from signed leases
• Additional growth from creative-class new developments in process (900,000 SF at share) in the Chelsea/Meatpacking area as well as the Moynihan
Office Building redevelopment
• Penn Plaza Redevelopment – 9 million SF existing portfolio (6.7 million SF of office with average in-place rents of $61 PSF) with significant NOI upside
and value creation post-redevelopment, including Hotel Pennsylvania and other sites in the district
• Complete the sellout of 220 Central Park South luxury condominiums – incremental net proceeds after repayment of debt and taxes is expected to be $900MM1
• Significant cash and available liquidity (~$4 billion) provide dry powder to take advantage of market opportunities
• Trading at a significant discount to Net Asset Value
10
VORNADO
TRADING AT A SIGNIFICANT DISCOUNT TO NET ASSET VALUE
VNO Share Price (11/08/17) 74.24$
Shares outstanding 203.8
Equity Market Capitalization 15,130$
Plus: Debt and preferred at share1 10,548
Other liabilities2 554
Gross Market Capitalization 26,232$
Less:
theMART3 2,060
555 California Street3 1,260
New York - Residential3 629
Hotel Pennsylvania3 500
Cash, restricted cash and marketable securities 1,579
220 CPS 900$
Less: Dividends paid to common shareholders (170)
730
ALX (1,654,000 units at $405.29/share (at 11/08/17)) 670 Sensitivity Table Inputs
BMS (annualized 1Q17 EBITDA of $22 at a 7.0x multiple) 171
Real estate fund investments 123
UE (5,717,000 units at $24.28/share (at 11/08/17)) 139
PEI (6,250,000 units at $10.38/share (at 11/08/17)) 65
Other assets 920
Other construction in progress (at 110% of book value) 134
Total – Other 8,980$
NYC Office and Street Retail Business 17,252$
NYC Office and Street Retail Pro Forma Cash NOI4 1,013$
Implied Cap Rate 5.9%
Vornado Share Price by NYC Office and NYC Street Retail Cap Rate
NYC Street Retail
NYC Office 74 3.50% 4.00% 4.50% 15.01%
4.00% 120 114 109 #DIV/0! 83
4.50% 111 105 100 #DIV/0! $74.24
5.00% 103 97 93 #DIV/0! 67
1. Excludes the following: 220 CPS debt of $1,325MM (which includes the delayed-draw term loan outstanding balance of
$375MM), since 220 Central Park South is for-sale property and the debt will self liquidate from the proceeds of executed sales
contracts; our share of ALX, UE, and PEI debt as they are represented on an equity basis; our share of 666 Fifth Avenue Office
debt of $698MM because 666 Fifth Avenue Office Cash NOI is excluded from Pro-Forma Cash NOI
2. Includes the following: $89MM of capital required for leases to achieve Incremental NOI from Signed Leases. Excludes
the following: $240MM for the 1535 Broadway capital lease obligation, which will be offset by the incremental value from
purchasing the fee from Host Hotels & Resorts in the future
3. Values as of 12/31/2016
4. Pro Forma cash NOI as of 9/30/2017. See page 30 for GAAP reconciliation
VNO Share Price (11/08/17) 74.24$
Shares outstanding 203.8
Equity Market Capitalization 15,130$
Plus: Debt and preferred at share1 10,548
Other liabilities2 554
Gross Market Capitalization 26,232$
Less:
theMART3 2,060
555 California Street3 1,260
New York - Residential3 629
Hotel Pennsylvania3 500
Cash, restricted cash and marketable securities 1,579
220 CPS 900$
Less: Dividends paid to common shareholders (170)
730
ALX (1,654,000 units at $405.29/share (at 11/08/17)) 670 Sensitivity Table Inputs
BMS (annualized 1Q17 EBITDA of $22 at a 7.0x multiple) 171
Real estate fund investments 123
UE (5,717,000 units at $24.28/share (at 11/08/17)) 139
PEI (6,250,000 units at $10.38/share (at 11/08/17)) 65
Other assets 920
Other construction in progress (at 110% of book value) 134
Total – Other 8,980$
NYC Office and Street Retail Business 17,252$
NYC Office and Street Retail Pro Forma Cash NOI4 1,013$
Implied Cap Rate 5.9%
Vornado Share Price by NYC Office and NYC Street Retail Cap Rate
NYC Street Retail
NYC Office 74 3.50% 4.00% 4.50% 15.01%
4.00% 120 114 109 #DIV/0! 83
4.50% 111 105 100 #DIV/0! $74.24
5.00% 103 97 93 #DIV/0! 67
(Amounts in millions)
All numbers as of 9/30/2017 except as noted
11
At 9/30/17
Secured debt 8,205$
Unsecured debt 1,225
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)106(tbed detadilosnoc fo erahs 'stseretni gnillortnocnon :sseL
Total debt 12,297
)523,1()naol mret + egagtrom( SPC 022
)896(erahs ta tbed eciffO eunevA htfiF 666
Cash, restricted cash and marketable securities (1,579)
Net Debt 8,695$
352,1)1PAAG-non( eciffO eunevA htfiF 666 gnidulcxe detsujda sa ,ADTIBE MTT $
Net Debt / EBITDA 6.9x
VORNADO
FORTRESS BALANCE SHEET
1. See page 30 for GAAP reconciliation
• ~$4 billion of liquidity
• ~$11 billion of unencumbered assets
• Investment grade credit rating of Baa2/BBB/BBB
(Amounts in millions)
12
VORNADO
LEADER AMONG BEST-IN-CLASS REITS
1
5.4%
3.5%
2.7% 2.6% 2.5%
4.0%
3.8%
3.5% 3.4% 3.3% 3.2%
2.8%
1.9%
Vornado SLG BXP DEI KRC EQR PSA AVB SPG TCO VTR FRT PLD
From 2006 to 2016, Vornado has delivered superior same-store NOI growth relative to blue-chip peers
2006-2016 Same-Store NOI CAGR
1. Same-store NOI growth data for all companies taken from public filings. Vornado NOI includes New York office, New York retail, ALX, 555 California Street, and theMART. Excludes investment income, our Real Estate Fund,
Hotel Pennsylvania, UE, PREIT and other. VTR CAGR is from 2008.
13
VORNADO
CONSISTENT TRACK RECORD OF STRONG GROWTH
$687
$764 $753
$833
$884
$863
$987
$1,019
$1,068
$1,176
$121
$45
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
1. See page 29
2. Incremental cash NOI is derived solely from signed leases not yet commenced; GAAP reconciliation on page 30
Vornado 10-year NOI1 (NON-GAAP)
Incremen
tal Cash NOI from
Signed Leases of $166MM
2
14
VORNADO
LEADER IN REPOSITIONING AND MODERNIZING PROPERTIES 11 ASSETS TOTALING 10.3 MM SF
888 SEVENTH AVENUE –2008
888,000 SF
• TPG Capital
• United Talent Agency
• Corcoran Sunshine
• Lone Star
• Principal Global Investors
350 PARK AVENUE –2008
571,000 SF
• M&T Bank
• Ziff Brothers
• Citco
• Marshall Wace North America, L.P.
330 MADISON AVENUE –2012
846,000 SF
• Glencore
• Guggenheim Partners
• JLL
• Point72 Asset Management
• HSBC Bank
• American Century Investments
1290 AVE OF THE AMERICAS –2014
2,114,000 SF
• Neuberger Berman
• AXA Equitable
• Cushman & Wakefield
• Hachette Book Group
• State Street Bank
• Columbia University
731 LEXINGTON AVENUE –2004
1,063,000 SF
• Bloomberg LP
280 PARK AVENUE –2015
1,254,000 SF
• PJT Partners
• Franklin Templeton Investments
• Cohen & Steers
• Trian Fund Management
• Viking Global Investors LP
• Blue Mountain Capital
90 PARK AVENUE –2016
961,000 SF
• Pricewaterhouse Coopers LLP
• Foley & Lardner LLP
• FactSet
• Alston & Bird
640 FIFTH AVENUE –2005
314,000 SF
• Victoria’s Secret
• Dyson
• Fidelity Investments
• Dune Capital
• Owl Creek Asset Management
• Hitchwood Capital Management
770 BROADWAY – 1999
1,159,000 SF
• Facebook
• Oath Inc.
• J.Crew
V O R N A D O R E M A I N C O –
L E A D E R I N R E P O S I T I O N I N G A N D M O D E R N I Z I N G P R O P E R T I E S
1 1 A S S E T S T O T A L I N G 1 0 . 3 M M S F
330 WEST 34TH STREET –2015
709,000 SF
• Foot Locker
• Outcome Health
• Deutsch
• New York & Company
• Structure Tone
7 WEST 34TH STREET –2014
479,000 SF
• Amazon
24
• Advent Capital Management
• Gramercy Property Trust
• Nuveen
• Hutchin Hill
• HomeAdvisor
15
HUDSON YARDS MANHATTAN WEST PENN PLAZA
VORNADO
PENN PLAZA - AN UNPRECEDENTED OPPORTUNITY
16
253
305 Fifth
EMPIRE STATE
BUILDING
MACY’S
MOYNIHAN OFFICE BUILDING
AND TRAIN HALL
MADISON
SQUARE
GARDEN
11
PENN
PLAZA
100 WEST 33RD ST
MANHATTAN MALL
1 PENN PLAZA330 WEST34TH ST
7 WEST
34TH ST
15 PENN PLAZA
HOTEL PENN
2
PENN
PLAZA
W 37TH STREET
W 36TH STREET
W 35TH STREET
W 34TH STREET
PLAZA33 W 33RD STREET
W 32ND STREET
W 31ST STREET
W 30TH STREET
W 29TH STREET
W 28TH STREET
N
IN
T
H
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V
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FI
FT
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Tremendous Value Creation Opportunity
• Existing office leasable space of 6.7MM SF
with average in-place rents of $61 PSF1
• Hudson Yards to the west asking rents average
$110 PSF1, a 80% premium
• Transformation of the neighborhood will also
substantially enhance the value of Vornado’s
Penn Plaza retail holdings
VORNADO
PENN PLAZA - AN UNPRECEDENTED OPPORTUNITY
1. As of 9/30/17
Vornado Owned Properties
Penn Station
Vornado Air Rights
Additional Assemblage
Opportunity
17
VORNADO
PENN PLAZA - AN UNPRECEDENTED OPPORTUNITY
EMPIRE STATE
BUILDING
MACY’S
MOYNIHAN TRAIN HALL
THE FARLEY BUILDING
HUDSON
YARDS
MANHATTAN
WEST
HERALD
SQUARE
PENN
STATION
MADISON
SQUARE
GARDEN
Hig
h
Lin
e
11th
A
ve
10th
A
ve
9th
A
ve
8th
A
ve
W. 40th St
W. 34th St
W. 31st St
W. 28th St
High Line
High Lin
e
BRYANT
PARK
6th
A
ve
Madiso
n
Par
k
5th
A
ve
Broadwa
y
7th
A
ve
C
A
E
2
1
3
Q
N
R
5
4
6F
M
B
D
7
S
PENN PLAZA
M34M34
M34
M34 M34
M20
M5
M4
M4
M7 M7
M55
M55
M55M32
M32
M4M32
M34
M34
M34
NJ TRANSIT
AMTRAK
PATH PATH
LIRR
40,000
RIDERS PER DAY
178,000
RIDERS PER DAY
28,000
RIDERS PER DAY
168,000
RIDERS PER DAY
234,000
RIDERS PER DAY
125,000
RIDERS PER DAY
M20
225,000
RIDERS PER DAY
366,000
RIDERS PER DAY
18
PROPOSED
“PENN SOUTH”
CONCOURSE
NEW
MOYNIHAN
TRAIN HALL
(FARLEY BUILDING)
RAIL CONCOURSES
5
TRANSFORMED
LONG ISLAND
RAIL ROAD
CONCOURSE
RECENTLY OPENED
WEST END CONCOURSE
NEW ENTRANCES
MODERNIZED SUBWAY
STATIONS
REDEVELOPED
AMTRAK CONCOURSE
NEW ENTRANCES MODERNIZED SUBWAY
STATIONS
VORNADO
PENN PLAZA - AN UNPRECEDENTED OPPORTUNITY
8th
Av
enu
e
7th
Av
enu
e
33rd Street
31st Street
19
VORNADO - MOYNIHAN OFFICE BUILDING DEVELOPMENT
FURTHER TRANSFORMING THE PENN PLAZA NEIGHBORHOOD
• A 50/50 joint venture between Vornado and the Related Companies recently closed and commenced on the conversion of the Farley Post Office in Penn
Plaza into the new Moynihan Office Building and Train Hall
• Total budget of $515 million at share
• The building is subject to a ground lease which expires in 2116
• The joint venture will develop 730,000 SF of unique creative office space and 120,000 SF of train hall retail
• Expected delivery 2020
Rendering of Moynihan Train Hall Stair connecting Moynihan Office Building to Moynihan Train Hall Moynihan Train Hall and Retail facing 9
TH Avenue
20
V O R N A D O R E M A I N C O –
G R O W T H F R O M N E W P R O J E C T S I N C H E L S E A / M E A T P A C K I N G
85 TENTH
AVENUE
Size: 173,000 RSF
Completion: 1Q 2018
Size: 170,000 RSF
Completion: 4Q 2017
Size:627,000 RSF
260 ELEVENTH
AVENUE
Size: 300,000 RSF
Est. Completion: 2021
Acquired: 4Q2016
VORNADO
GROWTH FROM NEW PROJECTS IN CHELSEA / MEATPACKING
21
VORNADO
theMART
1. As of 9/30/2017; square footage (“SF”)
2. Adds back free rent
3. See page 32 for GAAP Reconciliation
theMART building (Chicago) – best example of contemporary office space outside of Silicon Valley. Transformed from a showroom building to the premier creative and
tech hub in the Midwest, resulting in significant earnings growth and value creation with significant upside | 3,670,000 SF – 98.7% Occupancy1
Major Tenants:
• Motorola Mobility
(guaranteed by Google)
• ConAgra Foods Inc.
• 1871
• Kellogg’s
• Matter
• Yelp Inc.
• Paypal, Inc.
• Beam Suntory
• Caterpillar
• Allstate
• Bosch
• Condé Nast
• Between 2011 and 3Q17, converted over 900,000 SF in the building from showroom/
trade show space to creative office/retail space
• 2.8 million SF of total space leased since 2012
• 3Q17 TTM Pro Forma NOI (non-GAAP)2,3 of $102.3 million for theMART building versus
2011 NOI (non-GAAP)2,3 of $54.3 million
• In place escalated rents average $41.41 PSF as of 9/30/2017
22
555 California Street – the franchise office building in San Francisco and arguably the most iconic building on the west coast – further NOI growth expected from
redeveloped concourse and 315/345 Montgomery | 1,804,000 SF – 94.2% Occupancy1
Major Tenants:
• Bank of America
• Dodge & Cox
• Fenwick & West LLP
• Sidley Austin
• Microsoft
• Jones Day
• Goldman Sachs & Co.
• Kirkland & Ellis LLP
• Morgan Stanley
• UBS
• Wells Fargo
• Supercell
• KKR
• Tencent
• AllianceBernstein
• McKinsey & Company Inc.
• Norton Rose Fulbright
VORNADO
555 CALIFORNIA STREET
1. As of 9/30/2017; square footage (“SF”) shown at 100% share
2. Adds back free rent
3. See page 32 for GAAP Reconciliation
• 1.3 million SF of office space leased since 2012
• 3Q 2017 TTM Pro Forma NOI (non-GAAP)2,3 of $48.9 million
(which does not include NOI from approximately 162,000 SF of
vacancy and space under redevelopment) versus 2012 NOI (non-
GAAP)2,3 of $38.8 million
• In place escalated rents average $70.89 PSF as of 9/30/2017
23
A LEADER IN SUSTAINABILITY
NATIONALLY RECOGNIZED, INDUSTRY-LEADING SUSTAINABILITY PROGRAM
• Energy Star Partner of the Year in 2013, 2014, 2015, and 2017, Sustained Excellence recipient
• 20 million square feet of owned and managed LEED certified buildings
• Largest landlord of LEED certified buildings in New York City with 13 Million SF. All new commercial developments will be, at minimum, LEED Gold certified
• NAREIT Leader in the Light award 2017, 8th year in a row
• Global Real Estate Sustainability Benchmark (GRESB) “Green Star” since 2013; sector leader for North America's diversified category 2017
• 20% reduction in same-store greenhouse gas emission since 2009
SUSTAINABILITY SM
24
A P P E N D I X
WHY NEW YORK?
• Global city favored by businesses, residents, tourists and investors
• US gateway city with the strongest long-term population growth1 – vibrant 24/7 environment
benefits from trend towards urbanization
• Diversified employment base continues path of outsized growth
- In 1990, 1 in 2 New York jobs were in the financial services industry – now that ratio is 1 in 42
• Over 60 million tourists in 2016 and the most visited international tourist destination in the US
(12.7 million international visitors)3
• Most attractive and liquid real estate market in the US - drives competitive pricing from a deep
pool of global investors4
• Long-term history of superior asset appreciation - Class A properties historically double in value
every 10 years5
1. Source: Cushman & Wakefield, U.S. Census Bureau
2. Source: JLL Manhattan Market Overview (September, 2016)
3. Source: MasterCard 2015 Global Destination Cities Index, New York & Company (reflects 2016)
4. Source: Real Capital Analytics
5. Source: Cushman & Wakefield
26
WHY NEW YORK? STRONG EMPLOYMENT GROWTH
+33.8
+30.3 +32.9 +30.6
+44.6 +42.1
+30.4
+17.8
0
10
20
30
40
50
2010 2011 2012 2013 2014 2015 2016 2017 YTD
Thousands
of
Persons
SOURCE: U.S. BUREAU OF LABOR STATISTICS
* Through 3Q 2017
27
27.1 29.8 29.4 29.5 30.2
33 33.8 35.8
36.5 37.1 37.6 37.0 39.0
40.3 41.8 42.8
44.5 46.2
48.1 49.3
6
6.6 6.8 5.7 5.1
4.8 6.1
6.8 7.3
8.9 9.5 8.6
9.8
10.6
10.9 11.5
12.0
12.3
12.7 12.4
33.1
36.4 36.2 35.2 35.3
37.8
39.9
42.6 43.8
46.0 47.1 45.6
48.8
50.9
52.7
54.3
56.5
58.5
60.7 61.7
0
10
20
30
40
50
60
70
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E
International
Domestic
Source: Cushman & Wakefield, NYC +Co
WHY NEW YORK? CONSISTENT TOURISM GROWTH
Overall CA
GR: 3.3%
International
Domestic
Millions of T
ouris
ts
28
NON-GAAP RECONCILIATION
M. Roszkowski x0369
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
169pihsrentraP gnitarepO eht ot elbatubirtta emocni teN $ 804$ 913$ 501$ 663$ 718$ 703$ 131$ 415$ 611$
Interest and debt expense 507 470 654 759 761 798 828 827 822 853
Depreciation and amortization 694 665 686 733 735 778 729 729 711 677
Income tax expense (benefit) 12 (85) 24 26 7 5 (23) 10 (142) 4
EBITDA (non-GAAP) 2,174 1,854 2,277 2,019 2,166 2,299 2,237 1,697 1,806 2,145
Adjustments, net (1) (653) (354) (859) (661) (954) (1,083) (1,077) (602) (665) (1,015)
Washington, DC segment (286) (286) (286) (290) (295) (329) (329) (300) (278) (260)
-)1()9()52()05()07()43(12 dnuF etatsE laeR morf )ssol( emocnI - -
078368597038878298810,1260,1081,1652,1)PAAG-non( detsujda sa ,ADTIBE
Hotel Pennsylvania (10) (23) (31) (30) (28) (30) (24) (15) (42) (38)
)971()011()66()73()14()52()42()6()7()6()2( ten ,emocni tnemtsevni rehto dna tseretnI
EBITDA of 85 Tenth Avenue (39) (26) (17) (22) (23) (22) (21) (24) (5) (4)
EBITDA, as adjusted excl. Hotel Penn, investment income, and 85 Tenth Avenue (non-GAAP) 1,201 1,124 1,008 942 816 785 748 690 706 649
General and administrative expense 179 175 169 177 167 210 214 231 194 189
)44()82()83()82()82()22()42()32()03()04(dnedivid fo ssecxe ni IEP dna EU ,XLA fo sgninrae ytiuqE
Straight-line, FAS 141 and other (164) (201) (135) (108) (98) (83) (101) (130) (108) (107)
NOI excl. Hotel Penn, investment income, and 85 Tenth Avenue (non-GAAP) 1,176$ 1,068$ 1,019$ 987$ 863$ 884$ 833$ 753$ 764$ 687$
1. Includes income from sold properties, gains on sale of real estate, impairment losses and other adjustments
2. Includes interest on mezzanine debt, dividends on marketable securities, income on corporate investments and other adjustments
(Amounts in millions)
Reconciliation of Net income attributes to the Operating Partnership to EBITDA, EBITDA, as adjusted and NOI for the twelve months
ended December 31, 2007 through 2016
29
M. Roszkowski x0369
TTM
September 30,
2017
209$pihsrentraP gnitarepO eht ot elbatubirtta emocni teN
974esnepxe tbed dna tseretnI
946noitazitroma dna noitaicerpeD
Income tax expense 3
EBITDA (non-GAAP) 2,033
Adjustments, net(1) (755)
EBITDA, as adjusted (non-GAAP) 1,278
)52(eciffO eunevA htfiF 666 :sseL
EBITDA, as adjusted excluding 666 Fifth Avenue Office (non-GAAP) $ 1,253
NON-GAAP RECONCILIATION (CONT’D)
1. Includes income from our former Washington, DC segment, sold properties and our Real Estate Fund, gains on sale of real estate, impairment losses and other adjustments
(Amounts in millions)
Reconciliation of Net income attributable to the Operating Partnership to EBITDA, EBITDA as adjusted and EBITDA, as adjusted excluding 666 Fifth Avenue Office
for the twelve months ended September 30, 2017
Reconciliation of Vornado’s GAAP Incremental Revenue to Cash Incremental Revenue attributable to leases signed, but not yet commenced, for the twelve
months ended December 31, 2017 and 2018
hsaCPAAG
Incremental SL Rent Incremental
Revenue Adjustment Revenue
2017 40$ 81$ 121$
2018 19 26 45
Total 59$ 107$ 166$
30
NON-GAAP RECONCILIATION (CONT’D)
1. Adjustments at share for: straight-line rent, non-cash (FAS 141) income and elimination of non-cash EBITDA from 666 Fifth Avenue - Office
(Amounts in millions)
Reconciliation of trailing twelve months net income to EBITDA, EBITDA, as adjusted, Cash NOI, as adjusted, and Pro Forma Cash NOI for the twelve months
ended September 30, 2017
M. Roszkowski x0369
Trailing Twelve Months Ended September 30, 2017
New York 555 California
Total Office Retail Residential theMART Street
304$emocni teN $ 171 $ 194 $ 3 $ 32 $ 3
143esnepxe tbed dna tseretnI 216 74 12 19 20
874noitazitroma dna noitaicerpeD 308 95 10 41 24
3esnepxe xat emocnI 2 - - 1 -
522,1)PAAG-non( ADTIBE 697 363 25 93 47
- ADTIBE tcapmi taht smeti niatreC - - - - -
522,1d (non-GAAP)etsujda sa ,ADTIBE 697 363 25 93 47
Non-cash adjustments & other(1) (166) (106) (49) (3) (4) (4)
54A&G lanoisiviD :kcab-ddA 27 11 - 7 -
346922523816401,1d (non-GAAP)etsujda sa ,ION hsaC
Incremental NOI from signed leases 84 57 13 - 14 -
Pro Forma Cash NOI (non-GAAP) $ 1,188 $ 675 $ 338 $ 22 $ 110 $ 43
$1,013
31
NON-GAAP RECONCILIATION (CONT’D)
(Amounts in millions)
For the Trailing Twelve
Months Ended
September 30, 2017(1)
For the year ended
December 31, 2012(1)
1.3emocni teN )6.4( $ $
5.91esnepxe tbed dna tseretnI 0.22
8.32noitazitroma dna noitaicerpeD 5.82
2.0esnepxe xat emocnI 3.0
6.64ADTIBE 2.64
-ADTIBE tcapmi taht smeti niatreC )6.5(
6.64detsujda sa ,ADTIBE 6.04
6.1rehto dna stnemtsujda hsac-noN )8.1(
7.0sesael dengis morf ION latnemercnI -
9.84ION amrof orP 8.83 $ $
For the Trailing Twelve
Months Ended
September 30, 2017
For the Year Ended
December 31, 2011
5.23emocni teN )5.4( $ $
8.81esnepxe tbed dna tseretnI 2.13
2.83noitazitroma dna noitaicerpeD 6.12
-esnepxe xat emocnI -
5.98ADTIBE 3.84
-ADTIBE tcapmi taht smeti niatreC -
5.98detsujda sa ,ADTIBE 3.84
)7.0(rehto dna stnemtsujda hsac-noN 0.6
5.31sesael dengis morf ION latnemercnI -
3.201ION amrof orP 3.45 $ $
Reconciliation of theMART Building Net income to EBITDA, EBITDA, as adjusted, and Pro forma NOI for the year ended December 31,
2011 and the trailing twelve months ended September 30, 2017.
Reconciliation of 555 California Net income to EBITDA, EBITDA, as adjusted, and Pro forma NOI for the year ended December 31,
2012 and the trailing twelve months ended September 30, 2017.
1. Excluding noncontrolling interests share
For the Trailing Twelve
Months Ended
September 30, 2017(1)
For the year ended
December 31, 2012(1)
1.3emocni teN )6.4( $ $
5.91esnepxe tbed dna tseretnI 0.22
8.32noitazitroma dna noitaicerpeD 5.82
2.0esnepxe xat emocnI 3.0
6.64ADTIBE 2.64
-ADTIBE tcapmi taht smeti niatreC )6.5(
6.64detsujda sa ,ADTIBE 6.04
6.1rehto dna stnemtsujda hsac-noN )8.1(
7.0sesael dengis morf ION latnemercnI -
9.84ION amrof orP 8.83 $ $
For the Trailing Twelve
Months Ended
September 30, 2017
For the Year Ended
December 31, 2011
5.23emocni teN )5.4( $ $
8.81esnepxe tbed dna tseretnI 2.13
2.83noitazitroma dna noitaicerpeD 6.12
-esnepxe xat emocnI -
5.98ADTIBE 3.84
-ADTIBE tcapmi taht smeti niatreC -
5.98detsujda sa ,ADTIBE 3.84
)7.0(rehto dna stnemtsujda hsac-noN 0.6
5.31sesael dengis morf ION latnemercnI -
3.201ION amrof orP 3.45 $ $
Reconciliation of theMART Building Net income to EBITDA, EBITDA, as adjusted, and Pro forma NOI for the year ended December 31,
2011 and the trailing twelve months ended September 30, 2017.
Reconciliation of 555 California Net income to EBITDA, EBITDA, as adjusted, and Pro forma NOI for the year ended December 31,
2012 and the trailing twelve months ended September 30, 2017.
32
N O V E M B E R 2 0 1 7