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):
February 11, 2019
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)
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
1
Item 2.02. Results of Operations and Financial Condition.
On February 11, 2019, Vornado Realty Trust (the “Company”), the general partner of Vornado Realty L.P., issued a press release announcing its financial results for the fourth quarter of 2018. That press release referred to certain supplemental financial information that is available on the Company’s website. That press release and the supplemental financial information are attached to this Current Report on Form 8-K as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
Exhibits 99.1 and 99.2 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 the Company 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 exhibits are 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: February 12, 2019
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: February 12, 2019
3
EXHIBIT 99.1
Vornado Announces Fourth Quarter 2018 Financial Results
February 11, 2019 04:30 PM Eastern Standard Time
NEW YORK.......VORNADO REALTY TRUST (NYSE: VNO) reported today:
Quarter Ended December 31, 2018 Financial Results
NET INCOME attributable to common shareholders for the quarter ended December 31, 2018 was $100.5 million, or $0.53 per diluted share, compared to $27.3 million, or $0.14 per diluted share, for the prior year's quarter. Adjusting net income attributable to common shareholders for the items that impact the comparability of period-to-period net income listed in the table on page 2, net income attributable to common shareholders, as adjusted (non-GAAP) for the quarters ended December 31, 2018 and 2017 was $51.0 million and $65.8 million, or $0.27 and $0.34 per diluted share, respectively.
FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended December 31, 2018 was $210.1 million, or $1.10 per diluted share, compared to $153.2 million, or $0.80 per diluted share, for the prior year's quarter. Adjusting FFO attributable to common shareholders plus assumed conversions for the items that impact the comparability of period-to-period FFO listed in the table on page 3, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarters ended December 31, 2018 and 2017 was $171.4 million and $187.1 million, or $0.90 and $0.98 per diluted share, respectively.
Year Ended December 31, 2018 Financial Results
NET INCOME attributable to common shareholders for the year ended December 31, 2018 was $384.8 million, or $2.01 per diluted share, compared to $162.0 million, or $0.85 per diluted share, for the year ended December 31, 2017. Adjusting net income attributable to common shareholders for the items that impact the comparability of period-to-period net income listed in the table on page 2, net income attributable to common shareholders, as adjusted (non-GAAP) for the year ended December 31, 2018 and 2017 was $243.9 million and $252.9 million, or $1.27 and $1.32 per diluted share, respectively.
FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the year ended December 31, 2018 was $729.7 million, or $3.82 per diluted share, compared to $717.8 million, or $3.75 per diluted share, for the year ended December 31, 2017. Adjusting FFO attributable to common shareholders plus assumed conversions for the items that impact the comparability of period-to-period FFO listed in the table on page 3, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the years ended December 31, 2018 and 2017 was $718.8 million and $713.0 million, or $3.76 and $3.73 per diluted share, respectively.
1
The following table reconciles our net income attributable to common shareholders to net income attributable to common shareholders, as adjusted (non-GAAP):
(Amounts in thousands, except per share amounts) | For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income attributable to common shareholders | $ | 100,494 | $ | 27,319 | $ | 384,832 | $ | 162,017 | |||||||
Per diluted share | $ | 0.53 | $ | 0.14 | $ | 2.01 | $ | 0.85 | |||||||
Certain (income) expense items that impact net income attributable to common shareholders: | |||||||||||||||
After-tax net gain on sale of 220 Central Park South condominium units | $ | (67,336 | ) | $ | — | $ | (67,336 | ) | $ | — | |||||
After-tax purchase price fair value adjustment related to the increase in ownership of the Farley joint venture | (27,289 | ) | — | (27,289 | ) | — | |||||||||
Our share of loss (income) from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes) | 24,366 | (529 | ) | 23,749 | 10,804 | ||||||||||
Real estate impairment losses (including our share of partially owned entities) | 12,000 | 145 | 12,000 | 7,692 | |||||||||||
Decrease in fair value of marketable securities resulting from a new GAAP accounting standard effective January 1, 2018 (including our share of partially owned entities) | 3,733 | — | 30,335 | — | |||||||||||
(Income) loss from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off and 666 Fifth Avenue Office Condominium operations through August 3, 2018 sale) | (242 | ) | 1,664 | 5,727 | 43,615 | ||||||||||
Tax expense related to the reduction of our taxable REIT subsidiaries deferred tax assets | — | 34,800 | — | 34,800 | |||||||||||
Net gains on sale of real estate (including our share of partially owned entities) | — | (585 | ) | (28,104 | ) | (21,574 | ) | ||||||||
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium | — | — | (134,032 | ) | — | ||||||||||
Net gain on the repayment of our loan investment in 666 Fifth Avenue Office Condominium | — | — | (7,308 | ) | — | ||||||||||
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing | — | — | 23,503 | — | |||||||||||
Preferred share issuance costs | — | — | 14,486 | — | |||||||||||
Impairment loss on investment in Pennsylvania Real Estate Investment Trust ("PREIT") | — | — | — | 44,465 | |||||||||||
Net gain resulting from Urban Edge Properties ("UE") operating partnership unit issuances | — | — | — | (21,100 | ) | ||||||||||
Net gain on repayment of our Suffolk Downs JV debt investments | — | — | — | (11,373 | ) | ||||||||||
Other | 1,996 | 5,515 | 4,046 | 9,900 | |||||||||||
(52,772 | ) | 41,010 | (150,223 | ) | 97,229 | ||||||||||
Noncontrolling interests' share of above adjustments | 3,268 | (2,539 | ) | 9,285 | (6,382 | ) | |||||||||
Total of certain (income) expense items that impact net income attributable to common shareholders | $ | (49,504 | ) | $ | 38,471 | $ | (140,938 | ) | $ | 90,847 | |||||
Net income attributable to common shareholders, as adjusted (non-GAAP) | $ | 50,990 | $ | 65,790 | $ | 243,894 | $ | 252,864 | |||||||
Per diluted share (non-GAAP) | $ | 0.27 | $ | 0.34 | $ | 1.27 | $ | 1.32 | |||||||
2
The following table reconciles our 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 December 31, | For the Year Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(1) | $ | 210,100 | $ | 153,151 | $ | 729,740 | $ | 717,805 | |||||||
Per diluted share (non-GAAP) | $ | 1.10 | $ | 0.80 | $ | 3.82 | $ | 3.75 | |||||||
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: | |||||||||||||||
After-tax net gain on sale of 220 Central Park South condominium units | $ | (67,336 | ) | $ | — | $ | (67,336 | ) | $ | — | |||||
Our share of FFO from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes) | 24,366 | (529 | ) | 23,749 | 10,804 | ||||||||||
FFO from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off and 666 Fifth Avenue Office Condominium operations through August 3, 2018 sale) | (242 | ) | (4,006 | ) | (2,834 | ) | (73,240 | ) | |||||||
Tax expense related to the reduction of our taxable REIT subsidiaries deferred tax assets | — | 34,800 | — | 34,800 | |||||||||||
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing | — | — | 23,503 | — | |||||||||||
Preferred share issuance costs | — | — | 14,486 | — | |||||||||||
Net gain on the repayment of our loan investment in 666 Fifth Avenue Office Condominium | — | — | (7,308 | ) | — | ||||||||||
Impairment loss on investment in PREIT | — | — | — | 44,465 | |||||||||||
Net gain resulting from UE operating partnership unit issuances | — | — | — | (21,100 | ) | ||||||||||
Net gain on repayment of our Suffolk Downs JV debt investments | — | — | — | (11,373 | ) | ||||||||||
Other | 1,987 | 5,951 | 4,033 | 10,328 | |||||||||||
(41,225 | ) | 36,216 | (11,707 | ) | (5,316 | ) | |||||||||
Noncontrolling interests' share of above adjustments | 2,552 | (2,242 | ) | 727 | 534 | ||||||||||
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net | $ | (38,673 | ) | $ | 33,974 | $ | (10,980 | ) | $ | (4,782 | ) | ||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 171,427 | $ | 187,125 | $ | 718,760 | $ | 713,023 | |||||||
Per diluted share (non-GAAP) | $ | 0.90 | $ | 0.98 | $ | 3.76 | $ | 3.73 | |||||||
____________________________________________________________
(1) | See page 10 for a reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three months and year ended December 31, 2018 and 2017. |
3
Fourth Quarter Activity:
Acquisition:
Farley Office and Retail Building
On October 30, 2018, we increased our ownership interest in the joint venture that is developing the Farley Office and Retail Building to 95.0% from 50.1% by acquiring a 44.9% additional ownership interest from the Related Companies ("Related"). The purchase price was $41,500,000 plus the reimbursement of $33,026,000 of costs funded by Related through October 30, 2018. We consolidate the accounts of the joint venture as of October 30, 2018. In connection therewith, we recorded a net gain of $44,060,000, which is included in "purchase price fair value adjustment" on our consolidated statements of income. As a result of this gain, because we hold our investment in the joint venture through a taxable REIT subsidiary, $16,771,000 of income tax expense was recognized on our consolidated statements of income.
Financing:
On October 26, 2018, we extended our $750,000,000 unsecured term loan from October 2020 to February 2024. The interest rate on the extended unsecured term loan was lowered from LIBOR plus 1.15% to LIBOR plus 1.00% (3.52% as of December 31, 2018). In connection with the extension of our unsecured term loan, we entered into an interest rate swap from LIBOR plus 1.00% to a fixed rate of 3.87% through October 2023.
On November 16, 2018, we completed a $205,000,000 refinancing of 150 West 34th Street, a 78,000 square foot Manhattan retail property. The interest-only loan carries a rate of LIBOR plus 1.88% (4.26% as of December 31, 2018) and matures in 2024, as extended. Concurrently, we invested $105,000,000 in a participation in the refinanced mortgage loan, which earns interest at a rate of LIBOR plus 2.00% (4.38% as of December 31, 2018) and also matures in 2024, as extended, and is included in "other assets" on our consolidated balance sheets. The property was previously encumbered by a mortgage of the same amount at LIBOR plus 2.25%, which was scheduled to mature in 2020.
Other:
220 Central Park South ("220 CPS")
During the fourth quarter of 2018, we completed the sale of 11 condominium units at 220 CPS for net proceeds aggregating $214,776,000 and resulting in a financial statement net gain of $81,224,000 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, $13,888,000 of income tax expense was recognized in our consolidated statements of income and $213,000,000 of the $950,000,000 220 CPS loan was repaid.
4
Fourth Quarter Activity - continued:
Leasing:
• | 479,000 square feet of New York Office space (415,000 square feet at share) at an initial rent of $72.97 per square foot and a weighted average term of 7.7 years. The GAAP and cash mark-to-market rent on the 357,000 square feet of second generation space were positive 6.9% and 1.2%, respectively. Tenant improvements and leasing commissions were $10.22 per square foot per annum, or 14.0% of initial rent. |
• | 26,000 square feet of New York Retail space (17,000 square feet at share) at an initial rent of $211.34 per square foot and a weighted average term of 8.2 years. The GAAP and cash mark-to-market rent on the 7,000 square feet of second generation space were positive 3.0% and 1.1%, respectively. Tenant improvements and leasing commissions were $17.62 per square foot per annum, or 8.3% of initial rent. |
• | 46,000 square feet at theMART (all at share) at an initial rent of $60.73 per square foot and a weighted average term of 5.6 years. The GAAP and cash mark-to-market rent on the 46,000 square feet of second generation space were positive 8.7% and 3.2%, respectively. Tenant improvements and leasing commissions were $1.61 per square foot per annum, or 2.7% of initial rent. |
Same Store Net Operating Income ("NOI") At Share:
The percentage (decrease) increase in same store NOI at share and same store NOI at share - cash basis of our New York segment, theMART and 555 California Street are summarized below.
Total | New York(2) | theMART(3) | 555 California Street | |||||||||
Same store NOI at share % (decrease) increase(1): | ||||||||||||
Three months ended December 31, 2018 compared to December 31, 2017 | (6.3 | )% | (3.1 | )% | (56.6 | )% | 16.8 | % | ||||
Year ended December 31, 2018 compared to December 31, 2017 | 0.8 | % | 1.4 | % | (12.2 | )% | 14.9 | % | ||||
Three months ended December 31, 2018 compared to September 30, 2018 | (5.3 | )% | (1.1 | )% | (58.0 | )% | 3.8 | % | ||||
Same store NOI at share - cash basis % (decrease) increase: | ||||||||||||
Three months ended December 31, 2018 compared to December 31, 2017 | (1.7 | )% | 1.9 | % | (49.8 | )% | 15.8 | % | ||||
Year ended December 31, 2018 compared to December 31, 2017 | 3.9 | % | 4.3 | % | (6.5 | )% | 18.1 | % | ||||
Three months ended December 31, 2018 compared to September 30, 2018 | (4.2 | )% | — | % | (52.9 | )% | 5.7 | % | ||||
____________________
(1) | See pages 12 through 17 for same store NOI at share and same store NOI at share - cash basis reconciliations. | |||
(Decrease) Increase | ||||
(2) | Excluding Hotel Pennsylvania, same store NOI at share % (decrease) increase: | |||
Three months ended December 31, 2018 compared to December 31, 2017 | (3.0 | )% | ||
Year ended December 31, 2018 compared to December 31, 2017 | 1.5 | % | ||
Three months ended December 31, 2018 compared to September 30, 2018 | (1.7 | )% | ||
Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase (decrease): | ||||
Three months ended December 31, 2018 compared to December 31, 2017 | 2.1 | % | ||
Year ended December 31, 2018 compared to December 31, 2017 | 4.5 | % | ||
Three months ended December 31, 2018 compared to September 30, 2018 | (0.6 | )% | ||
(3) | Includes additional real estate tax expense accruals of $12,124,000 and $15,148,000 for the three months and year ended December 31, 2018, respectively, due to an increase in the tax-assessed value of theMART. | |||
5
NOI At Share:
The elements of our New York and Other NOI at share for the three months and year ended December 31, 2018 and 2017 and the three months ended September 30, 2018 are summarized below.
(Amounts in thousands) | For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||
December 31, | September 30, 2018 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
New York: | |||||||||||||||||||
Office | $ | 186,832 | $ | 189,481 | $ | 184,146 | $ | 743,001 | $ | 721,183 | |||||||||
Retail | 85,549 | 90,853 | 92,858 | 353,425 | 359,944 | ||||||||||||||
Residential | 5,834 | 5,920 | 5,202 | 23,515 | 24,370 | ||||||||||||||
Alexander's | 11,023 | 11,656 | 10,626 | 45,133 | 47,302 | ||||||||||||||
Hotel Pennsylvania | 5,961 | 6,318 | 4,496 | 11,916 | 13,266 | ||||||||||||||
Total New York | 295,199 | 304,228 | 297,328 | 1,176,990 | 1,166,065 | ||||||||||||||
Other: | |||||||||||||||||||
theMART(1) | 10,981 | 24,249 | 25,257 | 90,929 | 102,339 | ||||||||||||||
555 California Street | 14,005 | 12,003 | 13,515 | 54,691 | 47,588 | ||||||||||||||
Other investments | 9,346 | 23,377 | 13,524 | 60,010 | 85,391 | ||||||||||||||
Total Other | 34,332 | 59,629 | 52,296 | 205,630 | 235,318 | ||||||||||||||
NOI at share | $ | 329,531 | $ | 363,857 | $ | 349,624 | $ | 1,382,620 | $ | 1,401,383 | |||||||||
____________________
(1) | Includes additional real estate tax expense accruals of $12,124 and $15,148 for the three months and year ended December 31, 2018, respectively, due to an increase in the tax-assessed value of theMART. |
NOI At Share - Cash Basis:
The elements of our New York and Other NOI at share - cash basis for the three months and year ended December 31, 2018 and 2017 and the three months ended September 30, 2018 are summarized below.
(Amounts in thousands) | For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||
December 31, | September 30, 2018 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
New York: | |||||||||||||||||||
Office | $ | 185,624 | $ | 175,787 | $ | 181,575 | $ | 726,108 | $ | 678,839 | |||||||||
Retail | 80,515 | 83,320 | 84,976 | 324,219 | 324,318 | ||||||||||||||
Residential | 5,656 | 5,325 | 5,358 | 22,076 | 21,626 | ||||||||||||||
Alexander's | 11,129 | 12,004 | 11,774 | 47,040 | 48,683 | ||||||||||||||
Hotel Pennsylvania | 6,009 | 6,351 | 4,520 | 12,120 | 13,397 | ||||||||||||||
Total New York | 288,933 | 282,787 | 288,203 | 1,131,563 | 1,086,863 | ||||||||||||||
Other: | |||||||||||||||||||
theMART(1) | 12,758 | 24,396 | 26,234 | 94,070 | 99,242 | ||||||||||||||
555 California Street | 13,784 | 11,916 | 13,070 | 53,488 | 45,281 | ||||||||||||||
Other investments | 8,524 | 23,179 | 13,374 | 58,795 | 83,155 | ||||||||||||||
Total Other | 35,066 | 59,491 | 52,678 | 206,353 | 227,678 | ||||||||||||||
NOI at share - cash basis | $ | 323,999 | $ | 342,278 | $ | 340,881 | $ | 1,337,916 | $ | 1,314,541 | |||||||||
____________________
(1) | Includes additional real estate tax expense accruals of $12,124 and $15,148 for the three months and year ended December 31, 2018, respectively, due to an increase in the tax-assessed value of theMART. |
6
Development/Redevelopment as of December 31, 2018
(Amounts in thousands, except square feet) | (At Share) | Full Quarter Stabilized Operations | ||||||||||||||||||||
Property Rentable Sq. Ft. | Excluding Land Costs | Available for Occupancy | ||||||||||||||||||||
Current Projects | Segment | Incremental Budget | Amount Expended | % Complete | Start | |||||||||||||||||
220 Central Park South - residential condominiums | Other | 397,000 | $ | 1,400,000 | $ | 1,199,913 | (1) | 85.7% | Q3 2012 | N/A | N/A | |||||||||||
Farley Office and Retail Building - (95.0% interest) | New York | 850,000 | 760,000 | 137,267 | (2) | 18.1% | Q2 2017 | Q3 2020 | Q2 2022 | |||||||||||||
PENN1(3) | New York | 2,545,000 | 200,000 | (4) | 9,725 | 4.9% | Q4 2018 | N/A | N/A | |||||||||||||
512 West 22nd Street - office (55.0% interest) | New York | 173,000 | 72,000 | 52,505 | (5) | 72.9% | Q4 2015 | Q1 2019 | Q3 2020 | |||||||||||||
345 Montgomery Street (555 California Street) (70.0% interest) | Other | 78,000 | 32,000 | 15,284 | (6) | 47.8% | Q1 2018 | Q3 2019 | Q3 2020 | |||||||||||||
606 Broadway - office/retail (50.0% interest) | New York | 34,000 | 30,000 | 25,601 | (7) | 85.3% | Q2 2016 | Q4 2018 | Q2 2020 | |||||||||||||
825 Seventh Avenue - office (50.0% interest) | New York | 165,000 | 15,000 | 4,484 | 29.9% | Q2 2018 | Q1 2020 | Q1 2021 | ||||||||||||||
Total current projects | $ | 2,509,000 | $ | 1,444,779 | ||||||||||||||||||
Future Opportunities | Segment | Property Zoning Sq. Ft. | ||||||||||||||||||||
Penn District - multiple opportunities - office/residential/retail | New York | TBD | ||||||||||||||||||||
PENN2 - office/retail | New York | TBD | ||||||||||||||||||||
Hotel Pennsylvania | New York | 2,052,000 | ||||||||||||||||||||
260 Eleventh Avenue - office(8) | New York | 280,000 | ||||||||||||||||||||
Undeveloped Land | ||||||||||||||||||||||
29, 31, 33 West 57th Street (50.0% interest) | New York | 150,000 | ||||||||||||||||||||
484, 486 Eighth Avenue and 265, 267 West 34th Street | New York | 125,000 | ||||||||||||||||||||
527 West Kinzie, Chicago | Other | 330,000 | ||||||||||||||||||||
Rego Park III (32.4% interest) | Other | TBD | ||||||||||||||||||||
Total undeveloped land | 605,000 | |||||||||||||||||||||
_______________________
(1) | Excludes land and acquisition costs of $515,426. |
(2) | Excludes our share of the upfront contribution of $230,000 and net of anticipated historic tax credits. The building and land are subject to a lease which expires in 2116. |
(3) | The building is subject to a ground lease which expires in 2098. |
(4) | We expect the final budget will exceed $200,000 after anticipated scope changes. |
(5) | Excludes land and acquisition costs of $57,000. |
(6) | Excludes land and building costs of $31,000. |
(7) | Excludes land and acquisition costs of $22,703. |
(8) | The building is subject to a ground lease which expires in 2114. |
Conference Call and Audio Webcast
As previously announced, the Company will host a quarterly earnings conference call and an audio webcast on Tuesday, February 12, 2019 at 10:00 a.m. Eastern Time (ET). The conference call can be accessed by dialing 888-771-4371 (domestic) or 847-585-4405 (international) and indicating to the operator the passcode 48102474. A telephonic replay of the conference call will be available from 1:30 p.m. ET on February 12, 2019 through March 14, 2019. To access the replay, please dial 888-843-7419 and enter the passcode 48102474#. A live webcast of the conference call will be available on the Company’s website at www.vno.com and an online playback of the webcast will be available on the website following the conference call.
Supplemental Financial Information
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. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 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, 2018. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.
7
VORNADO REALTY TRUST
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except unit, share, and per share amounts) | As of | ||||||
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Real estate, at cost: | |||||||
Land | $ | 3,306,280 | $ | 3,143,648 | |||
Buildings and improvements | 10,110,992 | 9,898,605 | |||||
Development costs and construction in progress | 2,266,491 | 1,615,101 | |||||
Moynihan Train Hall development expenditures | 445,693 | — | |||||
Leasehold improvements and equipment | 108,427 | 98,941 | |||||
Total | 16,237,883 | 14,756,295 | |||||
Less accumulated depreciation and amortization | (3,180,175 | ) | (2,885,283 | ) | |||
Real estate, net | 13,057,708 | 11,871,012 | |||||
Cash and cash equivalents | 570,916 | 1,817,655 | |||||
Restricted cash | 145,989 | 97,157 | |||||
Marketable securities | 152,198 | 182,752 | |||||
Tenant and other receivables, net of allowance for doubtful accounts of $4,154 and $5,526 | 73,322 | 58,700 | |||||
Investments in partially owned entities | 858,113 | 1,056,829 | |||||
Real estate fund investments | 318,758 | 354,804 | |||||
220 Central Park South condominium units ready for sale | 99,627 | — | |||||
Receivable arising from the straight-lining of rents, net of allowance of $1,644 and $954 | 935,131 | 926,711 | |||||
Deferred leasing costs, net of accumulated amortization of $207,529 and $191,827 | 400,313 | 403,492 | |||||
Identified intangible assets, net of accumulated amortization of $172,114 and $150,837 | 136,781 | 159,260 | |||||
Other assets | 431,938 | 469,562 | |||||
$ | 17,180,794 | $ | 17,397,934 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||
Mortgages payable, net | $ | 8,167,798 | $ | 8,137,139 | |||
Senior unsecured notes, net | 844,002 | 843,614 | |||||
Unsecured term loan, net | 744,821 | 748,734 | |||||
Unsecured revolving credit facilities | 80,000 | — | |||||
Moynihan Train Hall obligation | 445,693 | — | |||||
Accounts payable and accrued expenses | 430,976 | 415,794 | |||||
Deferred revenue | 167,730 | 227,069 | |||||
Deferred compensation plan | 96,523 | 109,177 | |||||
Preferred shares redeemed on January 4 and 11, 2018 | — | 455,514 | |||||
Other liabilities | 311,806 | 468,255 | |||||
Total liabilities | 11,289,349 | 11,405,296 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests: | |||||||
Class A units - 12,544,477 and 12,528,899 units outstanding | 778,134 | 979,509 | |||||
Series D cumulative redeemable preferred units - 177,101 units outstanding | 5,428 | 5,428 | |||||
Total redeemable noncontrolling interests | 783,562 | 984,937 | |||||
Vornado's shareholders' equity: | |||||||
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,798,580 and 36,799,573 shares | 891,294 | 891,988 | |||||
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 190,535,499 and 189,983,858 shares | 7,600 | 7,577 | |||||
Additional capital | 7,725,857 | 7,492,658 | |||||
Earnings less than distributions | (4,167,184 | ) | (4,183,253 | ) | |||
Accumulated other comprehensive income | 7,664 | 128,682 | |||||
Total Vornado shareholders' equity | 4,465,231 | 4,337,652 | |||||
Noncontrolling interests in consolidated subsidiaries | 642,652 | 670,049 | |||||
Total equity | 5,107,883 | 5,007,701 | |||||
$ | 17,180,794 | $ | 17,397,934 | ||||
8
VORNADO REALTY TRUST
OPERATING RESULTS
(Amounts in thousands, except per share amounts) | For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | $ | 543,417 | $ | 536,226 | $ | 2,163,720 | $ | 2,084,126 | |||||||
Income from continuing operations | $ | 97,564 | $ | 52,278 | $ | 421,965 | $ | 277,356 | |||||||
Income (loss) from discontinued operations | 257 | 1,273 | 638 | (13,228 | ) | ||||||||||
Net income | 97,821 | 53,551 | 422,603 | 264,128 | |||||||||||
Less net loss (income) attributable to noncontrolling interests in: | |||||||||||||||
Consolidated subsidiaries | 21,886 | (7,366 | ) | 53,023 | (25,802 | ) | |||||||||
Operating Partnership | (6,680 | ) | (1,853 | ) | (25,672 | ) | (10,910 | ) | |||||||
Net income attributable to Vornado | 113,027 | 44,332 | 449,954 | 227,416 | |||||||||||
Preferred share dividends | (12,533 | ) | (17,013 | ) | (50,636 | ) | (65,399 | ) | |||||||
Preferred share issuance costs | — | — | (14,486 | ) | — | ||||||||||
NET INCOME attributable to common shareholders | $ | 100,494 | $ | 27,319 | $ | 384,832 | $ | 162,017 | |||||||
INCOME PER COMMON SHARE – BASIC: | |||||||||||||||
Income from continuing operations, net | $ | 0.53 | $ | 0.14 | $ | 2.02 | $ | 0.92 | |||||||
Loss from discontinued operations, net | — | — | — | (0.07 | ) | ||||||||||
Net income per common share | $ | 0.53 | $ | 0.14 | $ | 2.02 | $ | 0.85 | |||||||
Weighted average shares outstanding | 190,348 | 189,898 | 190,219 | 189,526 | |||||||||||
INCOME PER COMMON SHARE – DILUTED: | |||||||||||||||
Income from continuing operations, net | $ | 0.53 | $ | 0.14 | $ | 2.01 | $ | 0.91 | |||||||
Loss from discontinued operations, net | — | — | — | (0.06 | ) | ||||||||||
Net income per common share | $ | 0.53 | $ | 0.14 | $ | 2.01 | $ | 0.85 | |||||||
Weighted average shares outstanding | 191,199 | 191,020 | 191,290 | 191,258 | |||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 210,100 | $ | 153,151 | $ | 729,740 | $ | 717,805 | |||||||
Per diluted share (non-GAAP) | $ | 1.10 | $ | 0.80 | $ | 3.82 | $ | 3.75 | |||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 171,427 | $ | 187,125 | $ | 718,760 | $ | 713,023 | |||||||
Per diluted share (non-GAAP) | $ | 0.90 | $ | 0.98 | $ | 3.76 | $ | 3.73 | |||||||
Weighted average shares used in determining FFO per diluted share | 191,199 | 191,063 | 191,189 | 191,304 | |||||||||||
9
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 December 31, | For the Year Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income attributable to common shareholders | $ | 100,494 | $ | 27,319 | $ | 384,832 | $ | 162,017 | |||||||
Per diluted share | $ | 0.53 | $ | 0.14 | $ | 2.01 | $ | 0.85 | |||||||
FFO adjustments: | |||||||||||||||
Depreciation and amortization of real property | $ | 104,067 | $ | 106,017 | $ | 413,091 | $ | 467,966 | |||||||
Net gains on sale of real estate | — | — | (158,138 | ) | (3,797 | ) | |||||||||
Real estate impairment losses | 12,000 | — | 12,000 | — | |||||||||||
Decrease in fair value of marketable securities | 1,652 | — | 26,453 | — | |||||||||||
After-tax purchase price fair value adjustment on depreciable real estate | (27,289 | ) | — | (27,289 | ) | — | |||||||||
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO: | |||||||||||||||
Depreciation and amortization of real property | 24,309 | 28,247 | 101,591 | 137,000 | |||||||||||
Net gains on sale of real estate | — | (585 | ) | (3,998 | ) | (17,777 | ) | ||||||||
Real estate impairment losses | — | 145 | — | 7,692 | |||||||||||
Decrease in fair value of marketable securities | 2,081 | — | 3,882 | — | |||||||||||
116,820 | 133,824 | 367,592 | 591,084 | ||||||||||||
Noncontrolling interests' share of above adjustments | (7,229 | ) | (8,010 | ) | (22,746 | ) | (36,420 | ) | |||||||
FFO adjustments, net | $ | 109,591 | $ | 125,814 | $ | 344,846 | $ | 554,664 | |||||||
FFO attributable to common shareholders (non-GAAP) | $ | 210,085 | $ | 153,133 | $ | 729,678 | $ | 716,681 | |||||||
Convertible preferred share dividends | 15 | 18 | 62 | 77 | |||||||||||
Earnings allocated to Out-Performance Plan units | — | — | — | 1,047 | |||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 210,100 | $ | 153,151 | $ | 729,740 | $ | 717,805 | |||||||
Per diluted share (non-GAAP) | $ | 1.10 | $ | 0.80 | $ | 3.82 | $ | 3.75 | |||||||
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 depreciated real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified non-cash 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. A reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions is provided above. 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 FFO attributable to common shareholders plus assumed conversions to FFO attributable to common shareholders plus assumed conversions, as adjusted are provided on page 3 of this press release.
In accordance with the NAREIT December 2018 restated definition of FFO, we have elected to exclude the mark-to-market adjustments of marketable equity securities from the calculation of FFO. Our FFO for the nine months ended September 30, 2018 has been adjusted to exclude the $26,602,000, or $0.13 per share, decrease in fair value of marketable equity securities previously reported.
10
VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS - CONTINUED
Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the three months and year ended December 31, 2018 and 2017 and the three months ended September 30, 2018.
For the Three Months Ended | For the Year Ended December 31, | ||||||||||||||||||
(Amounts in thousands) | December 31, | September 30, 2018 | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Net income | $ | 97,821 | $ | 53,551 | $ | 219,162 | $ | 422,603 | $ | 264,128 | |||||||||
Deduct: | |||||||||||||||||||
Income from partially owned entities | (3,090 | ) | (9,622 | ) | (7,206 | ) | (9,149 | ) | (15,200 | ) | |||||||||
Loss (income) from real estate fund investments | 51,258 | (4,889 | ) | 190 | 89,231 | (3,240 | ) | ||||||||||||
Interest and other investment income, net | (7,656 | ) | (8,294 | ) | (2,893 | ) | (17,057 | ) | (30,861 | ) | |||||||||
Net gains on disposition of wholly owned and partially owned assets | (81,203 | ) | — | (141,269 | ) | (246,031 | ) | (501 | ) | ||||||||||
Purchase price fair value adjustment | (44,060 | ) | — | — | (44,060 | ) | — | ||||||||||||
(Income) loss from discontinued operations | (257 | ) | (1,273 | ) | (61 | ) | (638 | ) | 13,228 | ||||||||||
NOI attributable to noncontrolling interests in consolidated subsidiaries | (19,771 | ) | (16,533 | ) | (16,943 | ) | (71,186 | ) | (65,311 | ) | |||||||||
Add: | |||||||||||||||||||
Depreciation and amortization expense | 112,869 | 114,166 | 113,169 | 446,570 | 429,389 | ||||||||||||||
General and administrative expense | 32,934 | 34,916 | 31,977 | 141,871 | 150,782 | ||||||||||||||
Transaction related costs, impairment loss and other | 14,637 | 703 | 2,510 | 31,320 | 1,776 | ||||||||||||||
Our share of NOI from partially owned entities | 60,205 | 69,175 | 60,094 | 253,564 | 269,164 | ||||||||||||||
Interest and debt expense | 83,175 | 93,073 | 88,951 | 347,949 | 345,654 | ||||||||||||||
Income tax expense | 32,669 | 38,884 | 1,943 | 37,633 | 42,375 | ||||||||||||||
NOI at share | 329,531 | 363,857 | 349,624 | 1,382,620 | 1,401,383 | ||||||||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (5,532 | ) | (21,579 | ) | (8,743 | ) | (44,704 | ) | (86,842 | ) | |||||||||
NOI at share - cash basis | $ | 323,999 | $ | 342,278 | $ | 340,881 | $ | 1,337,916 | $ | 1,314,541 | |||||||||
NOI represents total revenues less operating expenses. We consider NOI 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, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered a substitute for net income. NOI may not be comparable to similarly titled measures employed by other companies.
11
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, theMART, 555 California Street and other investments for the three months ended December 31, 2018 compared to December 31, 2017.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended December 31, 2018 | $ | 329,531 | $ | 295,199 | $ | 10,981 | $ | 14,005 | $ | 9,346 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (337 | ) | (337 | ) | — | — | — | |||||||||||||
Dispositions | 19 | 19 | — | — | — | |||||||||||||||
Development properties | (12,623 | ) | (12,637 | ) | — | 14 | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (96 | ) | 368 | (464 | ) | — | — | |||||||||||||
Other non-operating income, net | (10,412 | ) | (1,066 | ) | — | — | (9,346 | ) | ||||||||||||
Same store NOI at share for the three months ended December 31, 2018 | $ | 306,082 | $ | 281,546 | $ | 10,517 | $ | 14,019 | $ | — | ||||||||||
NOI at share for the three months ended December 31, 2017 | $ | 363,857 | $ | 304,228 | $ | 24,249 | $ | 12,003 | $ | 23,377 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | 2 | 2 | — | — | — | |||||||||||||||
Dispositions | (23 | ) | (23 | ) | — | — | — | |||||||||||||
Development properties | (12,789 | ) | (12,789 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (984 | ) | (984 | ) | — | — | — | |||||||||||||
Other non-operating income, net | (23,377 | ) | — | — | — | (23,377 | ) | |||||||||||||
Same store NOI at share for the three months ended December 31, 2017 | $ | 326,686 | $ | 290,434 | $ | 24,249 | $ | 12,003 | $ | — | ||||||||||
(Decrease) increase in same store NOI at share for the three months ended December 31, 2018 compared to December 31, 2017 | $ | (20,604 | ) | $ | (8,888 | ) | $ | (13,732 | ) | $ | 2,016 | $ | — | |||||||
% (decrease) increase in same store NOI at share | (6.3 | )% | (3.1 | )% | (1) | (56.6 | )% | (2) | 16.8 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share decreased by 3.0%. |
(2) | The three months ended December 31, 2018 includes an additional $12,814 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
Same store NOI at share represents NOI at share from property operations which are owned by us and in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is NOI at share from operations before straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments which are owned by us and in service in both the current and prior year reporting periods. 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 as an alternative to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
12
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, theMART, 555 California Street and other investments for the three months ended December 31, 2018 compared to December 31, 2017.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended December 31, 2018 | $ | 323,999 | $ | 288,933 | $ | 12,758 | $ | 13,784 | $ | 8,524 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (336 | ) | (336 | ) | — | — | — | |||||||||||||
Dispositions | 19 | 19 | — | — | — | |||||||||||||||
Development properties | (14,628 | ) | (14,642 | ) | — | 14 | — | |||||||||||||
Lease termination income | (563 | ) | (43 | ) | (520 | ) | — | — | ||||||||||||
Other non-operating income, net | (9,590 | ) | (1,066 | ) | — | — | (8,524 | ) | ||||||||||||
Same store NOI at share - cash basis for the three months ended December 31, 2018 | $ | 298,901 | $ | 272,865 | $ | 12,238 | $ | 13,798 | $ | — | ||||||||||
NOI at share - cash basis for the three months ended December 31, 2017 | $ | 342,278 | $ | 282,787 | $ | 24,396 | $ | 11,916 | $ | 23,179 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | 2 | 2 | — | — | — | |||||||||||||||
Dispositions | 76 | 76 | — | — | — | |||||||||||||||
Development properties | (13,677 | ) | (13,677 | ) | — | — | — | |||||||||||||
Lease termination income | (1,393 | ) | (1,393 | ) | — | — | — | |||||||||||||
Other non-operating income, net | (23,180 | ) | (1 | ) | — | — | (23,179 | ) | ||||||||||||
Same store NOI at share - cash basis for the three months ended December 31, 2017 | $ | 304,106 | $ | 267,794 | $ | 24,396 | $ | 11,916 | $ | — | ||||||||||
(Decrease) increase in same store NOI at share - cash basis for the three months ended December 31, 2018 compared to December 31, 2017 | $ | (5,205 | ) | $ | 5,071 | $ | (12,158 | ) | $ | 1,882 | $ | — | ||||||||
% (decrease) increase in same store NOI at share - cash basis | (1.7 | )% | 1.9 | % | (1) | (49.8 | )% | (2) | 15.8 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.1%. |
(2) | The three months ended December 31, 2018 includes an additional $12,814 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
13
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, theMART, 555 California Street and other investments for the three months ended December 31, 2018 compared to September 30, 2018.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended December 31, 2018 | $ | 329,531 | $ | 295,199 | $ | 10,981 | $ | 14,005 | $ | 9,346 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Dispositions | 19 | 19 | — | — | — | |||||||||||||||
Development properties | (12,623 | ) | (12,637 | ) | — | 14 | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (96 | ) | 368 | (464 | ) | — | — | |||||||||||||
Other non-operating income, net | (10,412 | ) | (1,066 | ) | — | — | (9,346 | ) | ||||||||||||
Same store NOI at share for the three months ended December 31, 2018 | $ | 306,419 | $ | 281,883 | $ | 10,517 | $ | 14,019 | $ | — | ||||||||||
NOI at share for the three months ended September 30, 2018 | $ | 349,624 | $ | 297,328 | $ | 25,257 | $ | 13,515 | $ | 13,524 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Development properties | (13,488 | ) | (13,474 | ) | — | (14 | ) | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 1,581 | 1,800 | (219 | ) | — | — | ||||||||||||||
Other non-operating income, net | (14,103 | ) | (579 | ) | — | — | (13,524 | ) | ||||||||||||
Same store NOI at share for the three months ended September 30, 2018 | $ | 323,614 | $ | 285,075 | $ | 25,038 | $ | 13,501 | $ | — | ||||||||||
(Decrease) increase in same store NOI at share for the three months ended December 31, 2018 compared to September 30, 2018 | $ | (17,195 | ) | $ | (3,192 | ) | $ | (14,521 | ) | $ | 518 | $ | — | |||||||
% (decrease) increase in same store NOI at share | (5.3 | )% | (1.1 | )% | (1) | (58.0 | )% | (2) | 3.8 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share decreased by 1.7%. |
(2) | The three months ended December 31, 2018 includes an additional $12,124 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
14
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, theMART, 555 California Street and other investments for the three months ended December 31, 2018 compared to September 30, 2018.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended December 31, 2018 | $ | 323,999 | $ | 288,933 | $ | 12,758 | $ | 13,784 | $ | 8,524 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Dispositions | 19 | 19 | — | — | — | |||||||||||||||
Development properties | (14,628 | ) | (14,642 | ) | — | 14 | — | |||||||||||||
Lease termination income | (563 | ) | (43 | ) | (520 | ) | — | — | ||||||||||||
Other non-operating income, net | (9,590 | ) | (1,066 | ) | — | — | (8,524 | ) | ||||||||||||
Same store NOI at share - cash basis for the three months ended December 31, 2018 | $ | 299,237 | $ | 273,201 | $ | 12,238 | $ | 13,798 | $ | — | ||||||||||
NOI at share - cash basis for the three months ended September 30, 2018 | $ | 340,881 | $ | 288,203 | $ | 26,234 | $ | 13,070 | $ | 13,374 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Development properties | (14,342 | ) | (14,328 | ) | — | (14 | ) | — | ||||||||||||
Lease termination income | (318 | ) | (58 | ) | (260 | ) | — | — | ||||||||||||
Other non-operating income, net | (13,954 | ) | (580 | ) | — | — | (13,374 | ) | ||||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2018 | $ | 312,267 | $ | 273,237 | $ | 25,974 | $ | 13,056 | $ | — | ||||||||||
(Decrease) increase in same store NOI at share - cash basis for the three months ended December 31, 2018 compared to September 30, 2018 | $ | (13,030 | ) | $ | (36 | ) | $ | (13,736 | ) | $ | 742 | $ | — | |||||||
% (decrease) increase in same store NOI at share - cash basis | (4.2 | )% | — | % | (1) | (52.9 | )% | (2) | 5.7 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis decreased by 0.6%. |
(2) | The three months ended December 31, 2018 includes an additional $12,124 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
15
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, theMART, 555 California Street and other investments for the year ended December 31, 2018 compared to December 31, 2017.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the year ended December 31, 2018 | $ | 1,382,620 | $ | 1,176,990 | $ | 90,929 | $ | 54,691 | $ | 60,010 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (1,534 | ) | (1,385 | ) | (149 | ) | — | — | ||||||||||||
Dispositions | (351 | ) | (351 | ) | — | — | — | |||||||||||||
Development properties | (38,477 | ) | (38,477 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 2,301 | 3,025 | (724 | ) | — | — | ||||||||||||||
Other non-operating income, net | (62,732 | ) | (2,722 | ) | — | — | (60,010 | ) | ||||||||||||
Same store NOI at share for the year ended December 31, 2018 | $ | 1,281,827 | $ | 1,137,080 | $ | 90,056 | $ | 54,691 | $ | — | ||||||||||
NOI at share for the year ended December 31, 2017 | $ | 1,401,383 | $ | 1,166,065 | $ | 102,339 | $ | 47,588 | $ | 85,391 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | 36 | (164 | ) | 200 | — | — | ||||||||||||||
Dispositions | (1,532 | ) | (1,532 | ) | — | — | — | |||||||||||||
Development properties | (37,307 | ) | (37,307 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (2,976 | ) | (2,957 | ) | (19 | ) | — | — | ||||||||||||
Other non-operating income, net | (88,017 | ) | (2,626 | ) | — | — | (85,391 | ) | ||||||||||||
Same store NOI at share for the year ended December 31, 2017 | $ | 1,271,587 | $ | 1,121,479 | $ | 102,520 | $ | 47,588 | $ | — | ||||||||||
Increase (decrease) in same store NOI at share for the year ended December 31, 2018 compared to December 31, 2017 | $ | 10,240 | $ | 15,601 | $ | (12,464 | ) | $ | 7,103 | $ | — | |||||||||
% increase (decrease) in same store NOI at share | 0.8 | % | 1.4 | % | (1) | (12.2 | )% | (2) | 14.9 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 1.5%. |
(2) | The year ended December 31, 2018 includes an additional $15,148 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
16
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, theMART, 555 California Street and other investments for the year ended December 31, 2018 compared to December 31, 2017.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the year ended December 31, 2018 | $ | 1,337,916 | $ | 1,131,563 | $ | 94,070 | $ | 53,488 | $ | 58,795 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (1,235 | ) | (1,086 | ) | (149 | ) | — | — | ||||||||||||
Dispositions | (287 | ) | (287 | ) | — | — | — | |||||||||||||
Development properties | (42,264 | ) | (42,264 | ) | — | — | — | |||||||||||||
Lease termination income | (2,105 | ) | (1,163 | ) | (942 | ) | — | — | ||||||||||||
Other non-operating income, net | (61,515 | ) | (2,720 | ) | — | — | (58,795 | ) | ||||||||||||
Same store NOI at share - cash basis for the year ended December 31, 2018 | $ | 1,230,510 | $ | 1,084,043 | $ | 92,979 | $ | 53,488 | $ | — | ||||||||||
NOI at share - cash basis for the year ended December 31, 2017 | $ | 1,314,541 | $ | 1,086,863 | $ | 99,242 | $ | 45,281 | $ | 83,155 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | 137 | (63 | ) | 200 | — | — | ||||||||||||||
Dispositions | (1,078 | ) | (1,078 | ) | — | — | — | |||||||||||||
Development properties | (38,211 | ) | (38,211 | ) | — | — | — | |||||||||||||
Lease termination income | (4,958 | ) | (4,927 | ) | (31 | ) | — | — | ||||||||||||
Other non-operating income, net | (86,501 | ) | (3,346 | ) | — | — | (83,155 | ) | ||||||||||||
Same store NOI at share - cash basis for the year ended December 31, 2017 | $ | 1,183,930 | $ | 1,039,238 | $ | 99,411 | $ | 45,281 | $ | — | ||||||||||
Increase (decrease) in same store NOI at share - cash basis for the year ended December 31, 2018 compared to December 31, 2017 | $ | 46,580 | $ | 44,805 | $ | (6,432 | ) | $ | 8,207 | $ | — | |||||||||
% increase (decrease) in same store NOI at share - cash basis | 3.9 | % | 4.3 | % | (1) | (6.5 | )% | (2) | 18.1 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 4.5%. |
(2) | The year ended December 31, 2018 includes an additional $15,148 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
CONTACT:
JOSEPH MACNOW
(212) 894-7000
17
INDEX | |||
Page | |||
BUSINESS DEVELOPMENTS | - | ||
FINANCIAL INFORMATION | |||
Financial Highlights | |||
Net Income Attributable to Common Shareholders (Consolidated and by Segment) | - | ||
Net Operating Income at Share (by Segment and by Subsegment) | - | ||
Same Store NOI at Share and NOI at Share - Cash Basis | |||
NOI at Share By Region | |||
Consolidated Balance Sheets | |||
LEASING ACTIVITY AND LEASE EXPIRATIONS | |||
Leasing Activity | - | ||
Leasing Expirations | - | ||
COMPONENTS OF NET ASSET VALUE | - | ||
DEBT AND CAPITALIZATION | |||
Capital Structure | |||
Common Shares Data | |||
Debt Analysis | |||
Debt Maturities | |||
UNCONSOLIDATED JOINT VENTURES | - | ||
DEVELOPMENT ACTIVITY AND CAPITAL EXPENDITURES | |||
Development/Redevelopment Summary | |||
Capital Expenditures, Tenant Improvements and Leasing Commissions | - | ||
PROPERTY STATISTICS | |||
Square Footage | |||
Top 30 Tenants | |||
Occupancy and Residential Statistics | |||
Property Table | - | ||
EXECUTIVE OFFICERS AND RESEARCH COVERAGE | |||
APPENDIX: DEFINTIONS AND NON-GAAP RECONCILIATIONS | |||
Definitions | |||
Reconciliations | - | ||
Certain statements contained herein 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. 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 supplemental package. 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 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. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018. 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, which speak only as of the date of this supplemental package. 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 supplemental package. This supplemental package includes certain non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. These include Funds From Operations ("FFO"), Funds Available for Distribution ("FAD"), Net Operating Income ("NOI"), Net Asset Value ("NAV") and Earnings Before Depreciation and Amortization for Real Estate Companies ("EBIDTAre"). Quantitative reconciliations of the differences between the most directly comparable GAAP financial measures and the non-GAAP financial measures presented are provided within this Supplemental package. Definitions of these non-GAAP financial measures and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company's financial condition and results of operations, and, if applicable, the purposes for which management uses the measures, can be found in the Definitions section of this Supplemental package starting on page i.
- 2 -
BUSINESS DEVELOPMENTS | ||||
Acquisition Activity
537 West 26th Street
On February 9, 2018, we acquired 537 West 26th Street, a 14,000 square foot commercial property adjacent to our 260 Eleventh Avenue office property, and 55,000 square feet of additional zoning air rights for $44,000,000.
1535 Broadway
On July 30, 2012, we entered into a lease with Host Hotels & Resorts, Inc. (NYSE: HST) (“Host”), under which we redeveloped the retail and signage components of the Marriott Times Square Hotel. We accounted for this lease as a “capital lease” and recorded a $240,000,000 capital lease asset and liability. On September 21, 2018, we acquired the retail condominium from Host for $442,000,000 (inclusive of the $240,000,000 capital lease liability). The original lease transaction provided that we would become the 100% owner through a put/call arrangement, based on a pre-negotiated formula. This transaction satisfies the put/call arrangement. Our 100% fee interest includes 45,000 square feet of retail, the 1,611 seat Marquis Theater and the largest digital sign in New York with a 330 linear foot, 25,000 square foot display.
Farley Office and Retail Building
On October 30, 2018, we increased our ownership interest in the joint venture that is developing the Farley Office and Retail Building to 95.0% from 50.1% by acquiring a 44.9% additional ownership interest from the Related Companies ("Related"). The purchase price was $41,500,000 plus the reimbursement of $33,026,000 of costs funded by Related through October 30, 2018. We consolidate the accounts of the joint venture as of October 30, 2018. In connection therewith, we recorded a net gain of $44,060,000, which is included in "purchase price fair value adjustment" on our consolidated statements of income. As a result of this gain, because we hold our investment in the joint venture through a taxable REIT subsidiary, $16,771,000 of income tax expense was recognized on our consolidated statements of income.
- 3 -
BUSINESS DEVELOPMENTS | ||||
Disposition Activity
11 East 68th Street
On January 17, 2018, Vornado Capital Partners Real Estate Fund (the "Fund") completed the sale of the retail condominium at 11 East 68th Street, a property located on Madison Avenue and 68th Street, for $82,000,000. From the inception of this investment through its disposition, the Fund realized a $46,259,000 net gain.
27 Washington Square North
On June 21, 2018 we completed the $45,000,000 sale of 27 Washington Square North, which resulted in a net gain of $23,559,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.
666 Fifth Avenue Office Condominium
On August 3, 2018, we completed the sale of our 49.5% interests in the 666 Fifth Avenue Office Condominium. We received net proceeds of $120,000,000 and recognized a financial statement gain of $134,032,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. The gain for tax purposes was approximately $254,000,000. We continue to own all of the 666 Fifth Avenue Retail Condominium encompassing the Uniqlo, Tissot and Hollister stores with 125 linear feet of frontage on Fifth Avenue between 52nd and 53rd Street.
Concurrently with the sale of our interests, the existing mortgage loan on the property was repaid and we received net proceeds of $55,244,000 for the participation we held in the mortgage loan. We recognized a financial statement gain of $7,308,000, which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.
Financing Activity
On January 4 and 11, 2018, we redeemed all of the outstanding 6.625% Series G and Series I cumulative redeemable preferred shares/units at their redemption price of $25.00 per share/unit, or $470,000,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption, and expensed $14,486,000 of previously capitalized issuance costs.
On January 5, 2018, we completed a $100,000,000 refinancing of 33-00 Northern Boulevard (Center Building), a 471,000 square foot office building in Long Island City, New York. The seven-year loan is at LIBOR plus 1.80%, which was swapped to a fixed rate of 4.14%. We realized net proceeds of approximately $37,200,000 after repayment of the existing 4.43% $59,800,000 mortgage and closing costs.
On April 19, 2018, the joint venture between our Fund (25% owned) and our Crowne Plaza Joint Venture (57.1% owned) completed a $255,000,000 refinancing of the Crowne Plaza Times Square Hotel. The interest-only loan is at LIBOR plus 3.53% (6.00% at December 31, 2018) and matures in May 2020 with three one-year extension options. In connection therewith, the joint venture purchased an interest rate cap that caps LIBOR at a rate of 4.00%. The Crowne Plaza Times Square Hotel was previously encumbered by a $310,000,000 interest-only mortgage at LIBOR plus 2.80%, which was scheduled to mature in December 2018.
On June 11, 2018, the joint venture (50.1% owned) that owns Independence Plaza, a three-building 1,327 unit residential complex in the Tribeca submarket of Manhattan completed a $675,000,000 refinancing of Independence Plaza. The seven-year interest-only loan matures in July 2025 and has a fixed rate of 4.25%. Our share of net proceeds, after repayment of the existing 3.48% $550,000,000 mortgage and closing costs, was $55,618,000.
- 4 -
BUSINESS DEVELOPMENTS | ||||
Financing Activity - continued
On August 9, 2018, we completed a $120,000,000 refinancing of 4 Union Square South, a 206,000 square foot Manhattan retail property. The interest-only loan carries a rate of LIBOR plus 1.40% (3.75% as of December 31, 2018) and matures in 2025, as extended. The property was previously encumbered by a $113,000,000 mortgage at LIBOR plus 2.15%, which was scheduled to mature in 2019.
On October 26, 2018, we extended our $750,000,000 unsecured term loan from October 2020 to February 2024. The interest rate on the extended unsecured term loan was lowered from LIBOR plus 1.15% to LIBOR plus 1.00% (3.52% as of December 31, 2018). In connection with the extension of our unsecured term loan, we entered into an interest rate swap from LIBOR plus 1.00% to a fixed rate of 3.87% through October 2023.
On November 16, 2018, we completed a $205,000,000 refinancing of 150 West 34th Street, a 78,000 square foot Manhattan retail property. The interest-only loan carries a rate of LIBOR plus 1.88% (4.26% as of December 31, 2018) and matures in 2024, as extended. Concurrently, we invested $105,000,000 in a participation in the refinanced mortgage loan, which earns interest at a rate of LIBOR plus 2.00% (4.38% as of December 31, 2018) and also matures in 2024, as extended, and is included in "other assets" on our consolidated balance sheets. The property was previously encumbered by a mortgage of the same amount at LIBOR plus 2.25%, which was scheduled to mature in 2020.
Other Activity
220 Central Park South ("220 CPS")
During the fourth quarter of 2018, we completed the sale of 11 condominium units at 220 CPS for net proceeds aggregating $214,776,000 and resulting in a financial statement net gain of $81,224,000 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, $13,888,000 of income tax expense was recognized in our consolidated statements of income and $213,000,000 of the $950,000,000 220 CPS loan was repaid.
Fourth Quarter Leasing Activity
479,000 square feet of New York Office space (415,000 square feet at share) at an initial rent of $72.97 per square foot and a weighted average term of 7.7 years. The GAAP and cash mark-to-market rent on the 357,000 square feet of second generation space were positive 6.9% and 1.2%, respectively. Tenant improvements and leasing commissions were $10.22 per square foot per annum, or 14.0% of initial rent.
26,000 square feet of New York Retail space (17,000 square feet at share) at an initial rent of $211.34 per square foot and a weighted average term of 8.2 years. The GAAP and cash mark-to-market rent on the 7,000 square feet of second generation space were positive 3.0% and 1.1%, respectively. Tenant improvements and leasing commissions were $17.62 per square foot per annum, or 8.3% of initial rent.
46,000 square feet at theMART (all at share) at an initial rent of $60.73 per square foot and a weighted average term of 5.6 years. The GAAP and cash mark-to-market rent on the 46,000 square feet of second generation space were positive 8.7% and 3.2%, respectively. Tenant improvements and leasing commissions were $1.61 per square foot per annum, or 2.7% of initial rent.
- 5 -
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
(unaudited and in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||||
December 31, | September 30, 2018 | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Total revenues | $ | 543,417 | $ | 536,226 | $ | 542,048 | $ | 2,163,720 | $ | 2,084,126 | ||||||||||
Net income attributable to common shareholders | $ | 100,494 | $ | 27,319 | $ | 190,645 | $ | 384,832 | $ | 162,017 | ||||||||||
Per common share: | ||||||||||||||||||||
Basic | $ | 0.53 | $ | 0.14 | $ | 1.00 | $ | 2.02 | $ | 0.85 | ||||||||||
Diluted | $ | 0.53 | $ | 0.14 | $ | 1.00 | $ | 2.01 | $ | 0.85 | ||||||||||
Net income attributable to common shareholders, as adjusted (non-GAAP) | $ | 50,990 | $ | 65,790 | $ | 66,160 | $ | 243,894 | $ | 252,864 | ||||||||||
Per diluted share (non-GAAP) | $ | 0.27 | $ | 0.34 | $ | 0.35 | $ | 1.27 | $ | 1.32 | ||||||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 171,427 | $ | 187,125 | $ | 185,635 | $ | 718,760 | $ | 713,023 | ||||||||||
Per diluted share (non-GAAP) | $ | 0.90 | $ | 0.98 | $ | 0.97 | $ | 3.76 | $ | 3.73 | ||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 210,100 | $ | 153,151 | $ | 189,987 | $ | 729,740 | $ | 717,805 | ||||||||||
FFO - Operating Partnership Basis ("OP Basis") (non-GAAP) | $ | 223,583 | $ | 162,990 | $ | 202,168 | $ | 776,393 | $ | 762,989 | ||||||||||
Per diluted share (non-GAAP) | $ | 1.10 | $ | 0.80 | $ | 0.99 | $ | 3.82 | $ | 3.75 | ||||||||||
Dividends per common share | $ | 0.63 | $ | 0.60 | $ | 0.63 | $ | 2.52 | $ | 2.62 | (1) | |||||||||
FFO payout ratio (based on FFO attributable to common shareholders plus assumed conversions, as adjusted) | 70.0 | % | 61.2 | % | 64.9 | % | 67.0 | % | 70.2 | % | ||||||||||
FAD payout ratio | 100.0 | % | 89.6 | % | 80.8 | % | 90.3 | % | 88.8 | % | ||||||||||
Weighted average shares used in determining FFO attributable to common shareholders plus assumed conversions per diluted share (REIT basis) | 191,199 | 191,063 | 191,327 | 191,189 | 191,304 | |||||||||||||||
Convertible units: | ||||||||||||||||||||
Class A | 11,827 | 11,677 | 11,858 | 11,849 | 11,688 | |||||||||||||||
Equity awards - unit equivalents | 443 | 598 | 409 | 374 | 354 | |||||||||||||||
Weighted average shares used in determining FFO attributable to Class A unitholders plus assumed conversions per diluted share (OP Basis) | 203,469 | 203,338 | 203,594 | 203,412 | 203,346 | |||||||||||||||
______________
(1) | Includes dividends related to the operations of properties included in the July 17, 2017 spin-off of JBG SMITH Properties (NYSE: JBGS). |
Please refer to the Appendix for reconciliations of GAAP to non-GAAP measures.
- 6 -
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | ||||||||||||||||
(unaudited and in thousands) | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
December 31, | September 30, 2018 | |||||||||||||||
2018 | 2017 | Inc (Dec) | ||||||||||||||
Property rentals | $ | 433,521 | $ | 419,970 | $ | 13,551 | $ | 427,030 | ||||||||
Straight-lining of rents | (2,674 | ) | 8,040 | (10,714 | ) | 157 | ||||||||||
Amortization of acquired below-market leases, net | 7,093 | 11,345 | (4,252 | ) | 10,373 | |||||||||||
Total property rentals | 437,940 | 439,355 | (1,415 | ) | 437,560 | |||||||||||
Tenant expense reimbursements | 62,119 | 59,333 | 2,786 | 66,387 | ||||||||||||
Fee and other income: | ||||||||||||||||
BMS cleaning fees | 32,262 | 28,218 | 4,044 | 28,873 | ||||||||||||
Management and leasing fees | 3,119 | 2,705 | 414 | 4,734 | ||||||||||||
Lease termination fees | 639 | 2,224 | (1,585 | ) | 356 | |||||||||||
Other income | 7,338 | 4,391 | 2,947 | 4,138 | ||||||||||||
Total revenues | 543,417 | 536,226 | 7,191 | 542,048 | ||||||||||||
Operating expenses | 254,320 | 225,011 | 29,309 | 235,575 | ||||||||||||
Depreciation and amortization | 112,869 | 114,166 | (1,297 | ) | 113,169 | |||||||||||
General and administrative | 32,934 | 34,916 | (1,982 | ) | 31,977 | |||||||||||
(Benefit) expense from deferred compensation plan liability | (6,014 | ) | 1,699 | (7,713 | ) | 1,861 | ||||||||||
Transaction related costs, impairment loss and other | 14,637 | 703 | 13,934 | 2,510 | ||||||||||||
Total expenses | 408,746 | 376,495 | 32,251 | 385,092 | ||||||||||||
Operating income | 134,671 | 159,731 | (25,060 | ) | 156,956 | |||||||||||
Income from partially owned entities | 3,090 | 9,622 | (6,532 | ) | 7,206 | |||||||||||
(Loss) income from real estate fund investments | (51,258 | ) | 4,889 | (56,147 | ) | (190 | ) | |||||||||
Interest and other investment income, net | 7,656 | 8,294 | (638 | ) | 2,893 | |||||||||||
(Loss) income from deferred compensation plan assets | (6,014 | ) | 1,699 | (7,713 | ) | 1,861 | ||||||||||
Interest and debt expense | (83,175 | ) | (93,073 | ) | 9,898 | (88,951 | ) | |||||||||
Purchase price fair value adjustment | 44,060 | — | 44,060 | — | ||||||||||||
Net gains on disposition of wholly owned and partially owned assets | 81,203 | — | 81,203 | 141,269 | ||||||||||||
Income before income taxes | 130,233 | 91,162 | 39,071 | 221,044 | ||||||||||||
Income tax expense | (32,669 | ) | (38,884 | ) | 6,215 | (1,943 | ) | |||||||||
Income from continuing operations | 97,564 | 52,278 | 45,286 | 219,101 | ||||||||||||
Income from discontinued operations | 257 | 1,273 | (1,016 | ) | 61 | |||||||||||
Net income | 97,821 | 53,551 | 44,270 | 219,162 | ||||||||||||
Less net loss (income) attributable to noncontrolling interests in: | ||||||||||||||||
Consolidated subsidiaries | 21,886 | (7,366 | ) | 29,252 | (3,312 | ) | ||||||||||
Operating Partnership | (6,680 | ) | (1,853 | ) | (4,827 | ) | (12,671 | ) | ||||||||
Net income attributable to Vornado | 113,027 | 44,332 | 68,695 | 203,179 | ||||||||||||
Preferred share dividends | (12,533 | ) | (17,013 | ) | 4,480 | (12,534 | ) | |||||||||
Net income attributable to common shareholders | $ | 100,494 | $ | 27,319 | $ | 73,175 | $ | 190,645 | ||||||||
Capitalized expenditures: | ||||||||||||||||
Leasing payroll(1) | $ | 1,655 | $ | 1,749 | $ | (94 | ) | $ | 1,444 | |||||||
Development payroll | $ | 4,124 | $ | 1,710 | $ | 2,414 | $ | 2,771 | ||||||||
Interest and debt expense | $ | 23,448 | $ | 13,251 | $ | 10,197 | $ | 18,238 | ||||||||
_________________
(1) Beginning January 1, 2019, we no longer capitalize internal leasing costs in accordance with Accounting Standard Update 2016-02, Leases.
- 7 -
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | ||||||||||||
(unaudited and in thousands) | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2018 | 2017 | Inc (Dec) | ||||||||||
Property rentals | $ | 1,714,027 | $ | 1,629,753 | $ | 84,274 | ||||||
Straight-lining of rents | 7,605 | 39,096 | (31,491 | ) | ||||||||
Amortization of acquired below-market leases, net | 38,573 | 46,103 | (7,530 | ) | ||||||||
Total property rentals | 1,760,205 | 1,714,952 | 45,253 | |||||||||
Tenant expense reimbursements | 247,128 | 233,424 | 13,704 | |||||||||
Fee and other income: | ||||||||||||
BMS cleaning fees | 120,357 | 104,143 | 16,214 | |||||||||
Management and leasing fees | 13,324 | 10,087 | 3,237 | |||||||||
Lease termination fees | 2,144 | 8,171 | (6,027 | ) | ||||||||
Other income | 20,562 | 13,349 | 7,213 | |||||||||
Total revenues | 2,163,720 | 2,084,126 | 79,594 | |||||||||
Operating expenses | 963,478 | 886,596 | 76,882 | |||||||||
Depreciation and amortization | 446,570 | 429,389 | 17,181 | |||||||||
General and administrative | 141,871 | 150,782 | (8,911 | ) | ||||||||
(Benefit) expense from deferred compensation plan liability | (2,480 | ) | 6,932 | (9,412 | ) | |||||||
Transaction related costs, impairment loss and other | 31,320 | 1,776 | 29,544 | |||||||||
Total expenses | 1,580,759 | 1,475,475 | 105,284 | |||||||||
Operating income | 582,961 | 608,651 | (25,690 | ) | ||||||||
Income from partially owned entities | 9,149 | 15,200 | (6,051 | ) | ||||||||
(Loss) income from real estate fund investments | (89,231 | ) | 3,240 | (92,471 | ) | |||||||
Interest and other investment income, net | 17,057 | 30,861 | (13,804 | ) | ||||||||
(Loss) income from deferred compensation plan assets | (2,480 | ) | 6,932 | (9,412 | ) | |||||||
Interest and debt expense | (347,949 | ) | (345,654 | ) | (2,295 | ) | ||||||
Purchase price fair value adjustment | 44,060 | — | 44,060 | |||||||||
Net gains on disposition of wholly owned and partially owned assets | 246,031 | 501 | 245,530 | |||||||||
Income before income taxes | 459,598 | 319,731 | 139,867 | |||||||||
Income tax expense | (37,633 | ) | (42,375 | ) | 4,742 | |||||||
Income from continuing operations | 421,965 | 277,356 | 144,609 | |||||||||
Income (loss) from discontinued operations | 638 | (13,228 | ) | 13,866 | ||||||||
Net income | 422,603 | 264,128 | 158,475 | |||||||||
Less net loss (income) attributable to noncontrolling interests in: | ||||||||||||
Consolidated subsidiaries | 53,023 | (25,802 | ) | 78,825 | ||||||||
Operating Partnership | (25,672 | ) | (10,910 | ) | (14,762 | ) | ||||||
Net income attributable to Vornado | 449,954 | 227,416 | 222,538 | |||||||||
Preferred share dividends | (50,636 | ) | (65,399 | ) | 14,763 | |||||||
Preferred share issuance costs | (14,486 | ) | — | (14,486 | ) | |||||||
Net income attributable to common shareholders | $ | 384,832 | $ | 162,017 | $ | 222,815 | ||||||
Capitalized expenditures: | ||||||||||||
Leasing payroll(1) | $ | 5,538 | $ | 5,243 | $ | 295 | ||||||
Development payroll | $ | 12,120 | $ | 6,044 | $ | 6,076 | ||||||
Interest and debt expense | $ | 73,166 | $ | 48,230 | $ | 24,936 | ||||||
_________________
(1) Beginning January 1, 2019, we no longer capitalize internal leasing costs in accordance with Accounting Standard Update 2016-02, Leases.
- 8 -
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS BY SEGMENT |
(unaudited and in thousands) |
For the Three Months Ended December 31, 2018 | ||||||||||||
Total | New York | Other | ||||||||||
Property rentals | $ | 433,521 | $ | 364,886 | $ | 68,635 | ||||||
Straight-lining of rents | (2,674 | ) | (1,860 | ) | (814 | ) | ||||||
Amortization of acquired below-market leases, net | 7,093 | 7,016 | 77 | |||||||||
Total property rentals | 437,940 | 370,042 | 67,898 | |||||||||
Tenant expense reimbursements | 62,119 | 54,098 | 8,021 | |||||||||
Fee and other income: | ||||||||||||
BMS cleaning fees | 32,262 | 34,200 | (1,938 | ) | ||||||||
Management and leasing fees | 3,119 | 2,819 | 300 | |||||||||
Lease termination fees | 639 | 92 | 547 | |||||||||
Other income | 7,338 | 5,303 | 2,035 | |||||||||
Total revenues | 543,417 | 466,554 | 76,863 | |||||||||
Operating expenses | 254,320 | 206,696 | 47,624 | |||||||||
Depreciation and amortization | 112,869 | 91,602 | 21,267 | |||||||||
General and administrative | 32,934 | 9,817 | 23,117 | |||||||||
Benefit from deferred compensation plan liability | (6,014 | ) | — | (6,014 | ) | |||||||
Transaction related costs, impairment loss and other | 14,637 | 12,000 | 2,637 | |||||||||
Total expenses | 408,746 | 320,115 | 88,631 | |||||||||
Operating income (loss) | 134,671 | 146,439 | (11,768 | ) | ||||||||
Income from partially owned entities | 3,090 | 962 | 2,128 | |||||||||
Loss from real estate fund investments | (51,258 | ) | — | (51,258 | ) | |||||||
Interest and other investment income, net | 7,656 | 1,689 | 5,967 | |||||||||
Loss from deferred compensation plan assets | (6,014 | ) | — | (6,014 | ) | |||||||
Interest and debt expense | (83,175 | ) | (56,652 | ) | (26,523 | ) | ||||||
Purchase price fair value adjustment | 44,060 | 44,060 | — | |||||||||
Net gains (losses) on disposition of wholly owned and partially owned assets | 81,203 | (4 | ) | 81,207 | ||||||||
Income (loss) before income taxes | 130,233 | 136,494 | (6,261 | ) | ||||||||
Income tax expense | (32,669 | ) | (1,250 | ) | (31,419 | ) | ||||||
Income (loss) from continuing operations | 97,564 | 135,244 | (37,680 | ) | ||||||||
Income from discontinued operations | 257 | — | 257 | |||||||||
Net income (loss) | 97,821 | 135,244 | (37,423 | ) | ||||||||
Less net loss (income) attributable to noncontrolling interests in: | ||||||||||||
Consolidated subsidiaries | 21,886 | (3,680 | ) | 25,566 | ||||||||
Operating Partnership | (6,680 | ) | — | (6,680 | ) | |||||||
Net income (loss) attributable to Vornado | 113,027 | 131,564 | (18,537 | ) | ||||||||
Preferred share dividends | (12,533 | ) | — | (12,533 | ) | |||||||
Net income (loss) attributable to common shareholders for the three months ended December 31, 2018 | $ | 100,494 | $ | 131,564 | $ | (31,070 | ) | |||||
Net income (loss) attributable to common shareholders for the three months ended December 31, 2017 | $ | 27,319 | $ | 109,176 | $ | (81,857 | ) | |||||
- 9 -
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS BY SEGMENT |
(unaudited and in thousands) |
For the Year Ended December 31, 2018 | ||||||||||||
Total | New York | Other | ||||||||||
Property rentals | $ | 1,714,027 | $ | 1,421,587 | $ | 292,440 | ||||||
Straight-lining of rents | 7,605 | 6,394 | 1,211 | |||||||||
Amortization of acquired below-market leases, net | 38,573 | 37,600 | 973 | |||||||||
Total property rentals | 1,760,205 | 1,465,581 | 294,624 | |||||||||
Tenant expense reimbursements | 247,128 | 218,395 | 28,733 | |||||||||
Fee and other income: | ||||||||||||
BMS cleaning fees | 120,357 | 129,088 | (8,731 | ) | ||||||||
Management and leasing fees | 13,324 | 12,203 | 1,121 | |||||||||
Lease termination fees | 2,144 | 858 | 1,286 | |||||||||
Other income | 20,562 | 9,911 | 10,651 | |||||||||
Total revenues | 2,163,720 | 1,836,036 | 327,684 | |||||||||
Operating expenses | 963,478 | 806,464 | 157,014 | |||||||||
Depreciation and amortization | 446,570 | 359,319 | 87,251 | |||||||||
General and administrative | 141,871 | 40,292 | 101,579 | |||||||||
Benefit from deferred compensation plan liability | (2,480 | ) | — | (2,480 | ) | |||||||
Transaction related costs, impairment loss and other | 31,320 | 25,103 | 6,217 | |||||||||
Total expenses | 1,580,759 | 1,231,178 | 349,581 | |||||||||
Operating income (loss) | 582,961 | 604,858 | (21,897 | ) | ||||||||
Income from partially owned entities | 9,149 | 6,144 | 3,005 | |||||||||
Loss from real estate fund investments | (89,231 | ) | — | (89,231 | ) | |||||||
Interest and other investment income, net | 17,057 | 6,300 | 10,757 | |||||||||
Loss from deferred compensation plan assets | (2,480 | ) | — | (2,480 | ) | |||||||
Interest and debt expense | (347,949 | ) | (243,322 | ) | (104,627 | ) | ||||||
Purchase price fair value adjustment | 44,060 | 44,060 | — | |||||||||
Net gains on disposition of wholly owned and partially owned assets | 246,031 | 23,484 | 222,547 | |||||||||
Income before income taxes | 459,598 | 441,524 | 18,074 | |||||||||
Income tax expense | (37,633 | ) | (5,261 | ) | (32,372 | ) | ||||||
Income (loss) from continuing operations | 421,965 | 436,263 | (14,298 | ) | ||||||||
Income from discontinued operations | 638 | — | 638 | |||||||||
Net income (loss) | 422,603 | 436,263 | (13,660 | ) | ||||||||
Less net loss (income) attributable to noncontrolling interests in: | ||||||||||||
Consolidated subsidiaries | 53,023 | (4,319 | ) | 57,342 | ||||||||
Operating Partnership | (25,672 | ) | — | (25,672 | ) | |||||||
Net income attributable to Vornado | 449,954 | 431,944 | 18,010 | |||||||||
Preferred share dividends | (50,636 | ) | — | (50,636 | ) | |||||||
Preferred share issuance costs | (14,486 | ) | — | (14,486 | ) | |||||||
Net income (loss) attributable to common shareholders for the year ended December 31, 2018 | $ | 384,832 | $ | 431,944 | $ | (47,112 | ) | |||||
Net income (loss) attributable to common shareholders for the year ended December 31, 2017 | $ | 162,017 | $ | 417,840 | $ | (255,823 | ) | |||||
- 10 -
NET OPERATING INCOME AT SHARE BY SEGMENT | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
For the Three Months Ended December 31, 2018 | |||||||||||
Total | New York | Other | |||||||||
Total revenues | $ | 543,417 | $ | 466,554 | $ | 76,863 | |||||
Operating expenses | 254,320 | 206,696 | 47,624 | ||||||||
NOI - consolidated | 289,097 | 259,858 | 29,239 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (19,771 | ) | (13,837 | ) | (5,934 | ) | |||||
Add: Our share of NOI from partially owned entities | 60,205 | 49,178 | 11,027 | ||||||||
NOI at share | 329,531 | 295,199 | 34,332 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (5,532 | ) | (6,266 | ) | 734 | ||||||
NOI at share - cash basis | $ | 323,999 | $ | 288,933 | $ | 35,066 | |||||
For the Three Months Ended December 31, 2017 | |||||||||||
Total | New York | Other | |||||||||
Total revenues | $ | 536,226 | $ | 462,597 | $ | 73,629 | |||||
Operating expenses | 225,011 | 195,421 | 29,590 | ||||||||
NOI - consolidated | 311,215 | 267,176 | 44,039 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (16,533 | ) | (11,648 | ) | (4,885 | ) | |||||
Add: Our share of NOI from partially owned entities | 69,175 | 48,700 | 20,475 | ||||||||
NOI at share | 363,857 | 304,228 | 59,629 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (21,579 | ) | (21,441 | ) | (138 | ) | |||||
NOI at share - cash basis | $ | 342,278 | $ | 282,787 | $ | 59,491 | |||||
For the Three Months Ended September 30, 2018 | |||||||||||
Total | New York | Other | |||||||||
Total revenues | $ | 542,048 | $ | 462,446 | $ | 79,602 | |||||
Operating expenses | 235,575 | 200,949 | 34,626 | ||||||||
NOI - consolidated | 306,473 | 261,497 | 44,976 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (16,943 | ) | (11,348 | ) | (5,595 | ) | |||||
Add: Our share of NOI from partially owned entities | 60,094 | 47,179 | 12,915 | ||||||||
NOI at share | 349,624 | 297,328 | 52,296 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (8,743 | ) | (9,125 | ) | 382 | ||||||
NOI at share - cash basis | $ | 340,881 | $ | 288,203 | $ | 52,678 | |||||
________________________________________
See Appendix page vii for details of NOI at share components.
- 11 -
NET OPERATING INCOME AT SHARE BY SEGMENT | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
For the Year Ended December 31, 2018 | |||||||||||
Total | New York | Other | |||||||||
Total revenues | $ | 2,163,720 | $ | 1,836,036 | $ | 327,684 | |||||
Operating expenses | 963,478 | 806,464 | 157,014 | ||||||||
NOI - consolidated | 1,200,242 | 1,029,572 | 170,670 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (71,186 | ) | (48,490 | ) | (22,696 | ) | |||||
Add: Our share of NOI from partially owned entities | 253,564 | 195,908 | 57,656 | ||||||||
NOI at share | 1,382,620 | 1,176,990 | 205,630 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (44,704 | ) | (45,427 | ) | 723 | ||||||
NOI at share - cash basis | $ | 1,337,916 | $ | 1,131,563 | $ | 206,353 | |||||
For the Year Ended December 31, 2017 | |||||||||||
Total | New York | Other | |||||||||
Total revenues | $ | 2,084,126 | $ | 1,779,307 | $ | 304,819 | |||||
Operating expenses | 886,596 | 756,670 | 129,926 | ||||||||
NOI - consolidated | 1,197,530 | 1,022,637 | 174,893 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (65,311 | ) | (45,899 | ) | (19,412 | ) | |||||
Add: Our share of NOI from partially owned entities | 269,164 | 189,327 | 79,837 | ||||||||
NOI at share | 1,401,383 | 1,166,065 | 235,318 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (86,842 | ) | (79,202 | ) | (7,640 | ) | |||||
NOI at share - cash basis | $ | 1,314,541 | $ | 1,086,863 | $ | 227,678 | |||||
________________________________________
See Appendix page vii for details of NOI at share components.
- 12 -
NET OPERATING INCOME AT SHARE BY SUBSEGMENT | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | ||||||||||||||||||
December 31, | September 30, 2018 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
NOI at share: | |||||||||||||||||||
New York: | |||||||||||||||||||
Office | $ | 186,832 | $ | 189,481 | $ | 184,146 | $ | 743,001 | $ | 721,183 | |||||||||
Retail | 85,549 | 90,853 | 92,858 | 353,425 | 359,944 | ||||||||||||||
Residential | 5,834 | 5,920 | 5,202 | 23,515 | 24,370 | ||||||||||||||
Alexander's | 11,023 | 11,656 | 10,626 | 45,133 | 47,302 | ||||||||||||||
Hotel Pennsylvania | 5,961 | 6,318 | 4,496 | 11,916 | 13,266 | ||||||||||||||
Total New York | 295,199 | 304,228 | 297,328 | 1,176,990 | 1,166,065 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 10,981 | 24,249 | 25,257 | 90,929 | 102,339 | ||||||||||||||
555 California Street | 14,005 | 12,003 | 13,515 | 54,691 | 47,588 | ||||||||||||||
Other investments | 9,346 | 23,377 | 13,524 | 60,010 | 85,391 | ||||||||||||||
Total Other | 34,332 | 59,629 | 52,296 | 205,630 | 235,318 | ||||||||||||||
NOI at share | $ | 329,531 | $ | 363,857 | $ | 349,624 | $ | 1,382,620 | $ | 1,401,383 | |||||||||
NOI at share - cash basis: | |||||||||||||||||||
New York: | |||||||||||||||||||
Office | $ | 185,624 | $ | 175,787 | $ | 181,575 | $ | 726,108 | $ | 678,839 | |||||||||
Retail | 80,515 | 83,320 | 84,976 | 324,219 | 324,318 | ||||||||||||||
Residential | 5,656 | 5,325 | 5,358 | 22,076 | 21,626 | ||||||||||||||
Alexander's | 11,129 | 12,004 | 11,774 | 47,040 | 48,683 | ||||||||||||||
Hotel Pennsylvania | 6,009 | 6,351 | 4,520 | 12,120 | 13,397 | ||||||||||||||
Total New York | 288,933 | 282,787 | 288,203 | 1,131,563 | 1,086,863 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 12,758 | 24,396 | 26,234 | 94,070 | 99,242 | ||||||||||||||
555 California Street | 13,784 | 11,916 | 13,070 | 53,488 | 45,281 | ||||||||||||||
Other investments | 8,524 | 23,179 | 13,374 | 58,795 | 83,155 | ||||||||||||||
Total Other | 35,066 | 59,491 | 52,678 | 206,353 | 227,678 | ||||||||||||||
NOI at share - cash basis | $ | 323,999 | $ | 342,278 | $ | 340,881 | $ | 1,337,916 | $ | 1,314,541 | |||||||||
- 13 -
SAME STORE NOI AT SHARE AND NOI AT SHARE - CASH BASIS (NON-GAAP) | ||||||
(unaudited) | ||||||
Total | New York(2) | theMART(3) | 555 California Street | |||||||||
Same store NOI at share % (decrease) increase(1): | ||||||||||||
Three months ended December 31, 2018 compared to December 31, 2017 | (6.3 | )% | (3.1 | )% | (56.6 | )% | 16.8 | % | ||||
Year ended December 31, 2018 compared to December 31, 2017 | 0.8 | % | 1.4 | % | (12.2 | )% | 14.9 | % | ||||
Three months ended December 31, 2018 compared to September 30, 2018 | (5.3 | )% | (1.1 | )% | (58.0 | )% | 3.8 | % | ||||
Same store NOI at share - cash basis % (decrease) increase: | ||||||||||||
Three months ended December 31, 2018 compared to December 31, 2017 | (1.7 | )% | 1.9 | % | (49.8 | )% | 15.8 | % | ||||
Year ended December 31, 2018 compared to December 31, 2017 | 3.9 | % | 4.3 | % | (6.5 | )% | 18.1 | % | ||||
Three months ended December 31, 2018 compared to September 30, 2018 | (4.2 | )% | — | % | (52.9 | )% | 5.7 | % | ||||
____________________
(1) | See pages viii through xiii in the Appendix for same store NOI at share and same store NOI at share - cash basis reconciliations. | |||
(Decrease) Increase | ||||
(2) | Excluding Hotel Pennsylvania, same store NOI at share % (decrease) increase: | |||
Three months ended December 31, 2018 compared to December 31, 2017 | (3.0 | )% | ||
Year ended December 31, 2018 compared to December 31, 2017 | 1.5 | % | ||
Three months ended December 31, 2018 compared to September 30, 2018 | (1.7 | )% | ||
Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase (decrease): | ||||
Three months ended December 31, 2018 compared to December 31, 2017 | 2.1 | % | ||
Year ended December 31, 2018 compared to December 31, 2017 | 4.5 | % | ||
Three months ended December 31, 2018 compared to September 30, 2018 | (0.6 | )% | ||
(3) | Includes additional real estate tax expense accruals of $12,124,000 and $15,148,000 for the three months and year ended December 31, 2018, respectively, due to an increase in the tax-assessed value of theMART. | |||
- 14 -
NOI AT SHARE BY REGION | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Region: | ||||||||||||
New York City metropolitan area | 92 | % | 89 | % | 89 | % | 89 | % | ||||
Chicago, IL | 3 | % | 7 | % | 7 | % | 8 | % | ||||
San Francisco, CA | 5 | % | 4 | % | 4 | % | 3 | % | ||||
100 | % | 100 | % | 100 | % | 100 | % | |||||
- 15 -
CONSOLIDATED BALANCE SHEETS | |||||||||||
(unaudited and in thousands) | |||||||||||
As of | Increase (Decrease) | ||||||||||
December 31, 2018 | December 31, 2017 | ||||||||||
ASSETS | |||||||||||
Real estate, at cost: | |||||||||||
Land | $ | 3,306,280 | $ | 3,143,648 | $ | 162,632 | |||||
Buildings and improvements | 10,110,992 | 9,898,605 | 212,387 | ||||||||
Development costs and construction in progress | 2,266,491 | 1,615,101 | 651,390 | ||||||||
Moynihan Train Hall development expenditures | 445,693 | — | 445,693 | ||||||||
Leasehold improvements and equipment | 108,427 | 98,941 | 9,486 | ||||||||
Total | 16,237,883 | 14,756,295 | 1,481,588 | ||||||||
Less accumulated depreciation and amortization | (3,180,175 | ) | (2,885,283 | ) | (294,892 | ) | |||||
Real estate, net | 13,057,708 | 11,871,012 | 1,186,696 | ||||||||
Cash and cash equivalents | 570,916 | 1,817,655 | (1,246,739 | ) | |||||||
Restricted cash | 145,989 | 97,157 | 48,832 | ||||||||
Marketable securities | 152,198 | 182,752 | (30,554 | ) | |||||||
Tenant and other receivables, net | 73,322 | 58,700 | 14,622 | ||||||||
Investments in partially owned entities | 858,113 | 1,056,829 | (198,716 | ) | |||||||
Real estate fund investments | 318,758 | 354,804 | (36,046 | ) | |||||||
220 Central Park South condominium units ready for sale | 99,627 | — | 99,627 | ||||||||
Receivable arising from the straight-lining of rents, net | 935,131 | 926,711 | 8,420 | ||||||||
Deferred leasing costs, net | 400,313 | 403,492 | (3,179 | ) | |||||||
Identified intangible assets, net | 136,781 | 159,260 | (22,479 | ) | |||||||
Other assets | 431,938 | 469,562 | (37,624 | ) | |||||||
Total Assets | $ | 17,180,794 | $ | 17,397,934 | $ | (217,140 | ) | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||||||
Liabilities: | |||||||||||
Mortgages payable, net | $ | 8,167,798 | $ | 8,137,139 | $ | 30,659 | |||||
Senior unsecured notes, net | 844,002 | 843,614 | 388 | ||||||||
Unsecured term loan, net | 744,821 | 748,734 | (3,913 | ) | |||||||
Unsecured revolving credit facilities | 80,000 | — | 80,000 | ||||||||
Moynihan Train Hall obligation | 445,693 | — | 445,693 | ||||||||
Accounts payable and accrued expenses | 430,976 | 415,794 | 15,182 | ||||||||
Deferred revenue | 167,730 | 227,069 | (59,339 | ) | |||||||
Deferred compensation plan | 96,523 | 109,177 | (12,654 | ) | |||||||
Preferred shares redeemed on January 4 and 11, 2018 | — | 455,514 | (455,514 | ) | |||||||
Other liabilities | 311,806 | 468,255 | (156,449 | ) | |||||||
Total liabilities | 11,289,349 | 11,405,296 | (115,947 | ) | |||||||
Redeemable noncontrolling interests | 783,562 | 984,937 | (201,375 | ) | |||||||
Vornado shareholders' equity | 4,465,231 | 4,337,652 | 127,579 | ||||||||
Noncontrolling interests in consolidated subsidiaries | 642,652 | 670,049 | (27,397 | ) | |||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 17,180,794 | $ | 17,397,934 | $ | (217,140 | ) | ||||
- 16 -
LEASING ACTIVITY |
(unaudited) |
The leasing activity and related statistics in the table 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.
(square feet in thousands) | New York | 555 California Street | ||||||||||||||
Office | Retail | theMART | ||||||||||||||
Three Months Ended December 31, 2018 | ||||||||||||||||
Total square feet leased | 479 | 26 | 46 | — | ||||||||||||
Our share of square feet leased: | 415 | 17 | 46 | — | ||||||||||||
Initial rent(1) | $ | 72.97 | $ | 211.34 | $ | 60.73 | $ | — | ||||||||
Weighted average lease term (years) | 7.7 | 8.2 | 5.6 | — | ||||||||||||
Second generation relet space: | ||||||||||||||||
Square feet | 357 | 7 | 46 | — | ||||||||||||
GAAP basis: | ||||||||||||||||
Straight-line rent(2) | $ | 67.56 | $ | 228.99 | $ | 61.28 | $ | — | ||||||||
Prior straight-line rent | $ | 63.17 | $ | 222.39 | $ | 56.40 | $ | — | ||||||||
Percentage increase | 6.9 | % | 3.0 | % | 8.7 | % | — | % | ||||||||
Cash basis (non-GAAP): | ||||||||||||||||
Initial rent(1) | $ | 67.22 | $ | 219.50 | $ | 60.73 | $ | — | ||||||||
Prior escalated rent | $ | 66.41 | $ | 217.08 | $ | 58.87 | $ | — | ||||||||
Percentage increase | 1.2 | % | 1.1 | % | 3.2 | % | — | % | ||||||||
Tenant improvements and leasing commissions: | ||||||||||||||||
Per square foot | $ | 78.71 | $ | 144.50 | $ | 9.03 | $ | — | ||||||||
Per square foot per annum | $ | 10.22 | $ | 17.62 | $ | 1.61 | $ | — | ||||||||
Percentage of initial rent | 14.0 | % | 8.3 | % | 2.7 | % | — | % | ||||||||
____________________
(1) | Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot. |
(2) | Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases, and includes the effect of free rent and periodic step-ups in rent. |
- 17 -
LEASING ACTIVITY |
(unaudited) |
The leasing activity and related statistics in the table below are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with GAAP. Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period.
(square feet in thousands) | New York | 555 California Street | ||||||||||||||
Office | Retail | theMART | ||||||||||||||
Year Ended December 31, 2018 | ||||||||||||||||
Total square feet leased | 1,827 | 255 | 243 | 249 | ||||||||||||
Our share of square feet leased: | 1,627 | 236 | 243 | 174 | ||||||||||||
Initial rent(1) | $ | 79.03 | $ | 171.25 | $ | 53.47 | $ | 89.28 | ||||||||
Weighted average lease term (years) | 9.6 | 5.5 | 5.8 | 10.3 | ||||||||||||
Second generation relet space: | ||||||||||||||||
Square feet | 1,347 | 216 | 232 | 62 | ||||||||||||
GAAP basis: | ||||||||||||||||
Straight-line rent(2) | $ | 81.57 | $ | 180.01 | $ | 54.11 | $ | 104.06 | ||||||||
Prior straight-line rent | $ | 60.99 | $ | 232.98 | $ | 44.77 | $ | 77.46 | ||||||||
Percentage increase (decrease) | 33.7 | % | (22.7 | )% | 20.9 | % | 34.3 | % | ||||||||
Cash basis (non-GAAP): | ||||||||||||||||
Initial rent(1) | $ | 79.22 | $ | 164.74 | $ | 53.49 | $ | 97.28 | ||||||||
Prior escalated rent | $ | 64.59 | $ | 166.35 | $ | 47.48 | $ | 85.77 | ||||||||
Percentage increase (decrease) | 22.7 | % | (1.0 | )% | 12.7 | % | 13.4 | % | ||||||||
Tenant improvements and leasing commissions: | ||||||||||||||||
Per square foot | $ | 92.69 | $ | 59.17 | $ | 17.63 | $ | 94.98 | ||||||||
Per square foot per annum | $ | 9.66 | $ | 10.76 | $ | 3.04 | $ | 9.22 | ||||||||
Percentage of initial rent | 12.2 | % | 6.3 | % | 5.7 | % | 10.3 | % | ||||||||
____________________
(1) | Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot. |
(2) | Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases, and includes the effect of free rent and periodic step-ups in rent. |
- 18 -
LEASE EXPIRATIONS NEW YORK SEGMENT | |||||||||||||||
(unaudited) | |||||||||||||||
Period of Lease Expiration | Our Share of Square Feet of Expiring Leases(1) | Weighted Average Annual Rent of Expiring Leases | Percentage of Annualized Escalated Rent | ||||||||||||
Total | Per Sq. Ft. | ||||||||||||||
Office: | Month to Month | 47,000 | $ | 5,010,000 | $ | 106.60 | 0.4 | % | |||||||
First Quarter 2019 | 243,000 | 15,087,000 | 62.09 | 1.3 | % | ||||||||||
Second Quarter 2019 | 125,000 | 9,313,000 | 74.50 | 0.8 | % | ||||||||||
Third Quarter 2019 | 69,000 | 4,450,000 | 64.49 | 0.4 | % | ||||||||||
Fourth Quarter 2019 | 190,000 | 12,266,000 | 64.56 | 1.1 | % | ||||||||||
Total 2019 | 627,000 | 41,116,000 | 65.58 | 3.6 | % | ||||||||||
2020 | 1,240,000 | 86,369,000 | 69.65 | 7.6 | % | ||||||||||
2021 | 1,188,000 | 92,419,000 | 77.79 | 8.0 | % | ||||||||||
2022 | 709,000 | 47,069,000 | 66.39 | 4.1 | % | ||||||||||
2023 | 1,971,000 | 159,774,000 | 81.06 | 13.9 | % | ||||||||||
2024 | 1,391,000 | 109,744,000 | 78.90 | 9.5 | % | ||||||||||
2025 | 804,000 | 60,228,000 | 74.91 | 5.2 | % | ||||||||||
2026 | 1,236,000 | 93,992,000 | 76.05 | 8.2 | % | ||||||||||
2027 | 1,118,000 | 81,535,000 | 72.93 | 7.1 | % | ||||||||||
2028 | 1,022,000 | 72,762,000 | 71.20 | 6.4 | % | ||||||||||
Thereafter | 4,535,000 | 299,380,000 | 66.02 | 26.0 | % | ||||||||||
Retail: | Month to Month | 71,000 | $ | 9,355,000 | $ | 131.76 | 2.0 | % | |||||||
First Quarter 2019 | 35,000 | 8,638,000 | 246.80 | 1.9 | % | ||||||||||
Second Quarter 2019 | 10,000 | 1,793,000 | 179.30 | 0.4 | % | ||||||||||
Third Quarter 2019 | 20,000 | 9,531,000 | 476.55 | 2.1 | % | ||||||||||
Fourth Quarter 2019 | 38,000 | 6,512,000 | 171.37 | 1.4 | % | ||||||||||
Total 2019 | 103,000 | 26,474,000 | 257.03 | 5.8 | % | ||||||||||
2020 | 82,000 | 16,051,000 | 195.74 | 3.5 | % | ||||||||||
2021 | 58,000 | 9,589,000 | 165.33 | 2.1 | % | ||||||||||
2022 | 29,000 | 7,207,000 | 248.52 | 1.6 | % | ||||||||||
2023 | 110,000 | 44,107,000 | 400.97 | 9.6 | % | ||||||||||
2024 | 298,000 | 84,487,000 | 283.51 | 18.3 | % | ||||||||||
2025 | 42,000 | 19,220,000 | 457.62 | 4.2 | % | ||||||||||
2026 | 134,000 | 44,523,000 | 332.26 | 9.6 | % | ||||||||||
2027 | 32,000 | 22,719,000 | 709.97 | 4.9 | % | ||||||||||
2028 | 45,000 | 18,457,000 | 410.16 | 3.9 | % | ||||||||||
Thereafter | 907,000 | 159,242,000 | 175.57 | 34.5 | % | ||||||||||
____________________
(1) | Excludes storage, vacancy and other. |
- 19 -
LEASE EXPIRATIONS theMART | |||||||||||||||
(unaudited) | |||||||||||||||
Period of Lease Expiration | Our Share of Square Feet of Expiring Leases(1) | Weighted Average Annual Rent of Expiring Leases | Percentage of Annualized Escalated Rent | ||||||||||||
Total | Per Sq. Ft. | ||||||||||||||
Office / Showroom / Retail: | Month to Month | 2,000 | $ | 71,000 | $ | 35.50 | 0.1 | % | |||||||
First Quarter 2019 | 32,000 | 1,810,000 | 56.56 | 1.1 | % | ||||||||||
Second Quarter 2019 | 14,000 | 887,000 | 63.36 | 0.5 | % | ||||||||||
Third Quarter 2019 | 20,000 | 1,072,000 | 53.60 | 0.7 | % | ||||||||||
Fourth Quarter 2019 | 52,000 | 2,815,000 | 54.13 | 1.7 | % | ||||||||||
Total 2019 | 118,000 | 6,584,000 | 55.80 | 4.0 | % | ||||||||||
2020 | 281,000 | 13,885,000 | 49.41 | 8.5 | % | ||||||||||
2021 | 329,000 | 16,140,000 | 49.06 | 9.8 | % | ||||||||||
2022 | 649,000 | 31,051,000 | 47.84 | 18.9 | % | ||||||||||
2023 | 305,000 | 15,647,000 | 51.30 | 9.5 | % | ||||||||||
2024 | 238,000 | 11,383,000 | 47.83 | 6.9 | % | ||||||||||
2025 | 337,000 | 17,401,000 | 51.64 | 10.6 | % | ||||||||||
2026 | 215,000 | 10,358,000 | 48.18 | 6.3 | % | ||||||||||
2027 | 108,000 | 5,444,000 | 50.41 | 3.3 | % | ||||||||||
2028 | 642,000 | 27,877,000 | 43.42 | 17.0 | % | ||||||||||
Thereafter | 182,000 | 8,440,000 | 46.37 | 5.1 | % | ||||||||||
____________________
(1) Excludes storage, vacancy and other.
- 20 -
LEASE EXPIRATIONS 555 California Street | |||||||||||||||
(unaudited) | |||||||||||||||
Period of Lease Expiration | Our Share of Square Feet of Expiring Leases(1) | Weighted Average Annual Rent of Expiring Leases | Percentage of Annualized Escalated Rent | ||||||||||||
Total | Per Sq. Ft. | ||||||||||||||
Office / Retail: | Month to Month | — | $ | — | $ | — | — | % | |||||||
First Quarter 2019 | — | — | — | — | % | ||||||||||
Second Quarter 2019 | — | — | — | — | % | ||||||||||
Third Quarter 2019 | 4,000 | 335,000 | 83.75 | 0.4 | % | ||||||||||
Fourth Quarter 2019 | — | — | — | — | % | ||||||||||
Total 2019 | 4,000 | 335,000 | 83.75 | 0.4 | % | ||||||||||
2020 | 101,000 | 6,407,000 | 63.44 | 6.9 | % | ||||||||||
2021 | 76,000 | 5,324,000 | 70.05 | 5.7 | % | ||||||||||
2022 | 36,000 | 2,783,000 | 77.31 | 3.0 | % | ||||||||||
2023 | 133,000 | 9,335,000 | 70.19 | 10.1 | % | ||||||||||
2024 | 59,000 | 5,167,000 | 87.58 | 5.6 | % | ||||||||||
2025 | 364,000 | 25,578,000 | 70.27 | 27.6 | % | ||||||||||
2026 | 140,000 | 10,299,000 | 73.56 | 11.1 | % | ||||||||||
2027 | 69,000 | 5,698,000 | 82.58 | 6.1 | % | ||||||||||
2028 | 20,000 | 1,432,000 | 71.60 | 1.5 | % | ||||||||||
Thereafter | 235,000 | 20,410,000 | 86.85 | 22.0 | % | ||||||||||
____________________
(1) Excludes storage, vacancy and other.
- 21 -
COMPONENTS OF NET ASSET VALUE (AT SHARE) | |||||||||||||||||||
(unaudited and in millions, except square feet, shares and per share amounts) | |||||||||||||||||||
For the Year Ended December 31, 2018 | |||||||||||||||||||
NOI at Share - Cash Basis | Adjustments | Pro Forma NOI at Share - Cash Basis | Cap Rate | Value(1) | |||||||||||||||
Office: | |||||||||||||||||||
New York | 726 | (27 | ) | (2) | 699 | ||||||||||||||
theMART | 94 | 12 | (3) | 106 | |||||||||||||||
555 California Street | 53 | — | 53 | ||||||||||||||||
Total Office | 873 | (15 | ) | 858 | 4.50 | % | 19,067 | ||||||||||||
New York - Retail | 324 | — | 324 | 4.50 | % | 7,200 | |||||||||||||
New York - Residential | 22 | — | 22 | 4.00 | % | 550 | |||||||||||||
$ | 1,219 | $ | (15 | ) | $ | 1,204 | 26,817 | ||||||||||||
Less: Market management fee (28,133,000 square feet in service at share at $0.50 per square foot) at a 4.50% cap rate | (313 | ) | |||||||||||||||||
$ | 26,504 | ||||||||||||||||||
Other asset values: | ||||
220 Central Park South - incremental value after repayment of debt and taxes | $ | 1,000 | ||
Cash, restricted cash and marketable securities | 869 | |||
Alexander's Inc. ("Alexander's") (1,654,068 shares at $304.74 per share as of December 31, 2018) | 504 | |||
Hotel Pennsylvania | 500 | |||
BMS (2018 NOI of $27 at a 7.0x multiple) | 189 | |||
Urban Edge Properties ("UE") (5,717,184 shares at $16.62 per share as of December 31, 2018) | 95 | |||
Real estate fund investments (VNO's share at fair value) | 80 | |||
Pennsylvania Real Estate Investment Trust ("PREIT") (6,250,000 shares at $5.94 per share as of December 31, 2018) | 37 | |||
Other assets | 730 | |||
Other construction in progress (at 110% of book value) | 566 | |||
Total of other asset values | $ | 4,570 | ||
Liabilities (see following page) | $ | (11,300 | ) | |
NAV | $ | 19,774 | (1) | |
NAV per share | ||||
(203.5 million shares on an OP basis as of December 31, 2018) | $ | 97 | (1) | |
____________________
See notes on following page.
- 22 -
COMPONENTS OF NET ASSET VALUE (AT SHARE) | |||||||||||
(unaudited and in millions) | |||||||||||
Liabilities | |||||||||||
As of December 31, 2018 | Adjustments | Net | |||||||||
Consolidated contractual mortgage notes payable, net of noncontrolling interests' share | $ | 7,598 | $ | (737 | ) | (4) | $ | 6,861 | |||
Non-consolidated real estate debt | 2,683 | (581 | ) | (5) | 2,102 | ||||||
Corporate unsecured debt | 850 | — | 850 | ||||||||
Revolver/term loan | 830 | (750 | ) | (4) | 80 | ||||||
Other liabilities | 482 | — | 482 | ||||||||
Perpetual preferred units (at redemption value) | 925 | — | 925 | ||||||||
Total liabilities | $ | 13,368 | $ | (2,068 | ) | $ | 11,300 | ||||
________________________________________
(1) | Capitalization Rate ("Cap Rate") means the rate applied to pro-forma cash basis NOI to determine the fair value of our properties. The Cap Rates reflected in this financial supplement are based on management’s estimates, which are inherently uncertain. Other asset values are also estimates made by management, which are inherently uncertain. There can be no assurance that management’s estimates accurately reflect the fair value of our assets, and actual value may differ materially. |
(2) | Adjustment to deduct BMS NOI for the year ended December 31, 2018. |
(3) | Adjustment to reflect the annual real estate tax increase which will be billed to tenants in 2019. |
(4) | Debt related to 220 Central Park South. |
(5) | Excludes our share of debt of Alexander's, UE, and PREIT as they are presented on an equity basis in other asset values. |
- 23 -
CAPITAL STRUCTURE | ||||||||||||
(unaudited and in thousands, except per share and unit amounts) | ||||||||||||
As of December 31, 2018 | ||||||||||||
Debt (contractual balances) (non-GAAP): | ||||||||||||
Consolidated debt (1): | ||||||||||||
Mortgages payable | $ | 8,215,847 | ||||||||||
Senior unsecured notes | 850,000 | |||||||||||
$750 Million unsecured term loan | 750,000 | |||||||||||
$2.5 Billion unsecured revolving credit facilities | 80,000 | |||||||||||
9,895,847 | ||||||||||||
Pro rata share of debt of non-consolidated entities(2) | 2,682,865 | |||||||||||
Less: Noncontrolling interests' share of consolidated debt (primarily 1290 Avenue of the Americas and 555 California Street) | (617,596 | ) | ||||||||||
11,961,116 | (A) | |||||||||||
Shares/Units | Liquidation Preference | |||||||||||
Perpetual Preferred: | ||||||||||||
5.00% preferred unit (D-16) (1 unit @ $1,000,000 per unit) | 1,000 | |||||||||||
3.25% preferred units (D-17) (177,100 units @ $25 per unit) | 4,428 | |||||||||||
5.70% Series K preferred shares | 12,000 | $ | 25.00 | 300,000 | ||||||||
5.40% Series L preferred shares | 12,000 | 25.00 | 300,000 | |||||||||
5.25% Series M preferred shares | 12,780 | 25.00 | 319,500 | |||||||||
924,928 | (B) | |||||||||||
Converted Shares | December 31, 2018 Common Share Price | |||||||||||
Equity: | ||||||||||||
Common shares | 190,535 | $ | 62.03 | 11,818,886 | ||||||||
Class A units | 11,813 | 62.03 | 732,760 | |||||||||
Convertible share equivalents: | ||||||||||||
Equity awards - unit equivalents | 732 | 62.03 | 45,406 | |||||||||
D-13 preferred units | 753 | 62.03 | 46,709 | |||||||||
G1-G4 units | 61 | 62.03 | 3,784 | |||||||||
Series A preferred shares | 36 | 62.03 | 2,233 | |||||||||
12,649,778 | (C) | |||||||||||
Total Market Capitalization (A+B+C) | $ | 25,535,822 | ||||||||||
____________________
(1) | See reconciliation of consolidated debt, net (GAAP) to contractual debt (non-GAAP) on page xiv in the Appendix. |
(2) | As a result of Toys "R" Us ("Toys") filing a voluntary petition under chapter 11 of the United States Bankruptcy Code, we determined the Company no longer has the ability to exercise significant influence over Toys. Accordingly, we have excluded our share of Toys debt. |
- 24 -
COMMON SHARES DATA (NYSE: VNO) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Vornado Realty Trust common shares are traded on the New York Stock Exchange ("NYSE") under the symbol VNO. Below is a summary of performance and dividends for VNO common shares (based on NYSE prices): | |||||||||||||||||
Fourth Quarter 2018 | Third Quarter 2018 | Second Quarter 2018 | First Quarter 2018 | ||||||||||||||
High price | $ | 73.06 | $ | 77.59 | $ | 74.28 | $ | 78.31 | |||||||||
Low price | $ | 59.48 | $ | 69.50 | $ | 64.53 | $ | 64.13 | |||||||||
Closing price - end of quarter | $ | 62.03 | $ | 73.00 | $ | 73.92 | $ | 67.30 | |||||||||
Annualized dividend per share | $ | 2.52 | $ | 2.52 | $ | 2.52 | $ | 2.52 | |||||||||
Annualized dividend yield - on closing price | 4.1 | % | 3.5 | % | 3.4 | % | 3.7 | % | |||||||||
Outstanding shares, Class A units and convertible preferred units as converted (in thousands) | 203,930 | 203,604 | 203,577 | 203,613 | |||||||||||||
Closing market value of outstanding shares, Class A units and convertible preferred units as converted | $ | 12.6 Billion | $ | 14.9 Billion | $ | 15.0 Billion | $ | 13.7 Billion | |||||||||
- 25 -
DEBT ANALYSIS | |||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||
As of December 31, 2018 | |||||||||||||||||
Total | Variable | Fixed | |||||||||||||||
(Contractual debt balances) (non-GAAP) | Amount | Weighted Average Interest Rate | Amount | Weighted Average Interest Rate | Amount | Weighted Average Interest Rate | |||||||||||
Consolidated debt(1) | $ | 9,895,847 | 3.87% | $ | 3,292,382 | 4.31% | $ | 6,603,465 | 3.65% | ||||||||
Pro rata share of debt of non-consolidated entities(2) | 2,682,865 | 4.12% | 1,300,797 | 4.05% | 1,382,068 | 4.19% | |||||||||||
Total | 12,578,712 | 3.92% | 4,593,179 | 4.24% | 7,985,533 | 3.75% | |||||||||||
Less: Noncontrolling interests' share of consolidated debt (primarily 1290 Avenue of the Americas and 555 California Street) | (617,596 | ) | (164,922 | ) | (452,674 | ) | |||||||||||
Company's pro rata share of total debt | $ | 11,961,116 | 3.91% | $ | 4,428,257 | 4.23% | $ | 7,532,859 | 3.73% | ||||||||
Debt Covenant Ratios:(3) | Senior Unsecured Notes | Unsecured Revolving Credit Facilities and Unsecured Term Loan | |||||||
Actual | |||||||||
Required | Due 2022 | Due 2025 | Required | Actual | |||||
Total outstanding debt/total assets(4) | Less than 65% | 51% | 48% | Less than 60% | 39% | ||||
Secured debt/total assets | Less than 50% | 41% | 39% | Less than 50% | 31% | ||||
Interest coverage ratio (annualized combined EBITDA to annualized interest expense) | Greater than 1.50 | 2.51 | 2.51 | N/A | |||||
Fixed charge coverage | N/A | N/A | Greater than 1.40 | 2.33 | |||||
Unencumbered assets/unsecured debt | Greater than 150% | 387% | 410% | N/A | |||||
Unsecured debt/cap value of unencumbered assets | N/A | N/A | Less than 60% | 20% | |||||
Unencumbered coverage ratio | N/A | N/A | Greater than 1.50 | 7.25 | |||||
Unencumbered EBITDA (non-GAAP):(3) | Q4 2018 | |||
Annualized | ||||
New York | $ | 460,368 | ||
Other | 33,028 | |||
Total | $ | 493,396 | ||
____________________
(1) | See reconciliation of consolidated debt, net (GAAP) to contractual debt (non-GAAP) on page xiv in the Appendix. |
(2) | As a result of Toys filing a voluntary petition under chapter 11 of the United States Bankruptcy Code, we determined the Company no longer has the ability to exercise significant influence over Toys. Accordingly, we have excluded our share of Toys debt. |
(3) | Our debt covenant ratios are computed in accordance with the terms of our senior unsecured notes, unsecured revolving credit facilities, and unsecured term loan, as applicable. The methodology used for these computations may differ significantly from similarly titled ratios of other companies. For additional information regarding the methodology used to compute these ratios, please see our filings with the SEC of our revolving credit facilities, senior debt indentures and applicable prospectuses and prospectus supplements. |
(4) | Total assets include EBITDA (as defined) capped at 7.5% under the senior unsecured notes due 2022, 7.0% under the senior unsecured notes due 2025 and 6.0% under the unsecured revolving credit facilities and unsecured term loan. |
- 26 -
DEBT MATURITIES (CONTRACTUAL BALANCES) (NON-GAAP) | ||||||||||||||||||||||||||||||||||
(unaudited and in thousands) | ||||||||||||||||||||||||||||||||||
Property | Maturity Date (1) | Spread over LIBOR | Interest Rate | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | ||||||||||||||||||||||||
435 Seventh Avenue | 08/19 | L+225 | 4.71% | $ | 95,782 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 95,782 | |||||||||||||||||
100 West 33rd Street - office and retail | 07/20 | L+165 | 4.03% | — | 580,000 | — | — | — | — | 580,000 | ||||||||||||||||||||||||
220 Central Park South | 09/20 | L+200 | 4.52% | — | 737,369 | — | — | — | — | 737,369 | ||||||||||||||||||||||||
PENN11 | 12/20 | 3.95% | — | 450,000 | — | — | — | — | 450,000 | |||||||||||||||||||||||||
888 Seventh Avenue | 12/20 | 3.15% | (2) | — | 375,000 | — | — | — | — | 375,000 | ||||||||||||||||||||||||
Borgata Land | 02/21 | 5.14% | — | — | 54,551 | — | — | — | 54,551 | |||||||||||||||||||||||||
770 Broadway | 03/21 | 2.56% | (3) | — | — | 700,000 | — | — | — | 700,000 | ||||||||||||||||||||||||
909 Third Avenue | 05/21 | 3.91% | — | — | 350,000 | — | — | — | 350,000 | |||||||||||||||||||||||||
606 Broadway | 05/21 | L+300 | 5.39% | — | — | 51,290 | — | — | — | 51,290 | ||||||||||||||||||||||||
Farley Office and Retail Building | 06/21 | L+325 | 5.63% | — | — | 257,941 | — | — | — | 257,941 | ||||||||||||||||||||||||
555 California Street | 09/21 | 5.10% | — | — | 558,914 | — | — | — | 558,914 | |||||||||||||||||||||||||
theMART | 09/21 | 2.70% | — | — | 675,000 | — | — | — | 675,000 | |||||||||||||||||||||||||
655 Fifth Avenue | 10/21 | L+140 | 3.75% | — | — | 140,000 | — | — | — | 140,000 | ||||||||||||||||||||||||
PENN2 | 12/21 | L+165 | 4.00% | — | — | 575,000 | — | — | — | 575,000 | ||||||||||||||||||||||||
Senior unsecured notes due 2022 | 01/22 | 5.00% | — | — | — | 400,000 | — | — | 400,000 | |||||||||||||||||||||||||
$1.25 Billion unsecured revolving credit facility | 02/22 | L+100 | —% | — | — | — | — | — | — | — | ||||||||||||||||||||||||
1290 Avenue of the Americas | 11/22 | 3.34% | — | — | — | 950,000 | — | — | 950,000 | |||||||||||||||||||||||||
697-703 Fifth Avenue | 12/22 | L+190 | 4.25% | — | — | — | 450,000 | — | — | 450,000 | ||||||||||||||||||||||||
$1.25 Billion unsecured revolving credit facility | 01/23 | L+100 | 3.46% | — | — | — | — | 80,000 | — | 80,000 | ||||||||||||||||||||||||
666 Fifth Avenue Retail Condominium | 03/23 | 3.61% | — | — | — | — | 390,000 | — | 390,000 | |||||||||||||||||||||||||
Unsecured Term Loan | 02/24 | 3.87% | — | — | — | — | — | 750,000 | 750,000 | |||||||||||||||||||||||||
150 West 34th Street | 05/24 | L+188 | 4.26% | — | — | — | — | — | 205,000 | 205,000 | ||||||||||||||||||||||||
33-00 Northern Boulevard | 01/25 | 4.14% | (4) | — | — | — | — | — | 100,000 | 100,000 | ||||||||||||||||||||||||
Senior unsecured notes due 2025 | 01/25 | 3.50% | — | — | — | — | — | 450,000 | 450,000 | |||||||||||||||||||||||||
4 Union Square South | 08/25 | L+140 | 3.75% | — | — | — | — | — | 120,000 | 120,000 | ||||||||||||||||||||||||
350 Park Avenue | 01/27 | 3.92% | — | — | — | — | — | 400,000 | 400,000 | |||||||||||||||||||||||||
$ | 95,782 | $ | 2,142,369 | $ | 3,362,696 | $ | 1,800,000 | $ | 470,000 | $ | 2,025,000 | $ | 9,895,847 | |||||||||||||||||||||
Weighted average rate | 4.71 | % | 4.03 | % | 3.77 | % | 3.94 | % | 3.58 | % | 3.84 | % | 3.87 | % | ||||||||||||||||||||
Fixed rate debt | $ | — | $ | 825,000 | $ | 2,338,465 | $ | 1,350,000 | $ | 390,000 | $ | 1,700,000 | $ | 6,603,465 | ||||||||||||||||||||
Fixed weighted average rate expiring | — | % | 3.59 | % | 3.47 | % | 3.83 | % | 3.61 | % | 3.80 | % | 3.65 | % | ||||||||||||||||||||
Floating rate debt | $ | 95,782 | $ | 1,317,369 | $ | 1,024,231 | $ | 450,000 | $ | 80,000 | $ | 325,000 | $ | 3,292,382 | ||||||||||||||||||||
Floating weighted average rate expiring | 4.71 | % | 4.31 | % | 4.45 | % | 4.25 | % | 3.46 | % | 4.07 | % | 4.31 | % | ||||||||||||||||||||
____________________
(1) | Represents the extended maturity for certain loans in which we have the unilateral right to extend. |
(2) | Pursuant to an existing swap agreement, the loan bears interest at 3.15% through December 2020. The rate was swapped from LIBOR plus 1.60% (3.99% as of December 31, 2018). |
(3) | Pursuant to an existing swap agreement, the loan bears interest at 2.56% through September 2020. The rate was swapped from LIBOR plus 1.75% (4.13% as of December 31, 2018). |
(4) | Pursuant to an existing swap agreement, the loan bears interest at 4.14% through January 2025. The rate was swapped from LIBOR plus 1.80% (4.19% as of December 31, 2018). |
- 27 -
UNCONSOLIDATED JOINT VENTURES | ||||||||||||||||||||||
(unaudited and in thousands) | ||||||||||||||||||||||
Joint Venture Name | Asset Category | Percentage Ownership at December 31, 2018 | Company's Carrying Amount | Company's Pro rata Share of Debt (1) | 100% of Joint Venture Debt (1) | Maturity Date | Spread over LIBOR | Interest Rate | ||||||||||||||
Alexander's | Office/Retail | 32.4% | $ | 107,983 | $ | 379,256 | $ | 1,170,544 | Various | Various | Various | |||||||||||
PREIT | Retail | 7.9% | 59,491 | 130,357 | 1,642,408 | Various | Various | Various | ||||||||||||||
UE | Retail | 4.5% | 45,344 | 70,332 | 1,563,375 | Various | Various | Various | ||||||||||||||
Partially owned office buildings/land: | ||||||||||||||||||||||
One Park Avenue | Office/Retail | 55.0% | 133,140 | 165,000 | 300,000 | 03/21 | L+175 | 4.13% | ||||||||||||||
280 Park Avenue | Office/Retail | 50.0% | 114,873 | 600,000 | 1,200,000 | 09/24 | L+173 | 4.12% | ||||||||||||||
650 Madison Avenue | Office/Retail | 20.1% | 107,150 | 161,024 | 800,000 | 10/20 | N/A | 4.39% | ||||||||||||||
512 West 22nd Street | Office | 55.0% | 60,114 | 49,388 | 89,796 | 11/20 | L+265 | 4.99% | ||||||||||||||
West 57th Street properties | Office/Retail/Land | 50.0% | 43,656 | 10,000 | 20,000 | 12/22 | L+160 | 3.95% | ||||||||||||||
61 Ninth Avenue | Office/Retail | 45.1% | 31,678 | 36,264 | 80,409 | 12/21 | L+305 | 5.40% | ||||||||||||||
825 Seventh Avenue | Office/Retail | 50.0% | 9,779 | 10,250 | 20,500 | 06/19 | L+140 | 3.78% | ||||||||||||||
85 Tenth Avenue | Office/Retail | 49.9% | (5,476 | ) | 311,875 | 625,000 | 12/26 | N/A | 4.55% | |||||||||||||
Other | Office/Retail | Various | 4,091 | 17,465 | 50,150 | Various | Various | Various | ||||||||||||||
Other equity method investments: | ||||||||||||||||||||||
Independence Plaza | Residential/Retail | 50.1% | 66,343 | 338,175 | 675,000 | 07/25 | N/A | 4.25% | ||||||||||||||
Rosslyn Plaza | Office/Residential | 43.7% to 50.4% | 31,261 | 20,005 | 39,683 | 06/19 | L+225 | 4.60% | ||||||||||||||
Other | Various | Various | 48,686 | 99,474 | 644,023 | Various | Various | Various | ||||||||||||||
$ | 858,113 | $ | 2,398,865 | $ | 8,920,888 | |||||||||||||||||
330 Madison Avenue | Office/Retail | 25.0% | $ | (58,117 | ) | (2) | $ | 125,000 | $ | 500,000 | 08/24 | N/A | 3.43% | |||||||||
7 West 34th Street | Office/Retail | 53.0% | (51,579 | ) | (3) | 159,000 | 300,000 | 06/26 | N/A | 3.65% | ||||||||||||
$ | (109,696 | ) | $ | 284,000 | $ | 800,000 | ||||||||||||||||
____________________
(1) | Represents the contractual debt obligations. All amounts are non-recourse to us except the $300,000 mortgage loan on 7 West 34th Street which we guaranteed in connection with the sale of a 47.0% equity interest in May 2016. |
(2) | Our negative basis resulted from a refinancing distribution and is included in "other liabilities" on our consolidated balance sheets. |
(3) | Our negative basis resulted from a deferred gain from the sale of a 47.0% ownership interest in the property on May 27, 2016 and is included in "other liabilities" on our consolidated balance sheets. |
- 28 -
UNCONSOLIDATED JOINT VENTURES | |||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||
Percentage Ownership at December 31, 2018 | Our Share of Net Income (Loss) for the Three Months Ended December 31, | Our Share of NOI (non-GAAP) for the Three Months Ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Joint Venture Name | |||||||||||||||||
New York: | |||||||||||||||||
Alexander's | 32.4% | $ | 3,270 | (1) | $ | 5,728 | $ | 11,024 | $ | 11,656 | |||||||
85 Tenth Avenue | 49.9% | (2,217 | ) | (499 | ) | 4,880 | 4,738 | ||||||||||
One Park Avenue | 55.0% | 1,616 | 2,208 | 5,185 | 5,272 | ||||||||||||
280 Park Avenue | 50.0% | (1,581 | ) | (807 | ) | 9,529 | 9,654 | ||||||||||
650 Madison Avenue | 20.1% | (1,156 | ) | (962 | ) | 2,434 | 2,581 | ||||||||||
330 Madison Avenue | 25.0% | 644 | 740 | 2,790 | 2,818 | ||||||||||||
7 West 34th Street | 53.0% | 404 | 985 | 3,384 | 3,386 | ||||||||||||
Independence Plaza | 50.1% | (276 | ) | 1,180 | 6,776 | 7,010 | |||||||||||
825 Seventh Avenue | 50.0% | 176 | 674 | 543 | 832 | ||||||||||||
West 57th Street properties | 50.0% | (96 | ) | (131 | ) | 261 | 208 | ||||||||||
Other, net | Various | 178 | (975 | ) | 2,372 | 545 | |||||||||||
962 | 8,141 | 49,178 | 48,700 | ||||||||||||||
Other: | |||||||||||||||||
UE | 4.5% | 1,226 | 1,017 | 3,198 | 3,014 | ||||||||||||
Alexander's corporate fee income | 32.4% | 1,182 | 1,682 | 537 | 1,682 | ||||||||||||
PREIT | 7.9% | (902 | ) | 155 | 4,683 | 5,046 | |||||||||||
Suffolk Downs | 50.0% | 598 | (23 | ) | (14 | ) | (23 | ) | |||||||||
Rosslyn Plaza | 43.7% to 50.4% | (159 | ) | (422 | ) | 1,051 | 851 | ||||||||||
666 Fifth Avenue Office Condominium (2) | 49.5% | — | (3,042 | ) | — | 5,433 | |||||||||||
Other, net | Various | 183 | 2,114 | 1,572 | 4,472 | ||||||||||||
2,128 | 1,481 | 11,027 | 20,475 | ||||||||||||||
Total | $ | 3,090 | $ | 9,622 | $ | 60,205 | $ | 69,175 | |||||||||
____________________
(1) | Includes $2,081 for our share of expense related to the decrease in fair value of marketable securities held by Alexander's. |
(2) | On August 3, 2018, we completed the sale of our 49.5% interests in the 666 Fifth Avenue Office Condominium and were repaid our interest in the 666 Fifth Avenue Office Condominium mortgage loan. |
- 29 -
UNCONSOLIDATED JOINT VENTURES | |||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||
Percentage Ownership at December 31, 2018 | Our Share of Net Income for the Year Ended December 31, | Our Share of NOI (non-GAAP) for the Year Ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Joint Venture Name | |||||||||||||||||
New York: | |||||||||||||||||
Alexander's | 32.4% | $ | 10,485 | (1) | $ | 25,820 | $ | 45,134 | $ | 47,302 | |||||||
280 Park Avenue | 50.0% | (4,962 | ) | (7,289 | ) | 38,545 | 36,407 | ||||||||||
650 Madison Avenue | 20.1% | (4,048 | ) | (4,774 | ) | 10,299 | 9,511 | ||||||||||
85 Tenth Avenue | 49.9% | (3,589 | ) | (1,290 | ) | 18,801 | 19,153 | ||||||||||
7 West 34th Street | 53.0% | 3,238 | 3,053 | 13,441 | 13,543 | ||||||||||||
330 Madison Avenue | 25.0% | 2,725 | 4,150 | 11,127 | 10,121 | ||||||||||||
825 Seventh Avenue | 50.0% | 2,224 | 2,673 | 3,062 | 3,325 | ||||||||||||
Independence Plaza | 50.1% | 1,093 | 4,345 | 26,708 | 27,358 | ||||||||||||
West 57th Street properties | 50.0% | (340 | ) | (131 | ) | 900 | 1,086 | ||||||||||
One Park Avenue | 55.0% | (116 | ) | (2) | 5,565 | 20,364 | 17,528 | ||||||||||
Other, net | Various | (566 | ) | (2,563 | ) | 7,527 | 3,993 | ||||||||||
6,144 | 29,559 | 195,908 | 189,327 | ||||||||||||||
Other: | |||||||||||||||||
666 Fifth Avenue Office Condominium (3) | 49.5% | (4,873 | ) | (25,414 | ) | 12,145 | 20,636 | ||||||||||
Alexander's corporate fee income | 32.4% | 4,560 | 6,033 | 2,833 | 6,033 | ||||||||||||
UE | 4.5% | 4,460 | 27,328 | (4) | 11,822 | 14,479 | |||||||||||
PREIT | 7.9% | (3,015 | ) | (53,325 | ) | (5) | 20,032 | 21,071 | |||||||||
Suffolk Downs | 50.0% | 855 | 26,360 | (6) | (47 | ) | 235 | ||||||||||
Rosslyn Plaza | 43.7% to 50.4% | (215 | ) | (774 | ) | 4,520 | 4,187 | ||||||||||
Other, net | Various | 1,233 | 5,433 | 6,351 | 13,196 | ||||||||||||
3,005 | (14,359 | ) | 57,656 | 79,837 | |||||||||||||
Total | $ | 9,149 | $ | 15,200 | $ | 253,564 | $ | 269,164 | |||||||||
____________________
(1) | 2018 includes (i) our $7,708 share of Alexander's potential additional Transfer Tax, (ii) our $3,882 share of expense related to the decrease in fair value of marketable securities held by Alexander’s (iii) our $1,085 share of a non-cash straight-line rent write-off adjustment related to Sears Roebuck and Co. which filed for Chapter 11 bankruptcy relief and (iv) our $518 share of Alexander’s litigation expense due to a settlement. |
(2) | Includes our $4,978 share of potential additional Transfer Tax related to the March 2011 acquisition of One Park Avenue. |
(3) | On August 3, 2018, we completed the sale of our 49.5% interests in the 666 Fifth Avenue Office Condominium and were repaid our interest in the 666 Fifth Avenue Office Condominium mortgage loan. |
(4) | Includes a $21,100 net gain resulting from UE operating partner unit issuances. |
(5) | Includes a $44,465 non-cash impairment loss. |
(6) | Includes $26,687 of net gains comprised of $15,314 for our share of a net gain on the sale of Suffolk Downs and $11,373 for the net gain on repayment of our debt investments in Suffolk Downs JV. |
- 30 -
DEVELOPMENT/REDEVELOPMENT SUMMARY - AS OF DECEMBER 31, 2018 | |||||||||||||||||||||
(unaudited and in thousands, except square feet) | |||||||||||||||||||||
(At Share) | Full Quarter Stabilized Operations | ||||||||||||||||||||
Property Rentable Sq. Ft. | Excluding Land Costs | Available for Occupancy | |||||||||||||||||||
Current Projects | Segment | Incremental Budget | Amount Expended | % Complete | Start | ||||||||||||||||
220 Central Park South - residential condominiums | Other | 397,000 | $ | 1,400,000 | $ | 1,199,913 | (1) | 85.7% | Q3 2012 | N/A | N/A | ||||||||||
Farley Office and Retail Building - (95.0% interest) | New York | 850,000 | 760,000 | 137,267 | (2) | 18.1% | Q2 2017 | Q3 2020 | Q2 2022 | ||||||||||||
PENN1(3) | New York | 2,545,000 | 200,000 | (4) | 9,725 | 4.9% | Q4 2018 | N/A | N/A | ||||||||||||
512 West 22nd Street - office (55.0% interest) | New York | 173,000 | 72,000 | 52,505 | (5) | 72.9% | Q4 2015 | Q1 2019 | Q3 2020 | ||||||||||||
345 Montgomery Street (555 California Street) (70.0% interest) | Other | 78,000 | 32,000 | 15,284 | (6) | 47.8% | Q1 2018 | Q3 2019 | Q3 2020 | ||||||||||||
606 Broadway - office/retail (50.0% interest) | New York | 34,000 | 30,000 | 25,601 | (7) | 85.3% | Q2 2016 | Q4 2018 | Q2 2020 | ||||||||||||
825 Seventh Avenue - office (50.0% interest) | New York | 165,000 | 15,000 | 4,484 | 29.9% | Q2 2018 | Q1 2020 | Q1 2021 | |||||||||||||
Total current projects | $ | 2,509,000 | $ | 1,444,779 | |||||||||||||||||
Future Opportunities | Segment | Property Zoning Sq. Ft. | |||||||||||||||||||
Penn District - multiple opportunities - office/residential/retail | New York | TBD | |||||||||||||||||||
PENN2 - office/retail | New York | TBD | |||||||||||||||||||
Hotel Pennsylvania | New York | 2,052,000 | |||||||||||||||||||
260 Eleventh Avenue - office(8) | New York | 280,000 | |||||||||||||||||||
Undeveloped Land | |||||||||||||||||||||
29, 31, 33 West 57th Street (50.0% interest) | New York | 150,000 | |||||||||||||||||||
484, 486 Eighth Avenue and 265, 267 West 34th Street | New York | 125,000 | |||||||||||||||||||
527 West Kinzie, Chicago | Other | 330,000 | |||||||||||||||||||
Rego Park III (32.4% interest) | Other | TBD | |||||||||||||||||||
Total undeveloped land | 605,000 | ||||||||||||||||||||
____________________
(1) | Excludes land and acquisition costs of $515,426. |
(2) | Excludes our share of the upfront contribution of $230,000 and net of anticipated historic tax credits. The building and land are subject to a lease which expires in 2116. |
(3) | The building is subject to a ground lease which expires in 2098. |
(4) | We expect the final budget will exceed $200,000 after anticipated scope changes. |
(5) | Excludes land and acquisition costs of $57,000. |
(6) | Excludes land and building costs of $31,000. |
(7) | Excludes land and acquisition costs of $22,703. |
(8) | The building is subject to a ground lease which expires in 2114. |
- 31 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS | |||||||||||||
CONSOLIDATED | |||||||||||||
(unaudited and in thousands) | |||||||||||||
Year Ended December 31, | |||||||||||||
Amounts paid for capital expenditures: | 2018 | 2017 | 2016 | ||||||||||
Expenditures to maintain assets | $ | 92,386 | $ | 111,629 | $ | 119,076 | |||||||
Tenant improvements | 100,191 | 128,287 | 219,751 | ||||||||||
Leasing commissions | 33,254 | 36,447 | 47,906 | ||||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 225,831 | 276,363 | 386,733 | ||||||||||
Non-recurring capital expenditures | 43,135 | 35,149 | 58,693 | ||||||||||
Total capital expenditures and leasing commissions | $ | 268,966 | $ | 311,512 | (1) | $ | 445,426 | (1) | |||||
Year Ended December 31, | |||||||||||||
2018 | 2017 | 2016 | |||||||||||
Amounts paid for development and redevelopment expenditures: | |||||||||||||
220 Central Park South | $ | 295,827 | $ | 265,791 | $ | 303,974 | |||||||
Farley Office and Retail Building | 18,995 | — | — | ||||||||||
345 Montgomery Street (555 California Street) | 18,187 | 5,950 | 434 | ||||||||||
606 Broadway | 15,959 | 15,997 | 4,234 | ||||||||||
PENN1 | 8,856 | 1,401 | — | ||||||||||
1535 Broadway | 8,645 | 1,982 | 9,283 | ||||||||||
90 Park Avenue | 1,015 | 7,523 | 33,308 | ||||||||||
640 Fifth Avenue | 199 | 1,648 | 46,282 | ||||||||||
Other | 50,503 | 55,560 | (2) | 209,050 | (2) | ||||||||
$ | 418,186 | $ | 355,852 | $ | 606,565 | ||||||||
____________________
(1) | Includes $33,722 and $105,998 for the years ended December 31, 2017 and 2016, respectively, of capital expenditures and leasing commissions from our former Washington, DC segment which was spun-off on July 17, 2017. |
(2) | Primarily relates to our former Washington, DC segment. |
- 32 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS | ||||||||||||
NEW YORK SEGMENT | ||||||||||||
(unaudited and in thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
Amounts paid for capital expenditures: | 2018 | 2017 | 2016 | |||||||||
Expenditures to maintain assets | $ | 70,954 | $ | 79,567 | $ | 65,561 | ||||||
Tenant improvements | 76,187 | 83,639 | 112,687 | |||||||||
Leasing commissions | 29,435 | 26,114 | 38,134 | |||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 176,576 | 189,320 | 216,382 | |||||||||
Non-recurring capital expenditures | 31,381 | 27,762 | 47,642 | |||||||||
Total capital expenditures and leasing commissions | $ | 207,957 | $ | 217,082 | $ | 264,024 | ||||||
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Amounts paid for development and redevelopment expenditures: | ||||||||||||
Farley Office and Retail Building | $ | 18,995 | $ | — | $ | — | ||||||
606 Broadway | 15,959 | 15,997 | 4,234 | |||||||||
PENN1 | 8,856 | 1,462 | — | |||||||||
1535 Broadway | 8,645 | 1,982 | 9,283 | |||||||||
90 Park Avenue | 1,015 | 7,523 | 33,308 | |||||||||
640 Fifth Avenue | 199 | 1,648 | 46,282 | |||||||||
Other | 35,446 | 14,762 | 25,096 | |||||||||
$ | 89,115 | $ | 43,374 | $ | 118,203 | |||||||
- 33 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS | ||||||||||||
theMART | ||||||||||||
(unaudited and in thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
Amounts paid for capital expenditures: | 2018 | 2017 | 2016 | |||||||||
Expenditures to maintain assets | $ | 13,282 | $ | 12,772 | $ | 20,098 | ||||||
Tenant improvements | 15,106 | 8,730 | 29,738 | |||||||||
Leasing commissions | 459 | 1,701 | 2,070 | |||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 28,847 | 23,203 | 51,906 | |||||||||
Non-recurring capital expenditures | 260 | — | — | |||||||||
Total capital expenditures and leasing commissions | $ | 29,107 | $ | 23,203 | $ | 51,906 | ||||||
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Amounts paid for development and redevelopment expenditures: | ||||||||||||
Common area enhancements | $ | 51 | $ | 5,342 | $ | 24,788 | ||||||
Other | 10,739 | 799 | 1,384 | |||||||||
$ | 10,790 | $ | 6,141 | $ | 26,172 | |||||||
- 34 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS | ||||||||||||
555 CALIFORNIA STREET | ||||||||||||
(unaudited and in thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
Amounts paid for capital expenditures: | 2018 | 2017 | 2016 | |||||||||
Expenditures to maintain assets | $ | 8,150 | $ | 9,689 | $ | 9,954 | ||||||
Tenant improvements | 8,898 | 19,327 | 9,904 | |||||||||
Leasing commissions | 3,360 | 1,330 | 1,486 | |||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 20,408 | 30,346 | 21,344 | |||||||||
Non-recurring capital expenditures | 11,494 | 7,159 | 2,154 | |||||||||
Total capital expenditures and leasing commissions | $ | 31,902 | $ | 37,505 | $ | 23,498 | ||||||
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Amounts paid for development and redevelopment expenditures: | ||||||||||||
345 Montgomery Street | $ | 18,187 | $ | 5,950 | $ | 434 | ||||||
Other | 445 | 6,465 | 8,716 | |||||||||
$ | 18,632 | $ | 12,415 | $ | 9,150 | |||||||
- 35 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS | |||||||||||||
OTHER | |||||||||||||
(unaudited and in thousands) | |||||||||||||
Year Ended December 31, | |||||||||||||
2018 | 2017 | 2016 | |||||||||||
Amounts paid for development and redevelopment expenditures: | |||||||||||||
220 Central Park South | $ | 295,827 | $ | 265,791 | $ | 303,974 | |||||||
Other | 3,822 | 28,131 | (1) | 149,066 | (1) | ||||||||
$ | 299,649 | $ | 293,922 | $ | 453,040 | ||||||||
____________________
(1) | Primarily relates to our former Washington, DC segment which was spun-off on July 17, 2017. |
- 36 -
SQUARE FOOTAGE | ||||||||||||||||||||
(unaudited and square feet in thousands) | ||||||||||||||||||||
At Vornado's Share | ||||||||||||||||||||
At 100% | Under Development | In Service | ||||||||||||||||||
Total | Office | Retail | Showroom | Other | ||||||||||||||||
Segment: | ||||||||||||||||||||
New York: | ||||||||||||||||||||
Office | 21,495 | 17,980 | 1,348 | 16,449 | — | 183 | — | |||||||||||||
Retail | 2,802 | 2,557 | 138 | — | 2,419 | — | — | |||||||||||||
Residential - 1,687 units | 1,533 | 800 | — | — | — | — | 800 | |||||||||||||
Alexander's (32.4% interest), including 312 residential units | 2,437 | 790 | — | 288 | 419 | — | 83 | |||||||||||||
Hotel Pennsylvania | 1,400 | 1,400 | — | — | — | — | 1,400 | |||||||||||||
29,667 | 23,527 | 1,486 | 16,737 | 2,838 | 183 | 2,283 | ||||||||||||||
Other: | ||||||||||||||||||||
theMART | 3,694 | 3,685 | — | 2,043 | 109 | 1,533 | — | |||||||||||||
555 California Street (70% interest) | 1,821 | 1,275 | 55 | 1,189 | 31 | — | — | |||||||||||||
Other | 2,832 | 1,333 | 146 | 212 | 864 | — | 111 | |||||||||||||
8,347 | 6,293 | 201 | 3,444 | 1,004 | 1,533 | 111 | ||||||||||||||
Total square feet at December 31, 2018 | 38,014 | 29,820 | 1,687 | 20,181 | 3,842 | 1,716 | 2,394 | |||||||||||||
Total square feet at September 30, 2018 | 37,987 | 29,424 | 1,022 | 20,447 | 3,846 | 1,715 | 2,394 | |||||||||||||
Parking Garages (not included above): | Square Feet | Number of Garages | Number of Spaces | |||||||||||||||||
New York | 1,669 | 10 | 4,875 | |||||||||||||||||
theMART | 558 | 4 | 1,637 | |||||||||||||||||
555 California Street | 168 | 1 | 453 | |||||||||||||||||
Rosslyn Plaza | 411 | 4 | 1,094 | |||||||||||||||||
Total at December 31, 2018 | 2,806 | 19 | 8,059 | |||||||||||||||||
- 37 -
TOP 30 TENANTS | |||||||
(unaudited and in thousands, except square feet) | |||||||
Tenants | Square Footage At Share(1) | Annualized Revenues At Share (non-GAAP)(1) | % of Annualized Revenues At Share (non-GAAP)(2) | |||||||
Facebook | 758,292 | $ | 75,749 | 3.1 | % | |||||
IPG and affiliates | 967,552 | 63,689 | 2.6 | % | ||||||
Swatch Group USA | 25,634 | 47,968 | 2.0 | % | ||||||
Macy's | 646,434 | 38,248 | 1.6 | % | ||||||
Google/Motorola Mobility (guaranteed by Google) | 728,483 | 35,214 | 1.4 | % | ||||||
Bloomberg L.P. | 287,898 | 33,874 | 1.4 | % | ||||||
Forever 21 | 170,374 | 33,649 | 1.4 | % | ||||||
Victoria's Secret (guaranteed by L Brands, Inc.) | 63,779 | 33,190 | 1.4 | % | ||||||
AXA Equitable Life Insurance | 336,646 | 32,647 | 1.3 | % | ||||||
Oath (Verizon) | 327,138 | 30,878 | 1.3 | % | ||||||
Ziff Brothers Investments, Inc. | 287,030 | 30,654 | 1.3 | % | ||||||
McGraw-Hill Companies, Inc. | 479,557 | 30,443 | 1.2 | % | ||||||
AMC Networks, Inc. | 404,920 | 27,713 | 1.1 | % | ||||||
The City of New York | 563,545 | 25,554 | 1.0 | % | ||||||
Topshop | 94,349 | 24,414 | 1.0 | % | ||||||
Fast Retailing (Uniqlo) | 90,732 | 23,795 | 1.0 | % | ||||||
Amazon (including its Whole Foods subsidiary) | 308,113 | 23,585 | 1.0 | % | ||||||
Madison Square Garden | 344,355 | 22,852 | 0.9 | % | ||||||
Neuberger Berman Group LLC | 288,325 | 22,801 | 0.9 | % | ||||||
New York University | 347,948 | 20,416 | 0.8 | % | ||||||
Bank of America | 254,033 | 20,367 | 0.8 | % | ||||||
Hollister | 21,741 | 20,252 | 0.8 | % | ||||||
JCPenney | 426,370 | 20,016 | 0.8 | % | ||||||
PwC | 243,434 | 17,430 | 0.7 | % | ||||||
U.S. Government | 578,711 | 14,666 | 0.6 | % | ||||||
Sephora | 16,146 | 14,173 | 0.6 | % | ||||||
Information Builders, Inc. | 229,064 | 13,845 | 0.6 | % | ||||||
Ferragamo | 53,171 | 13,537 | 0.6 | % | ||||||
New York & Company, Inc. | 207,585 | 12,031 | 0.5 | % | ||||||
Cushman & Wakefield | 127,314 | 11,784 | 0.5 | % | ||||||
34.2 | % | |||||||||
____________________
(1) | Includes leases not yet commenced. |
(2) | See reconciliation of our annualized revenue at share on page xiv in the Appendix. |
- 38 -
OCCUPANCY | |||||||||
(unaudited) | |||||||||
New York | theMART | 555 California Street | |||||||
Occupancy rate at: | |||||||||
December 31, 2018 | 97.0 | % | 94.7 | % | 99.4 | % | |||
September 30, 2018 | 97.3 | % | 95.5 | % | 99.4 | % | |||
December 31, 2017 | 97.2 | % | 98.6 | % | 94.2 | % | |||
RESIDENTIAL STATISTICS in service | |||||||
(unaudited) | |||||||
Vornado's Ownership Interest | |||||||
Number of Units | Number of Units | Occupancy Rate | Average Monthly Rent Per Unit | ||||
New York: | |||||||
December 31, 2018 | 1,999 | 963 | 96.6% | $3,803 | |||
September 30, 2018 | 1,999 | 963 | 96.7% | $3,775 | |||
December 31, 2017 | 2,009 | 981 | 96.7% | $3,722 | |||
- 39 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK: | |||||||||||||||||||||||||
Penn District: | |||||||||||||||||||||||||
PENN1 | |||||||||||||||||||||||||
(ground leased through 2098) | Cisco, Lion Resources, WSP USA, Symantec Corporation, | ||||||||||||||||||||||||
-Office | 100.0 | % | 92.5 | % | $ | 66.64 | 2,274,000 | 2,105,000 | 169,000 | United Healthcare Services, Inc., Siemens Mobility | |||||||||||||||
Bank of America, Kmart Corporation, | |||||||||||||||||||||||||
-Retail | 100.0 | % | 97.9 | % | 137.08 | 271,000 | 271,000 | Shake Shack, Starbucks | |||||||||||||||||
100.0 | % | 93.1 | % | 74.14 | 2,545,000 | 2,376,000 | 169,000 | $ | — | ||||||||||||||||
PENN2 | EMC, Information Builders, Inc., | ||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 60.64 | 1,589,000 | 1,359,000 | 230,000 | Madison Square Garden, McGraw-Hill Companies, Inc. | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 217.40 | 45,000 | 39,000 | 6,000 | Chase Manhattan Bank | ||||||||||||||||
100.0 | % | 100.0 | % | 64.96 | 1,634,000 | 1,398,000 | 236,000 | 575,000 | |||||||||||||||||
PENN11 | |||||||||||||||||||||||||
-Office | 100.0 | % | 99.7 | % | 62.24 | 1,110,000 | 1,110,000 | — | Macy's, Madison Square Garden, AMC Networks, Inc. | ||||||||||||||||
PNC Bank National Association, Starbucks, | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 145.56 | 41,000 | 41,000 | — | Madison Square Garden | ||||||||||||||||
100.0 | % | 99.7 | % | 65.21 | 1,151,000 | 1,151,000 | — | 450,000 | |||||||||||||||||
100 West 33rd Street | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 65.71 | 859,000 | 859,000 | — | 398,402 | IPG and affiliates | |||||||||||||||
Manhattan Mall | |||||||||||||||||||||||||
-Retail | 100.0 | % | 94.9 | % | 129.07 | 256,000 | 256,000 | — | 181,598 | JCPenney, Aeropostale, Express, Starbucks | |||||||||||||||
330 West 34th Street | |||||||||||||||||||||||||
(ground leased through 2149 - | |||||||||||||||||||||||||
34.8% ownership interest in the land) | New York & Company, Inc., Structure Tone, | ||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 62.98 | 703,000 | 703,000 | — | Deutsch, Inc., Web.com, Footlocker, Home Advisor, Inc. | ||||||||||||||||
-Retail | 100.0 | % | 44.3 | % | 124.70 | 19,000 | 19,000 | — | Starbucks*, Ballast Point* | ||||||||||||||||
100.0 | % | 98.5 | % | 62.98 | 722,000 | 722,000 | — | 50,150 (3) | |||||||||||||||||
435 Seventh Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 187.82 | 43,000 | 43,000 | — | 95,782 | Forever 21* | |||||||||||||||
7 West 34th Street | |||||||||||||||||||||||||
-Office | 53.0 | % | 100.0 | % | 64.86 | 458,000 | 458,000 | — | Amazon | ||||||||||||||||
-Retail | 53.0 | % | 89.3 | % | 336.54 | 19,000 | 19,000 | — | Amazon, Lindt*, Naturalizer* (guaranteed by Caleres) | ||||||||||||||||
53.0 | % | 99.6 | % | 75.68 | 477,000 | 477,000 | — | 300,000 | |||||||||||||||||
431 Seventh Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 270.94 | 10,000 | 10,000 | — | — | ||||||||||||||||
488 Eighth Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 89.36 | 6,000 | 6,000 | — | — | ||||||||||||||||
138-142 West 32nd Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 67.3 | % | 83.91 | 8,000 | 8,000 | — | — | ||||||||||||||||
150 West 34th Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 112.53 | 78,000 | 78,000 | — | 205,000 | Old Navy | |||||||||||||||
- 40 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
Penn District (Continued): | |||||||||||||||||||||||||
137 West 33rd Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | $ | 97.47 | 3,000 | 3,000 | — | $ | — | ||||||||||||||
131-135 West 33rd Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 55.08 | 23,000 | 23,000 | — | — | ||||||||||||||||
Total Penn District | 7,815,000 | 7,410,000 | 405,000 | 2,255,932 | |||||||||||||||||||||
Midtown East: | |||||||||||||||||||||||||
909 Third Avenue | IPG and affiliates, Forest Laboratories, | ||||||||||||||||||||||||
(ground leased through 2063) | Geller & Company, Morrison Cohen LLP, Robeco USA Inc., | ||||||||||||||||||||||||
-Office | 100.0 | % | 98.6 | % | 64.23 | (4) | 1,352,000 | 1,352,000 | — | 350,000 | United States Post Office, | ||||||||||||||
Thomson Reuters LLC, Sard Verbinnen* | |||||||||||||||||||||||||
150 East 58th Street | |||||||||||||||||||||||||
(ground leased through 2118) | |||||||||||||||||||||||||
-Office | 100.0 | % | 97.0 | % | 76.09 | 540,000 | 540,000 | — | Castle Harlan, Tournesol Realty LLC (Peter Marino) | ||||||||||||||||
-Retail | 100.0 | % | 13.1 | % | 17.86 | 3,000 | 3,000 | — | |||||||||||||||||
100.0 | % | 96.5 | % | 75.77 | 543,000 | 543,000 | — | — | |||||||||||||||||
715 Lexington Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 92.5 | % | 105.09 | 23,000 | 23,000 | — | — | New York & Company, Inc., Jonathan Adler | |||||||||||||||
966 Third Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 96.03 | 7,000 | 7,000 | — | — | McDonald's | |||||||||||||||
968 Third Avenue | |||||||||||||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 165.23 | 7,000 | 7,000 | — | — | Wells Fargo* | |||||||||||||||
Total Midtown East | 1,932,000 | 1,932,000 | — | 350,000 | |||||||||||||||||||||
Midtown West: | |||||||||||||||||||||||||
888 Seventh Avenue | TPG-Axon Capital, Lone Star US Acquisitions LLC, | ||||||||||||||||||||||||
(ground leased through 2067) | Pershing Square Capital Management, | ||||||||||||||||||||||||
-Office | 100.0 | % | 96.6 | % | 92.27 | 871,000 | 871,000 | — | Vornado Executive Headquarters | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 309.08 | 15,000 | 15,000 | — | Redeye Grill L.P. | ||||||||||||||||
100.0 | % | 96.7 | % | 95.94 | 886,000 | 886,000 | — | 375,000 | |||||||||||||||||
57th Street - 2 buildings | |||||||||||||||||||||||||
-Office | 50.0 | % | 84.6 | % | 48.81 | 81,000 | 81,000 | — | Various | ||||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 136.71 | 22,000 | 22,000 | — | |||||||||||||||||
50.0 | % | 87.9 | % | 67..58 | 103,000 | 103,000 | — | 20,000 | |||||||||||||||||
Total Midtown West | 989,000 | 989,000 | — | 395,000 | |||||||||||||||||||||
Park Avenue: | |||||||||||||||||||||||||
280 Park Avenue | Cohen & Steers Inc., Franklin Templeton Co. LLC, | ||||||||||||||||||||||||
-Office | 50.0 | % | 93.3 | % | 101.12 | 1,234,000 | 1,234,000 | — | PJT Partners, Investcorp International Inc., GIC Inc., Wells Fargo | ||||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 102.82 | 26,000 | 26,000 | — | Scottrade Inc., Starbucks, The Four Seasons Restaurant | ||||||||||||||||
50.0 | % | 93.5 | % | 101.15 | 1,260,000 | 1,260,000 | — | 1,200,000 | |||||||||||||||||
- 41 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
Park Avenue (Continued): | |||||||||||||||||||||||||
350 Park Avenue | Kissinger Associates Inc., Ziff Brothers Investment Inc., | ||||||||||||||||||||||||
-Office | 100.0 | % | 97.7 | % | $ | 108.35 | 554,000 | 554,000 | — | MFA Financial Inc., M&T Bank | |||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 270.21 | 17,000 | 17,000 | — | Fidelity Investments, AT&T Wireless, Valley National Bank | ||||||||||||||||
100.0 | % | 97.8 | % | 113.17 | 571,000 | 571,000 | — | $ | 400,000 | ||||||||||||||||
Total Park Avenue | 1,831,000 | 1,831,000 | — | 1,600,000 | |||||||||||||||||||||
Grand Central: | |||||||||||||||||||||||||
90 Park Avenue | Alston & Bird, Capital One, PwC, | ||||||||||||||||||||||||
-Office | 100.0 | % | 94.8 | % | 78.15 | 938,000 | 938,000 | — | Factset Research Systems Inc., Foley & Lardner | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 133.90 | 24,000 | 24,000 | — | Citibank, Starbucks | ||||||||||||||||
100.0 | % | 94.9 | % | 79.54 | 962,000 | 962,000 | — | — | |||||||||||||||||
330 Madison Avenue | Guggenheim Partners LLC, HSBC Bank AFS, Glencore Ltd., | ||||||||||||||||||||||||
-Office | 25.0 | % | 96.9 | % | 79.04 | 813,000 | 813,000 | — | Jones Lang LaSalle Inc., Wells Fargo, American Century | ||||||||||||||||
-Retail | 25.0 | % | 100.0 | % | 331.56 | 33,000 | 33,000 | — | Ann Taylor Retail Inc., Citibank, Starbucks | ||||||||||||||||
25.0 | % | 97.0 | % | 88.89 | 846,000 | 846,000 | — | 500,000 | |||||||||||||||||
510 Fifth Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 159.31 | 66,000 | 66,000 | — | — | The North Face, Elie Tahari | |||||||||||||||
Total Grand Central | 1,874,000 | 1,874,000 | — | 500,000 | |||||||||||||||||||||
Madison/Fifth: | |||||||||||||||||||||||||
640 Fifth Avenue | Fidelity Investments, Owl Creek Asset Management LP, | ||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 92.87 | 246,000 | 246,000 | — | Avolon Aerospace*, GCA Savvian Inc. | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 940.17 | 69,000 | 69,000 | — | Victoria's Secret (guaranteed by L Brands, Inc.), Dyson | ||||||||||||||||
100.0 | % | 100.0 | % | 278.47 | 315,000 | 315,000 | — | — | |||||||||||||||||
666 Fifth Avenue Retail Condominium | |||||||||||||||||||||||||
-Retail | 100.0 | % | (5) | 100.0 | % | 470.16 | 114,000 | 114,000 | — | 390,000 | Fast Retailing (Uniqlo), Hollister, Tissot | ||||||||||||||
595 Madison Avenue | Beauvais Carpets, Levin Capital Strategies LP, | ||||||||||||||||||||||||
-Office | 100.0 | % | 96.1 | % | 84.54 | 301,000 | 301,000 | — | Cosmetech Mably Int'l LLC. | ||||||||||||||||
-Retail | 100.0 | % | 39.2 | % | 1,273.21 | 29,000 | 29,000 | — | Coach | ||||||||||||||||
100.0 | % | 91.1 | % | 189.00 | 330,000 | 330,000 | — | — | |||||||||||||||||
650 Madison Avenue | Memorial Sloan Kettering Cancer Center, Polo Ralph Lauren, | ||||||||||||||||||||||||
-Office | 20.1 | % | 97.9 | % | 113.76 | 564,000 | 564,000 | — | Willett Advisors LLC (Bloomberg Philanthropies), Sotheby's International Realty, Inc. | ||||||||||||||||
-Retail | 20.1 | % | 68.6 | % | 1,256.83 | 40,000 | 40,000 | — | Moncler USA Inc., Tod's, Celine* | ||||||||||||||||
20.1 | % | 96.0 | % | 189.46 | 604,000 | 604,000 | — | 800,000 | |||||||||||||||||
689 Fifth Avenue | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 86.36 | 81,000 | 81,000 | — | Yamaha Artist Services Inc., Brunello Cucinelli USA Inc. | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 864.35 | 17,000 | 17,000 | — | MAC Cosmetics, Massimo Dutti | ||||||||||||||||
100.0 | % | 100.0 | % | 221.32 | 98,000 | 98,000 | — | — | |||||||||||||||||
655 Fifth Avenue | |||||||||||||||||||||||||
-Retail | 92.5 | % | 100.0 | % | 253.79 | 57,000 | 57,000 | — | 140,000 | Ferragamo | |||||||||||||||
- 42 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
Madison/Fifth (Continued): | |||||||||||||||||||||||||
697-703 Fifth Avenue | |||||||||||||||||||||||||
-Retail | 74.3 | % | 100.0 | % | $ | 2,760.34 | 26,000 | 26,000 | — | $ | 450,000 | Swatch Group USA, Harry Winston | |||||||||||||
Total Madison/Fifth | 1,544,000 | 1,544,000 | 1,780,000 | ||||||||||||||||||||||
Midtown South: | |||||||||||||||||||||||||
770 Broadway | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 97.55 | 1,078,000 | 1,078,000 | — | Facebook, Oath (Verizon) | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 66.56 | 105,000 | 105,000 | — | Ann Taylor Retail Inc., Bank of America, Kmart Corporation | ||||||||||||||||
100.0 | % | 100.0 | % | 94.80 | 1,183,000 | 1,183,000 | — | 700,000 | |||||||||||||||||
One Park Avenue | New York University, Clarins USA Inc., | ||||||||||||||||||||||||
BMG Rights Management, Robert A.M. Stern Architect, | |||||||||||||||||||||||||
-Office | 55.0 | % | 100.0 | % | 58.91 | 865,000 | 865,000 | — | automotiveMastermind | ||||||||||||||||
-Retail | 55.0 | % | 100.0 | % | 88.52 | 78,000 | 78,000 | — | Bank of Baroda, Citibank, Equinox, Men's Wearhouse | ||||||||||||||||
55.0 | % | 100.0 | % | 61.36 | 943,000 | 943,000 | — | 300,000 | |||||||||||||||||
4 Union Square South | Burlington, Whole Foods Market, DSW, | ||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 107.88 | 206,000 | 206,000 | — | 120,000 | Forever 21 | |||||||||||||||
692 Broadway | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 92.96 | 36,000 | 36,000 | — | — | Equinox, Oath (Verizon) | |||||||||||||||
Total Midtown South | 2,368,000 | 2,368,000 | — | 1,120,000 | |||||||||||||||||||||
Rockefeller Center: | |||||||||||||||||||||||||
1290 Avenue of the Americas | AXA Equitable Life Insurance, Hachette Book Group Inc., | ||||||||||||||||||||||||
Bryan Cave LLP, Neuberger Berman Group LLC, SSB Realty LLC, | |||||||||||||||||||||||||
Cushman & Wakefield, Fitzpatrick, | |||||||||||||||||||||||||
-Office | 70.0 | % | 100.0 | % | 82.41 | 2,037,000 | 2,037,000 | — | Cella, Harper & Scinto, Columbia University | ||||||||||||||||
-Retail | 70.0 | % | 100.0 | % | 181.83 | 76,000 | 76,000 | — | Duane Reade, JPMorgan Chase Bank, Sovereign Bank, Starbucks | ||||||||||||||||
70.0 | % | 100.0 | % | 85.98 | 2,113,000 | 2,113,000 | — | 950,000 | |||||||||||||||||
608 Fifth Avenue | |||||||||||||||||||||||||
(ground leased through 2033) | |||||||||||||||||||||||||
-Office | 100.0 | % | 99.8 | % | 72.24 | 93,000 | 93,000 | — | |||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 486.09 | 44,000 | 44,000 | — | Topshop | ||||||||||||||||
100.0 | % | 99.9 | % | 205.15 | 137,000 | 137,000 | — | — | |||||||||||||||||
Total Rockefeller Center | 2,250,000 | 2,250,000 | — | 950,000 | |||||||||||||||||||||
Wall Street/Downtown: | |||||||||||||||||||||||||
40 Fulton Street | |||||||||||||||||||||||||
-Office | 100.0 | % | 77.1 | % | 44.54 | 246,000 | 246,000 | — | Market News International Inc., Sapient Corp. | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 108.51 | 5,000 | 5,000 | — | TD Bank | ||||||||||||||||
100.0 | % | 77.5 | % | 45.81 | 251,000 | 251,000 | — | — | |||||||||||||||||
Soho: | |||||||||||||||||||||||||
478-486 Broadway - 2 buildings | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 252.41 | 65,000 | 65,000 | — | Topshop, Madewell, J. Crew | ||||||||||||||||
-Residential (10 units) | 100.0 | % | 100.0 | % | 20,000 | 20,000 | — | ||||||||||||||||||
100.0 | % | 100.0 | % | 85,000 | 85,000 | — | — | ||||||||||||||||||
- 43 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
Soho (Continued): | |||||||||||||||||||||||||
443 Broadway | |||||||||||||||||||||||||
Retail | 100.0 | % | 100.0 | % | $ | 100.00 | 16,000 | 16,000 | — | $ | — | Necessary Clothing | |||||||||||||
304 Canal Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | — | — | 4,000 | 4,000 | — | ||||||||||||||||||
-Residential (4 units) | 100.0 | % | 100.0 | % | 9,000 | 9,000 | — | ||||||||||||||||||
100.0 | % | 69.2 | % | 13,000 | 13,000 | — | — | ||||||||||||||||||
334 Canal Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 100.20 | 4,000 | 4,000 | — | |||||||||||||||||
-Residential (4 units) | 100.0 | % | 75.0 | % | — | 11,000 | 11,000 | — | |||||||||||||||||
100.0 | % | 81.7 | % | 15,000 | 15,000 | — | — | ||||||||||||||||||
155 Spring Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 93.6 | % | 141.06 | 50,000 | 50,000 | — | — | Vera Bradley | |||||||||||||||
148 Spring Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 196.15 | 8,000 | 8,000 | — | — | Dr. Martens | |||||||||||||||
150 Spring Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 63.2 | % | 427.73 | 6,000 | 6,000 | — | Sandro | ||||||||||||||||
-Residential (1 unit) | 100.0 | % | 100.0 | % | 1,000 | 1,000 | — | ||||||||||||||||||
100.0 | % | 68.5 | % | 7,000 | 7,000 | — | — | ||||||||||||||||||
Total Soho | 194,000 | 194,000 | — | — | |||||||||||||||||||||
Times Square: | |||||||||||||||||||||||||
1540 Broadway | Forever 21, Planet Hollywood, Disney, Sunglass Hut, | ||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 270.70 | 161,000 | 161,000 | — | — | MAC Cosmetics, U.S. Polo | |||||||||||||||
1535 Broadway | |||||||||||||||||||||||||
-Retail | 100.0 | % | 95.3 | % | 1,086.40 | 45,000 | 45,000 | — | T-Mobile, Invicta, Swatch Group USA, Levi's, Sephora | ||||||||||||||||
-Theatre | 100.0 | % | 100.0 | % | 13.68 | 62,000 | 62,000 | — | Nederlander-Marquis Theatre | ||||||||||||||||
100.0 | % | 98.0 | % | 404.70 | 107,000 | 107,000 | — | — | |||||||||||||||||
Total Times Square | 268,000 | 268,000 | — | — | |||||||||||||||||||||
Upper East Side: | |||||||||||||||||||||||||
828-850 Madison Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 94.8 | % | 456.48 | 18,000 | 14,000 | 4,000 | — | Gucci, Cartier, Christofle Silver Inc. | |||||||||||||||
677-679 Madison Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 501.39 | 8,000 | 8,000 | — | Berluti | ||||||||||||||||
-Residential (8 units) | 100.0 | % | 75.0 | % | 5,000 | 5,000 | — | ||||||||||||||||||
100.0 | % | 90.4 | % | 13,000 | 13,000 | — | — | ||||||||||||||||||
759-771 Madison Avenue (40 East 66th) | |||||||||||||||||||||||||
-Residential (5 units) | 100.0 | % | 100.0 | % | 12,000 | 12,000 | — | ||||||||||||||||||
-Retail | 100.0 | % | 66.7 | % | 1,108.31 | 11,000 | 11,000 | — | John Varvatos, J. Crew | ||||||||||||||||
100.0 | % | 84.1 | % | 23,000 | 23,000 | — | — | ||||||||||||||||||
1131 Third Avenue | |||||||||||||||||||||||||
Retail | 100.0 | % | 100.0 | % | 161.80 | 23,000 | 23,000 | — | — | Nike, Crunch LLC, J.Jill | |||||||||||||||
- 44 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
Upper East Side (Continued): | |||||||||||||||||||||||||
Other | |||||||||||||||||||||||||
-Retail - 2 buildings | 100.0 | % | 100.0 | % | $ | — | 15,000 | 15,000 | — | ||||||||||||||||
-Residential (8 units) | 100.0 | % | 87.5 | % | 7,000 | 7,000 | — | ||||||||||||||||||
100.0 | % | 96.0 | % | 22,000 | 22,000 | — | $ | — | |||||||||||||||||
Total Upper East Side | 99,000 | 95,000 | 4,000 | — | |||||||||||||||||||||
Long Island City: | |||||||||||||||||||||||||
33-00 Northern Boulevard (Center Building) | |||||||||||||||||||||||||
-Office | 100.0 | % | 95.5 | % | 35.76 | 471,000 | 471,000 | — | 100,000 | The City of New York, NYC Transit Authority | |||||||||||||||
Chelsea/Meatpacking District: | |||||||||||||||||||||||||
260 Eleventh Avenue | |||||||||||||||||||||||||
(ground leased through 2114) | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 53.21 | 184,000 | 184,000 | — | — | The City of New York | |||||||||||||||
85 Tenth Avenue | Google, General Services Administration, | ||||||||||||||||||||||||
Telehouse International Corp., L-3 Communications, | |||||||||||||||||||||||||
-Office | 49.9 | % | 99.8 | % | 89.39 | 586,000 | 586,000 | — | Moet Hennessy USA. Inc. | ||||||||||||||||
-Retail | 49.9 | % | 96.4 | % | 78.39 | 43,000 | 43,000 | — | IL Posto LLC, Toro NYC Restaurant, L'Atelier | ||||||||||||||||
49.9 | % | 99.5 | % | 88.65 | 629,000 | 629,000 | — | 625,000 | |||||||||||||||||
537 West 26th Street | |||||||||||||||||||||||||
-Retail | 100 | % | — | — | 14,000 | 14,000 | — | — | |||||||||||||||||
Total Chelsea/Meatpacking District | 827,000 | 827,000 | — | 625,000 | |||||||||||||||||||||
Upper West Side: | |||||||||||||||||||||||||
50-70 W 93rd Street | |||||||||||||||||||||||||
-Residential (325 units) | 49.9 | % | 96.0 | % | 283,000 | 283,000 | — | 80,000 | |||||||||||||||||
Tribeca: | |||||||||||||||||||||||||
Independence Plaza, Tribeca | |||||||||||||||||||||||||
-Residential (1,327 units) | 50.1 | % | 97.5 | % | 1,185,000 | 1,185,000 | — | ||||||||||||||||||
-Retail | 50.1 | % | 100.0 | % | 53.50 | 72,000 | 60,000 | 12,000 | Duane Reade, Food Emporium | ||||||||||||||||
50.1 | % | 97.7 | % | 1,257,000 | 1,245,000 | 12,000 | 675,000 | ||||||||||||||||||
339 Greenwich Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 109.91 | 8,000 | 8,000 | — | — | Sarabeth's | |||||||||||||||
Total Tribeca | 1,265,000 | 1,253,000 | 12,000 | 675,000 | |||||||||||||||||||||
New Jersey: | |||||||||||||||||||||||||
Paramus | |||||||||||||||||||||||||
-Office | 100.0 | % | 87.2 | % | 23.28 | 129,000 | 129,000 | — | — | Vornado's Administrative Headquarters | |||||||||||||||
Washington D.C.: | |||||||||||||||||||||||||
3040 M Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 72.87 | 44,000 | 44,000 | — | — | Nike, Amazon | |||||||||||||||
- 45 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
Property under Development: | |||||||||||||||||||||||||
512 West 22nd Street | |||||||||||||||||||||||||
-Office | 55.0 | % | — | $ | — | 173,000 | — | 173,000 | $ | 89,796 | |||||||||||||||
61 Ninth Avenue | |||||||||||||||||||||||||
(ground leased through 2115) | |||||||||||||||||||||||||
-Office | 45.1 | % | — | — | 147,000 | — | 147,000 | Aetna Life Insurance Company* | |||||||||||||||||
-Retail | 45.1 | % | 100.0 | % | 287.61 | 23,000 | 23,000 | — | Starbucks | ||||||||||||||||
45.1 | % | 100.0 | % | 287.61 | 170,000 | 23,000 | 147,000 | 80,409 | |||||||||||||||||
606 Broadway (19 East Houston Street) | |||||||||||||||||||||||||
-Office | 50.0 | % | — | — | 23,000 | — | 23,000 | ||||||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 669.56 | 11,000 | 3,000 | 8,000 | HSBC* | ||||||||||||||||
50.0 | % | 100.0 | % | 669.56 | 34,000 | 3,000 | 31,000 | 51,290 | |||||||||||||||||
Farley Office and Retail Building (ground and building leased through 2116) | |||||||||||||||||||||||||
-Office | 95.0 | % | — | — | 730,000 | — | 730,000 | ||||||||||||||||||
-Retail | 95.0 | % | — | — | 120,000 | — | 120,000 | ||||||||||||||||||
95.0 | % | — | — | 850,000 | — | 850,000 | 257,941 | ||||||||||||||||||
825 Seventh Avenue | |||||||||||||||||||||||||
-Office | 50.0 | % | — | — | 165,000 | — | 165,000 | ||||||||||||||||||
-Retail | 100.0 | % | — | — | 4,000 | — | 4,000 | ||||||||||||||||||
51.2 | % | — | — | 169,000 | — | 169,000 | 20,500 | ||||||||||||||||||
Total Property under Development | — | 1,396,000 | 26,000 | 1,370,000 | 499,936 | ||||||||||||||||||||
Properties to be Developed: | |||||||||||||||||||||||||
57th Street (3 properties) | |||||||||||||||||||||||||
-Office | 50.0 | % | — | — | — | — | — | ||||||||||||||||||
-Retail | 50.0 | % | — | — | — | — | — | ||||||||||||||||||
484 Eighth Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | — | — | — | — | — | — | |||||||||||||||||
486 Eighth Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | — | — | — | — | — | — | |||||||||||||||||
265 West 34th Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | — | — | — | — | — | — | |||||||||||||||||
267 West 34th Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | — | — | — | — | — | — | |||||||||||||||||
Total Properties to be Developed | — | — | — | — | |||||||||||||||||||||
New York Office: | |||||||||||||||||||||||||
Total | 97.3 | % | $ | 76.04 | 21,495,000 | 19,858,000 | 1,637,000 | ||||||||||||||||||
Vornado's Ownership Interest | 97.2 | % | $ | 74.04 | 17,980,000 | 16,632,000 | 1,348,000 | ||||||||||||||||||
New York Retail: | |||||||||||||||||||||||||
Total | 97.2 | % | $ | 232.86 | 2,802,000 | 2,648,000 | 154,000 | ||||||||||||||||||
Vornado's Ownership Interest | 97.3 | % | $ | 228.43 | 2,557,000 | 2,419,000 | 138,000 | ||||||||||||||||||
New York Residential: | |||||||||||||||||||||||||
Total | 96.7 | % | 1,533,000 | 1,533,000 | — | ||||||||||||||||||||
Vornado's Ownership Interest | 96.6 | % | 800,000 | 800,000 | — | ||||||||||||||||||||
- 46 -
NEW YORK SEGMENT | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
NEW YORK (Continued): | |||||||||||||||||||||||||
ALEXANDER'S, INC.: | |||||||||||||||||||||||||
New York: | |||||||||||||||||||||||||
731 Lexington Avenue, Manhattan | |||||||||||||||||||||||||
-Office | 32.4 | % | 100.0 | % | $ | 117.66 | 889,000 | 889,000 | — | $ | 500,000 | Bloomberg | |||||||||||||
-Retail | 32.4 | % | 99.4 | % | 193.81 | 174,000 | 174,000 | — | 350,000 | Hennes & Mauritz, The Home Depot, The Container Store | |||||||||||||||
32.4 | % | 99.9 | % | 129.04 | 1,063,000 | 1,063,000 | — | 850,000 | |||||||||||||||||
Burlington, | |||||||||||||||||||||||||
Rego Park I, Queens (4.8 acres) | 32.4 | % | 43.1 | % | 46.93 | 343,000 | 343,000 | — | — | Bed Bath & Beyond, Marshalls | |||||||||||||||
Rego Park II (adjacent to Rego Park I), | |||||||||||||||||||||||||
Queens (6.6 acres) | 32.4 | % | 99.9 | % | 44.73 | 609,000 | 609,000 | — | 252,544 | Century 21, Costco, Kohl's, TJ Maxx | |||||||||||||||
Flushing, Queens (1.0 acre ground leased through 2037) | 32.4 | % | 100.0 | % | 18.22 | 167,000 | 167,000 | — | — | New World Mall LLC | |||||||||||||||
The Alexander Apartment Tower, | |||||||||||||||||||||||||
Rego Park, Queens, NY | |||||||||||||||||||||||||
Residential (312 units) | 32.4 | % | 95.5 | % | — | 255,000 | 255,000 | — | — | ||||||||||||||||
New Jersey: | |||||||||||||||||||||||||
Paramus, New Jersey | |||||||||||||||||||||||||
(30.3 acres ground leased to IKEA through 2041) | 32.4 | % | 100.0 | % | — | — | — | — | 68,000 | IKEA (ground lessee) | |||||||||||||||
Property to be Developed: | |||||||||||||||||||||||||
Rego Park III (adjacent to Rego Park II), | |||||||||||||||||||||||||
Queens, NY (3.4 acres) | 32.4 | % | — | — | — | — | — | — | |||||||||||||||||
Total Alexander's | 32.4 | % | 91.4 | % | 73.83 | 2,437,000 | 2,437,000 | — | 1,170,544 | ||||||||||||||||
Hotel Pennsylvania: | |||||||||||||||||||||||||
-Hotel (1,700 Rooms) | 100.0 | % | 1,400,000 | 1,400,000 | — | — | |||||||||||||||||||
Total New York | 96.7 | % | $ | 91.27 | 29,667,000 | 27,876,000 | 1,791,000 | $ | 12,101,412 | ||||||||||||||||
Vornado's Ownership Interest | 97.0 | % | $ | 78.09 | 23,527,000 | 22,041,000 | 1,486,000 | $ | 8,142,708 | ||||||||||||||||
____________________
* Lease not yet commenced.
(1) | Weighted average annual rent per square foot for office properties excludes garages and de minimis amounts of storage space. Weighted average annual rent per square foot for retail excludes non-selling space. |
(2) | Represents the contractual debt obligations. |
(3) | Amount represents debt on land which is owned 34.8% by Vornado. |
(4) | Excludes US Post Office leased through 2038 (including three five-year renewal options) for which the annual escalated rent is $12.99 PSF. |
(5) | 75,000 square feet is leased from 666 Fifth Avenue Office Condominium. |
- 47 -
OTHER | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
% Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
theMART: | |||||||||||||||||||||||||
theMART, Chicago | Motorola Mobility (guaranteed by Google), | ||||||||||||||||||||||||
CCC Information Services, Ogilvy Group (WPP), | |||||||||||||||||||||||||
Publicis Groupe (Razorfish), | |||||||||||||||||||||||||
1871, Yelp Inc., Paypal, Inc., Allscripts Healthcare, | |||||||||||||||||||||||||
Chicago School of Professional Psychology, Kellogg Company, | |||||||||||||||||||||||||
Innovation Development Institute, Inc., Chicago Teachers Union, | |||||||||||||||||||||||||
-Office | 100.0 | % | 92.4 | % | $ | 43.71 | 2,043,000 | 2,043,000 | — | ConAgra Foods Inc., Allstate Insurance Company | |||||||||||||||
Steelcase, Baker, Knapp & Tubbs, Holly Hunt Ltd., | |||||||||||||||||||||||||
-Showroom/Trade show | 100.0 | % | 98.1 | % | 53.44 | 1,533,000 | 1,533,000 | — | Allsteel Inc., Herman Miller Inc., Knoll Inc., Teknion LLC | ||||||||||||||||
-Retail | 100.0 | % | 90.6 | % | 54.87 | 99,000 | 99,000 | — | |||||||||||||||||
100.0 | % | 94.8 | % | 48.18 | 3,675,000 | 3,675,000 | — | $ | 675,000 | ||||||||||||||||
Other (2 properties) | 50.0 | % | 89.5 | % | 43.90 | 19,000 | 19,000 | — | 32,227 | ||||||||||||||||
Total theMART | 94.7 | % | $ | 48.16 | 3,694,000 | 3,694,000 | — | $ | 707,227 | ||||||||||||||||
Vornado's Ownership Interest | 94.7 | % | $ | 48.16 | 3,685,000 | 3,685,000 | — | $ | 691,113 | ||||||||||||||||
555 California Street: | |||||||||||||||||||||||||
555 California Street | 70.0 | % | 99.3 | % | $ | 76.99 | 1,508,000 | 1,508,000 | — | $ | 558,914 | Bank of America, Dodge & Cox, Goldman Sachs & Co., | |||||||||||||
Jones Day, Kirkland & Ellis LLP, Morgan Stanley & Co. Inc., | |||||||||||||||||||||||||
McKinsey & Company Inc., UBS Financial Services, | |||||||||||||||||||||||||
KKR Financial, Microsoft Corporation, | |||||||||||||||||||||||||
Fenwick & West LLP, Sidley Austin | |||||||||||||||||||||||||
315 Montgomery Street | 70.0 | % | 100.0 | % | 66.70 | 235,000 | 235,000 | — | — | Bank of America, Regus, Ripple Labs Inc., LendingHome Corporation | |||||||||||||||
Blue Shield | |||||||||||||||||||||||||
345 Montgomery Street | 70.0 | % | — | — | 78,000 | — | 78,000 | — | Regus* | ||||||||||||||||
Total 555 California Street | 99.4 | % | $ | 75.60 | 1,821,000 | 1,743,000 | 78,000 | $ | 558,914 | ||||||||||||||||
Vornado's Ownership Interest | 99.4 | % | $ | 75.60 | 1,275,000 | 1,220,000 | 55,000 | $ | 391,240 | ||||||||||||||||
____________________
* Lease not yet commenced.
(1) | Weighted average annual rent per square foot excludes ground rent, storage rent and garages. |
(2) | Represents the contractual debt obligations. |
- 48 -
REAL ESTATE FUND | |||||||||||||||||||||||||
PROPERTY TABLE | |||||||||||||||||||||||||
Fund % Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(2) | Major Tenants | ||||||||||||||||||||
Property | Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||
VORNADO CAPITAL PARTNERS | |||||||||||||||||||||||||
REAL ESTATE FUND: | |||||||||||||||||||||||||
New York, NY: | |||||||||||||||||||||||||
Lucida, 86th Street and Lexington Avenue | |||||||||||||||||||||||||
(ground leased through 2082) | Barnes & Noble, Hennes & Mauritz, | ||||||||||||||||||||||||
- Retail | 100.0 | % | 100.0 | % | $ | 243.36 | 96,000 | 96,000 | — | Sephora, Bank of America | |||||||||||||||
- Residential (39 units) | 100.0 | % | 94.9 | % | 59,000 | 59,000 | — | ||||||||||||||||||
100.0 | % | 155,000 | 155,000 | — | $ | 144,130 | |||||||||||||||||||
Crowne Plaza Times Square (0.64 acres owned in fee; 0.18 acres ground leased through 2187 and 0.05 acres ground leased through 2035) | |||||||||||||||||||||||||
- Hotel (795 Rooms) | |||||||||||||||||||||||||
- Retail | 75.3 | % | 87.7 | % | 164.29 | 47,000 | 47,000 | — | New York Sports Club, Krispy Kreme* | ||||||||||||||||
- Office | 75.3 | % | 100.0 | % | 47.25 | 196,000 | 196,000 | — | American Management Association, Open Jar | ||||||||||||||||
75.3 | % | 97.6 | % | 69.89 | 243,000 | 243,000 | — | 256,956 | |||||||||||||||||
501 Broadway | 100.0 | % | 100.0 | % | 265.08 | 9,000 | 9,000 | — | 22,872 | Capital One Financial Corporation | |||||||||||||||
Miami, FL: | |||||||||||||||||||||||||
1100 Lincoln Road | |||||||||||||||||||||||||
- Retail | 100.0 | % | 66.8 | % | 181.48 | 51,000 | 51,000 | — | Banana Republic | ||||||||||||||||
- Theatre | 100.0 | % | 100.0 | % | 41.88 | 79,000 | 79,000 | — | Regal Cinema | ||||||||||||||||
100.0 | % | 86.9 | % | 83.84 | 130,000 | 130,000 | — | 82,750 | |||||||||||||||||
Total Real Estate Fund | 88.8 | % | 94.9 | % | 537,000 | 537,000 | — | $ | 506,708 | ||||||||||||||||
Vornado's Ownership Interest | 28.6 | % | 95.6 | % | 154,000 | 154,000 | — | $ | 110,810 | ||||||||||||||||
____________________
* Lease not yet commenced.
(1) | Weighted average annual rent per square foot excludes ground rent, storage rent and garages. |
(2) | Represents the contractual debt obligations. |
- 49 -
OTHER | ||||||||||||||||||||||||||||
PROPERTY TABLE | ||||||||||||||||||||||||||||
Property | % Ownership | % Occupancy | Weighted Average Annual Rent PSF(1) | Square Feet | Encumbrances (non-GAAP) (in thousands)(3) | Major Tenants | ||||||||||||||||||||||
Total Property | In Service | Under Development or Not Available for Lease | ||||||||||||||||||||||||||
Owned by Company | Owned by Tenant(2) | |||||||||||||||||||||||||||
OTHER: | ||||||||||||||||||||||||||||
Virginia: | ||||||||||||||||||||||||||||
Rosslyn Plaza | ||||||||||||||||||||||||||||
Office - 4 buildings | 46.2 | % | 61.6 | % | $ | 45.74 | 736,000 | 432,000 | — | 304,000 | Gartner, Nathan Associates, Inc. | |||||||||||||||||
Residential - 2 buildings (197 units) | 43.7 | % | 97.9 | % | 253,000 | 253,000 | — | — | ||||||||||||||||||||
989,000 | 685,000 | — | 304,000 | $ | 39,683 | |||||||||||||||||||||||
Fashion Centre Mall | 7.5 | % | 99.6 | % | 49.06 | 868,000 | 868,000 | — | — | 410,000 | Macy's, Nordstrom | |||||||||||||||||
Washington Tower | 7.5 | % | 100.0 | % | 51.16 | 170,000 | 170,000 | — | — | 40,000 | Computer Science Corp. | |||||||||||||||||
New Jersey: | ||||||||||||||||||||||||||||
Wayne Town Center, Wayne (ground leased through 2064) | 100.0 | % | 100.0 | % | 31.22 | 677,000 | 228,000 | 443,000 | 6,000 | — | JCPenney, Costco, Dick's Sporting Goods, | |||||||||||||||||
Nordstrom Rack, 24 Hour Fitness | ||||||||||||||||||||||||||||
Maryland: | ||||||||||||||||||||||||||||
Annapolis (ground and building leased through 2042) | 100.0 | % | 100.0 | % | 8.99 | 128,000 | 128,000 | — | — | — | The Home Depot | |||||||||||||||||
Total Other | 92.5 | % | $ | 40.66 | 2,832,000 | 2,079,000 | 443,000 | 310,000 | $ | 489,683 | ||||||||||||||||||
Vornado's Ownership Interest | 92.8 | % | $ | 31.57 | 1,333,000 | 744,000 | 443,000 | 146,000 | $ | 53,754 | ||||||||||||||||||
____________________
(1) | Weighted average annual rent per square foot excludes ground rent, storage rent, garages and residential. |
(2) | Owned by tenant on land leased from the company. |
(3) | Represents the contractual debt obligations. |
- 50 -
INVESTOR INFORMATION | |||||
Executive Officers: | |||||
Steven Roth | Chairman of the Board and Chief Executive Officer | ||||
David R. Greenbaum | President - New York Division | ||||
Michael J. Franco | Executive Vice President - Chief Investment Officer | ||||
Joseph Macnow | Executive Vice President - Chief Financial Officer and Chief Administrative Officer | ||||
RESEARCH COVERAGE - EQUITY | |||||
James Feldman | Steve Sakwa/Jason Green | Nicholas Yulico | |||
Bank of America/Merrill Lynch | Evercore ISI | Scotia Capital (USA) Inc | |||
646-855-5808 | 212-446-9462/212-446-9449 | 212-225-6904 | |||
Ross Smotrich/Trevor Young | Daniel Ismail | John W. Guinee/Aaron Wolf | |||
Barclays Capital | Green Street Advisors | Stifel Nicolaus & Company | |||
212-526-2306/212-526-3098 | 949-640-8780 | 443-224-1307/443-224-1206 | |||
John P. Kim/Alex Nelson | Anthony Paolone/Patrice Chen | Michael Lewis | |||
BMO Capital Markets | JP Morgan | SunTrust Robinson Humphrey | |||
212-885-4115/212-885-4144 | 212-622-6682/212-622-1893 | 212-319-5659 | |||
Michael Bilerman/Emmanuel Korchman | Vikram Malhotra/Adam J. Gabalski | Frank Lee | |||
Citi | Morgan Stanley | UBS | |||
212-816-1383/212-816-1382 | 212-761-7064/212-761-8051 | 415-352-5679 | |||
Derek Johnston/Mike Husseini | Alexander Goldfarb/Daniel Santos | ||||
Deutsche Bank | Sandler O'Neill | ||||
904-520-4973/212-250-7703 | 212-466-7937/212-466-7927 | ||||
RESEARCH COVERAGE - DEBT | |||||
Andrew Molloy | Jesse Rosenthal | Thierry Perrein | |||
Bank of America/Merrill Lynch | CreditSights | Wells Fargo Securities | |||
646-855-6435 | 212-340-3816 | 704-410-3262 | |||
Cristina Rosenberg | Mark Streeter | ||||
Citi | JP Morgan | ||||
212-723-6199 | 212-834-5086 | ||||
Research Coverage - Equity and Debt is provided as a service to interested parties and not as an endorsement of any report, or representation as to the accuracy of any information contained therein. Opinions, forecasts and other forward-looking statements expressed in analysts' reports are subject to change without notice. | |||||
- 51 -
APPENDIX
DEFINITIONS AND NON-GAAP RECONCILIATIONS
FINANCIAL SUPPLEMENT DEFINITIONS |
The financial supplement includes various non-GAAP financial measures. Descriptions of these non-GAAP measures are provided below. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided on the following pages.
Net Operating Income ("NOI") - NOI represents total revenues less operating expenses. We consider NOI 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, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered a substitute for net income. NOI may not be comparable to similarly titled measures employed by other companies. We calculate NOI on an Operating Partnership basis which is before allocation to the noncontrolling interest of the Operating Partnership.
Funds From Operations ("FFO") - 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 depreciable real estate assets, real estate impairment losses, 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 accordance with the NAREIT December 2018 restated definition of FFO, we have elected to exclude the mark-to-market adjustments of marketable equity securities from the calculation of FFO. Our FFO for the nine months ended September 30, 2018 has been adjusted to exclude the $26,602,000, or $0.13 per share, decrease in fair value of marketable equity securities previously reported.
Funds Available For Distribution ("FAD") - FAD is defined as FFO less (i) cash basis recurring tenant improvements, leasing commissions and capital expenditures, (ii) straight-line rents and amortization of acquired below-market leases, net, and (iii) other non-cash income, plus (iv) other non-cash charges. FAD is a non-GAAP financial measure that is not intended to represent cash flow and is not indicative of cash flow provided by operating activities as determined in accordance with GAAP. FAD is presented solely as a supplemental disclosure that management believes provides useful information regarding the Company's ability to fund its dividends.
Net Asset Value ("NAV") - Net Asset Value ("NAV") means the sum of the estimated values of our New York Office, New York Retail, New York Residential, theMART and 555 California Street assets, calculated by dividing pro forma 2018 cash basis NOI by the Cap Rate applicable to each such asset category, plus other estimated asset values minus liabilities as of December 31, 2018. “NAV per share” means NAV divided by the number of Vornado common shares outstanding on an Operating Partnership basis as of December 31, 2018. NAV may not be equivalent to enterprise value, and NAV per share may not be equivalent to an appropriate trading price for Vornado common shares. NAV per share is not a representation or guarantee that our common shares will or should trade at this amount, that a shareholder would be able to realize this amount in selling our common shares, that a third party would offer the estimated NAV per share in an offer to purchase all or substantially all of our common shares, that we would actually receive the estimated NAV for the applicable asset or assets upon a sale of those assets, or that a shareholder would receive distributions per share equal to the estimated NAV per share upon sale or liquidation. Investors should not rely on the NAV per share as being an accurate measure of the fair market value of our common shares.
The terms NAV and NAV per share may not be comparable to similar measures presented by others. We consider NAV and NAV per share to be useful supplemental measures which assist both management and investors in estimating the fair value of Vornado. The calculation of NAV and NAV per share involves significant estimates and can be made using various methods. Each individual investor should review our calculation of NAV and NAV per share and make its own determination as to whether the methodology, assumptions and estimates we used to arrive at NAV and NAV per share are appropriate, or whether such investor should use an alternative methodology to perform its own calculations.
- i -
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS, AS ADJUSTED | ||||||||||||||||||||
(unaudited and in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||||
December 31, | September 30, 2018 | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Net income attributable to common shareholders | (A) | $ | 100,494 | $ | 27,319 | $ | 190,645 | $ | 384,832 | $ | 162,017 | |||||||||
Per diluted share | $ | 0.53 | $ | 0.14 | $ | 1.00 | $ | 2.01 | $ | 0.85 | ||||||||||
Certain (income) expense items that impact net income attributable to common shareholders: | ||||||||||||||||||||
After-tax net gain on sale of 220 Central Park South condominium units | $ | (67,336 | ) | $ | — | $ | — | $ | (67,336 | ) | $ | — | ||||||||
After-tax purchase price fair value adjustment related to the increase in ownership of the Farley joint venture | (27,289 | ) | — | — | (27,289 | ) | — | |||||||||||||
Our share of loss (income) from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes) | 24,366 | (529 | ) | 748 | 23,749 | 10,804 | ||||||||||||||
Real estate impairment losses (including our share of partially owned entities) | 12,000 | 145 | — | 12,000 | 7,692 | |||||||||||||||
Decrease in fair value of marketable securities resulting from a new GAAP accounting standard effective January 1, 2018 (including our share of partially owned entities) | 3,733 | — | 7,966 | 30,335 | — | |||||||||||||||
(Income) loss from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off and 666 Fifth Avenue Office Condominium operations through August 3, 2018 sale) | (242 | ) | 1,664 | 512 | 5,727 | 43,615 | ||||||||||||||
Tax expense related to the reduction of our taxable REIT subsidiaries deferred tax assets | — | 34,800 | — | — | 34,800 | |||||||||||||||
Net gains on sale of real estate (including our share of partially owned entities) | — | (585 | ) | (3,350 | ) | (28,104 | ) | (21,574 | ) | |||||||||||
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium | — | — | (134,032 | ) | (134,032 | ) | — | |||||||||||||
Net gain on the repayment of our loan investment in 666 Fifth Avenue Office Condominium | — | — | (7,308 | ) | (7,308 | ) | — | |||||||||||||
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing | — | — | — | 23,503 | — | |||||||||||||||
Preferred share issuance costs | — | — | — | 14,486 | — | |||||||||||||||
Impairment loss on investment in PREIT | — | — | — | — | 44,465 | |||||||||||||||
Net gain resulting from UE operating partnership unit issuances | — | — | — | — | (21,100 | ) | ||||||||||||||
Net gain on repayment of our Suffolk Downs JV debt investments | — | — | — | — | (11,373 | ) | ||||||||||||||
Other | 1,996 | 5,515 | 2,737 | 4,046 | 9,900 | |||||||||||||||
(52,772 | ) | 41,010 | (132,727 | ) | (150,223 | ) | 97,229 | |||||||||||||
Noncontrolling interests' share of above adjustments | 3,268 | (2,539 | ) | 8,242 | 9,285 | (6,382 | ) | |||||||||||||
Total of certain (income) expense items that impact net income attributable to common shareholders | (B) | $ | (49,504 | ) | $ | 38,471 | $ | (124,485 | ) | $ | (140,938 | ) | $ | 90,847 | ||||||
Per diluted share (non-GAAP) | $ | (0.26 | ) | $ | 0.20 | $ | (0.65 | ) | $ | (0.74 | ) | $ | 0.47 | |||||||
Net income attributable to common shareholders, as adjusted (non-GAAP) | (A+B) | $ | 50,990 | $ | 65,790 | $ | 66,160 | $ | 243,894 | $ | 252,864 | |||||||||
Per diluted share (non-GAAP) | $ | 0.27 | $ | 0.34 | $ | 0.35 | $ | 1.27 | $ | 1.32 | ||||||||||
- ii -
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS | ||||||||||||||||||||
(unaudited and in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||||
December 31, | September 30, 2018 | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP): | ||||||||||||||||||||
Net income attributable to common shareholders | (A) | $ | 100,494 | $ | 27,319 | $ | 190,645 | $ | 384,832 | $ | 162,017 | |||||||||
Per diluted share | $ | 0.53 | $ | 0.14 | $ | 1.00 | $ | 2.01 | $ | 0.85 | ||||||||||
FFO adjustments: | ||||||||||||||||||||
Depreciation and amortization of real property | $ | 104,067 | $ | 106,017 | $ | 105,015 | $ | 413,091 | $ | 467,966 | ||||||||||
Net gains on sale of real estate | — | — | (133,961 | ) | (158,138 | ) | (3,797 | ) | ||||||||||||
Real estate impairment losses | 12,000 | — | — | 12,000 | — | |||||||||||||||
Decrease in fair value of marketable securities | 1,652 | — | 7,699 | 26,453 | — | |||||||||||||||
After-tax purchase price fair value adjustment on depreciable real estate | (27,289 | ) | — | — | (27,289 | ) | — | |||||||||||||
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO: | ||||||||||||||||||||
Depreciation and amortization of real property | 24,309 | 28,247 | 23,688 | 101,591 | 137,000 | |||||||||||||||
Net gains on sale of real estate | — | (585 | ) | (3,421 | ) | (3,998 | ) | (17,777 | ) | |||||||||||
Real estate impairment losses | — | 145 | — | — | 7,692 | |||||||||||||||
Decrease in fair value of marketable securities | 2,081 | — | 267 | 3,882 | — | |||||||||||||||
116,820 | 133,824 | (713 | ) | 367,592 | 591,084 | |||||||||||||||
Noncontrolling interests' share of above adjustments | (7,229 | ) | (8,010 | ) | 40 | (22,746 | ) | (36,420 | ) | |||||||||||
FFO adjustments, net | (B) | $ | 109,591 | $ | 125,814 | $ | (673 | ) | $ | 344,846 | $ | 554,664 | ||||||||
FFO attributable to common shareholders (non-GAAP) | (A+B) | $ | 210,085 | $ | 153,133 | $ | 189,972 | $ | 729,678 | $ | 716,681 | |||||||||
Convertible preferred share dividends | 15 | 18 | 15 | 62 | 77 | |||||||||||||||
Earnings allocated to Out-Performance Plan units | — | — | — | — | 1,047 | |||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | 210,100 | 153,151 | 189,987 | 729,740 | 717,805 | |||||||||||||||
Add back of FFO allocated to noncontrolling interests of the Operating Partnership | 13,483 | 9,839 | 12,181 | 46,653 | 45,184 | |||||||||||||||
FFO - OP Basis (non-GAAP) | $ | 223,583 | $ | 162,990 | $ | 202,168 | $ | 776,393 | $ | 762,989 | ||||||||||
FFO per diluted share (non-GAAP) | $ | 1.10 | $ | 0.80 | $ | 0.99 | $ | 3.82 | $ | 3.75 | ||||||||||
- iii -
NON-GAAP RECONCILIATIONS RECONCILIATION OF FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS TO FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS, AS ADJUSTED | ||||||||||||||||||||
(unaudited and in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||||
December 31, | September 30, 2018 | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | (A) | $ | 210,100 | $ | 153,151 | $ | 189,987 | $ | 729,740 | $ | 717,805 | |||||||||
Per diluted share (non-GAAP) | $ | 1.10 | $ | 0.80 | $ | 0.99 | $ | 3.82 | $ | 3.75 | ||||||||||
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: | ||||||||||||||||||||
After-tax net gain on sale of 220 Central Park South condominium units | $ | (67,336 | ) | $ | — | $ | — | $ | (67,336 | ) | $ | — | ||||||||
Our share of FFO from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes) | 24,366 | (529 | ) | 748 | 23,749 | 10,804 | ||||||||||||||
FFO from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off and 666 Fifth Avenue Office Condominium operations through August 3, 2018 sale) | (242 | ) | (4,006 | ) | (818 | ) | (2,834 | ) | (73,240 | ) | ||||||||||
Tax expense related to the reduction of our taxable REIT subsidiaries deferred tax assets | — | 34,800 | — | — | 34,800 | |||||||||||||||
Net gain on the repayment of our loan investment in 666 Fifth Avenue Office Condominium | — | — | (7,308 | ) | (7,308 | ) | — | |||||||||||||
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing | — | — | — | 23,503 | — | |||||||||||||||
Preferred share issuance costs | — | — | — | 14,486 | — | |||||||||||||||
Impairment loss on investment in PREIT | — | — | — | — | 44,465 | |||||||||||||||
Net gain resulting from UE operating partnership unit issuances | — | — | — | — | (21,100 | ) | ||||||||||||||
Net gain on repayment of our Suffolk Downs JV debt investments | — | — | — | — | (11,373 | ) | ||||||||||||||
Other | 1,987 | 5,951 | 2,737 | 4,033 | 10,328 | |||||||||||||||
(41,225 | ) | 36,216 | (4,641 | ) | (11,707 | ) | (5,316 | ) | ||||||||||||
Noncontrolling interests' share of above adjustments | 2,552 | (2,242 | ) | 289 | 727 | 534 | ||||||||||||||
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net | (B) | $ | (38,673 | ) | $ | 33,974 | $ | (4,352 | ) | $ | (10,980 | ) | $ | (4,782 | ) | |||||
Per diluted share (non-GAAP) | $ | (0.20 | ) | $ | 0.18 | $ | (0.02 | ) | $ | (0.06 | ) | $ | (0.02 | ) | ||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | (A+B) | $ | 171,427 | $ | 187,125 | $ | 185,635 | $ | 718,760 | $ | 713,023 | |||||||||
Per diluted share (non-GAAP) | $ | 0.90 | $ | 0.98 | $ | 0.97 | $ | 3.76 | $ | 3.73 | ||||||||||
- iv -
NON-GAAP RECONCILIATIONS RECONCILIATION OF FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS TO FAD | ||||||||||||||||||||
(unaudited and in thousands) | ||||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | |||||||||||||||||||
December 31, | September 30, 2018 | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | (A) | $ | 210,100 | $ | 153,151 | $ | 189,987 | $ | 729,740 | $ | 717,805 | |||||||||
Adjustments to arrive at FAD (non-GAAP): | ||||||||||||||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | (64,303 | ) | (62,636 | ) | (44,918 | ) | (225,831 | ) | (276,997 | ) | ||||||||||
Adjustments to FFO excluding FFO attributable to discontinued operations and sold properties | (40,983 | ) | 37,986 | (3,717 | ) | (8,767 | ) | 130,668 | ||||||||||||
Amortization of acquired below-market leases, net | (6,656 | ) | (10,908 | ) | (9,937 | ) | (36,826 | ) | (45,043 | ) | ||||||||||
Amortization of debt issuance costs | 7,493 | 9,236 | 8,348 | 31,979 | 32,790 | |||||||||||||||
Stock-based compensation expense | 5,532 | 5,510 | 5,546 | 31,722 | 32,829 | |||||||||||||||
Straight-line rentals | 2,674 | (8,040 | ) | (157 | ) | (7,605 | ) | (45,792 | ) | |||||||||||
Non real estate depreciation | 1,490 | 1,630 | 1,463 | 6,052 | 7,334 | |||||||||||||||
Noncontrolling interests' share of above adjustments | 5,830 | 1,685 | 2,693 | 13,226 | 10,202 | |||||||||||||||
FAD adjustments, net | (B) | (88,923 | ) | (25,537 | ) | (40,679 | ) | (196,050 | ) | (154,009 | ) | |||||||||
FAD (non-GAAP) | (A+B) | $ | 121,177 | $ | 127,614 | $ | 149,308 | $ | 533,690 | $ | 563,796 | |||||||||
FAD payout ratio (1) | 100.0 | % | 89.6 | % | 80.8 | % | 90.3 | % | 88.8 | % | ||||||||||
_____________________________________________
(1) | FAD payout ratios on a quarterly basis are not necessarily indicative of amounts for the full year due to fluctuation in timing of cash based expenditures, the commencement of new leases and the seasonality of our operations. |
- v -
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME TO NET OPERATING INCOME AT SHARE AND NET OPERATING INCOME AT SHARE - CASH BASIS | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | ||||||||||||||||||
December 31, | September 30, 2018 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Net income | $ | 97,821 | $ | 53,551 | $ | 219,162 | $ | 422,603 | $ | 264,128 | |||||||||
Deduct: | |||||||||||||||||||
Income from partially owned entities | (3,090 | ) | (9,622 | ) | (7,206 | ) | (9,149 | ) | (15,200 | ) | |||||||||
Loss (income) from real estate fund investments | 51,258 | (4,889 | ) | 190 | 89,231 | (3,240 | ) | ||||||||||||
Interest and other investment income, net | (7,656 | ) | (8,294 | ) | (2,893 | ) | (17,057 | ) | (30,861 | ) | |||||||||
Net gains on disposition of wholly owned and partially owned assets | (81,203 | ) | — | (141,269 | ) | (246,031 | ) | (501 | ) | ||||||||||
Purchase price fair value adjustment | (44,060 | ) | — | — | (44,060 | ) | — | ||||||||||||
(Income) loss from discontinued operations | (257 | ) | (1,273 | ) | (61 | ) | (638 | ) | 13,228 | ||||||||||
NOI attributable to noncontrolling interests in consolidated subsidiaries | (19,771 | ) | (16,533 | ) | (16,943 | ) | (71,186 | ) | (65,311 | ) | |||||||||
Add: | |||||||||||||||||||
Depreciation and amortization expense | 112,869 | 114,166 | 113,169 | 446,570 | 429,389 | ||||||||||||||
General and administrative expense | 32,934 | 34,916 | 31,977 | 141,871 | 150,782 | ||||||||||||||
Transaction related costs, impairment loss and other | 14,637 | 703 | 2,510 | 31,320 | 1,776 | ||||||||||||||
Our share of NOI from partially owned entities | 60,205 | 69,175 | 60,094 | 253,564 | 269,164 | ||||||||||||||
Interest and debt expense | 83,175 | 93,073 | 88,951 | 347,949 | 345,654 | ||||||||||||||
Income tax expense | 32,669 | 38,884 | 1,943 | 37,633 | 42,375 | ||||||||||||||
NOI at share | 329,531 | 363,857 | 349,624 | 1,382,620 | 1,401,383 | ||||||||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (5,532 | ) | (21,579 | ) | (8,743 | ) | (44,704 | ) | (86,842 | ) | |||||||||
NOI at share - cash basis | $ | 323,999 | $ | 342,278 | $ | 340,881 | $ | 1,337,916 | $ | 1,314,541 | |||||||||
- vi -
NON-GAAP RECONCILIATIONS COMPONENTS OF NET OPERATING INCOME AT SHARE AND NET OPERATING INCOME AT SHARE - CASH BASIS | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
For the Three Months Ended December 31, | |||||||||||||||||||||||||||||||||||||||
Total Revenues | Operating Expenses | NOI | Non-cash Adjustments(1) | NOI - cash basis | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||
New York | $ | 466,554 | $ | 462,597 | $ | 206,696 | $ | 195,421 | $ | 259,858 | $ | 267,176 | $ | (4,219 | ) | $ | (17,761 | ) | $ | 255,639 | $ | 249,415 | |||||||||||||||||
Other | 76,863 | 73,629 | 47,624 | 29,590 | 29,239 | 44,039 | 1,572 | 160 | 30,811 | 44,199 | |||||||||||||||||||||||||||||
Consolidated total | 543,417 | 536,226 | 254,320 | 225,011 | 289,097 | 311,215 | (2,647 | ) | (17,601 | ) | 286,450 | 293,614 | |||||||||||||||||||||||||||
Noncontrolling interests' share in consolidated subsidiaries | (30,436 | ) | (26,594 | ) | (10,665 | ) | (10,061 | ) | (19,771 | ) | (16,533 | ) | 96 | 315 | (19,675 | ) | (16,218 | ) | |||||||||||||||||||||
Our share of partially owned entities | 98,363 | 114,677 | 38,158 | 45,502 | 60,205 | 69,175 | (2,981 | ) | (4,293 | ) | 57,224 | 64,882 | |||||||||||||||||||||||||||
Vornado's share | $ | 611,344 | $ | 624,309 | $ | 281,813 | $ | 260,452 | $ | 329,531 | $ | 363,857 | $ | (5,532 | ) | $ | (21,579 | ) | $ | 323,999 | $ | 342,278 | |||||||||||||||||
For the Three Months Ended September 30, 2018 | |||||||||||||||||||
Total Revenues | Operating Expenses | NOI | Non-cash Adjustments(1) | NOI - cash basis | |||||||||||||||
New York | $ | 462,446 | $ | 200,949 | $ | 261,497 | $ | (8,937 | ) | $ | 252,560 | ||||||||
Other | 79,602 | 34,626 | 44,976 | 429 | 45,405 | ||||||||||||||
Consolidated total | 542,048 | 235,575 | 306,473 | (8,508 | ) | 297,965 | |||||||||||||
Noncontrolling interests' share in consolidated subsidiaries | (27,403 | ) | (10,460 | ) | (16,943 | ) | 112 | (16,831 | ) | ||||||||||
Our share of partially owned entities | 97,960 | 37,866 | 60,094 | (347 | ) | 59,747 | |||||||||||||
Vornado's share | $ | 612,605 | $ | 262,981 | $ | 349,624 | $ | (8,743 | ) | $ | 340,881 | ||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||
Total Revenues | Operating Expenses | NOI | Non-cash Adjustments(1) | NOI - cash basis | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||
New York | $ | 1,836,036 | $ | 1,779,307 | $ | 806,464 | $ | 756,670 | $ | 1,029,572 | $ | 1,022,637 | $ | (38,856 | ) | $ | (71,229 | ) | $ | 990,716 | $ | 951,408 | |||||||||||||||||
Other | 327,684 | 304,819 | 157,014 | 129,926 | 170,670 | 174,893 | 1,823 | (5,800 | ) | 172,493 | 169,093 | ||||||||||||||||||||||||||||
Consolidated total | 2,163,720 | 2,084,126 | 963,478 | 886,596 | 1,200,242 | 1,197,530 | (37,033 | ) | (77,029 | ) | 1,163,209 | 1,120,501 | |||||||||||||||||||||||||||
Noncontrolling interests' share in consolidated subsidiaries | (111,982 | ) | (104,568 | ) | (40,796 | ) | (39,257 | ) | (71,186 | ) | (65,311 | ) | 902 | 6,117 | (70,284 | ) | (59,194 | ) | |||||||||||||||||||||
Our share of partially owned entities | 418,819 | 444,043 | 165,255 | 174,879 | 253,564 | 269,164 | (8,573 | ) | (15,930 | ) | 244,991 | 253,234 | |||||||||||||||||||||||||||
Vornado's share | $ | 2,470,557 | $ | 2,423,601 | $ | 1,087,937 | $ | 1,022,218 | $ | 1,382,620 | $ | 1,401,383 | $ | (44,704 | ) | $ | (86,842 | ) | $ | 1,337,916 | $ | 1,314,541 | |||||||||||||||||
________________________________________
(1) | Includes adjustments for straight-line rents, amortization of acquired below-market leases, net and other. |
- vii -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE THREE MONTHS ENDED DECEMBER 31, 2018 COMPARED TO DECEMBER 31, 2017 | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended December 31, 2018 | $ | 329,531 | $ | 295,199 | $ | 10,981 | $ | 14,005 | $ | 9,346 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (337 | ) | (337 | ) | — | — | — | ||||||||||||
Dispositions | 19 | 19 | — | — | — | ||||||||||||||
Development properties | (12,623 | ) | (12,637 | ) | — | 14 | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (96 | ) | 368 | (464 | ) | — | — | ||||||||||||
Other non-operating income, net | (10,412 | ) | (1,066 | ) | — | — | (9,346 | ) | |||||||||||
Same store NOI at share for the three months ended December 31, 2018 | $ | 306,082 | $ | 281,546 | $ | 10,517 | $ | 14,019 | $ | — | |||||||||
NOI at share for the three months ended December 31, 2017 | $ | 363,857 | $ | 304,228 | $ | 24,249 | $ | 12,003 | $ | 23,377 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | 2 | 2 | — | — | — | ||||||||||||||
Dispositions | (23 | ) | (23 | ) | — | — | — | ||||||||||||
Development properties | (12,789 | ) | (12,789 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (984 | ) | (984 | ) | — | — | — | ||||||||||||
Other non-operating income, net | (23,377 | ) | — | — | — | (23,377 | ) | ||||||||||||
Same store NOI at share for the three months ended December 31, 2017 | $ | 326,686 | $ | 290,434 | $ | 24,249 | $ | 12,003 | $ | — | |||||||||
(Decrease) increase in same store NOI at share for the three months ended December 31, 2018 compared to December 31, 2017 | $ | (20,604 | ) | $ | (8,888 | ) | $ | (13,732 | ) | $ | 2,016 | $ | — | ||||||
% (decrease) increase in same store NOI at share | (6.3 | )% | (3.1 | )% | (1) | (56.6 | )% | (2) | 16.8 | % | — | % | |||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share decreased by 3.0%. |
(2) | The three months ended December 31, 2018 includes an additional $12,814 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
- viii -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE YEAR ENDED DECEMBER 31, 2018 COMPARED TO DECEMBER 31, 2017 | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the year ended December 31, 2018 | $ | 1,382,620 | $ | 1,176,990 | $ | 90,929 | $ | 54,691 | $ | 60,010 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (1,534 | ) | (1,385 | ) | (149 | ) | — | — | |||||||||||
Dispositions | (351 | ) | (351 | ) | — | — | — | ||||||||||||
Development properties | (38,477 | ) | (38,477 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 2,301 | 3,025 | (724 | ) | — | — | |||||||||||||
Other non-operating income, net | (62,732 | ) | (2,722 | ) | — | — | (60,010 | ) | |||||||||||
Same store NOI at share for the year ended December 31, 2018 | $ | 1,281,827 | $ | 1,137,080 | $ | 90,056 | $ | 54,691 | $ | — | |||||||||
NOI at share for the year ended December 31, 2017 | $ | 1,401,383 | $ | 1,166,065 | $ | 102,339 | $ | 47,588 | $ | 85,391 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | 36 | (164 | ) | 200 | — | — | |||||||||||||
Dispositions | (1,532 | ) | (1,532 | ) | — | — | — | ||||||||||||
Development properties | (37,307 | ) | (37,307 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (2,976 | ) | (2,957 | ) | (19 | ) | — | — | |||||||||||
Other non-operating income, net | (88,017 | ) | (2,626 | ) | — | — | (85,391 | ) | |||||||||||
Same store NOI at share for the year ended December 31, 2017 | $ | 1,271,587 | $ | 1,121,479 | $ | 102,520 | $ | 47,588 | $ | — | |||||||||
Increase (decrease) in same store NOI at share for the year ended December 31, 2018 compared to December 31, 2017 | $ | 10,240 | $ | 15,601 | $ | (12,464 | ) | $ | 7,103 | $ | — | ||||||||
% increase (decrease) in same store NOI at share | 0.8 | % | 1.4 | % | (1) | (12.2 | )% | (2) | 14.9 | % | — | % | |||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 1.5%. |
(2) | The year ended December 31, 2018 includes an additional $15,148 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
- ix -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE THREE MONTHS ENDED DECEMBER 31, 2018 COMPARED TO SEPTEMBER 30, 2018 | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended December 31, 2018 | $ | 329,531 | $ | 295,199 | $ | 10,981 | $ | 14,005 | $ | 9,346 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Dispositions | 19 | 19 | — | — | — | ||||||||||||||
Development properties | (12,623 | ) | (12,637 | ) | — | 14 | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (96 | ) | 368 | (464 | ) | — | — | ||||||||||||
Other non-operating income, net | (10,412 | ) | (1,066 | ) | — | — | (9,346 | ) | |||||||||||
Same store NOI at share for the three months ended December 31, 2018 | $ | 306,419 | $ | 281,883 | $ | 10,517 | $ | 14,019 | $ | — | |||||||||
NOI at share for the three months ended September 30, 2018 | $ | 349,624 | $ | 297,328 | $ | 25,257 | $ | 13,515 | $ | 13,524 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Development properties | (13,488 | ) | (13,474 | ) | — | (14 | ) | — | |||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 1,581 | 1,800 | (219 | ) | — | — | |||||||||||||
Other non-operating income, net | (14,103 | ) | (579 | ) | — | — | (13,524 | ) | |||||||||||
Same store NOI at share for the three months ended September 30, 2018 | $ | 323,614 | $ | 285,075 | $ | 25,038 | $ | 13,501 | $ | — | |||||||||
(Decrease) increase in same store NOI at share for the three months ended December 31, 2018 compared to September 30, 2018 | $ | (17,195 | ) | $ | (3,192 | ) | $ | (14,521 | ) | $ | 518 | $ | — | ||||||
% (decrease) increase in same store NOI at share | (5.3 | )% | (1.1 | )% | (1) | (58.0 | )% | (2) | 3.8 | % | — | % | |||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share decreased by 1.7%. |
(2) | The three months ended December 31, 2018 includes an additional $12,124 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
- x -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE THREE MONTHS ENDED DECEMBER 31, 2018 COMPARED TO DECEMBER 31, 2017 | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended December 31, 2018 | $ | 323,999 | $ | 288,933 | $ | 12,758 | $ | 13,784 | $ | 8,524 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (336 | ) | (336 | ) | — | — | — | ||||||||||||
Dispositions | 19 | 19 | — | — | — | ||||||||||||||
Development properties | (14,628 | ) | (14,642 | ) | — | 14 | — | ||||||||||||
Lease termination income | (563 | ) | (43 | ) | (520 | ) | — | — | |||||||||||
Other non-operating income, net | (9,590 | ) | (1,066 | ) | — | — | (8,524 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended December 31, 2018 | $ | 298,901 | $ | 272,865 | $ | 12,238 | $ | 13,798 | $ | — | |||||||||
NOI at share - cash basis for the three months ended December 31, 2017 | $ | 342,278 | $ | 282,787 | $ | 24,396 | $ | 11,916 | $ | 23,179 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | 2 | 2 | — | — | — | ||||||||||||||
Dispositions | 76 | 76 | — | — | — | ||||||||||||||
Development properties | (13,677 | ) | (13,677 | ) | — | — | — | ||||||||||||
Lease termination income | (1,393 | ) | (1,393 | ) | — | — | — | ||||||||||||
Other non-operating income, net | (23,180 | ) | (1 | ) | — | — | (23,179 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended December 31, 2017 | $ | 304,106 | $ | 267,794 | $ | 24,396 | $ | 11,916 | $ | — | |||||||||
(Decrease) increase in same store NOI at share - cash basis for the three months ended December 31, 2018 compared to December 31, 2017 | $ | (5,205 | ) | $ | 5,071 | $ | (12,158 | ) | $ | 1,882 | $ | — | |||||||
% (decrease) increase in same store NOI at share - cash basis | (1.7 | )% | 1.9 | % | (1) | (49.8 | )% | (2) | 15.8 | % | — | % | |||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.1%. |
(2) | The three months ended December 31, 2018 includes an additional $12,814 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
- xi -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE YEAR ENDED DECEMBER 31, 2018 COMPARED TO DECEMBER 31, 2017 | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the year ended December 31, 2018 | $ | 1,337,916 | $ | 1,131,563 | $ | 94,070 | $ | 53,488 | $ | 58,795 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (1,235 | ) | (1,086 | ) | (149 | ) | — | — | |||||||||||
Dispositions | (287 | ) | (287 | ) | — | — | — | ||||||||||||
Development properties | (42,264 | ) | (42,264 | ) | — | — | — | ||||||||||||
Lease termination income | (2,105 | ) | (1,163 | ) | (942 | ) | — | — | |||||||||||
Other non-operating income, net | (61,515 | ) | (2,720 | ) | — | — | (58,795 | ) | |||||||||||
Same store NOI at share - cash basis for the year ended December 31, 2018 | $ | 1,230,510 | $ | 1,084,043 | $ | 92,979 | $ | 53,488 | $ | — | |||||||||
NOI at share - cash basis for the year ended December 31, 2017 | $ | 1,314,541 | $ | 1,086,863 | $ | 99,242 | $ | 45,281 | $ | 83,155 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | 137 | (63 | ) | 200 | — | — | |||||||||||||
Dispositions | (1,078 | ) | (1,078 | ) | — | — | — | ||||||||||||
Development properties | (38,211 | ) | (38,211 | ) | — | — | — | ||||||||||||
Lease termination income | (4,958 | ) | (4,927 | ) | (31 | ) | — | — | |||||||||||
Other non-operating income, net | (86,501 | ) | (3,346 | ) | — | — | (83,155 | ) | |||||||||||
Same store NOI at share - cash basis for the year ended December 31, 2017 | $ | 1,183,930 | $ | 1,039,238 | $ | 99,411 | $ | 45,281 | $ | — | |||||||||
Increase (decrease) in same store NOI at share - cash basis for the year ended December 31, 2018 compared to December 31, 2017 | $ | 46,580 | $ | 44,805 | $ | (6,432 | ) | $ | 8,207 | $ | — | ||||||||
% increase (decrease) in same store NOI at share - cash basis | 3.9 | % | 4.3 | % | (1) | (6.5 | )% | (2) | 18.1 | % | — | % | |||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 4.5%. |
(2) | The year ended December 31, 2018 includes an additional $15,148 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
- xii -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE THREE MONTHS ENDED DECEMBER 31, 2018 COMPARED TO SEPTEMBER 30, 2018 | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended December 31, 2018 | $ | 323,999 | $ | 288,933 | $ | 12,758 | $ | 13,784 | $ | 8,524 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Dispositions | 19 | 19 | — | — | — | ||||||||||||||
Development properties | (14,628 | ) | (14,642 | ) | — | 14 | — | ||||||||||||
Lease termination income | (563 | ) | (43 | ) | (520 | ) | — | — | |||||||||||
Other non-operating income, net | (9,590 | ) | (1,066 | ) | — | — | (8,524 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended December 31, 2018 | $ | 299,237 | $ | 273,201 | $ | 12,238 | $ | 13,798 | $ | — | |||||||||
NOI at share - cash basis for the three months ended September 30, 2018 | $ | 340,881 | $ | 288,203 | $ | 26,234 | $ | 13,070 | $ | 13,374 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Development properties | (14,342 | ) | (14,328 | ) | — | (14 | ) | — | |||||||||||
Lease termination income | (318 | ) | (58 | ) | (260 | ) | — | — | |||||||||||
Other non-operating income, net | (13,954 | ) | (580 | ) | — | — | (13,374 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2018 | $ | 312,267 | $ | 273,237 | $ | 25,974 | $ | 13,056 | $ | — | |||||||||
(Decrease) increase in same store NOI at share - cash basis for the three months ended December 31, 2018 compared to September 30, 2018 | $ | (13,030 | ) | $ | (36 | ) | $ | (13,736 | ) | $ | 742 | $ | — | ||||||
% (decrease) increase in same store NOI at share - cash basis | (4.2 | )% | 0.0 | % | (1) | (52.9 | )% | (2) | 5.7 | % | — | % | |||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis decreased by 0.6%. |
(2) | The three months ended December 31, 2018 includes an additional $12,124 real estate tax expense accrual due to an increase in the tax-assessed value of theMART. |
- xiii -
NON-GAAP RECONCILIATIONS | |||
RECONCILIATION OF CONSOLIDATED REVENUES TO OUR PRO RATA SHARE OF REVENUES (ANNUALIZED) | |||
(unaudited and in thousands) | |||
For the Three Months Ended December 31, 2018 | |||
Consolidated revenues | $ | 543,417 | |
Noncontrolling interest adjustments | (30,436 | ) | |
Consolidated revenues at our share (non-GAAP) | 512,981 | ||
Unconsolidated revenues at our share (non-GAAP) | 98,363 | ||
Our pro rata share of revenues (non-GAAP) | $ | 611,344 | |
Our pro rata share of revenues (annualized) (non-GAAP) | $ | 2,445,376 | |
RECONCILIATION OF CONSOLIDATED DEBT, NET TO CONTRACTUAL DEBT (NON-GAAP) | |||||||||||
(unaudited and in thousands) | |||||||||||
As of December 31, 2018 | |||||||||||
Consolidated Debt, net | Deferred Financing Costs, Net and Other | Contractual Debt (non-GAAP) | |||||||||
Mortgages payable | $ | 8,167,798 | $ | 48,049 | $ | 8,215,847 | |||||
Senior unsecured notes | 844,002 | 5,998 | 850,000 | ||||||||
$750 Million unsecured term loan | 744,821 | 5,179 | 750,000 | ||||||||
$2.5 Billion unsecured revolving credit facilities | 80,000 | — | 80,000 | ||||||||
$ | 9,836,621 | $ | 59,226 | $ | 9,895,847 | ||||||
- xiv -
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME TO EBITDAre | ||||||
(unaudited and in thousands) | ||||||
EBITDAre (i.e., EBITDA for real estate companies) is a non-GAAP financial measure established by NAREIT, which may not be comparable to EBITDA reported by other REITs that do not compute EBITDA in accordance with the NAREIT definition. The White Paper on EBITDAre approved by the Board of Governors of NAREIT in September 2017 defines EBITDAre as GAAP net income (loss), plus interest expense, plus income tax expense, plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property including losses and gains on change of control, plus impairment write-downs of depreciated property and of investments in unconsolidated joint ventures caused by a decrease in value of depreciated property in the joint venture, plus adjustments to reflect the entity's share of EBITDA of unconsolidated joint ventures. The Company has included EBITDAre because it is a performance measure used by other REITs and therefore may provide useful information to investors in comparing Vornado's performance to that of other REITs.
For the Three Months Ended | For the Year Ended December 31, | ||||||||||||||||||
December 31, | September 30, 2018 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Reconciliation of net income to EBITDAre (non-GAAP): | |||||||||||||||||||
Net income | $ | 97,821 | $ | 53,551 | $ | 219,162 | $ | 422,603 | $ | 264,128 | |||||||||
Less net loss (income) attributable to noncontrolling interests in consolidated subsidiaries | 21,886 | (7,366 | ) | (3,312 | ) | 53,023 | (25,802 | ) | |||||||||||
Net income attributable to the Operating Partnership | 119,707 | 46,185 | 215,850 | 475,626 | 238,326 | ||||||||||||||
EBITDAre adjustments at share: | |||||||||||||||||||
Depreciation and amortization (includes $75,413 related to discontinued operations for the year ended December 31, 2017) | 129,866 | 136,194 | 130,166 | 520,791 | 612,608 | ||||||||||||||
Interest and debt expense (includes $29,552 related to discontinued operations for the year ended December 31, 2017) | 106,267 | 120,280 | 112,917 | 448,290 | 468,630 | ||||||||||||||
Income tax expense (includes $524 related to discontinued operations for the year ended December 31, 2017) | 32,797 | 39,047 | 2,072 | 38,003 | 44,289 | ||||||||||||||
Net gains on sale of depreciable real estate | — | (585 | ) | (137,382 | ) | (162,136 | ) | (21,574 | ) | ||||||||||
Real estate impairment losses | 12,000 | 145 | — | 12,000 | 7,692 | ||||||||||||||
EBITDAre at share (non-GAAP) | 400,637 | 341,266 | 323,623 | 1,332,574 | 1,349,971 | ||||||||||||||
EBITDAre attributable to noncontrolling interests in consolidated subsidiaries | (8,393 | ) | 20,352 | 16,192 | (1,314 | ) | 75,674 | ||||||||||||
EBITDAre (non-GAAP) | $ | 392,244 | $ | 361,618 | $ | 339,815 | $ | 1,331,260 | $ | 1,425,645 | |||||||||
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NON-GAAP RECONCILIATIONS RECONCILIATION OF EBITDAre TO EBITDAre, AS ADJUSTED | |||||||||||||||||||
(unaudited and in thousands) | |||||||||||||||||||
For the Three Months Ended | For the Year Ended December 31, | ||||||||||||||||||
December 31, | September 30, 2018 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
EBITDAre (non-GAAP) | $ | 392,244 | $ | 361,618 | $ | 339,815 | $ | 1,331,260 | $ | 1,425,645 | |||||||||
EBITDAre attributable to noncontrolling interests in consolidated subsidiaries | 8,393 | (20,352 | ) | (16,192 | ) | 1,314 | (75,674 | ) | |||||||||||
Certain (income) expense items that impact EBITDAre: | |||||||||||||||||||
Gain on sale of 220 Central Park South condominium units | (81,224 | ) | — | — | (81,224 | ) | — | ||||||||||||
After-tax purchase price fair value adjustment related to the increase in ownership of the Farley joint venture | (44,060 | ) | — | — | (44,060 | ) | — | ||||||||||||
Our share of EBITDAre from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes) | 24,366 | (529 | ) | 748 | 23,749 | 10,804 | |||||||||||||
Decrease in fair value of marketable securities (including our share of partially owned entities) | 3,733 | — | 7,966 | 30,335 | — | ||||||||||||||
EBITDAre from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off and 666 Fifth Avenue Office Condominium operations through August 3, 2018 sale) | (65 | ) | (12,588 | ) | (2,282 | ) | (15,805 | ) | (122,168 | ) | |||||||||
Net gain on the repayment of our loan investment in the 666 Fifth Avenue Office Condominium | — | — | (7,308 | ) | (7,308 | ) | — | ||||||||||||
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing | — | — | — | 23,503 | — | ||||||||||||||
Impairment loss on investment in PREIT | — | — | — | — | 44,465 | ||||||||||||||
Net gain resulting from UE operating partnership unit issuances | — | — | — | — | (21,100 | ) | |||||||||||||
Net gain on repayment of our Suffolk Downs JV debt investments | — | — | — | — | (11,373 | ) | |||||||||||||
Other | 1,810 | 1,532 | 2,233 | 875 | 2,090 | ||||||||||||||
Total of certain (income) expense items that impact EBITDAre | (95,440 | ) | (11,585 | ) | 1,357 | (69,935 | ) | (97,282 | ) | ||||||||||
EBITDAre, as adjusted (non-GAAP) | $ | 305,197 | $ | 329,681 | $ | 324,980 | $ | 1,262,639 | $ | 1,252,689 | |||||||||
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