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):
(Exact Name of Registrant as Specified in Charter)
No. | No. | |||||
(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)
No. | No. | |||||
(State or Other | (Commission | (IRS Employer | ||||
Jurisdiction of Incorporation) | File Number) | Identification No.) | ||||
(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.):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
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 ☐
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
Securities registered pursuant to Section 12(b) of the Act:
Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||
Vornado Realty Trust | ||||||
Cumulative Redeemable Preferred Shares of beneficial interest, liquidation preference $25.00 per share | ||||||
Vornado Realty Trust | ||||||
Vornado Realty Trust | ||||||
Vornado Realty Trust | ||||||
Item 2.02. Results of Operations and Financial Condition.
On October 28, 2019, Vornado Realty Trust (the “Company”), the general partner of Vornado Realty L.P., issued a press release announcing its financial results for the third quarter of 2019. 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: October 29, 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: October 29, 2019
3
EXHIBIT 99.1
Vornado Announces Third Quarter 2019 Financial Results
October 28, 2019 04:30 PM Eastern Standard Time
NEW YORK.......VORNADO REALTY TRUST (NYSE: VNO) reported today:
Quarter Ended September 30, 2019 Financial Results
NET INCOME attributable to common shareholders for the quarter ended September 30, 2019 was $322,906,000, or $1.69 per diluted share, compared to $190,645,000, or $1.00 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 the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the quarters ended September 30, 2019 and 2018 was $52,624,000 and $64,806,000, or $0.28 and $0.34 per diluted share, respectively.
FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended September 30, 2019 was $279,509,000, or $1.46 per diluted share, compared to $189,987,000, or $0.99 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 September 30, 2019 and 2018 was $170,966,000 and $184,280,000, or $0.89 and $0.96 per diluted share, respectively.
Nine Months Ended September 30, 2019 Financial Results
NET INCOME attributable to common shareholders for the nine months ended September 30, 2019 was $2.905 billion, or $15.20 per diluted share, compared to $284,338,000, or $1.49 per diluted share, for the nine months ended September 30, 2018. 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 the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the nine months ended September 30, 2019 and 2018 was $120,372,000 and $189,307,000, or $0.63 and $0.99 per diluted share, respectively.
FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the nine months ended September 30, 2019 was $691,522,000, or $3.62 per diluted share, compared to $519,640,000, or $2.72 per diluted share, for the nine months ended September 30, 2018. 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 nine months ended September 30, 2019 and 2018 was $494,936,000 and $543,531,000, or $2.59 and $2.84 per diluted share, respectively.
The decreases in "net income attributable to common shareholders, as adjusted" and "FFO attributable to common shareholders plus assumed conversions, as adjusted" were partially due to (i) $8,986,000 (at share), or $0.04 per diluted share, from the non-cash write-off of straight-line rent receivables, (ii) $8,046,000, or $0.04 per diluted share, of non-cash expense for the time-based equity compensation granted in connection with the new leadership group announced in April 2019 and (iii) $11,055,000, or $0.05 per share, of non-cash expense for the accelerated vesting of previously issued OP Units and Vornado restricted stock due to the removal of the time-based vesting requirement for participants who have reached 65 years of age.
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 September 30, | For the Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income attributable to common shareholders | $ | 322,906 | $ | 190,645 | $ | 2,904,589 | $ | 284,338 | |||||||
Per diluted share | $ | 1.69 | $ | 1.00 | $ | 15.20 | $ | 1.49 | |||||||
Certain (income) expense items that impact net income attributable to common shareholders: | |||||||||||||||
Net gains on sale of real estate (primarily our 25% interest in 330 Madison Avenue in 2019) | $ | (178,769 | ) | $ | (3,350 | ) | $ | (178,769 | ) | $ | (27,786 | ) | |||
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units | (109,035 | ) | — | (328,910 | ) | — | |||||||||
Mark-to-market decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from March 12, 2019) | 4,875 | — | 19,211 | — | |||||||||||
Our share of (income) loss from real estate fund investments | (1,455 | ) | 748 | 22,207 | (617 | ) | |||||||||
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium | — | (134,032 | ) | — | (134,032 | ) | |||||||||
Mark-to-market decrease (increase) in Lexington Realty Trust ("Lexington") common shares (sold on March 1, 2019) | — | 7,942 | (16,068 | ) | 24,934 | ||||||||||
Previously capitalized internal leasing costs(1) | — | (1,444 | ) | — | (3,883 | ) | |||||||||
Net gain on transfer to Fifth Avenue and Times Square retail JV, net of $11,945 attributable to noncontrolling interests | — | — | (2,559,154 | ) | — | ||||||||||
Non-cash impairment losses and related write-offs, substantially 608 Fifth Avenue | — | — | 108,592 | — | |||||||||||
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on March 4, 2019) | — | — | (62,395 | ) | — | ||||||||||
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022 | — | — | 22,540 | — | |||||||||||
Our share of disputed additional New York City transfer taxes | — | — | — | 23,503 | |||||||||||
Preferred share issuance costs | — | — | — | 14,486 | |||||||||||
Other | (4,811 | ) | (4,035 | ) | (857 | ) | 2,061 | ||||||||
(289,195 | ) | (134,171 | ) | (2,973,603 | ) | (101,334 | ) | ||||||||
Noncontrolling interests' share of above adjustments | 18,913 | 8,332 | 189,386 | 6,303 | |||||||||||
Total of certain (income) expense items that impact net income attributable to common shareholders | $ | (270,282 | ) | $ | (125,839 | ) | $ | (2,784,217 | ) | $ | (95,031 | ) | |||
Net income attributable to common shareholders, as adjusted (non-GAAP) | $ | 52,624 | $ | 64,806 | $ | 120,372 | $ | 189,307 | |||||||
Per diluted share (non-GAAP) | $ | 0.28 | $ | 0.34 | $ | 0.63 | $ | 0.99 | |||||||
____________________________________________________________
See notes on the following page.
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 September 30, | For the Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(2) | $ | 279,509 | $ | 189,987 | $ | 691,522 | $ | 519,640 | |||||||
Per diluted share (non-GAAP) | $ | 1.46 | $ | 0.99 | $ | 3.62 | $ | 2.72 | |||||||
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: | |||||||||||||||
After-tax net gain on sale of 220 CPS condominium units | $ | (109,035 | ) | $ | — | $ | (328,910 | ) | $ | — | |||||
Our share of (income) loss from real estate fund investments | (1,455 | ) | 748 | 22,207 | (617 | ) | |||||||||
Previously capitalized internal leasing costs(1) | — | (1,444 | ) | — | (3,883 | ) | |||||||||
Non-cash impairment loss and related write-offs on 608 Fifth Avenue | — | — | 77,156 | — | |||||||||||
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022 | — | — | 22,540 | — | |||||||||||
Our share of disputed additional New York City transfer taxes | — | — | — | 23,503 | |||||||||||
Preferred share issuance costs | — | — | — | 14,486 | |||||||||||
Other | (5,229 | ) | (5,389 | ) | (2,931 | ) | (7,854 | ) | |||||||
(115,719 | ) | (6,085 | ) | (209,938 | ) | 25,635 | |||||||||
Noncontrolling interests' share of above adjustments | 7,176 | 378 | 13,352 | (1,744 | ) | ||||||||||
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net | $ | (108,543 | ) | $ | (5,707 | ) | $ | (196,586 | ) | $ | 23,891 | ||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 170,966 | $ | 184,280 | $ | 494,936 | $ | 543,531 | |||||||
Per diluted share (non-GAAP) | $ | 0.89 | $ | 0.96 | $ | 2.59 | $ | 2.84 | |||||||
____________________________________________________________
(1) | "Net income, as adjusted" and "FFO, as adjusted" for the three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, or $0.01 and $0.02 per diluted share, respectively for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized. |
(2) | 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 and nine months ended September 30, 2019 and 2018. |
3
Dispositions:
220 CPS
During the three months ended September 30, 2019, we closed on the sale of 14 condominium units at 220 CPS for net proceeds aggregating $348,759,000 resulting in a financial statement net gain of $130,888,000 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, $21,853,000 of income tax expense was recognized on our consolidated statements of income.
330 Madison Avenue
On July 11, 2019, we sold our 25% interest in 330 Madison Avenue to our joint venture partner. We received net proceeds of approximately $100,000,000 after deducting our share of the existing $500,000,000 mortgage loan resulting in a financial statement net gain of $159,292,000. The net gain is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the three and nine months ended September 30, 2019. The gain for tax purposes was approximately $139,000,000.
3040 M Street
On September 18, 2019, we completed the $49,750,000 sale of 3040 M Street, a 44,000 square foot retail building in Washington, DC, which resulted in a net gain of $19,477,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income for the three and nine months ended September 30, 2019. The gain for tax purposes was approximately $19,000,000.
Financings:
On July 25, 2019, a joint venture, in which we have a 50% interest, completed a $60,000,000 refinancing of 825 Seventh Avenue, a 165,000 square foot office building on the corner of 53rd Street and Seventh Avenue, of which $28,882,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.65% (3.78% as of September 30, 2019) and matures in 2022 with a one-year extension option. The loan replaces the previous $20,500,000 loan that bore interest at LIBOR plus 1.40% and was scheduled to mature in September 2019.
On September 5, 2019, a consolidated joint venture, in which we have a 50% interest, completed a $75,000,000 refinancing of 606 Broadway, a 35,000 square foot office and retail building on the northeast corner of Broadway and Houston Street in Manhattan, of which $67,500,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.80% (3.85% as of September 30, 2019) and matures in 2024. In connection therewith, the joint venture purchased an interest rate cap that caps LIBOR at a rate of 4.00%. The loan replaces the previous $65,000,000 construction loan. The construction loan bore interest at LIBOR plus 3.00% and was scheduled to mature in May 2021.
On September 27, 2019, we repaid the $575,000,000 mortgage loan on PENN2 with proceeds from our unsecured revolving credit facilities. The mortgage loan was scheduled to mature in December 2021, as fully extended. PENN2 is a 1,795,000 square foot office building located on the west side of 7th Avenue between 31st and 33rd Street currently under redevelopment.
Leasing:
• | 197,000 square feet of New York Office space (171,000 square feet at share) at an initial rent of $80.44 per square foot and a weighted average lease term of 6.5 years. The GAAP and cash mark-to-market rent on the 108,000 square feet of second generation space were positive 28.5% and 22.7%, respectively. Tenant improvements and leasing commissions were $13.13 per square foot per annum, or 16.3% of initial rent. |
• | 26,000 square feet of New York Retail space (24,000 square feet at share) at an initial rent of $145.54 per square foot and a weighted average lease term of 5.4 years. The GAAP and cash mark-to-market rent on the 17,000 square feet of second generation space were positive 15.6% and 6.2%, respectively. Tenant improvements and leasing commissions were $8.31 per square foot per annum, or 5.7% of initial rent. |
• | 45,000 square feet at theMART at an initial rent of $48.54 per square foot and a weighted average lease term of 5.5 years. The GAAP and cash mark-to-market rent on the 43,000 square feet of second generation space were positive 14.9% and 6.7%, respectively. Tenant improvements and leasing commissions were $10.12 per square foot per annum, or 20.9% of initial rent. |
• | 50,000 square feet at 555 California Street (35,000 square feet at share) at an initial rent of $96.54 per square foot and a weighted average lease term of 8.5 years. The GAAP and cash mark-to-market rent on the 29,000 square feet of second generation space were positive 64.5% and 39.3%, respectively. Tenant improvements and leasing commissions were $9.94 per square foot per annum, or 10.3% of initial rent. |
4
Same Store Net Operating Income ("NOI") At Share:
The percentage increase (decrease) 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 | 555 California Street | |||||||||
Same store NOI at share % increase (decrease)(1): | ||||||||||||
Three months ended September 30, 2019 compared to September 30, 2018 | 0.9 | % | 0.5 | % | (2.8 | )% | 13.9 | % | ||||
Nine months ended September 30, 2019 compared to September 30, 2018 | 0.6 | % | (0.2 | )% | 2.2 | % | 11.9 | % | ||||
Three months ended September 30, 2019 compared to June 30, 2019 | (0.8 | )% | 1.9 | % | (21.2 | )% | (1.1 | )% | ||||
Same store NOI at share - cash basis % increase (decrease)(1): | ||||||||||||
Three months ended September 30, 2019 compared to September 30, 2018 | 1.0 | % | 0.3 | % | (1.0 | )% | 17.7 | % | ||||
Nine months ended September 30, 2019 compared to September 30, 2018 | 2.7 | % | 1.6 | % | 5.5 | % | 15.7 | % | ||||
Three months ended September 30, 2019 compared to June 30, 2019 | (2.7 | )% | (0.4 | )% | (19.3 | )% | (2.2 | )% | ||||
____________________
(1) | See pages 12 through 17 for same store NOI at share and same store NOI at share - cash basis reconciliations. | |||
Increase | ||||
(2) | Excluding Hotel Pennsylvania, same store NOI at share % increase: | |||
Three months ended September 30, 2019 compared to September 30, 2018 | 1.2 | % | ||
Nine months ended September 30, 2019 compared to September 30, 2018 | 0.4 | % | ||
Three months ended September 30, 2019 compared to June 30, 2019 | 2.4 | % | ||
Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase: | ||||
Three months ended September 30, 2019 compared to September 30, 2018 | 1.0 | % | ||
Nine months ended September 30, 2019 compared to September 30, 2018 | 2.4 | % | ||
Three months ended September 30, 2019 compared to June 30, 2019 | 0.1 | % | ||
5
NOI At Share:
The elements of our New York and Other NOI at share for the three and nine months ended September 30, 2019 and 2018 and the three months ended June 30, 2019 are summarized below.
(Amounts in thousands) | For the Three Months Ended | For the Nine Months Ended September 30, | |||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
New York: | |||||||||||||||||||
Office(1) | $ | 177,469 | $ | 184,146 | $ | 179,592 | $ | 540,601 | $ | 556,169 | |||||||||
Retail(1) | 68,159 | 92,858 | 57,063 | 213,489 | 267,876 | ||||||||||||||
Residential | 5,575 | 5,202 | 5,908 | 17,528 | 17,681 | ||||||||||||||
Alexander's Inc. ("Alexander's") | 11,269 | 10,626 | 11,108 | 33,699 | 34,110 | ||||||||||||||
Hotel Pennsylvania | 3,012 | 4,496 | 4,031 | 1,227 | 5,955 | ||||||||||||||
Total New York | 265,484 | 297,328 | 257,702 | 806,544 | 881,791 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 24,862 | 25,257 | 30,974 | 79,359 | 79,948 | ||||||||||||||
555 California Street | 15,265 | 13,515 | 15,358 | 45,124 | 40,686 | ||||||||||||||
Other investments | 1,919 | 13,524 | 4,875 | 23,184 | 50,664 | ||||||||||||||
Total Other | 42,046 | 52,296 | 51,207 | 147,667 | 171,298 | ||||||||||||||
NOI at share | $ | 307,530 | $ | 349,624 | $ | 308,909 | $ | 954,211 | $ | 1,053,089 | |||||||||
____________________
(1) | Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019. |
NOI At Share - Cash Basis:
The elements of our New York and Other NOI at share - cash basis for the three and nine months ended September 30, 2019 and 2018 and the three months ended June 30, 2019 are summarized below.
(Amounts in thousands) | For the Three Months Ended | For the Nine Months Ended September 30, | |||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
New York: | |||||||||||||||||||
Office(1) | $ | 174,796 | $ | 181,575 | $ | 178,806 | $ | 537,972 | $ | 540,484 | |||||||||
Retail(1) | 65,636 | 84,976 | 66,726 | 213,298 | 243,704 | ||||||||||||||
Residential | 5,057 | 5,358 | 5,303 | 16,131 | 16,420 | ||||||||||||||
Alexander's | 11,471 | 11,774 | 11,322 | 34,320 | 35,911 | ||||||||||||||
Hotel Pennsylvania | 2,964 | 4,520 | 3,982 | 1,082 | 6,111 | ||||||||||||||
Total New York | 259,924 | 288,203 | 266,139 | 802,803 | 842,630 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 26,588 | 26,234 | 31,984 | 83,484 | 81,312 | ||||||||||||||
555 California Street | 15,325 | 13,070 | 15,595 | 45,665 | 39,704 | ||||||||||||||
Other investments | 1,656 | 13,374 | 4,939 | 22,789 | 50,271 | ||||||||||||||
Total Other | 43,569 | 52,678 | 52,518 | 151,938 | 171,287 | ||||||||||||||
NOI at share - cash basis | $ | 303,493 | $ | 340,881 | $ | 318,657 | $ | 954,741 | $ | 1,013,917 | |||||||||
____________________
(1) | Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019. |
6
Penn District - Active Development/Redevelopment Summary as of September 30, 2019
(Amounts in thousands, except square feet) | ||||||||||||||||||
Property Rentable Sq. Ft. | Projected Incremental Cash Yield | |||||||||||||||||
Active Penn District Projects | Segment | Budget(1) | Amount Expended | Remainder to be Expended | Stabilization Year | |||||||||||||
Farley (95% interest) | New York | 845,000 | 1,030,000 | (2) | 528,080 | 501,920 | 2022 | 7.4% | ||||||||||
PENN2 - as expanded | New York | 1,795,000 | 750,000 | 34,372 | 715,628 | 2024 | 8.4% | |||||||||||
PENN1(3) | New York | 2,544,000 | 325,000 | 57,355 | 267,645 | N/A | 13.5%(3)(4) | |||||||||||
Districtwide Improvements | New York | N/A | 100,000 | 5,372 | 94,628 | N/A | N/A | |||||||||||
Total Active Penn District Projects | 2,205,000 | 625,179 | 1,579,821 | (5) | 8.3% | |||||||||||||
__________________________
(1) | Excluding debt and equity carry. |
(2) | Net of anticipated historic tax credits. |
(3) | Property is ground leased through 2098, as fully extended. Fair market value resets occur in 2023, 2048 and 2073. The 13.5% projected return is before the ground rent reset in 2023, which may be material. |
(4) | Achieved as existing leases roll; average remaining lease term 5.0 years. |
(5) | Expected to be funded from our balance sheet, principally from 220 CPS net sales proceeds. |
There can be no assurance that the above projects will be completed, completed on schedule or within budget. In addition, there can be no assurance that the Company will be successful in leasing the properties on the expected schedule or at the assumed rental rates.
Conference Call and Audio Webcast
As previously announced, the Company will host a quarterly earnings conference call and an audio webcast on Tuesday, October 29, 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 49056911. A telephonic replay of the conference call will be available from 1:30 p.m. ET on October 29, 2019 through November 28, 2019. To access the replay, please dial 888-843-7419 and enter the passcode 49056911#. 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 SHEETS
(Amounts in thousands, except unit, share, and per share amounts) | As of | ||||||
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Real estate, at cost: | |||||||
Land | $ | 2,602,039 | $ | 3,306,280 | |||
Buildings and improvements | 7,888,950 | 10,110,992 | |||||
Development costs and construction in progress | 1,805,846 | 2,266,491 | |||||
Moynihan Train Hall development expenditures | 791,703 | 445,693 | |||||
Leasehold improvements and equipment | 121,164 | 108,427 | |||||
Total | 13,209,702 | 16,237,883 | |||||
Less accumulated depreciation and amortization | (2,945,107 | ) | (3,180,175 | ) | |||
Real estate, net | 10,264,595 | 13,057,708 | |||||
Right-of-use assets | 370,604 | — | |||||
Cash and cash equivalents | 1,132,491 | 570,916 | |||||
Restricted cash | 113,065 | 145,989 | |||||
Marketable securities | 35,751 | 152,198 | |||||
Tenant and other receivables | 99,499 | 73,322 | |||||
Investments in partially owned entities | 4,023,820 | 858,113 | |||||
Real estate fund investments | 306,596 | 318,758 | |||||
220 Central Park South condominium units ready for sale | 288,135 | 99,627 | |||||
Receivable arising from the straight-lining of rents | 743,646 | 935,131 | |||||
Deferred leasing costs, net of accumulated amortization of $191,299 and $207,529 | 360,608 | 400,313 | |||||
Identified intangible assets, net of accumulated amortization of $99,623 and $172,114 | 30,773 | 136,781 | |||||
Other assets | 446,516 | 431,938 | |||||
$ | 18,216,099 | $ | 17,180,794 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||
Mortgages payable, net | $ | 5,640,895 | $ | 8,167,798 | |||
Senior unsecured notes, net | 445,668 | 844,002 | |||||
Unsecured term loan, net | 745,585 | 744,821 | |||||
Unsecured revolving credit facilities | 655,000 | 80,000 | |||||
Lease liabilities | 490,978 | — | |||||
Moynihan Train Hall obligation | 791,703 | 445,693 | |||||
Accounts payable and accrued expenses | 453,331 | 430,976 | |||||
Deferred revenue | 62,583 | 167,730 | |||||
Deferred compensation plan | 99,677 | 96,523 | |||||
Other liabilities | 266,090 | 311,806 | |||||
Total liabilities | 9,651,510 | 11,289,349 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests: | |||||||
Class A units - 13,346,927 and 12,544,477 units outstanding | 849,798 | 778,134 | |||||
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding | 4,535 | 5,428 | |||||
Total redeemable noncontrolling interests | 854,333 | 783,562 | |||||
Shareholders' equity: | |||||||
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,797,280 and 36,798,580 shares | 891,256 | 891,294 | |||||
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 190,850,321 and 190,535,499 shares | 7,613 | 7,600 | |||||
Additional capital | 7,872,597 | 7,725,857 | |||||
Earnings less than distributions | (1,649,035 | ) | (4,167,184 | ) | |||
Accumulated other comprehensive (loss) income | (47,359 | ) | 7,664 | ||||
Total shareholders' equity | 7,075,072 | 4,465,231 | |||||
Noncontrolling interests in consolidated subsidiaries | 635,184 | 642,652 | |||||
Total equity | 7,710,256 | 5,107,883 | |||||
$ | 18,216,099 | $ | 17,180,794 | ||||
8
VORNADO REALTY TRUST
OPERATING RESULTS
(Amounts in thousands, except per share amounts) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | $ | 465,961 | $ | 542,048 | $ | 1,463,732 | $ | 1,620,303 | |||||||
Income from continuing operations | $ | 363,857 | $ | 219,101 | $ | 3,173,671 | $ | 324,401 | |||||||
(Loss) income from discontinued operations | (8 | ) | 61 | (85 | ) | 381 | |||||||||
Net income | 363,849 | 219,162 | 3,173,586 | 324,782 | |||||||||||
Less net (income) loss attributable to noncontrolling interests in: | |||||||||||||||
Consolidated subsidiaries | (5,774 | ) | (3,312 | ) | (34,045 | ) | 31,137 | ||||||||
Operating Partnership | (22,637 | ) | (12,671 | ) | (197,354 | ) | (18,992 | ) | |||||||
Net income attributable to Vornado | 335,438 | 203,179 | 2,942,187 | 336,927 | |||||||||||
Preferred share dividends | (12,532 | ) | (12,534 | ) | (37,598 | ) | (38,103 | ) | |||||||
Preferred share issuance costs | — | — | — | (14,486 | ) | ||||||||||
NET INCOME attributable to common shareholders | $ | 322,906 | $ | 190,645 | $ | 2,904,589 | $ | 284,338 | |||||||
INCOME PER COMMON SHARE – BASIC: | |||||||||||||||
Net income per common share | $ | 1.69 | $ | 1.00 | $ | 15.22 | $ | 1.50 | |||||||
Weighted average shares outstanding | 190,814 | 190,245 | 190,762 | 190,176 | |||||||||||
INCOME PER COMMON SHARE – DILUTED: | |||||||||||||||
Net income per common share | $ | 1.69 | $ | 1.00 | $ | 15.20 | $ | 1.49 | |||||||
Weighted average shares outstanding | 191,024 | 191,327 | 191,027 | 191,292 | |||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 279,509 | $ | 189,987 | $ | 691,522 | $ | 519,640 | |||||||
Per diluted share (non-GAAP) | $ | 1.46 | $ | 0.99 | $ | 3.62 | $ | 2.72 | |||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 170,966 | $ | 184,280 | $ | 494,936 | $ | 543,531 | |||||||
Per diluted share (non-GAAP) | $ | 0.89 | $ | 0.96 | $ | 2.59 | $ | 2.84 | |||||||
Weighted average shares used in determining FFO attributable to common shareholders plus assumed conversions per diluted share | 191,024 | 191,327 | 191,024 | 191,186 | |||||||||||
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 September 30, | For the Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions: | |||||||||||||||
Net income attributable to common shareholders | $ | 322,906 | $ | 190,645 | $ | 2,904,589 | $ | 284,338 | |||||||
Per diluted share | $ | 1.69 | $ | 1.00 | $ | 15.20 | $ | 1.49 | |||||||
FFO adjustments: | |||||||||||||||
Depreciation and amortization of real property | $ | 89,479 | $ | 105,015 | $ | 303,415 | $ | 309,024 | |||||||
Net gains on sale of real estate | (178,769 | ) | (133,961 | ) | (178,769 | ) | (158,138 | ) | |||||||
Real estate impairment losses | — | — | 31,436 | — | |||||||||||
Net gain on transfer to Fifth Avenue and Times Square JV, net of $11,945 attributable to noncontrolling interests | — | — | (2,559,154 | ) | — | ||||||||||
Net gain from sale of UE common shares (sold on March 4, 2019) | — | — | (62,395 | ) | — | ||||||||||
Decrease (increase) in fair value of marketable securities: | |||||||||||||||
PREIT | 4,875 | — | 19,211 | — | |||||||||||
Lexington (sold on March 1, 2019) | — | 7,942 | (16,068 | ) | 24,934 | ||||||||||
Other | (7 | ) | (243 | ) | (48 | ) | (133 | ) | |||||||
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO: | |||||||||||||||
Depreciation and amortization of real property | 37,696 | 23,688 | 97,317 | 77,282 | |||||||||||
Net gains on sale of real estate | — | (3,421 | ) | — | (3,998 | ) | |||||||||
Decrease in fair value of marketable securities | 291 | 267 | 1,988 | 1,801 | |||||||||||
(46,435 | ) | (713 | ) | (2,363,067 | ) | 250,772 | |||||||||
Noncontrolling interests' share of above adjustments | 3,024 | 40 | 149,957 | (15,517 | ) | ||||||||||
FFO adjustments, net | $ | (43,411 | ) | $ | (673 | ) | $ | (2,213,110 | ) | $ | 235,255 | ||||
FFO attributable to common shareholders | $ | 279,495 | $ | 189,972 | $ | 691,479 | $ | 519,593 | |||||||
Convertible preferred share dividends | 14 | 15 | 43 | 47 | |||||||||||
FFO attributable to common shareholders plus assumed conversions | $ | 279,509 | $ | 189,987 | $ | 691,522 | $ | 519,640 | |||||||
Per diluted share | $ | 1.46 | $ | 0.99 | $ | 3.62 | $ | 2.72 | |||||||
Reconciliation of Weighted Average Shares | |||||||||||||||
Weighted average common shares outstanding | 190,814 | 190,245 | 190,762 | 190,176 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock options and restricted share awards | 176 | 1,045 | 227 | 972 | |||||||||||
Convertible preferred shares | 34 | 37 | 35 | 38 | |||||||||||
Denominator for FFO per diluted share | 191,024 | 191,327 | 191,024 | 191,186 | |||||||||||
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. 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. FFO for the three months ended September 30, 2018 has been adjusted to exclude the $7,966,000, or $0.04 per share, decrease in fair value of marketable equity securities previously reported. 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 and nine months ended September 30, 2019 and 2018 and the three months ended June 30, 2019.
For the Three Months Ended | For the Nine Months Ended September 30, | ||||||||||||||||||
(Amounts in thousands) | September 30, | June 30, 2019 | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income | $ | 363,849 | $ | 219,162 | $ | 2,596,693 | $ | 3,173,586 | $ | 324,782 | |||||||||
Depreciation and amortization expense | 96,437 | 113,169 | 113,035 | 326,181 | 333,701 | ||||||||||||||
General and administrative expense | 33,237 | 31,977 | 38,872 | 130,129 | 108,937 | ||||||||||||||
Transaction related costs, impairment losses and other | 1,576 | 2,510 | 101,590 | 103,315 | 16,683 | ||||||||||||||
Income from partially owned entities | (25,946 | ) | (7,206 | ) | (22,873 | ) | (56,139 | ) | (6,059 | ) | |||||||||
(Income) loss from real estate fund investments | (2,190 | ) | 190 | 15,803 | 13,780 | 37,973 | |||||||||||||
Interest and other investment income, net | (3,045 | ) | (2,893 | ) | (7,840 | ) | (15,930 | ) | (9,401 | ) | |||||||||
Interest and debt expense | 61,448 | 88,951 | 63,029 | 226,940 | 264,774 | ||||||||||||||
Net gain on transfer to Fifth Avenue and Times Square JV | — | — | (2,571,099 | ) | (2,571,099 | ) | — | ||||||||||||
Net gains on disposition of wholly owned and partially owned assets | (309,657 | ) | (141,269 | ) | (111,713 | ) | (641,664 | ) | (164,828 | ) | |||||||||
Income tax expense | 23,885 | 1,943 | 26,914 | 80,542 | 4,964 | ||||||||||||||
Loss (income) from discontinued operations | 8 | (61 | ) | (60 | ) | 85 | (381 | ) | |||||||||||
NOI from partially owned entities | 86,024 | 60,094 | 82,974 | 236,400 | 193,359 | ||||||||||||||
NOI attributable to noncontrolling interests in consolidated subsidiaries | (18,096 | ) | (16,943 | ) | (16,416 | ) | (51,915 | ) | (51,415 | ) | |||||||||
NOI at share | 307,530 | 349,624 | 308,909 | 954,211 | 1,053,089 | ||||||||||||||
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (4,037 | ) | (8,743 | ) | 9,748 | 530 | (39,172 | ) | |||||||||||
NOI at share - cash basis | $ | 303,493 | $ | 340,881 | $ | 318,657 | $ | 954,741 | $ | 1,013,917 | |||||||||
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 September 30, 2019 compared to September 30, 2018.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended September 30, 2019 | $ | 307,530 | $ | 265,484 | $ | 24,862 | $ | 15,265 | $ | 1,919 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | |||||||||||||
Dispositions | (650 | ) | (650 | ) | — | — | — | |||||||||||||
Development properties | (14,704 | ) | (14,704 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (627 | ) | (107 | ) | (520 | ) | — | — | ||||||||||||
Other non-same store (income) expense, net | (10,222 | ) | (8,410 | ) | (12 | ) | 119 | (1,919 | ) | |||||||||||
Same store NOI at share for the three months ended September 30, 2019 | $ | 281,322 | $ | 241,608 | $ | 24,330 | $ | 15,384 | $ | — | ||||||||||
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: | ||||||||||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (28,972 | ) | (28,972 | ) | — | — | — | |||||||||||||
Dispositions | (3,317 | ) | (3,317 | ) | — | — | — | |||||||||||||
Development properties | (23,256 | ) | (23,242 | ) | — | (14 | ) | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 1,578 | 1,797 | (219 | ) | — | — | ||||||||||||||
Other non-same store (income) expense, net | (16,767 | ) | (3,248 | ) | 5 | — | (13,524 | ) | ||||||||||||
Same store NOI at share for the three months ended September 30, 2018 | $ | 278,890 | $ | 240,346 | $ | 25,043 | $ | 13,501 | $ | — | ||||||||||
Increase (decrease) in same store NOI at share for the three months ended September 30, 2019 compared to September 30, 2018 | $ | 2,432 | $ | 1,262 | $ | (713 | ) | $ | 1,883 | $ | — | |||||||||
% increase (decrease) in same store NOI at share | 0.9 | % | 0.5 | % | (1) | (2.8 | )% | 13.9 | % | — | % | |||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI increased by 1.2%. |
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 September 30, 2019 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 September 30, 2019 | $ | 303,493 | $ | 259,924 | $ | 26,588 | $ | 15,325 | $ | 1,656 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | |||||||||||||
Dispositions | (690 | ) | (690 | ) | — | — | — | |||||||||||||
Development properties | (20,306 | ) | (20,306 | ) | — | — | — | |||||||||||||
Lease termination income | (1,016 | ) | (157 | ) | (859 | ) | — | — | ||||||||||||
Other non-same store (income) expense, net | (11,280 | ) | (9,658 | ) | (12 | ) | 46 | (1,656 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2019 | $ | 270,196 | $ | 229,108 | $ | 25,717 | $ | 15,371 | $ | — | ||||||||||
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: | ||||||||||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (27,452 | ) | (27,452 | ) | — | — | — | |||||||||||||
Dispositions | (3,370 | ) | (3,370 | ) | — | — | — | |||||||||||||
Development properties | (25,061 | ) | (25,047 | ) | — | (14 | ) | — | ||||||||||||
Lease termination income | (268 | ) | (8 | ) | (260 | ) | — | — | ||||||||||||
Other non-same store (income) expense, net | (17,319 | ) | (3,950 | ) | 5 | — | (13,374 | ) | ||||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2018 | $ | 267,411 | $ | 228,376 | $ | 25,979 | $ | 13,056 | $ | — | ||||||||||
Increase (decrease) in same store NOI at share - cash basis for the three months ended September 30, 2019 compared to September 30, 2018 | $ | 2,785 | $ | 732 | $ | (262 | ) | $ | 2,315 | $ | — | |||||||||
% increase (decrease) in same store NOI at share - cash basis | 1.0 | % | 0.3 | % | (1) | (1.0 | )% | 17.7 | % | — | % | |||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 1.0%. |
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 September 30, 2019 compared to June 30, 2019.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended September 30, 2019 | $ | 307,530 | $ | 265,484 | $ | 24,862 | $ | 15,265 | $ | 1,919 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | |||||||||||||
Dispositions | (650 | ) | (650 | ) | — | — | — | |||||||||||||
Development properties | (14,704 | ) | (14,704 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (627 | ) | (107 | ) | (520 | ) | — | — | ||||||||||||
Other non-same store (income) expense, net | (10,220 | ) | (8,408 | ) | (12 | ) | 119 | (1,919 | ) | |||||||||||
Same store NOI at share for the three months ended September 30, 2019 | $ | 281,324 | $ | 241,610 | $ | 24,330 | $ | 15,384 | $ | — | ||||||||||
NOI at share for the three months ended June 30, 2019 | $ | 308,909 | $ | 257,702 | $ | 30,974 | $ | 15,358 | $ | 4,875 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | |||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,479 | ) | (5,479 | ) | — | — | — | |||||||||||||
Dispositions | (3,401 | ) | (3,401 | ) | — | — | — | |||||||||||||
Development properties | (19,698 | ) | (19,698 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 2,933 | 2,933 | — | — | — | |||||||||||||||
Other non-same store expense (income), net | 214 | 4,983 | (98 | ) | 204 | (4,875 | ) | |||||||||||||
Same store NOI at share for the three months ended June 30, 2019 | $ | 283,473 | $ | 237,035 | $ | 30,876 | $ | 15,562 | $ | — | ||||||||||
(Decrease) increase in same store NOI at share for the three months ended September 30, 2019 compared to June 30, 2019 | $ | (2,149 | ) | $ | 4,575 | $ | (6,546 | ) | $ | (178 | ) | $ | — | |||||||
% (decrease) increase in same store NOI at share | (0.8 | )% | 1.9 | % | (1) | (21.2 | )% | (1.1 | )% | — | % | |||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 2.4%. |
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 September 30, 2019 compared to June 30, 2019.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended September 30, 2019 | $ | 303,493 | $ | 259,924 | $ | 26,588 | $ | 15,325 | $ | 1,656 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | |||||||||||||
Dispositions | (690 | ) | (690 | ) | — | — | — | |||||||||||||
Development properties | (20,306 | ) | (20,306 | ) | — | — | — | |||||||||||||
Lease termination income | (1,016 | ) | (157 | ) | (859 | ) | — | — | ||||||||||||
Other non-same store (income) expense, net | (11,280 | ) | (9,658 | ) | (12 | ) | 46 | (1,656 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2019 | $ | 270,196 | $ | 229,108 | $ | 25,717 | $ | 15,371 | $ | — | ||||||||||
NOI at share - cash basis for the three months ended June 30, 2019 | $ | 318,657 | $ | 266,139 | $ | 31,984 | $ | 15,595 | $ | 4,939 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | |||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,183 | ) | (5,183 | ) | — | — | — | |||||||||||||
Dispositions | (3,600 | ) | (3,600 | ) | — | — | — | |||||||||||||
Development properties | (22,438 | ) | (22,438 | ) | — | — | — | |||||||||||||
Lease termination income | (247 | ) | (247 | ) | — | — | — | |||||||||||||
Other non-same store (income) expense, net | (9,613 | ) | (4,705 | ) | (98 | ) | 129 | (4,939 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended June 30, 2019 | $ | 277,571 | $ | 229,961 | $ | 31,886 | $ | 15,724 | $ | — | ||||||||||
Decrease in same store NOI at share - cash basis for the three months ended September 30, 2019 compared to June 30, 2019 | $ | (7,375 | ) | $ | (853 | ) | $ | (6,169 | ) | $ | (353 | ) | $ | — | ||||||
% decrease in same store NOI at share - cash basis | (2.7 | )% | (0.4 | )% | (1) | (19.3 | )% | (2.2 | )% | — | % | |||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 0.1%. |
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 nine months ended September 30, 2019 compared to September 30, 2018.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the nine months ended September 30, 2019 | $ | 954,211 | $ | 806,544 | $ | 79,359 | $ | 45,124 | $ | 23,184 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (225 | ) | (225 | ) | — | — | — | |||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,479 | ) | (5,479 | ) | — | — | — | |||||||||||||
Dispositions | (7,277 | ) | (7,277 | ) | — | — | — | |||||||||||||
Development properties | (37,806 | ) | (37,806 | ) | — | — | — | |||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 4,362 | 4,882 | (520 | ) | — | — | ||||||||||||||
Other non-same store (income) expense, net | (28,711 | ) | (3,983 | ) | (1,943 | ) | 399 | (23,184 | ) | |||||||||||
Same store NOI at share for the nine months ended September 30, 2019 | $ | 879,075 | $ | 756,656 | $ | 76,896 | $ | 45,523 | $ | — | ||||||||||
NOI at share for the nine months ended September 30, 2018 | $ | 1,053,089 | $ | 881,791 | $ | 79,948 | $ | 40,686 | $ | 50,664 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (124 | ) | (124 | ) | — | — | — | |||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (55,337 | ) | (55,337 | ) | — | — | — | |||||||||||||
Dispositions | (10,288 | ) | (10,288 | ) | — | — | — | |||||||||||||
Development properties | (53,394 | ) | (53,380 | ) | — | (14 | ) | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 2,394 | 2,655 | (261 | ) | — | — | ||||||||||||||
Other non-same store income, net | (62,284 | ) | (7,188 | ) | (4,432 | ) | — | (50,664 | ) | |||||||||||
Same store NOI at share for the nine months ended September 30, 2018 | $ | 874,056 | $ | 758,129 | $ | 75,255 | $ | 40,672 | $ | — | ||||||||||
Increase (decrease) in same store NOI at share for the nine months ended September 30, 2019 compared to September 30, 2018 | $ | 5,019 | $ | (1,473 | ) | $ | 1,641 | $ | 4,851 | $ | — | |||||||||
% increase (decrease) in same store NOI at share | 0.6 | % | (0.2 | )% | (1) | 2.2 | % | 11.9 | % | — | % | |||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 0.4%. |
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 nine months ended September 30, 2019 compared to September 30, 2018.
(Amounts in thousands) | Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the nine months ended September 30, 2019 | $ | 954,741 | $ | 802,803 | $ | 83,484 | $ | 45,665 | $ | 22,789 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (226 | ) | (226 | ) | — | — | — | |||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,183 | ) | (5,183 | ) | — | — | — | |||||||||||||
Dispositions | (7,716 | ) | (7,716 | ) | — | — | — | |||||||||||||
Development properties | (47,597 | ) | (47,597 | ) | — | — | — | |||||||||||||
Lease termination income | (2,943 | ) | (2,084 | ) | (859 | ) | — | — | ||||||||||||
Other non-same store (income) expense, net | (39,399 | ) | (14,919 | ) | (1,942 | ) | 251 | (22,789 | ) | |||||||||||
Same store NOI at share - cash basis for the nine months ended September 30, 2019 | $ | 851,677 | $ | 725,078 | $ | 80,683 | $ | 45,916 | $ | — | ||||||||||
NOI at share - cash basis for the nine months ended September 30, 2018 | $ | 1,013,917 | $ | 842,630 | $ | 81,312 | $ | 39,704 | $ | 50,271 | ||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||
Acquisitions | (124 | ) | (124 | ) | — | — | — | |||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (52,184 | ) | (52,184 | ) | — | — | — | |||||||||||||
Dispositions | (9,933 | ) | (9,933 | ) | — | — | — | |||||||||||||
Development properties | (57,495 | ) | (57,481 | ) | — | (14 | ) | — | ||||||||||||
Lease termination income | (1,491 | ) | (1,069 | ) | (422 | ) | — | — | ||||||||||||
Other non-same store income, net | (63,227 | ) | (8,524 | ) | (4,432 | ) | — | (50,271 | ) | |||||||||||
Same store NOI at share - cash basis for the nine months ended September 30, 2018 | $ | 829,463 | $ | 713,315 | $ | 76,458 | $ | 39,690 | $ | — | ||||||||||
Increase in same store NOI at share - cash basis for the nine months ended September 30, 2019 compared to September 30, 2018 | $ | 22,214 | $ | 11,763 | $ | 4,225 | $ | 6,226 | $ | — | ||||||||||
% increase in same store NOI at share - cash basis | 2.7 | % | 1.6 | % | (1) | 5.5 | % | 15.7 | % | — | % | |||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.4%. |
CONTACT:
JOSEPH MACNOW
(212) 894-7000
17
EXHIBIT 99.2
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 and NOI at Share By Region | |||
Consolidated Balance Sheets | |||
LEASING ACTIVITY AND LEASE EXPIRATIONS | |||
Leasing Activity | - | ||
Leasing Expirations | - | ||
TRAILING TWELVE MONTH PRO-FORMA CASH NOI AT SHARE | |||
DEBT AND CAPITALIZATION | |||
Capital Structure | |||
Common Shares Data | |||
Debt Analysis | |||
Debt Maturities | |||
UNCONSOLIDATED JOINT VENTURES | - | ||
DEVELOPMENT ACTIVITY AND CAPITAL EXPENDITURES | |||
Penn District Active Development/Redevelopment Summary | |||
Other 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: DEFINITIONS 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 Part 1 of 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") 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 | ||||
Disposition Activity
220 Central Park South ("220 CPS")
During the three months ended September 30, 2019, we closed on the sale of 14 condominium units at 220 CPS for net proceeds aggregating $348,759,000 resulting in a financial statement net gain of $130,888,000 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, $21,853,000 of income tax expense was recognized on our consolidated statements of income. During the nine months ended September 30, 2019, we closed on the sale of 37 condominium units at 220 CPS for net proceeds of $1,039,493,000 resulting in a financial statement net gain of $400,500,000 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, $71,590,000 of income tax expense was recognized on our consolidated statements of income. From inception to September 30, 2019, we closed on the sale of 48 units for aggregate net proceeds of $1,254,269,000. During the third quarter of 2019, we repaid the remaining $48,883,000 of the $950,000,000 220 CPS loan.
Lexington Realty Trust ("Lexington")
On March 1, 2019, we sold all of our 18,468,969 common shares of Lexington, realizing net proceeds of $167,698,000. We recorded a $16,068,000 mark-to-market increase in the fair value of our common shares for the period from January 1, 2019 through the date of sale, which is included in "interest and other investment income, net" on our consolidated statements of income for the nine months ended September 30, 2019.
Urban Edge Properties (“UE”)
On March 4, 2019, we converted to common shares and sold all of our 5,717,184 partnership units of UE, realizing net proceeds of $108,512,000. The sale resulted in a net gain of $62,395,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the nine months ended September 30, 2019.
- 3 -
BUSINESS DEVELOPMENTS | ||||
Disposition Activity - continued
Fifth Avenue and Times Square JV
On April 18, 2019 (the “Closing Date”), we entered into a transaction agreement (the “Transaction Agreement”) with a group of institutional investors (the “Investors”). The Transaction Agreement provides for a series of transactions (collectively, the “Transaction”) pursuant to which (i) prior to the Closing Date, we contributed our interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the “Properties”) to subsidiaries of a newly formed joint venture (“Fifth Avenue and Times Square JV”) and (ii) on the Closing Date, transferred a 48.5% common interest in Fifth Avenue and Times Square JV to the Investors. The 48.5% common interest in the joint venture represents an effective 47.2% interest in the Properties (of which 45.4% was transferred from Vornado). The Properties include approximately 489,000 square feet of retail space, 327,000 square feet of office space, signage associated with 1535 and 1540 Broadway, the parking garage at 1540 Broadway and the theater at 1535 Broadway.
We retained the remaining 51.5% common interest in Fifth Avenue and Times Square JV which represents an effective 51.0% interest in the Properties and an aggregate $1.828 billion of preferred equity interests in certain of the properties. We also provided $500,000,000 of temporary preferred equity on 640 Fifth Avenue until May 23, 2019 when mortgage financing was completed. All of the preferred equity has an annual coupon of 4.25% for the first five years, increasing to 4.75% for the next five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.
Net cash proceeds from the Transaction were $1.179 billion, after (i) deductions for the defeasance of a $390,000,000 mortgage loan on 666 Fifth Avenue and the repayment of a $140,000,000 mortgage loan on 655 Fifth Avenue, (ii) proceeds from a $500,000,000 mortgage loan on 640 Fifth Avenue, described below, (iii) approximately $23,000,000 used to purchase noncontrolling investors' interests and (iv) approximately $53,000,000 of transaction costs (including $17,000,000 of costs related to the defeasance of the 666 Fifth Avenue mortgage loan).
We continue to manage and lease the Properties. We share control with the Investors over major decisions of the joint venture, including decisions regarding leasing, operating and capital budgets, and refinancings. Accordingly, we no longer hold a controlling financial interest in the Properties which has been transferred to the joint venture. As a result, our investment in Fifth Avenue and Times Square JV is accounted for under the equity method from the date of transfer. The Transaction valued the Properties at $5,556,000,000 resulting in a financial statement net gain of $2,571,099,000, before noncontrolling interest of $11,945,000, including the related step-up in our basis of the retained portion of the assets to fair value. The net gain is included in "net gain on transfer to Fifth Avenue and Times Square JV" on our consolidated statements of income for the nine months ended September 30, 2019. The gain for tax purposes was approximately $735,000,000.
On May 23, 2019, we received $500,000,000 from the redemption of our temporary preferred equity in 640 Fifth Avenue. The temporary preferred equity was redeemed from the proceeds of a $500,000,000 mortgage financing that was completed on the property. The five year loan, which is guaranteed by us, is interest only at LIBOR plus 1.01%. The interest rate was swapped for four years to a fixed rate of 3.07%.
330 Madison Avenue
On July 11, 2019, we sold our 25% interest in 330 Madison Avenue to our joint venture partner. We received net proceeds of approximately $100,000,000 after deducting our share of the existing $500,000,000 mortgage loan resulting in a financial statement net gain of $159,292,000. The net gain is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the three and nine months ended September 30, 2019. The gain for tax purposes was approximately $139,000,000.
3040 M Street
On September 18, 2019, we completed the $49,750,000 sale of 3040 M Street, a 44,000 square foot retail building in Washington, DC, which resulted in a net gain of $19,477,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income for the three and nine months ended September 30, 2019. The gain for tax purposes was approximately $19,000,000.
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BUSINESS DEVELOPMENTS | ||||
Financing Activity
On January 28, 2019, a joint venture, in which we have a 45.1% interest, completed a $167,500,000 refinancing of 61 Ninth Avenue, a 166,000 square foot office and retail property in the Meatpacking district of Manhattan which is fully leased to Aetna and Starbucks. The seven-year interest only loan carries a rate of LIBOR plus 1.35% (3.40% as of September 30, 2019) and matures in January 2026. We realized net proceeds of approximately $31,000,000. The loan replaces the previous $90,000,000 construction loan that bore interest at LIBOR plus 3.05% and was scheduled to mature in 2021.
On February 4, 2019, we completed a $95,700,000 refinancing of 435 Seventh Avenue, a 43,000 square foot Manhattan retail property. The interest-only loan carries a rate of LIBOR plus 1.30% (3.37% as of September 30, 2019) and matures in 2024. The recourse loan replaces the previous $95,700,000 loan that bore interest at LIBOR plus 2.25% and was scheduled to mature in August 2019.
On February 12, 2019, we completed a $580,000,000 refinancing of 100 West 33rd Street, a 1.1 million square foot Manhattan property comprised of 859,000 square feet of office space and the 256,000 square foot Manhattan Mall. The interest-only loan carries a rate of LIBOR plus 1.55% (3.62% as of September 30, 2019) and matures in April 2024, with two one-year extension options. The loan replaces the previous $580,000,000 loan that bore interest at LIBOR plus 1.65% and was scheduled to mature in July 2020.
On March 1, 2019, we called for redemption all of our $400,000,000 5.00% senior unsecured notes. The notes, which were scheduled to mature in January 2022, were redeemed on April 1, 2019 at a redemption price of 105.51% of the principal amount plus accrued interest. In connection therewith, we expensed $22,540,000 relating to debt prepayment costs which is included in "interest and debt expense" on our consolidated statements of income for the nine months ended September 30, 2019.
On March 26, 2019, we increased to $1.5 billion (from $1.25 billion) and extended to March 2024 (as fully extended) from February 2022 one of our two unsecured revolving credit facilities. The interest rate on the extended facility was lowered from LIBOR plus 1.00% to LIBOR plus 0.90%. The facility fee remains unchanged at 20 basis points.
On May 24, 2019, we extended our $375,000,000 mortgage loan on 888 Seventh Avenue, a 886,000 square foot Manhattan office building, from December 2020 to December 2025. The interest rate on the extended mortgage loan is LIBOR plus 1.70% (3.73% as of September 30, 2019). Pursuant to an existing swap agreement, the interest rate on the $375,000,000 mortgage loan has been swapped to 3.25% through December 2020.
On June 28, 2019, a joint venture, in which we have a 55% interest, completed a $145,700,000 refinancing of 512 West 22nd Street, a 173,000 square foot office building in the West Chelsea submarket of Manhattan, of which $106,425,000 was outstanding as of September 30, 2019. The four-year interest only loan carries a rate of LIBOR plus 2.00% (4.05% as of September 30, 2019) and matures in June 2023 with a one-year extension option. The loan replaces the previous $126,000,000 construction loan that bore interest at LIBOR plus 2.65% and was scheduled to mature in 2019.
On July 25, 2019, a joint venture, in which we have a 50% interest, completed a $60,000,000 refinancing of 825 Seventh Avenue, a 165,000 square foot office building on the corner of 53rd Street and Seventh Avenue, of which $28,882,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.65% (3.78% as of September 30, 2019) and matures in 2022 with a one-year extension option. The loan replaces the previous $20,500,000 loan that bore interest at LIBOR plus 1.40% and was scheduled to mature in September 2019.
On September 5, 2019, a consolidated joint venture, in which we have a 50% interest, completed a $75,000,000 refinancing of 606 Broadway, a 35,000 square foot office and retail building on the northeast corner of Broadway and Houston Street in Manhattan, of which $67,500,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.80% (3.85% as of September 30, 2019) and matures in 2024. In connection therewith, the joint venture purchased an interest rate cap that caps LIBOR at a rate of 4.00%. The loan replaces the previous $65,000,000 construction loan. The construction loan bore interest at LIBOR plus 3.00% and was scheduled to mature in May 2021.
On September 27, 2019, we repaid the $575,000,000 mortgage loan on PENN2 with proceeds from our unsecured revolving credit facilities. The mortgage loan was scheduled to mature in December 2021, as fully extended. PENN2 is a 1,795,000 square foot office building located on the west side of 7th Avenue between 31st and 33rd Street currently under redevelopment.
- 5 -
BUSINESS DEVELOPMENTS | ||||
Third Quarter Leasing Activity
197,000 square feet of New York Office space (171,000 square feet at share) at an initial rent of $80.44 per square foot and a weighted average lease term of 6.5 years. The GAAP and cash mark-to-market rent on the 108,000 square feet of second generation space were positive 28.5% and 22.7%, respectively. Tenant improvements and leasing commissions were $13.13 per square foot per annum, or 16.3% of initial rent.
26,000 square feet of New York Retail space (24,000 square feet at share) at an initial rent of $145.54 per square foot and a weighted average lease term of 5.4 years. The GAAP and cash mark-to-market rent on the 17,000 square feet of second generation space were positive 15.6% and 6.2%, respectively. Tenant improvements and leasing commissions were $8.31 per square foot per annum, or 5.7% of initial rent.
45,000 square feet at theMART at an initial rent of $48.54 per square foot and a weighted average lease term of 5.5 years. The GAAP and cash mark-to-market rent on the 43,000 square feet of second generation space were positive 14.9% and 6.7%, respectively. Tenant improvements and leasing commissions were $10.12 per square foot per annum, or 20.9% of initial rent.
50,000 square feet at 555 California Street (35,000 square feet at share) at an initial rent of $96.54 per square foot and a weighted average lease term of 8.5 years. The GAAP and cash mark-to-market rent on the 29,000 square feet of second generation space were positive 64.5% and 39.3%, respectively. Tenant improvements and leasing commissions were $9.94 per square foot per annum, or 10.3% of initial rent.
- 6 -
FINANCIAL HIGHLIGHTS (unaudited) | |||||||||||||||||||
(Amounts in thousands, except per share amounts) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | ||||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Total revenues | $ | 465,961 | $ | 542,048 | $ | 463,103 | $ | 1,463,732 | $ | 1,620,303 | |||||||||
Net income attributable to common shareholders | $ | 322,906 | $ | 190,645 | $ | 2,400,195 | $ | 2,904,589 | $ | 284,338 | |||||||||
Per common share: | |||||||||||||||||||
Basic | $ | 1.69 | $ | 1.00 | $ | 12.58 | $ | 15.22 | $ | 1.50 | |||||||||
Diluted | $ | 1.69 | $ | 1.00 | $ | 12.56 | $ | 15.20 | $ | 1.49 | |||||||||
Net income attributable to common shareholders, as adjusted (non-GAAP) | $ | 52,624 | $ | 64,806 | $ | 42,552 | $ | 120,372 | $ | 189,307 | |||||||||
Per diluted share (non-GAAP) | $ | 0.28 | $ | 0.34 | $ | 0.22 | $ | 0.63 | $ | 0.99 | |||||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 170,966 | $ | 184,280 | $ | 173,775 | $ | 494,936 | $ | 543,531 | |||||||||
Per diluted share (non-GAAP) | $ | 0.89 | $ | 0.96 | $ | 0.91 | $ | 2.59 | $ | 2.84 | |||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 279,509 | $ | 189,987 | $ | 164,329 | $ | 691,522 | $ | 519,640 | |||||||||
FFO - Operating Partnership Basis ("OP Basis") (non-GAAP) | $ | 297,837 | $ | 202,168 | $ | 175,013 | $ | 736,382 | $ | 552,837 | |||||||||
Per diluted share (non-GAAP) | $ | 1.46 | $ | 0.99 | $ | 0.86 | $ | 3.62 | $ | 2.72 | |||||||||
Dividends per common share | $ | 0.66 | $ | 0.63 | $ | 0.66 | $ | 1.98 | $ | 1.89 | |||||||||
FFO payout ratio (based on FFO attributable to common shareholders plus assumed conversions, as adjusted) | 74.2 | % | 65.6 | % | 72.5 | % | 76.4 | % | 66.5 | % | |||||||||
FAD payout ratio | 104.8 | % | 81.8 | % | 95.7 | % | 95.7 | % | 88.3 | % | |||||||||
Weighted average shares used in determining FFO attributable to common shareholders plus assumed conversions per diluted share (REIT basis) | 191,024 | 191,327 | 191,058 | 191,024 | 191,186 | ||||||||||||||
Convertible units: | |||||||||||||||||||
Class A | 12,195 | 11,858 | 12,143 | 12,141 | 11,857 | ||||||||||||||
Equity awards - unit equivalents | 331 | 409 | 279 | 251 | 357 | ||||||||||||||
Weighted average shares used in determining FFO attributable to Class A unitholders plus assumed conversions per diluted share (OP Basis) | 203,550 | 203,594 | 203,480 | 203,416 | 203,400 | ||||||||||||||
Please refer to the Appendix for reconciliations of GAAP to non-GAAP measures.
- 7 -
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (unaudited) | ||||||||||||||||
(Amounts in thousands) | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
September 30, | June 30, 2019 | |||||||||||||||
2019 | 2018 | Variance | ||||||||||||||
Property rentals(1) | $ | 372,186 | $ | 427,030 | $ | (54,844 | ) | $ | 368,165 | |||||||
Tenant expense reimbursements(1) | 55,772 | 66,387 | (10,615 | ) | 51,084 | |||||||||||
Amortization of acquired below-market leases, net | 4,393 | 10,373 | (5,980 | ) | 4,643 | |||||||||||
Straight-lining of rents | (4,713 | ) | 157 | (4,870 | ) | (2,593 | ) | |||||||||
Total rental revenues | 427,638 | 503,947 | (76,309 | ) | 421,299 | |||||||||||
Fee and other income: | ||||||||||||||||
BMS cleaning fees | 30,677 | 28,873 | 1,804 | 32,570 | ||||||||||||
Management and leasing fees | 3,326 | 4,734 | (1,408 | ) | 4,500 | |||||||||||
Other income | 4,320 | 4,494 | (174 | ) | 4,734 | |||||||||||
Total revenues | 465,961 | 542,048 | (76,087 | ) | 463,103 | |||||||||||
Operating expenses | (226,359 | ) | (235,575 | ) | 9,216 | (220,752 | ) | |||||||||
Depreciation and amortization | (96,437 | ) | (113,169 | ) | 16,732 | (113,035 | ) | |||||||||
General and administrative | (33,237 | ) | (31,977 | ) | (1,260 | ) | (38,872 | ) | ||||||||
Expense from deferred compensation plan liability | (974 | ) | (1,861 | ) | 887 | (1,315 | ) | |||||||||
Transaction related costs, impairment losses and other | (1,576 | ) | (2,510 | ) | 934 | (101,590 | ) | |||||||||
Total expenses | (358,583 | ) | (385,092 | ) | 26,509 | (475,564 | ) | |||||||||
Income from partially owned entities(2) | 25,946 | 7,206 | 18,740 | 22,873 | ||||||||||||
Income (loss) from real estate fund investments | 2,190 | (190 | ) | 2,380 | (15,803 | ) | ||||||||||
Interest and other investment income, net | 3,045 | 2,893 | 152 | 7,840 | ||||||||||||
Income from deferred compensation plan assets | 974 | 1,861 | (887 | ) | 1,315 | |||||||||||
Interest and debt expense | (61,448 | ) | (88,951 | ) | 27,503 | (63,029 | ) | |||||||||
Net gain on transfer to Fifth Avenue and Times Square JV | — | — | — | 2,571,099 | ||||||||||||
Net gains on disposition of wholly owned and partially owned assets | 309,657 | 141,269 | 168,388 | 111,713 | ||||||||||||
Income before income taxes | 387,742 | 221,044 | 166,698 | 2,623,547 | ||||||||||||
Income tax expense | (23,885 | ) | (1,943 | ) | (21,942 | ) | (26,914 | ) | ||||||||
Income from continuing operations | 363,857 | 219,101 | 144,756 | 2,596,633 | ||||||||||||
(Loss) income from discontinued operations | (8 | ) | 61 | (69 | ) | 60 | ||||||||||
Net income | 363,849 | 219,162 | 144,687 | 2,596,693 | ||||||||||||
Less net income attributable to noncontrolling interests in: | ||||||||||||||||
Consolidated subsidiaries | (5,774 | ) | (3,312 | ) | (2,462 | ) | (21,451 | ) | ||||||||
Operating Partnership | (22,637 | ) | (12,671 | ) | (9,966 | ) | (162,515 | ) | ||||||||
Net income attributable to Vornado | 335,438 | 203,179 | 132,259 | 2,412,727 | ||||||||||||
Preferred share dividends | (12,532 | ) | (12,534 | ) | 2 | (12,532 | ) | |||||||||
Net income attributable to common shareholders | $ | 322,906 | $ | 190,645 | $ | 132,261 | $ | 2,400,195 | ||||||||
Capitalized expenditures: | ||||||||||||||||
Leasing payroll(3) | $ | — | $ | 1,444 | $ | (1,444 | ) | $ | — | |||||||
Development payroll | 2,158 | 2,771 | (613 | ) | 5,923 | |||||||||||
Interest and debt expense | 16,047 | 18,238 | (2,191 | ) | 19,812 | |||||||||||
_________________
(1) | "Property rentals" and "tenant expense reimbursements" represent non-GAAP financial measures which are reconciled above to "rental revenues" the most directly comparable financial measure calculated in accordance with GAAP. |
(2) | Beginning April 18, 2019, "income from partially owned entities" includes the previously consolidated properties contributed to Fifth Avenue and Times Square JV. |
(3) | Beginning January 1, 2019, we no longer capitalize internal leasing costs in accordance with Accounting Standard Update 2016-02, Leases. |
- 8 -
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (unaudited) | |||||||||||||
(Amounts in thousands) | |||||||||||||
For the Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | Variance | |||||||||||
Property rentals(1) | $ | 1,168,731 | $ | 1,280,506 | $ | (111,775 | ) | ||||||
Tenant expense reimbursements(1) | 172,968 | 185,009 | (12,041 | ) | |||||||||
Amortization of acquired below-market leases, net | 15,561 | 31,480 | (15,919 | ) | |||||||||
Straight-lining of rents | (8,446 | ) | 10,279 | (18,725 | ) | ||||||||
Total rental revenues | 1,348,814 | 1,507,274 | (158,460 | ) | |||||||||
Fee and other income: | |||||||||||||
BMS cleaning fees | 93,032 | 88,095 | 4,937 | ||||||||||
Management and leasing fees | 10,063 | 10,205 | (142 | ) | |||||||||
Other income | 11,823 | 14,729 | (2,906 | ) | |||||||||
Total revenues | 1,463,732 | 1,620,303 | (156,571 | ) | |||||||||
Operating expenses | (694,006 | ) | (709,158 | ) | 15,152 | ||||||||
Depreciation and amortization | (326,181 | ) | (333,701 | ) | 7,520 | ||||||||
General and administrative | (130,129 | ) | (108,937 | ) | (21,192 | ) | |||||||
Expense from deferred compensation plan liability | (7,722 | ) | (3,534 | ) | (4,188 | ) | |||||||
Transaction related costs, impairment losses and other | (103,315 | ) | (16,683 | ) | (86,632 | ) | |||||||
Total expenses | (1,261,353 | ) | (1,172,013 | ) | (89,340 | ) | |||||||
Income from partially owned entities(2) | 56,139 | 6,059 | 50,080 | ||||||||||
Loss from real estate fund investments | (13,780 | ) | (37,973 | ) | 24,193 | ||||||||
Interest and other investment income, net | 15,930 | 9,401 | 6,529 | ||||||||||
Income from deferred compensation plan assets | 7,722 | 3,534 | 4,188 | ||||||||||
Interest and debt expense | (226,940 | ) | (264,774 | ) | 37,834 | ||||||||
Net gain on transfer to Fifth Avenue and Times Square JV | 2,571,099 | — | 2,571,099 | ||||||||||
Net gains on disposition of wholly owned and partially owned assets | 641,664 | 164,828 | 476,836 | ||||||||||
Income before income taxes | 3,254,213 | 329,365 | 2,924,848 | ||||||||||
Income tax expense | (80,542 | ) | (4,964 | ) | (75,578 | ) | |||||||
Income from continuing operations | 3,173,671 | 324,401 | 2,849,270 | ||||||||||
(Loss) income from discontinued operations | (85 | ) | 381 | (466 | ) | ||||||||
Net income | 3,173,586 | 324,782 | 2,848,804 | ||||||||||
Less net (income) loss attributable to noncontrolling interests in: | |||||||||||||
Consolidated subsidiaries | (34,045 | ) | 31,137 | (65,182 | ) | ||||||||
Operating Partnership | (197,354 | ) | (18,992 | ) | (178,362 | ) | |||||||
Net income attributable to Vornado | 2,942,187 | 336,927 | 2,605,260 | ||||||||||
Preferred share dividends | (37,598 | ) | (38,103 | ) | 505 | ||||||||
Preferred share issuance costs | — | (14,486 | ) | 14,486 | |||||||||
Net income attributable to common shareholders | $ | 2,904,589 | $ | 284,338 | $ | 2,620,251 | |||||||
Capitalized expenditures: | |||||||||||||
Leasing payroll(3) | $ | — | $ | 3,883 | $ | (3,883 | ) | ||||||
Development payroll | 12,673 | 7,996 | 4,677 | ||||||||||
Interest and debt expense | 59,184 | 49,718 | 9,466 | ||||||||||
_________________
(1) | "Property rentals" and "tenant expense reimbursements" represent non-GAAP financial measures which are reconciled above to "rental revenues" the most directly comparable financial measure calculated in accordance with GAAP. |
(2) | Beginning April 18, 2019, "income from partially owned entities" includes the previously consolidated properties contributed to Fifth Avenue and Times Square JV. |
(3) | Beginning January 1, 2019, we no longer capitalize internal leasing costs in accordance with Accounting Standard Update 2016-02, Leases. |
- 9 -
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS BY SEGMENT (unaudited) |
(Amounts in thousands) |
For the Three Months Ended September 30, 2019 | |||||||||||
Total | New York | Other | |||||||||
Property rentals(1) | $ | 372,186 | $ | 298,096 | $ | 74,090 | |||||
Tenant expense reimbursements(1) | 55,772 | 44,105 | 11,667 | ||||||||
Amortization of acquired below-market leases, net | 4,393 | 4,083 | 310 | ||||||||
Straight-lining of rents | (4,713 | ) | (3,510 | ) | (1,203 | ) | |||||
Total rental revenues | 427,638 | 342,774 | 84,864 | ||||||||
Fee and other income: | |||||||||||
BMS cleaning fees | 30,677 | 32,787 | (2,110 | ) | |||||||
Management and leasing fees | 3,326 | 3,746 | (420 | ) | |||||||
Other income | 4,320 | 1,261 | 3,059 | ||||||||
Total revenues | 465,961 | 380,568 | 85,393 | ||||||||
Operating expenses | (226,359 | ) | (188,159 | ) | (38,200 | ) | |||||
Depreciation and amortization | (96,437 | ) | (73,972 | ) | (22,465 | ) | |||||
General and administrative | (33,237 | ) | (12,355 | ) | (20,882 | ) | |||||
Expense from deferred compensation plan liability | (974 | ) | — | (974 | ) | ||||||
Transaction related costs, impairment losses and other | (1,576 | ) | — | (1,576 | ) | ||||||
Total expenses | (358,583 | ) | (274,486 | ) | (84,097 | ) | |||||
Income from partially owned entities | 25,946 | 23,726 | 2,220 | ||||||||
Income from real estate fund investments | 2,190 | — | 2,190 | ||||||||
Interest and other investment income, net | 3,045 | 1,292 | 1,753 | ||||||||
Income from deferred compensation plan assets | 974 | — | 974 | ||||||||
Interest and debt expense | (61,448 | ) | (42,269 | ) | (19,179 | ) | |||||
Net gains on disposition of wholly owned and partially owned assets | 309,657 | 178,769 | 130,888 | ||||||||
Income before income taxes | 387,742 | 267,600 | 120,142 | ||||||||
Income tax expense | (23,885 | ) | (1,473 | ) | (22,412 | ) | |||||
Income from continuing operations | 363,857 | 266,127 | 97,730 | ||||||||
Loss from discontinued operations | (8 | ) | — | (8 | ) | ||||||
Net income | 363,849 | 266,127 | 97,722 | ||||||||
Less net income attributable to noncontrolling interests in consolidated subsidiaries | (5,774 | ) | (2,568 | ) | (3,206 | ) | |||||
Net income attributable to Vornado Realty L.P. | 358,075 | $ | 263,559 | $ | 94,516 | ||||||
Less net income attributable to noncontrolling interests in the Operating Partnership | (22,595 | ) | |||||||||
Preferred unit distributions | (12,574 | ) | |||||||||
Net income attributable to common shareholders | $ | 322,906 | |||||||||
For the three months ended September 30, 2018: | |||||||||||
Net income attributable to Vornado Realty L.P. | $ | 215,850 | $ | 99,833 | $ | 116,017 | |||||
Net income attributable to common shareholders | $ | 190,645 | |||||||||
_________________
(1) | "Property rentals" and "tenant expense reimbursements" represent non-GAAP financial measures which are reconciled above to "rental revenues" the most directly comparable financial measure calculated in accordance with GAAP. |
- 10 -
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS BY SEGMENT (unaudited) |
(Amounts in thousands) |
For the Nine Months Ended September 30, 2019 | ||||||||||||
Total | New York | Other | ||||||||||
Property rentals(1) | $ | 1,168,731 | $ | 936,161 | $ | 232,570 | ||||||
Tenant expense reimbursements(1) | 172,968 | 140,634 | 32,334 | |||||||||
Amortization of acquired below-market leases, net | 15,561 | 14,833 | 728 | |||||||||
Straight-lining of rents | (8,446 | ) | (5,430 | ) | (3,016 | ) | ||||||
Total rental revenues | 1,348,814 | 1,086,198 | 262,616 | |||||||||
Fee and other income: | ||||||||||||
BMS cleaning fees | 93,032 | 99,488 | (6,456 | ) | ||||||||
Management and leasing fees | 10,063 | 10,469 | (406 | ) | ||||||||
Other income | 11,823 | 4,079 | 7,744 | |||||||||
Total revenues | 1,463,732 | 1,200,234 | 263,498 | |||||||||
Operating expenses | (694,006 | ) | (574,073 | ) | (119,933 | ) | ||||||
Depreciation and amortization | (326,181 | ) | (258,262 | ) | (67,919 | ) | ||||||
General and administrative | (130,129 | ) | (45,591 | ) | (84,538 | ) | ||||||
Expense from deferred compensation plan liability | (7,722 | ) | — | (7,722 | ) | |||||||
Transaction related costs, impairment losses and other | (103,315 | ) | (101,360 | ) | (1,955 | ) | ||||||
Total expenses | (1,261,353 | ) | (979,286 | ) | (282,067 | ) | ||||||
Income from partially owned entities | 56,139 | 50,252 | 5,887 | |||||||||
Loss from real estate fund investments | (13,780 | ) | — | (13,780 | ) | |||||||
Interest and other investment income, net | 15,930 | 4,088 | 11,842 | |||||||||
Income from deferred compensation plan assets | 7,722 | — | 7,722 | |||||||||
Interest and debt expense | (226,940 | ) | (140,744 | ) | (86,196 | ) | ||||||
Net gain on transfer to Fifth Avenue and Times Square JV | 2,571,099 | 2,571,099 | — | |||||||||
Net gains on disposition of wholly owned and partially owned assets | 641,664 | 178,769 | 462,895 | |||||||||
Income before income taxes | 3,254,213 | 2,884,412 | 369,801 | |||||||||
Income tax expense | (80,542 | ) | (4,185 | ) | (76,357 | ) | ||||||
Income from continuing operations | 3,173,671 | 2,880,227 | 293,444 | |||||||||
Loss from discontinued operations | (85 | ) | — | (85 | ) | |||||||
Net income | 3,173,586 | 2,880,227 | 293,359 | |||||||||
Less net income attributable to noncontrolling interests in consolidated subsidiaries | (34,045 | ) | (18,710 | ) | (15,335 | ) | ||||||
Net income attributable to Vornado Realty L.P. | 3,139,541 | $ | 2,861,517 | $ | 278,024 | |||||||
Less net income attributable to noncontrolling interests in the Operating Partnership | (197,230 | ) | ||||||||||
Preferred unit distributions | (37,722 | ) | ||||||||||
Net income attributable to common shareholders | $ | 2,904,589 | ||||||||||
For the nine months ended September 30, 2018: | ||||||||||||
Net income (loss) attributable to Vornado Realty L.P. | $ | 355,919 | $ | 300,380 | $ | 55,539 | ||||||
Net income attributable to common shareholders | $ | 284,338 | ||||||||||
_________________
(1) | "Property rentals" and "tenant expense reimbursements" represent non-GAAP financial measures which are reconciled above to "rental revenues" the most directly comparable financial measure calculated in accordance with GAAP. |
- 11 -
NET OPERATING INCOME AT SHARE BY SEGMENT (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Three Months Ended September 30, 2019 | |||||||||||
Total | New York(1) | Other | |||||||||
Total revenues | $ | 465,961 | $ | 380,568 | $ | 85,393 | |||||
Operating expenses | 226,359 | 188,159 | 38,200 | ||||||||
NOI - consolidated | 239,602 | 192,409 | 47,193 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (18,096 | ) | (9,574 | ) | (8,522 | ) | |||||
Add: NOI from partially owned entities | 86,024 | 82,649 | 3,375 | ||||||||
NOI at share | 307,530 | 265,484 | 42,046 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | (4,037 | ) | (5,560 | ) | 1,523 | ||||||
NOI at share - cash basis | $ | 303,493 | $ | 259,924 | $ | 43,569 | |||||
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: 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 | |||||
For the Three Months Ended June 30, 2019 | |||||||||||
Total | New York(1) | Other | |||||||||
Total revenues | $ | 463,103 | $ | 376,381 | $ | 86,722 | |||||
Operating expenses | 220,752 | 187,819 | 32,933 | ||||||||
NOI - consolidated | 242,351 | 188,562 | 53,789 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (16,416 | ) | (10,030 | ) | (6,386 | ) | |||||
Add: NOI from partially owned entities | 82,974 | 79,170 | 3,804 | ||||||||
NOI at share | 308,909 | 257,702 | 51,207 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | 9,748 | 8,437 | 1,311 | ||||||||
NOI at share - cash basis | $ | 318,657 | $ | 266,139 | $ | 52,518 | |||||
________________________________________
(1) | Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019. |
See Appendix page vii for details of NOI at share components.
- 12 -
NET OPERATING INCOME AT SHARE BY SEGMENT (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Nine Months Ended September 30, 2019 | |||||||||||
Total | New York(1) | Other | |||||||||
Total revenues | $ | 1,463,732 | $ | 1,200,234 | $ | 263,498 | |||||
Operating expenses | 694,006 | 574,073 | 119,933 | ||||||||
NOI - consolidated | 769,726 | 626,161 | 143,565 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (51,915 | ) | (31,011 | ) | (20,904 | ) | |||||
Add: NOI from partially owned entities | 236,400 | 211,394 | 25,006 | ||||||||
NOI at share | 954,211 | 806,544 | 147,667 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | 530 | (3,741 | ) | 4,271 | |||||||
NOI at share - cash basis | $ | 954,741 | $ | 802,803 | $ | 151,938 | |||||
For the Nine Months Ended September 30, 2018 | |||||||||||
Total | New York | Other | |||||||||
Total revenues | $ | 1,620,303 | $ | 1,369,482 | $ | 250,821 | |||||
Operating expenses | 709,158 | 599,768 | 109,390 | ||||||||
NOI - consolidated | 911,145 | 769,714 | 141,431 | ||||||||
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries | (51,415 | ) | (34,653 | ) | (16,762 | ) | |||||
Add: NOI from partially owned entities | 193,359 | 146,730 | 46,629 | ||||||||
NOI at share | 1,053,089 | 881,791 | 171,298 | ||||||||
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | (39,172 | ) | (39,161 | ) | (11 | ) | |||||
NOI at share - cash basis | $ | 1,013,917 | $ | 842,630 | $ | 171,287 | |||||
________________________________________
(1) | Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019. |
See Appendix page vii for details of NOI at share components.
- 13 -
NET OPERATING INCOME AT SHARE BY SUBSEGMENT (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | ||||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
NOI at share: | |||||||||||||||||||
New York: | |||||||||||||||||||
Office(1) | $ | 177,469 | $ | 184,146 | $ | 179,592 | $ | 540,601 | $ | 556,169 | |||||||||
Retail(1) | 68,159 | 92,858 | 57,063 | 213,489 | 267,876 | ||||||||||||||
Residential | 5,575 | 5,202 | 5,908 | 17,528 | 17,681 | ||||||||||||||
Alexander's Inc ("Alexander's") | 11,269 | 10,626 | 11,108 | 33,699 | 34,110 | ||||||||||||||
Hotel Pennsylvania | 3,012 | 4,496 | 4,031 | 1,227 | 5,955 | ||||||||||||||
Total New York | 265,484 | 297,328 | 257,702 | 806,544 | 881,791 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 24,862 | 25,257 | 30,974 | 79,359 | 79,948 | ||||||||||||||
555 California Street | 15,265 | 13,515 | 15,358 | 45,124 | 40,686 | ||||||||||||||
Other investments | 1,919 | 13,524 | 4,875 | 23,184 | 50,664 | ||||||||||||||
Total Other | 42,046 | 52,296 | 51,207 | 147,667 | 171,298 | ||||||||||||||
NOI at share | $ | 307,530 | $ | 349,624 | $ | 308,909 | $ | 954,211 | $ | 1,053,089 | |||||||||
NOI at share - cash basis: | |||||||||||||||||||
New York: | |||||||||||||||||||
Office(1) | $ | 174,796 | $ | 181,575 | $ | 178,806 | $ | 537,972 | $ | 540,484 | |||||||||
Retail(1) | 65,636 | 84,976 | 66,726 | 213,298 | 243,704 | ||||||||||||||
Residential | 5,057 | 5,358 | 5,303 | 16,131 | 16,420 | ||||||||||||||
Alexander's | 11,471 | 11,774 | 11,322 | 34,320 | 35,911 | ||||||||||||||
Hotel Pennsylvania | 2,964 | 4,520 | 3,982 | 1,082 | 6,111 | ||||||||||||||
Total New York | 259,924 | 288,203 | 266,139 | 802,803 | 842,630 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 26,588 | 26,234 | 31,984 | 83,484 | 81,312 | ||||||||||||||
555 California Street | 15,325 | 13,070 | 15,595 | 45,665 | 39,704 | ||||||||||||||
Other investments | 1,656 | 13,374 | 4,939 | 22,789 | 50,271 | ||||||||||||||
Total Other | 43,569 | 52,678 | 52,518 | 151,938 | 171,287 | ||||||||||||||
NOI at share - cash basis | $ | 303,493 | $ | 340,881 | $ | 318,657 | $ | 954,741 | $ | 1,013,917 | |||||||||
________________________________________
(1) | Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019. |
- 14 -
SAME STORE NOI AT SHARE AND NOI AT SHARE - CASH BASIS (NON-GAAP) (unaudited) | ||||||
Total | New York(2) | theMART | 555 California Street | |||||||||
Same store NOI at share % increase (decrease)(1): | ||||||||||||
Three months ended September 30, 2019 compared to September 30, 2018 | 0.9 | % | 0.5 | % | (2.8 | )% | 13.9 | % | ||||
Nine months ended September 30, 2019 compared to September 30, 2018 | 0.6 | % | (0.2 | )% | 2.2 | % | 11.9 | % | ||||
Three months ended September 30, 2019 compared to June 30, 2019 | (0.8 | )% | 1.9 | % | (21.2 | )% | (1.1 | )% | ||||
Same store NOI at share - cash basis % increase (decrease)(1): | ||||||||||||
Three months ended September 30, 2019 compared to September 30, 2018 | 1.0 | % | 0.3 | % | (1.0 | )% | 17.7 | % | ||||
Nine months ended September 30, 2019 compared to September 30, 2018 | 2.7 | % | 1.6 | % | 5.5 | % | 15.7 | % | ||||
Three months ended September 30, 2019 compared to June 30, 2019 | (2.7 | )% | (0.4 | )% | (19.3 | )% | (2.2 | )% | ||||
____________________
(1) | See pages viii through xiii in the Appendix for same store NOI at share and same store NOI at share - cash basis reconciliations. | |||
Increase | ||||
(2) | Excluding Hotel Pennsylvania, same store NOI at share % increase: | |||
Three months ended September 30, 2019 compared to September 30, 2018 | 1.2 | % | ||
Nine months ended September 30, 2019 compared to September 30, 2018 | 0.4 | % | ||
Three months ended September 30, 2019 compared to June 30, 2019 | 2.4 | % | ||
Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase: | ||||
Three months ended September 30, 2019 compared to September 30, 2018 | 1.0 | % | ||
Nine months ended September 30, 2019 compared to September 30, 2018 | 2.4 | % | ||
Three months ended September 30, 2019 compared to June 30, 2019 | 0.1 | % | ||
NOI AT SHARE BY REGION (unaudited) | |||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Region: | |||||||||||
New York City metropolitan area | 87 | % | 88 | % | 86 | % | 88 | % | |||
Chicago, IL | 8 | % | 8 | % | 9 | % | 8 | % | |||
San Francisco, CA | 5 | % | 4 | % | 5 | % | 4 | % | |||
100 | % | 100 | % | 100 | % | 100 | % | ||||
- 15 -
CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||||||
(Amounts in thousands) | |||||||||||
As of | Increase (Decrease) | ||||||||||
September 30, 2019 | December 31, 2018 | ||||||||||
ASSETS | |||||||||||
Real estate, at cost: | |||||||||||
Land | $ | 2,602,039 | $ | 3,306,280 | $ | (704,241 | ) | ||||
Buildings and improvements | 7,888,950 | 10,110,992 | (2,222,042 | ) | |||||||
Development costs and construction in progress | 1,805,846 | 2,266,491 | (460,645 | ) | |||||||
Moynihan Train Hall development expenditures | 791,703 | 445,693 | 346,010 | ||||||||
Leasehold improvements and equipment | 121,164 | 108,427 | 12,737 | ||||||||
Total | 13,209,702 | 16,237,883 | (3,028,181 | ) | |||||||
Less accumulated depreciation and amortization | (2,945,107 | ) | (3,180,175 | ) | 235,068 | ||||||
Real estate, net | 10,264,595 | 13,057,708 | (2,793,113 | ) | |||||||
Right-of-use assets | 370,604 | — | 370,604 | ||||||||
Cash and cash equivalents | 1,132,491 | 570,916 | 561,575 | ||||||||
Restricted cash | 113,065 | 145,989 | (32,924 | ) | |||||||
Marketable securities | 35,751 | 152,198 | (116,447 | ) | |||||||
Tenant and other receivables | 99,499 | 73,322 | 26,177 | ||||||||
Investments in partially owned entities | 4,023,820 | 858,113 | 3,165,707 | ||||||||
Real estate fund investments | 306,596 | 318,758 | (12,162 | ) | |||||||
220 Central Park South condominium units ready for sale | 288,135 | 99,627 | 188,508 | ||||||||
Receivable arising from the straight-lining of rents | 743,646 | 935,131 | (191,485 | ) | |||||||
Deferred leasing costs, net | 360,608 | 400,313 | (39,705 | ) | |||||||
Identified intangible assets, net | 30,773 | 136,781 | (106,008 | ) | |||||||
Other assets | 446,516 | 431,938 | 14,578 | ||||||||
Total Assets | $ | 18,216,099 | $ | 17,180,794 | $ | 1,035,305 | |||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||||||
Liabilities: | |||||||||||
Mortgages payable, net | $ | 5,640,895 | $ | 8,167,798 | $ | (2,526,903 | ) | ||||
Senior unsecured notes, net | 445,668 | 844,002 | (398,334 | ) | |||||||
Unsecured term loan, net | 745,585 | 744,821 | 764 | ||||||||
Unsecured revolving credit facilities | 655,000 | 80,000 | 575,000 | ||||||||
Lease liabilities | 490,978 | — | 490,978 | ||||||||
Moynihan Train Hall obligation | 791,703 | 445,693 | 346,010 | ||||||||
Accounts payable and accrued expenses | 453,331 | 430,976 | 22,355 | ||||||||
Deferred revenue | 62,583 | 167,730 | (105,147 | ) | |||||||
Deferred compensation plan | 99,677 | 96,523 | 3,154 | ||||||||
Other liabilities | 266,090 | 311,806 | (45,716 | ) | |||||||
Total liabilities | 9,651,510 | 11,289,349 | (1,637,839 | ) | |||||||
Redeemable noncontrolling interests | 854,333 | 783,562 | 70,771 | ||||||||
Shareholders' equity | 7,075,072 | 4,465,231 | 2,609,841 | ||||||||
Noncontrolling interests in consolidated subsidiaries | 635,184 | 642,652 | (7,468 | ) | |||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 18,216,099 | $ | 17,180,794 | $ | 1,035,305 | |||||
- 16 -
LEASING ACTIVITY (unaudited) |
(Square feet in thousands) |
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.
New York | 555 California Street | |||||||||||||||
Office | Retail | theMART | ||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||
Total square feet leased | 197 | 26 | 45 | 50 | ||||||||||||
Our share of square feet leased: | 171 | 24 | 45 | 35 | ||||||||||||
Initial rent(1) | $ | 80.44 | $ | 145.54 | $ | 48.54 | $ | 96.54 | ||||||||
Weighted average lease term (years) | 6.5 | 5.4 | 5.5 | 8.5 | ||||||||||||
Second generation relet space: | ||||||||||||||||
Square feet | 108 | 17 | 43 | 29 | ||||||||||||
GAAP basis: | ||||||||||||||||
Straight-line rent(2) | $ | 77.33 | $ | 135.49 | $ | 46.46 | $ | 108.38 | ||||||||
Prior straight-line rent | $ | 60.16 | $ | 117.16 | $ | 40.42 | $ | 65.87 | ||||||||
Percentage increase | 28.5 | % | 15.6 | % | 14.9 | % | 64.5 | % | ||||||||
Cash basis (non-GAAP): | ||||||||||||||||
Initial rent(1) | $ | 78.77 | $ | 131.49 | $ | 47.87 | $ | 97.41 | ||||||||
Prior escalated rent | $ | 64.22 | $ | 123.82 | $ | 44.88 | $ | 69.94 | ||||||||
Percentage increase | 22.7 | % | 6.2 | % | 6.7 | % | 39.3 | % | ||||||||
Tenant improvements and leasing commissions: | ||||||||||||||||
Per square foot | $ | 85.35 | $ | 44.85 | $ | 55.67 | $ | 84.46 | ||||||||
Per square foot per annum | $ | 13.13 | $ | 8.31 | $ | 10.12 | $ | 9.94 | ||||||||
Percentage of initial rent | 16.3 | % | 5.7 | % | 20.9 | % | 10.3 | % | ||||||||
____________________
See notes on following page.
- 17 -
LEASING ACTIVITY (unaudited) |
(Square feet in thousands) |
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.
New York | 555 California Street | |||||||||||||||
Office | Retail | theMART | ||||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||||
Total square feet leased | 814 | 144 | 234 | 141 | ||||||||||||
Our share of square feet leased: | 676 | 134 | 234 | 99 | ||||||||||||
Initial rent(1) | $ | 78.81 | $ | 143.61 | $ | 49.24 | $ | 87.56 | ||||||||
Weighted average lease term (years) | 7.9 | 11.7 | 6.3 | 6.3 | ||||||||||||
Second generation relet space: | ||||||||||||||||
Square feet | 499 | 119 | 230 | 93 | ||||||||||||
GAAP basis: | ||||||||||||||||
Straight-line rent(2) | $ | 74.22 | $ | 149.93 | $ | 48.22 | $ | 92.50 | ||||||||
Prior straight-line rent | $ | 69.48 | $ | 117.94 | $ | 42.83 | $ | 58.57 | ||||||||
Percentage increase | 6.8 | % | 27.1 | % | 12.6 | % | 57.9 | % | ||||||||
Cash basis (non-GAAP): | ||||||||||||||||
Initial rent(1) | $ | 75.62 | $ | 137.36 | $ | 49.08 | $ | 87.29 | ||||||||
Prior escalated rent | $ | 71.28 | $ | 126.86 | $ | 46.18 | $ | 66.31 | ||||||||
Percentage increase | 6.1 | % | 8.3 | % | 6.3 | % | 31.6 | % | ||||||||
Tenant improvements and leasing commissions: | ||||||||||||||||
Per square foot | $ | 82.88 | $ | 51.02 | $ | 35.42 | $ | 57.71 | ||||||||
Per square foot per annum | $ | 10.49 | $ | 4.36 | $ | 5.62 | $ | 9.16 | ||||||||
Percentage of initial rent | 13.3 | % | 3.0 | % | 11.4 | % | 10.5 | % | ||||||||
____________________
(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 (unaudited) NEW YORK SEGMENT | |||||||||||||||
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 | 17,000 | $ | 1,001,000 | $ | 58.88 | 0.1 | % | |||||||
Fourth Quarter 2019 | 85,000 | 6,144,000 | 72.28 | 0.5 | % | ||||||||||
First Quarter 2020 | 522,000 | 32,895,000 | 63.02 | 2.9 | % | ||||||||||
Second Quarter 2020 | 215,000 | 15,915,000 | 74.02 | 1.4 | % | ||||||||||
Third Quarter 2020 | 177,000 | 14,918,000 | 84.28 | 1.3 | % | ||||||||||
Fourth Quarter 2020 | 141,000 | 9,839,000 | 69.78 | 0.9 | % | ||||||||||
Total 2020 | 1,055,000 | 73,567,000 | 69.80 | 6.5 | % | ||||||||||
2021 | 1,141,000 | 90,217,000 | 79.07 | 7.9 | % | ||||||||||
2022 | 692,000 | 46,310,000 | 66.92 | 4.1 | % | ||||||||||
2023 | 1,986,000 | 165,032,000 | 83.10 | 14.5 | % | ||||||||||
2024 | 1,458,000 | 119,851,000 | 82.20 | 10.5 | % | ||||||||||
2025 | 794,000 | 60,968,000 | 76.79 | 5.3 | % | ||||||||||
2026 | 1,199,000 | 91,501,000 | 76.31 | 8.0 | % | ||||||||||
2027 | 1,091,000 | 79,564,000 | 72.93 | 7.0 | % | ||||||||||
2028 | 900,000 | 63,210,000 | 70.23 | 5.4 | % | ||||||||||
2029 | 676,000 | 55,054,000 | 81.44 | 4.8 | % | ||||||||||
Thereafter | 4,328,000 | 289,647,000 | 66.92 | 25.4 | % | ||||||||||
Retail: | Month to Month | 51,000 | $ | 6,173,000 | $ | 121.04 | 1.9 | % | |||||||
Fourth Quarter 2019 | 41,000 | 8,403,000 | 204.95 | 2.6 | % | ||||||||||
First Quarter 2020 | 17,000 | 4,590,000 | 270.00 | 1.4 | % | ||||||||||
Second Quarter 2020 | 42,000 | 5,000,000 | 119.05 | 1.6 | % | ||||||||||
Third Quarter 2020 | 4,000 | 1,613,000 | 403.25 | 0.5 | % | ||||||||||
Fourth Quarter 2020 | 14,000 | 1,570,000 | 112.14 | 0.5 | % | ||||||||||
Total 2020 | 77,000 | 12,773,000 | 165.90 | 4.0 | % | ||||||||||
2021 | 90,000 | 10,975,000 | 121.94 | 3.4 | % | ||||||||||
2022 | 25,000 | 6,648,000 | 265.92 | 2.1 | % | ||||||||||
2023 | 64,000 | 31,020,000 | 484.69 | 9.7 | % | ||||||||||
2024 | 230,000 | 52,394,000 | 227.80 | 16.4 | % | ||||||||||
2025 | 40,000 | 13,648,000 | 341.20 | 4.3 | % | ||||||||||
2026 | 78,000 | 27,440,000 | 351.79 | 8.6 | % | ||||||||||
2027 | 24,000 | 18,158,000 | 756.58 | 5.7 | % | ||||||||||
2028 | 25,000 | 12,673,000 | 506.92 | 3.9 | % | ||||||||||
2029 | 201,000 | 39,267,000 | 195.36 | 12.3 | % | ||||||||||
Thereafter | 592,000 | 80,343,000 | 135.71 | 25.1 | % | ||||||||||
____________________
(1) | Excludes storage, vacancy and other. |
- 19 -
LEASE EXPIRATIONS (unaudited) theMART | |||||||||||||||
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 | 8,000 | $ | 463,000 | $ | 57.88 | 0.3 | % | |||||||
Fourth Quarter 2019 | 43,000 | 2,221,000 | 51.65 | 1.3 | % | ||||||||||
First Quarter 2020 | 139,000 | 6,246,000 | 44.94 | 3.8 | % | ||||||||||
Second Quarter 2020 | 31,000 | 1,568,000 | 50.58 | 1.0 | % | ||||||||||
Third Quarter 2020 | 76,000 | 3,663,000 | 48.20 | 2.2 | % | ||||||||||
Fourth Quarter 2020 | 42,000 | 2,230,000 | 53.10 | 1.4 | % | ||||||||||
Total 2020 | 288,000 | 13,707,000 | 47.59 | 8.4 | % | ||||||||||
2021 | 304,000 | 14,734,000 | 48.47 | 8.9 | % | ||||||||||
2022 | 608,000 | 29,154,000 | 47.95 | 17.7 | % | ||||||||||
2023 | 302,000 | 15,314,000 | 50.71 | 9.3 | % | ||||||||||
2024 | 317,000 | 15,407,000 | 48.60 | 9.4 | % | ||||||||||
2025 | 308,000 | 16,015,000 | 52.00 | 9.7 | % | ||||||||||
2026 | 295,000 | 14,257,000 | 48.33 | 8.7 | % | ||||||||||
2027 | 108,000 | 5,384,000 | 49.85 | 3.3 | % | ||||||||||
2028 | 642,000 | 27,710,000 | 43.16 | 16.7 | % | ||||||||||
2029 | 61,000 | 2,810,000 | 46.07 | 1.7 | % | ||||||||||
Thereafter | 168,000 | 7,590,000 | 45.18 | 4.6 | % | ||||||||||
____________________
(1) Excludes storage, vacancy and other.
- 20 -
LEASE EXPIRATIONS (unaudited) 555 California Street | |||||||||||||||
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 | 3,000 | $ | 258,000 | $ | 89.00 | 0.3 | % | |||||||
Fourth Quarter 2019 | — | — | — | — | % | ||||||||||
First Quarter 2020 | — | — | — | — | % | ||||||||||
Second Quarter 2020 | 9,000 | 897,000 | 99.67 | 0.9 | % | ||||||||||
Third Quarter 2020 | 25,000 | 1,434,000 | 57.36 | 1.4 | % | ||||||||||
Fourth Quarter 2020 | 7,000 | 653,000 | 93.29 | 0.7 | % | ||||||||||
Total 2020 | 41,000 | 2,984,000 | 72.78 | 3.0 | % | ||||||||||
2021 | 76,000 | 5,629,000 | 74.07 | 5.6 | % | ||||||||||
2022 | 36,000 | 2,923,000 | 81.19 | 2.9 | % | ||||||||||
2023 | 133,000 | 9,801,000 | 73.69 | 9.8 | % | ||||||||||
2024 | 51,000 | 4,860,000 | 95.29 | 4.9 | % | ||||||||||
2025 | 411,000 | 31,313,000 | 76.19 | 31.4 | % | ||||||||||
2026 | 140,000 | 10,991,000 | 78.51 | 11.0 | % | ||||||||||
2027 | 69,000 | 5,993,000 | 86.86 | 6.0 | % | ||||||||||
2028 | 20,000 | 1,534,000 | 76.70 | 1.5 | % | ||||||||||
2029 | 74,000 | 6,874,000 | 92.89 | 6.9 | % | ||||||||||
Thereafter | 194,000 | 16,670,000 | 85.93 | 16.7 | % | ||||||||||
____________________
(1) Excludes storage, vacancy and other.
- 21 -
TRAILING TWELVE MONTH PRO-FORMA CASH NET OPERATING INCOME AT SHARE (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Trailing Twelve Months Ended September 30, 2019 | For the Trailing Twelve Months Ended June 30, 2019 | ||||||||||||||||||
Adjustment for Transfer of 45.4% Interest in Fifth Avenue and Times Square JV(1) | |||||||||||||||||||
NOI at Share - Cash Basis | Adjustments | Pro Forma NOI at Share - Cash Basis | Pro Forma NOI at Share - Cash Basis | ||||||||||||||||
Office: | |||||||||||||||||||
New York | $ | 723,596 | $ | (13,644 | ) | $ | (36,124 | ) | (2) | $ | 673,828 | $ | 672,676 | ||||||
theMART | 96,242 | — | 8,997 | (3) | 105,239 | 104,885 | |||||||||||||
555 California Street | 59,449 | — | — | 59,449 | 57,194 | ||||||||||||||
Total Office | 879,287 | (13,644 | ) | (27,127 | ) | 838,516 | 834,755 | ||||||||||||
New York - Retail | 293,813 | (46,221 | ) | (17,446 | ) | (4) | 230,146 | 234,267 | |||||||||||
New York - Residential | 21,787 | — | — | 21,787 | 22,088 | ||||||||||||||
$ | 1,194,887 | $ | (59,865 | ) | $ | (44,573 | ) | $ | 1,090,449 | $ | 1,091,110 | ||||||||
____________________________
(1) | Adjusts October 1, 2018 through April 18, 2019 to reflect new ownership interests in the properties contributed to Fifth Avenue and Times Square JV. |
(2) | Adjustment to deduct $27,057 of BMS NOI for the trailing twelve months ended September 30, 2019 and $9,067 of 330 Madison Avenue NOI (sold on July 11, 2019). |
(3) | Adjustment to offset the accrual in Q4 2018 for the annual real estate tax increase which is billed to tenants throughout 2019. |
(4) | Primarily adjusting for Topshop at 608 Fifth Avenue and the sale of 3040 M Street. |
- 22 -
CAPITAL STRUCTURE (unaudited) | ||||||||||||
(Amounts in thousands, except per share and unit amounts) | ||||||||||||
As of September 30, 2019 | ||||||||||||
Debt (contractual balances) (non-GAAP): | ||||||||||||
Consolidated debt (1): | ||||||||||||
Mortgages payable | $ | 5,673,671 | ||||||||||
Senior unsecured notes | 450,000 | |||||||||||
$750 Million unsecured term loan | 750,000 | |||||||||||
$2.75 Billion unsecured revolving credit facilities | 655,000 | |||||||||||
7,528,671 | ||||||||||||
Pro rata share of debt of non-consolidated entities(2)(3) | 2,807,187 | |||||||||||
Less: Noncontrolling interests' share of consolidated debt (primarily 1290 Avenue of the Americas and 555 California Street) | (484,275 | ) | ||||||||||
9,851,583 | (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) (141,400 units @ $25 per unit) | 3,535 | |||||||||||
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 | |||||||||
924,035 | (B) | |||||||||||
Converted Shares | September 30, 2019 Common Share Price | |||||||||||
Equity: | ||||||||||||
Common shares | 190,850 | $ | 63.67 | 12,151,420 | ||||||||
Class A units | 12,185 | 63.67 | 775,819 | |||||||||
Convertible share equivalents: | ||||||||||||
Equity awards - unit equivalents | 1,162 | 63.67 | 73,985 | |||||||||
D-13 preferred units | 733 | 63.67 | 46,670 | |||||||||
G1-G4 units | 61 | 63.67 | 3,884 | |||||||||
Series A preferred shares | 34 | 63.67 | 2,165 | |||||||||
13,053,943 | (C) | |||||||||||
Total Market Capitalization (A+B+C) | $ | 23,829,561 | ||||||||||
____________________
(1) | See reconciliation of consolidated debt, net (GAAP) to contractual debt (non-GAAP) on page xiv in the Appendix. |
(2) | As a result of the bankruptcy plan of reorganization for Toys "R" Us, Inc. ("Toys") being declared effective and our stock in Toys being canceled, we no longer hold an investment in Toys. Accordingly, no Toys debt is included in our pro rata share of debt of non-consolidated entities. |
(3) | Our pro rata share of debt of non-consolidated entities is net of our $63,409 share of Alexander's participation in its Rego Park II shopping center mortgage loan which is considered partially extinguished as the participation interest is a reacquisition of debt. |
- 23 -
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): | |||||||||||||||
Third Quarter 2019 | Second Quarter 2019 | First Quarter 2019 | Fourth Quarter 2018 | ||||||||||||
High price | $ | 66.72 | $ | 70.45 | $ | 70.54 | $ | 73.06 | |||||||
Low price | $ | 58.60 | $ | 62.87 | $ | 59.95 | $ | 59.48 | |||||||
Closing price - end of quarter | $ | 63.67 | $ | 64.10 | $ | 67.44 | $ | 62.03 | |||||||
Annualized dividend per share | $ | 2.64 | $ | 2.64 | $ | 2.64 | $ | 2.52 | |||||||
Annualized dividend yield - on closing price | 4.1 | % | 4.1 | % | 3.9 | % | 4.1 | % | |||||||
Outstanding shares, Class A units and convertible preferred units as converted (in thousands) | 205,024 | 205,011 | 204,336 | 203,930 | |||||||||||
Closing market value of outstanding shares, Class A units and convertible preferred units as converted | $ | 13.1 Billion | $ | 13.1 Billion | $ | 13.8 Billion | $ | 12.6 Billion | |||||||
- 24 -
DEBT ANALYSIS (unaudited) | |||||||||||||||||
(Amounts in thousands) | |||||||||||||||||
As of September 30, 2019 | |||||||||||||||||
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) | $ | 7,528,671 | 3.53% | $ | 1,723,196 | 3.39% | $ | 5,805,475 | 3.57% | ||||||||
Pro rata share of debt of non-consolidated entities(2)(3) | 2,807,187 | 3.87% | 1,479,819 | 3.68% | 1,327,368 | 4.08% | |||||||||||
Total | 10,335,858 | 3.62% | 3,203,015 | 3.53% | 7,132,843 | 3.66% | |||||||||||
Less: Noncontrolling interests' share of consolidated debt (primarily 1290 Avenue of the Americas and 555 California Street) | (484,275 | ) | (33,750 | ) | (450,525 | ) | |||||||||||
Company's pro rata share of total debt | $ | 9,851,583 | 3.60% | $ | 3,169,265 | 3.52% | $ | 6,682,318 | 3.64% | ||||||||
Debt Covenant Ratios:(4) | Senior Unsecured Notes due 2025 | Unsecured Revolving Credit Facilities and Unsecured Term Loan | |||||
Required | Actual | Required | Actual | ||||
Total outstanding debt/total assets(5) | Less than 65% | 40% | Less than 60% | 31% | |||
Secured debt/total assets | Less than 50% | 30% | Less than 50% | 25% | |||
Interest coverage ratio (annualized combined EBITDA to annualized interest expense) | Greater than 1.50 | 2.89 | N/A | ||||
Fixed charge coverage | N/A | Greater than 1.40 | 2.68 | ||||
Unencumbered assets/unsecured debt | Greater than 150% | 529% | N/A | ||||
Unsecured debt/cap value of unencumbered assets | N/A | Less than 60% | 10% | ||||
Unencumbered coverage ratio | N/A | Greater than 1.50 | 8.65 | ||||
Unencumbered EBITDA (non-GAAP):(5) | Q3 2019 | |||
Annualized | ||||
New York | $ | 275,704 | ||
Other | 29,896 | |||
Total | $ | 305,600 | ||
____________________
(1) | See reconciliation of consolidated debt, net (GAAP) to contractual debt (non-GAAP) on page xiv in the Appendix. |
(2) | As a result of the bankruptcy plan of reorganization for Toys "R" Us, Inc. ("Toys") being declared effective and our stock in Toys being canceled, we no longer hold an investment in Toys. Accordingly, no Toys debt is included in our pro rata share of debt of non-consolidated entities. |
(3) | Our pro rata share of debt of non-consolidated entities is net of our $63,409 share of Alexander's participation in its Rego Park II shopping center mortgage loan which is considered partially extinguished as the participation interest is a reacquisition of debt. |
(4) | 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. |
(5) | Total assets include EBITDA (as defined) capped at 7.0% under the terms of the senior unsecured notes due 2025 and 6.0% under the terms of the unsecured revolving credit facilities and unsecured term loan. |
- 25 -
DEBT MATURITIES (CONTRACTUAL BALANCES) (NON-GAAP) (unaudited) | ||||||||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||||
Property | Maturity Date (1) | Spread over LIBOR | Interest Rate | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | ||||||||||||||||||||||||
PENN11 | 12/20 | 3.95% | $ | — | $ | 450,000 | $ | — | $ | — | $ | — | $ | — | $ | 450,000 | ||||||||||||||||||
Borgata Land | 02/21 | 5.14% | — | — | 53,726 | — | — | — | 53,726 | |||||||||||||||||||||||||
770 Broadway | 03/21 | 2.56% | (2) | — | — | 700,000 | — | — | — | 700,000 | ||||||||||||||||||||||||
909 Third Avenue | 05/21 | 3.91% | — | — | 350,000 | — | — | — | 350,000 | |||||||||||||||||||||||||
555 California Street | 09/21 | 5.10% | — | — | 551,749 | — | — | — | 551,749 | |||||||||||||||||||||||||
theMART | 09/21 | 2.70% | — | — | 675,000 | — | — | — | 675,000 | |||||||||||||||||||||||||
1290 Avenue of the Americas | 11/22 | 3.34% | — | — | — | 950,000 | — | — | 950,000 | |||||||||||||||||||||||||
$1.25 Billion unsecured revolving credit facility | 01/23 | L+100 | 3.05% | — | — | — | — | 80,000 | — | 80,000 | ||||||||||||||||||||||||
$750 Million unsecured term loan | 02/24 | 3.87% | (3) | — | — | — | — | — | 750,000 | 750,000 | ||||||||||||||||||||||||
435 Seventh Avenue - retail | 02/24 | L+130 | 3.37% | — | — | — | — | — | 95,696 | 95,696 | ||||||||||||||||||||||||
$1.5 Billion unsecured revolving credit facility | 03/24 | L+90 | 2.95% | (4) | — | — | — | — | — | 575,000 | 575,000 | |||||||||||||||||||||||
150 West 34th Street | 05/24 | L+188 | 3.92% | — | — | — | — | — | 205,000 | 205,000 | ||||||||||||||||||||||||
606 Broadway | 09/24 | L+180 | 3.85% | — | — | — | — | — | 67,500 | 67,500 | ||||||||||||||||||||||||
33-00 Northern Boulevard | 01/25 | 4.14% | (5) | — | — | — | — | — | 100,000 | 100,000 | ||||||||||||||||||||||||
Senior unsecured notes due 2025 | 01/25 | 3.50% | — | — | — | — | — | 450,000 | 450,000 | |||||||||||||||||||||||||
4 Union Square South - retail | 08/25 | L+140 | 3.50% | — | — | — | — | — | 120,000 | 120,000 | ||||||||||||||||||||||||
888 Seventh Avenue | 12/25 | 3.25% | (6) | — | — | — | — | — | 375,000 | 375,000 | ||||||||||||||||||||||||
100 West 33rd Street - office and retail | 04/26 | L+155 | 3.62% | — | — | — | — | — | 580,000 | 580,000 | ||||||||||||||||||||||||
350 Park Avenue | 01/27 | 3.92% | — | — | — | — | — | 400,000 | 400,000 | |||||||||||||||||||||||||
$ | — | $ | 450,000 | $ | 2,330,475 | $ | 950,000 | $ | 80,000 | $ | 3,718,196 | $ | 7,528,671 | |||||||||||||||||||||
Weighted average rate | — | % | 3.95 | % | 3.46 | % | 3.34 | % | 3.05 | % | 3.57 | % | 3.53 | % | ||||||||||||||||||||
Fixed rate debt | $ | — | $ | 450,000 | $ | 2,330,475 | $ | 950,000 | $ | — | $ | 2,075,000 | $ | 5,805,475 | ||||||||||||||||||||
Fixed weighted average rate expiring | — | % | 3.95 | % | 3.46 | % | 3.34 | % | — | % | 3.70 | % | 3.57 | % | ||||||||||||||||||||
Floating rate debt | $ | — | $ | — | $ | — | $ | — | $ | 80,000 | $ | 1,643,196 | $ | 1,723,196 | ||||||||||||||||||||
Floating weighted average rate expiring | — | % | — | % | — | % | — | % | 3.05 | % | 3.41 | % | 3.39 | % | ||||||||||||||||||||
____________________
(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 2.56% through September 2020. The rate was swapped from LIBOR plus 1.75% (3.79% as of September 30, 2019). |
(3) | Pursuant to an existing swap agreement, the loan bears interest at 3.87% through October 2023. The rate was swapped from LIBOR plus 1.00% (3.04% as of September 30, 2019). |
(4) | On September 27, 2019, we drew $575,000 to pay down our PENN2 mortgage loan which was scheduled to mature in December 2019. |
(5) | 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% (3.85% as of September 30, 2019). |
(6) | Pursuant to an existing swap agreement, the loan bears interest at 3.25% through December 2020. The rate was swapped from LIBOR plus 1.70% (3.73% as of September 30, 2019). |
- 26 -
UNCONSOLIDATED JOINT VENTURES (unaudited) | ||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||
Joint Venture Name | Asset Category | Percentage Ownership at September 30, 2019 | Company's Carrying Amount | Company's Pro rata Share of Debt(1) | 100% of Joint Venture Debt(1) | Maturity Date(2) | Spread over LIBOR | Interest Rate | ||||||||||||||
Fifth Avenue and Times Square JV | Retail/Office | 51.5% | $ | 3,308,363 | $ | 461,461 | $ | 950,000 | Various | Various | Various | |||||||||||
Alexander's | Office/Retail | 32.4% | 101,228 | 315,847 | (3) | 974,836 | Various | Various | Various | |||||||||||||
Partially owned office buildings/land: | ||||||||||||||||||||||
One Park Avenue | Office/Retail | 55.0% | 138,117 | 165,000 | 300,000 | 03/21 | L+175 | 3.79% | ||||||||||||||
650 Madison Avenue | Office/Retail | 20.1% | 103,686 | 161,024 | 800,000 | 10/20 | N/A | 4.39% | ||||||||||||||
280 Park Avenue | Office/Retail | 50.0% | 102,010 | 600,000 | 1,200,000 | 09/24 | L+173 | 3.77% | ||||||||||||||
512 West 22nd Street | Office | 55.0% | 60,224 | 58,533 | 106,425 | 06/24 | L+200 | 4.05% | ||||||||||||||
West 57th Street properties | Office/Retail/Land | 50.0% | 43,833 | 10,000 | 20,000 | 12/22 | L+160 | 3.70% | ||||||||||||||
825 Seventh Avenue | Office/Retail | 50.0% | 9,775 | 14,441 | 28,882 | 07/23 | L+165 | 3.78% | ||||||||||||||
61 Ninth Avenue | Office/Retail | 45.1% | 6,044 | 75,543 | 167,500 | 01/26 | L+135 | 3.40% | ||||||||||||||
Other | Office/Retail | Various | 4,098 | 17,465 | 50,150 | Various | Various | Various | ||||||||||||||
Other equity method investments: | ||||||||||||||||||||||
Independence Plaza | Residential/Retail | 50.1% | 65,552 | 338,175 | 675,000 | 07/25 | N/A | 4.25% | ||||||||||||||
Rosslyn Plaza | Office/Residential | 43.7% to 50.4% | 31,731 | 19,716 | 39,111 | 06/22 | L+195 | 4.04% | ||||||||||||||
Other | Various | Various | 49,159 | 99,107 | 643,112 | Various | Various | Various | ||||||||||||||
$ | 4,023,820 | $ | 2,336,312 | $ | 5,955,016 | |||||||||||||||||
7 West 34th Street | Office/Retail | 53.0% | (52,222 | ) | (4) | 159,000 | 300,000 | 06/26 | N/A | 3.65% | ||||||||||||
85 Tenth Avenue | Office/Retail | 49.9% | (5,814 | ) | (4) | 311,875 | 625,000 | 12/26 | N/A | 4.55% | ||||||||||||
$ | (58,036 | ) | $ | 470,875 | $ | 925,000 | ||||||||||||||||
____________________
(1) | Represents the contractual debt obligations. All amounts are non-recourse to us except the $300,000 mortgage loan on 7 West 34th Street and $500,000 mortgage loan on 640 Fifth Avenue, included in Fifth Avenue and Times Square JV. |
(2) | Represents the extended maturity for certain loans in which we have the unilateral right to extend. |
(3) | Net of our $63,409 share of Alexander's participation in its Rego Park II shopping center mortgage loan which is considered partially extinguished as the participation interest is a reacquisition of debt. |
(4) | Our negative basis results from distributions in excess of our investment. |
- 27 -
UNCONSOLIDATED JOINT VENTURES (unaudited) | |||||||||||||||||
(Amounts in thousands) | |||||||||||||||||
Percentage Ownership at September 30, 2019 | Our Share of Net Income (Loss) for the Three Months Ended September 30, | Our Share of NOI (non-GAAP) for the Three Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Joint Venture Name | |||||||||||||||||
New York: | |||||||||||||||||
Fifth Avenue and Times Square JV(1): | |||||||||||||||||
Equity in net income | 51.5% | $ | 9,891 | $ | — | $ | 35,584 | $ | — | ||||||||
Return on preferred equity, net of our share of the expense | 9,545 | — | — | — | |||||||||||||
19,436 | — | 35,584 | — | ||||||||||||||
Alexander's | 32.4% | 5,393 | 4,278 | 11,269 | 10,626 | ||||||||||||
280 Park Avenue | 50.0% | (2,130 | ) | (1,632 | ) | 8,734 | 9,688 | ||||||||||
One Park Avenue | 55.0% | 1,765 | 1,426 | 5,319 | 4,877 | ||||||||||||
7 West 34th Street | 53.0% | 1,003 | 946 | 3,500 | 3,354 | ||||||||||||
650 Madison Avenue | 20.1% | (860 | ) | (1,268 | ) | 2,829 | 2,334 | ||||||||||
Independence Plaza | 50.1% | (561 | ) | (1,139 | ) | 6,455 | 5,916 | ||||||||||
85 Tenth Avenue | 49.9% | (559 | ) | (629 | ) | 4,762 | 4,487 | ||||||||||
61 Ninth Avenue | 45.1% | 558 | 623 | 1,873 | 827 | ||||||||||||
512 West 22nd Street | 55.0% | 146 | 8 | 779 | 688 | ||||||||||||
West 57th Street properties | 50.0% | (102 | ) | (77 | ) | 259 | 212 | ||||||||||
330 Madison Avenue(2) | N/A | 45 | 652 | 268 | 2,765 | ||||||||||||
Other, net | Various | (408 | ) | 701 | 1,018 | 1,405 | |||||||||||
23,726 | 3,889 | 82,649 | 47,179 | ||||||||||||||
Other: | |||||||||||||||||
Alexander's corporate fee income | 32.4% | 1,299 | 1,149 | 720 | 541 | ||||||||||||
Rosslyn Plaza | 43.7% to 50.4% | 68 | (58 | ) | 1,238 | 1,135 | |||||||||||
UE(3) | N/A | — | 2,763 | — | 2,859 | ||||||||||||
PREIT(4) | N/A | — | (616 | ) | — | 5,119 | |||||||||||
666 Fifth Avenue Office Condominium(5) | N/A | — | (112 | ) | — | 1,737 | |||||||||||
Other, net | Various | 853 | 191 | 1,417 | 1,524 | ||||||||||||
2,220 | 3,317 | 3,375 | 12,915 | ||||||||||||||
Total | $ | 25,946 | $ | 7,206 | $ | 86,024 | $ | 60,094 | |||||||||
____________________
(1) | Completed on April 18, 2019. |
(2) | Sold on July 11, 2019. |
(3) | Sold on March 4, 2019. |
(4) | On March 12, 2019, we converted all of our PREIT operating partnership units into common shares and began accounting for our investment as a marketable security. |
(5) | Sold on August 3, 2018. |
- 28 -
UNCONSOLIDATED JOINT VENTURES (unaudited) | |||||||||||||||||
(Amounts in thousands) | |||||||||||||||||
Percentage Ownership at September 30, 2019 | Our Share of Net Income (Loss) for the Nine Months Ended September 30, | Our Share of NOI (non-GAAP) for the Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Joint Venture Name | |||||||||||||||||
New York: | |||||||||||||||||
Fifth Avenue and Times Square JV(1): | |||||||||||||||||
Equity in net income | 51.5% | $ | 21,108 | $ | — | $ | 66,770 | $ | — | ||||||||
Return on preferred equity, net of our share of the expense | 18,131 | — | — | — | |||||||||||||
39,239 | — | 66,770 | — | ||||||||||||||
Alexander's | 32.4% | 14,707 | 7,215 | (2) | 33,699 | 34,110 | |||||||||||
280 Park Avenue | 50.0% | (8,615 | ) | (3) | (3,381 | ) | 25,824 | 29,016 | |||||||||
One Park Avenue | 55.0% | 4,912 | (1,732 | ) | (4) | 15,815 | 15,179 | ||||||||||
7 West 34th Street | 53.0% | 2,801 | 2,834 | 10,307 | 10,057 | ||||||||||||
650 Madison Avenue | 20.1% | (2,761 | ) | (2,892 | ) | 8,239 | 7,865 | ||||||||||
330 Madison Avenue(5) | N/A | 1,333 | 2,081 | 5,669 | 8,337 | ||||||||||||
61 Ninth Avenue | 45.1% | 1,018 | 1,080 | 4,583 | 1,372 | ||||||||||||
Independence Plaza | 50.1% | (789 | ) | 1,369 | 20,172 | 19,932 | |||||||||||
West 57th Street properties | 50.0% | (294 | ) | (244 | ) | 769 | 639 | ||||||||||
512 West 22nd Street | 55.0% | 68 | 25 | 2,203 | 1,947 | ||||||||||||
85 Tenth Avenue | 49.9% | 4 | (1,372 | ) | 14,730 | 13,921 | |||||||||||
Other, net | Various | (1,371 | ) | 199 | 2,614 | 4,355 | |||||||||||
50,252 | 5,182 | 211,394 | 146,730 | ||||||||||||||
Other: | |||||||||||||||||
Alexander's corporate fee income | 32.4% | 3,478 | 3,378 | 1,736 | 2,296 | ||||||||||||
UE(6) | N/A | 773 | 3,234 | 4,902 | 8,624 | ||||||||||||
Rosslyn Plaza | 43.7% to 50.4% | 470 | (56 | ) | 4,023 | 3,469 | |||||||||||
PREIT(7) | N/A | 51 | (2,113 | ) | 9,824 | 15,349 | |||||||||||
666 Fifth Avenue Office Condominium(8) | N/A | — | (4,873 | ) | — | 12,145 | |||||||||||
Other, net | Various | 1,115 | 1,307 | 4,521 | 4,746 | ||||||||||||
5,887 | 877 | 25,006 | 46,629 | ||||||||||||||
Total | $ | 56,139 | $ | 6,059 | $ | 236,400 | $ | 193,359 | |||||||||
____________________
(1) | Completed on April 18, 2019. |
(2) | Includes our $7,708 share of Alexander's disputed additional transfer tax related to the November 2012 sale of Kings Plaza Regional Shopping Center based on the precedent established by the New York City Tax Appeals Tribunal (the "Tax Tribunal") decision regarding One Park Avenue. See note below. |
(3) | Includes a $1,079 reduction in income from the non-cash write-off of straight-line rent receivable related to the Four Seasons Restaurant. |
(4) | Includes our $4,978 share of disputed additional transfer tax recorded in the first quarter of 2018 related to the March 2011 acquisition of One Park Avenue as a result of the Tax Tribunal's decision. We appealed the Tax Tribunal's decision to the New York State Supreme Court, Appellate Division, First Department ("Appellate Division"). Our appeal was heard on April 2, 2019, and on April 25, 2019 the Appellate Division entered an unanimous decision and order that confirmed the decision of the Tax Tribunal and dismissed our appeal. On June 20, 2019, we filed a motion to reargue the Appellate Division's decision with the appellate court. |
(5) | Sold on July 11, 2019. |
(6) | Sold on March 4, 2019. |
(7) | On March 12, 2019, we converted all of our PREIT operating partnership units into common shares and began accounting for our investment as a marketable security. |
(8) | Sold on August 3, 2018. |
- 29 -
PENN DISTRICT | ||||||||||||||||||
ACTIVE DEVELOPMENT/REDEVELOPMENT SUMMARY - AS OF SEPTEMBER 30, 2019 (unaudited) | ||||||||||||||||||
(Amounts in thousands, except square feet) | ||||||||||||||||||
Property Rentable Sq. Ft. | Projected Incremental Cash Yield | |||||||||||||||||
Active Penn District Projects | Segment | Budget(1) | Amount Expended | Remainder to be Expended | Stabilization Year | |||||||||||||
Farley (95% interest) | New York | 845,000 | 1,030,000 | (2) | 528,080 | 501,920 | 2022 | 7.4% | ||||||||||
PENN2 - as expanded | New York | 1,795,000 | 750,000 | 34,372 | 715,628 | 2024 | 8.4% | |||||||||||
PENN1(3) | New York | 2,544,000 | 325,000 | 57,355 | 267,645 | N/A | 13.5%(3)(4) | |||||||||||
Districtwide Improvements | New York | N/A | 100,000 | 5,372 | 94,628 | N/A | N/A | |||||||||||
Total Active Penn District Projects | 2,205,000 | 625,179 | 1,579,821 | (5) | 8.3% | |||||||||||||
___________________
(1) | Excluding debt and equity carry. |
(2) | Net of anticipated historic tax credits. |
(3) | Property is ground leased through 2098, as fully extended. Fair market value resets occur in 2023, 2048 and 2073. The 13.5% projected return is before the ground rent reset in 2023, which may be material. |
(4) | Achieved as existing leases roll; average remaining lease term 5.0 years. |
(5) | Expected to be funded from our balance sheet, principally from 220 CPS net sales proceeds. |
There can be no assurance that the above projects will be completed, completed on schedule or within budget. In addition, there can be no assurance that the Company will be successful in leasing the properties on the expected schedule or at the assumed rental rates.
- 30 -
OTHER DEVELOPMENT/REDEVELOPMENT SUMMARY - AS OF SEPTEMBER 30, 2019 (unaudited) | ||||||||||||||||
(Amounts in thousands, except square feet) | ||||||||||||||||
Property Rentable Sq. Ft. | Stabilization Year | |||||||||||||||
Other Active Projects | Segment | Budget | Amount Expended | Remainder to be Expended | ||||||||||||
220 CPS - residential condominiums | Other | 397,000 | 1,400,000 | 1,337,441 | (1) | 62,559 | N/A | |||||||||
345 Montgomery Street (555 California Street) (70% interest) | Other | 78,000 | 32,000 | 27,832 | 4,168 | 2020 | ||||||||||
825 Seventh Avenue - office (50% interest) | New York | 165,000 | 15,000 | 11,311 | 3,689 | 2021 | ||||||||||
Total Other Projects | 1,447,000 | 1,376,584 | 70,416 | |||||||||||||
Future Opportunities | Segment | Property Zoning Sq. Ft. | ||||||||||||||
Penn District - multiple opportunities - office/residential/retail | New York | |||||||||||||||
Hotel Pennsylvania | New York | 2,052,000 | ||||||||||||||
260 Eleventh Avenue - office(2) | New York | 280,000 | ||||||||||||||
Undeveloped Land | ||||||||||||||||
29, 31, 33 West 57th Street (50% 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) | New York | |||||||||||||||
Total undeveloped land | 605,000 | |||||||||||||||
____________________
(1) | Excludes land and acquisition costs of 515,426. |
(2) | The building is subject to a ground lease which expires in 2114. |
There can be no assurance that the above projects will be completed, completed on schedule or within budget.
- 31 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) | |||||||||||||
CONSOLIDATED | |||||||||||||
(Amounts in thousands) | |||||||||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | ||||||||||||
2018 | 2017 | ||||||||||||
Amounts paid for capital expenditures: | |||||||||||||
Expenditures to maintain assets | $ | 75,190 | $ | 92,386 | $ | 111,629 | |||||||
Tenant improvements | 78,738 | 100,191 | 128,287 | ||||||||||
Leasing commissions | 17,051 | 33,254 | 36,447 | ||||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 170,979 | 225,831 | 276,363 | ||||||||||
Non-recurring capital expenditures | 26,393 | 43,135 | 35,149 | ||||||||||
Total capital expenditures and leasing commissions | $ | 197,372 | $ | 268,966 | $ | 311,512 | |||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | ||||||||||||
2018 | 2017 | ||||||||||||
Amounts paid for development and redevelopment expenditures: | |||||||||||||
Farley Office and Retail Building | $ | 190,991 | $ | 18,995 | $ | — | |||||||
220 CPS | 142,439 | 295,827 | 265,791 | ||||||||||
PENN1 | 34,476 | 8,856 | 1,462 | ||||||||||
345 Montgomery Street | 18,844 | 18,187 | 5,950 | ||||||||||
PENN2 | 17,404 | 16,288 | 2,021 | ||||||||||
606 Broadway | 7,181 | 15,959 | 15,997 | ||||||||||
1535 Broadway | 1,031 | 8,645 | 1,982 | ||||||||||
Other | 35,915 | 35,429 | 62,649 | (1) | |||||||||
$ | 448,281 | $ | 418,186 | $ | 355,852 | ||||||||
____________________
(1) | Primarily relates to our former Washington, DC segment which was spun-off on July 17, 2017. |
- 32 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) | ||||||||||||
NEW YORK SEGMENT | ||||||||||||
(Amounts in thousands) | ||||||||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | |||||||||||
2018 | 2017 | |||||||||||
Amounts paid for capital expenditures: | ||||||||||||
Expenditures to maintain assets | $ | 66,061 | $ | 70,954 | $ | 79,567 | ||||||
Tenant improvements | 67,503 | 76,187 | 83,639 | |||||||||
Leasing commissions | 15,251 | 29,435 | 26,114 | |||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 148,815 | 176,576 | 189,320 | |||||||||
Non-recurring capital expenditures | 24,588 | 31,381 | 27,762 | |||||||||
Total capital expenditures and leasing commissions | $ | 173,403 | $ | 207,957 | $ | 217,082 | ||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | |||||||||||
2018 | 2017 | |||||||||||
Amounts paid for development and redevelopment expenditures: | ||||||||||||
Farley Office and Retail Building | $ | 190,991 | $ | 18,995 | $ | — | ||||||
PENN1 | 34,476 | 8,856 | 1,462 | |||||||||
PENN2 | 17,404 | 16,288 | 2,021 | |||||||||
606 Broadway | 7,181 | 15,959 | 15,997 | |||||||||
1535 Broadway | 1,031 | 8,645 | 1,982 | |||||||||
Other | 30,488 | 20,372 | 21,912 | |||||||||
$ | 281,571 | $ | 89,115 | $ | 43,374 | |||||||
- 33 -
CAPITAL EXPENDITURES,TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) | ||||||||||||
theMART | ||||||||||||
(Amounts in thousands) | ||||||||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | |||||||||||
2018 | 2017 | |||||||||||
Amounts paid for capital expenditures: | ||||||||||||
Expenditures to maintain assets | $ | 6,720 | $ | 13,282 | $ | 12,772 | ||||||
Tenant improvements | 8,021 | 15,106 | 8,730 | |||||||||
Leasing commissions | 714 | 459 | 1,701 | |||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 15,455 | 28,847 | 23,203 | |||||||||
Non-recurring capital expenditures | 166 | 260 | — | |||||||||
Total capital expenditures and leasing commissions | $ | 15,621 | $ | 29,107 | $ | 23,203 | ||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | |||||||||||
2018 | 2017 | |||||||||||
Amounts paid for development and redevelopment expenditures: | ||||||||||||
Common area enhancements | $ | 71 | $ | 51 | $ | 5,342 | ||||||
Other | 1,539 | 10,739 | 799 | |||||||||
$ | 1,610 | $ | 10,790 | $ | 6,141 | |||||||
- 34 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) | ||||||||||||
555 CALIFORNIA STREET | ||||||||||||
(Amounts in thousands) | ||||||||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | |||||||||||
2018 | 2017 | |||||||||||
Amounts paid for capital expenditures: | ||||||||||||
Expenditures to maintain assets | $ | 2,409 | $ | 8,150 | $ | 9,689 | ||||||
Tenant improvements | 3,214 | 8,898 | 19,327 | |||||||||
Leasing commissions | 1,086 | 3,360 | 1,330 | |||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | 6,709 | 20,408 | 30,346 | |||||||||
Non-recurring capital expenditures | 1,639 | 11,494 | 7,159 | |||||||||
Total capital expenditures and leasing commissions | $ | 8,348 | $ | 31,902 | $ | 37,505 | ||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | |||||||||||
2018 | 2017 | |||||||||||
Amounts paid for development and redevelopment expenditures: | ||||||||||||
345 Montgomery Street | $ | 18,844 | $ | 18,187 | $ | 5,950 | ||||||
Other | 3,817 | 445 | 6,465 | |||||||||
$ | 22,661 | $ | 18,632 | $ | 12,415 | |||||||
- 35 -
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) | |||||||||||||
OTHER | |||||||||||||
(Amounts in thousands) | |||||||||||||
Nine Months Ended September 30, 2019 | Year Ended December 31, | ||||||||||||
2018 | 2017 | ||||||||||||
Amounts paid for development and redevelopment expenditures: | |||||||||||||
220 CPS | $ | 142,439 | $ | 295,827 | $ | 265,791 | |||||||
Other | — | 3,822 | 28,131 | (1) | |||||||||
$ | 142,439 | $ | 299,649 | $ | 293,922 | ||||||||
____________________
(1) | Primarily relates to our former Washington, DC segment which was spun-off on July 17, 2017. |
- 36 -
SQUARE FOOTAGE (unaudited) | ||||||||||||||||||||
(Square feet in thousands) | ||||||||||||||||||||
At Vornado's Share | ||||||||||||||||||||
At 100% | Under Development | In Service | ||||||||||||||||||
Total | Office | Retail | Showroom | Other | ||||||||||||||||
Segment: | ||||||||||||||||||||
New York: | ||||||||||||||||||||
Office | 20,686 | 17,621 | 1,429 | 16,009 | — | 183 | — | |||||||||||||
Retail | 2,710 | 2,241 | 282 | — | 1,959 | — | — | |||||||||||||
Residential - 1,679 units | 1,533 | 800 | 7 | — | — | — | 793 | |||||||||||||
Alexander's (32.4% interest), including 312 residential units | 2,449 | 793 | 63 | 288 | 356 | — | 86 | |||||||||||||
Hotel Pennsylvania | 1,400 | 1,400 | — | — | — | — | 1,400 | |||||||||||||
28,778 | 22,855 | 1,781 | 16,297 | 2,315 | 183 | 2,279 | ||||||||||||||
Other: | ||||||||||||||||||||
theMART | 3,693 | 3,684 | — | 2,046 | 105 | 1,533 | — | |||||||||||||
555 California Street (70% interest) | 1,819 | 1,273 | 55 | 1,185 | 33 | — | — | |||||||||||||
Other | 2,831 | 1,332 | 140 | 212 | 869 | — | 111 | |||||||||||||
8,343 | 6,289 | 195 | 3,443 | 1,007 | 1,533 | 111 | ||||||||||||||
Total square feet at September 30, 2019 | 37,121 | 29,144 | 1,976 | 19,740 | 3,322 | 1,716 | 2,390 | |||||||||||||
Total square feet at June 30, 2019 | 38,013 | 29,397 | 1,789 | 20,031 | 3,468 | 1,716 | 2,393 | |||||||||||||
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 September 30, 2019 | 2,806 | 19 | 8,059 | |||||||||||||||||
- 37 -
TOP 30 TENANTS (unaudited) | |||||||
(Amounts 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 | 757,653 | $ | 77,238 | 3.4 | % | |||||
IPG and affiliates | 967,552 | 65,657 | 2.9 | % | ||||||
Macy's | 646,434 | 38,404 | 1.7 | % | ||||||
Bloomberg L.P. | 303,147 | 36,029 | 1.6 | % | ||||||
Google/Motorola Mobility (guaranteed by Google) | 728,483 | 35,302 | 1.6 | % | ||||||
AXA Equitable Life Insurance | 336,646 | 33,250 | 1.5 | % | ||||||
Oath (Verizon) | 327,138 | 31,928 | 1.4 | % | ||||||
Ziff Brothers Investments, Inc. | 287,030 | 31,535 | 1.4 | % | ||||||
McGraw-Hill Companies, Inc. | 479,557 | 30,812 | 1.4 | % | ||||||
Swatch Group USA(3) | 14,950 | 29,051 | 1.3 | % | ||||||
Amazon (including its Whole Foods subsidiary) | 310,272 | 27,509 | 1.2 | % | ||||||
The City of New York | 563,545 | 25,194 | 1.1 | % | ||||||
AMC Networks, Inc. | 326,061 | 23,920 | 1.1 | % | ||||||
Neuberger Berman Group LLC | 288,325 | 23,290 | 1.0 | % | ||||||
Forever 21(3)(4) | 112,468 | 22,998 | 1.0 | % | ||||||
Madison Square Garden and affiliates | 342,822 | 22,940 | 1.0 | % | ||||||
JCPenney | 426,370 | 22,454 | 1.0 | % | ||||||
Bank of America | 254,033 | 22,389 | 1.0 | % | ||||||
New York University | 347,948 | 20,690 | 0.9 | % | ||||||
PwC | 241,196 | 17,731 | 0.8 | % | ||||||
Victoria's Secret (guaranteed by L Brands, Inc.)(3) | 33,164 | 17,656 | 0.8 | % | ||||||
U.S. Government | 578,711 | 14,313 | 0.6 | % | ||||||
Information Builders, Inc. | 210,978 | 13,360 | 0.6 | % | ||||||
Fast Retailing (Uniqlo)(3) | 47,181 | 12,817 | 0.6 | % | ||||||
Cushman & Wakefield | 127,314 | 11,982 | 0.5 | % | ||||||
New York & Company, Inc. | 201,688 | 11,779 | 0.5 | % | ||||||
Kmart Corporation | 223,741 | 11,459 | 0.5 | % | ||||||
Hollister(3) | 11,306 | 10,923 | 0.5 | % | ||||||
Foot Locker | 149,987 | 10,668 | 0.5 | % | ||||||
Forest Laboratories | 168,673 | 10,651 | 0.5 | % | ||||||
33.9 | % | |||||||||
____________________
(1) | Includes leases not yet commenced. |
(2) | See reconciliation of our annualized revenue at share on page xiv in the Appendix. |
(3) | Tenant annualized revenues adjusted to reflect the transfer of the 45.4% interest in Fifth Avenue and Times Square JV. |
(4) | On September 29, 2019, Forever 21 filed for Chapter 11 bankruptcy protection. |
- 38 -
OCCUPANCY (unaudited) | |||||||||
New York | theMART | 555 California Street | |||||||
Occupancy rate at: | |||||||||
September 30, 2019 | 96.8 | % | 95.0 | % | 100.0 | % | |||
June 30, 2019 | 96.5 | % | 94.8 | % | 99.5 | % | |||
December 31, 2018 | 97.0 | % | 94.7 | % | 99.4 | % | |||
September 30, 2018 | 97.3 | % | 95.5 | % | 99.4 | % | |||
RESIDENTIAL STATISTICS in service (unaudited) | |||||||
Vornado's Ownership Interest | |||||||
Number of Units | Number of Units | Occupancy Rate | Average Monthly Rent Per Unit | ||||
New York: | |||||||
September 30, 2019 | 1,991 | 955 | 96.8% | $3,879 | |||
June 30, 2019 | 1,995 | 959 | 95.9% | $3,837 | |||
December 31, 2018 | 1,999 | 963 | 96.6% | $3,803 | |||
September 30, 2018 | 1,999 | 963 | 96.7% | $3,775 | |||
- 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, WSP USA, Symantec Corporation, | ||||||||||||||||||||||||
-Office | 100.0 | % | 91.8 | % | $ | 69.15 | 2,273,000 | 2,104,000 | 169,000 | United Healthcare Services, Inc., Siemens Mobility | |||||||||||||||
Bank of America, Kmart Corporation, | |||||||||||||||||||||||||
-Retail | 100.0 | % | 95.0 | % | 126.42 | 271,000 | 244,000 | 27,000 | Shake Shack, Starbucks | ||||||||||||||||
100.0 | % | 92.1 | % | 75.25 | 2,544,000 | 2,348,000 | 196,000 | $ | — | ||||||||||||||||
PENN2 | EMC, Information Builders, Inc., | ||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 63.88 | 1,591,000 | 1,197,000 | 394,000 | Madison Square Garden, McGraw-Hill Companies, Inc. | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 219.87 | 45,000 | 39,000 | 6,000 | Chase Manhattan Bank | ||||||||||||||||
100.0 | % | 100.0 | % | 68.17 | 1,636,000 | 1,236,000 | 400,000 | — | |||||||||||||||||
PENN11 | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 62.59 | 1,113,000 | 1,113,000 | — | Macy's, Madison Square Garden, AMC Networks, Inc. | ||||||||||||||||
PNC Bank National Association, Starbucks, | |||||||||||||||||||||||||
-Retail | 100.0 | % | 95.2 | % | 138.32 | 40,000 | 40,000 | — | Madison Square Garden | ||||||||||||||||
100.0 | % | 99.8 | % | 65.22 | 1,153,000 | 1,153,000 | — | 450,000 | |||||||||||||||||
100 West 33rd Street | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 69.39 | 859,000 | 859,000 | — | 398,402 | IPG and affiliates | |||||||||||||||
Manhattan Mall | |||||||||||||||||||||||||
-Retail | 100.0 | % | 99.0 | % | 131.17 | 256,000 | 256,000 | — | 181,598 | JCPenney, Aeropostale, Express, Starbucks, Rose Mansion | |||||||||||||||
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 | % | 65.18 | 703,000 | 703,000 | — | Deutsch, Inc., Web.com, Footlocker, Home Advisor, Inc. | ||||||||||||||||
-Retail | 100.0 | % | 63.0 | % | 126.88 | 21,000 | 21,000 | — | Starbucks, Ballast Point* | ||||||||||||||||
100.0 | % | 98.9 | % | 65.18 | 724,000 | 724,000 | — | 50,150 (3) | |||||||||||||||||
435 Seventh Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 187.82 | 43,000 | 43,000 | — | 95,696 | Forever 21 | |||||||||||||||
7 West 34th Street | |||||||||||||||||||||||||
-Office | 53.0 | % | 100.0 | % | 70.98 | 458,000 | 458,000 | — | Amazon | ||||||||||||||||
-Retail | 53.0 | % | 89.3 | % | 342.89 | 19,000 | 19,000 | — | Amazon, Lindt, Naturalizer (guaranteed by Caleres) | ||||||||||||||||
53.0 | % | 99.6 | % | 81.81 | 477,000 | 477,000 | — | 300,000 | |||||||||||||||||
431 Seventh Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 283.80 | 10,000 | 10,000 | — | — | ||||||||||||||||
488 Eighth Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 90.32 | 6,000 | 6,000 | — | — | ||||||||||||||||
138-142 West 32nd Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 113.14 | 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 | % | $ | 99.01 | 3,000 | 3,000 | — | $ | — | ||||||||||||||
131-135 West 33rd Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 55.08 | 23,000 | 23,000 | — | — | ||||||||||||||||
Total Penn District | 7,820,000 | 7,224,000 | 596,000 | 1,680,846 | |||||||||||||||||||||
Midtown East: | |||||||||||||||||||||||||
909 Third Avenue | |||||||||||||||||||||||||
(ground leased through 2063)** | IPG and affiliates, Forest Laboratories, | ||||||||||||||||||||||||
-Office | 100.0 | % | 98.6 | % | 65.78 | (4) | 1,352,000 | 1,352,000 | — | 350,000 | Geller & Company, Morrison Cohen LLP, | ||||||||||||||
United States Post Office, Thomson Reuters LLC, Sard Verbinnen* | |||||||||||||||||||||||||
150 East 58th Street | |||||||||||||||||||||||||
(ground leased through 2118)** | |||||||||||||||||||||||||
-Office | 100.0 | % | 97.9 | % | 77.70 | 540,000 | 540,000 | — | Castle Harlan, Tournesol Realty LLC (Peter Marino) | ||||||||||||||||
-Retail | 100.0 | % | 13.1 | % | 17.86 | 3,000 | 3,000 | — | |||||||||||||||||
100.0 | % | 97.4 | % | 77.37 | 543,000 | 543,000 | — | — | |||||||||||||||||
715 Lexington Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 143.56 | 23,000 | 23,000 | — | — | New York & Company, Inc., Jonathan Adler, Orangetheory Fitness*, | |||||||||||||||
Casper* | |||||||||||||||||||||||||
966 Third Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 107.88 | 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 | |||||||||||||||||||||||||
(ground leased through 2067)** | Axon Capital LP, Lone Star US Acquisitions LLC, | ||||||||||||||||||||||||
-Office | 100.0 | % | 92.6 | % | 92.12 | 870,000 | 870,000 | — | Vornado Executive Headquarters, United Talent Agency | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 309.08 | 15,000 | 15,000 | — | Redeye Grill L.P. | ||||||||||||||||
100.0 | % | 92.8 | % | 95.80 | 885,000 | 885,000 | — | 375,000 | |||||||||||||||||
57th Street - 2 buildings | |||||||||||||||||||||||||
-Office | 50.0 | % | 72.4 | % | 48.83 | 81,000 | 81,000 | — | Various | ||||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 140.39 | 22,000 | 22,000 | — | |||||||||||||||||
50.0 | % | 78.3 | % | 68.38 | 103,000 | 103,000 | — | 20,000 | |||||||||||||||||
Total Midtown West | 988,000 | 988,000 | — | 395,000 | |||||||||||||||||||||
Park Avenue: | |||||||||||||||||||||||||
280 Park Avenue | Cohen & Steers Inc., Franklin Templeton Co. LLC, | ||||||||||||||||||||||||
-Office | 50.0 | % | 93.0 | % | 103.48 | 1,234,000 | 1,234,000 | — | PJT Partners, Investcorp International Inc., GIC Inc., Wells Fargo | ||||||||||||||||
-Retail | 50.0 | % | 16.8 | % | 259.70 | 26,000 | 26,000 | — | Scottrade Inc., Starbucks | ||||||||||||||||
50.0 | % | 91.4 | % | 106.71 | 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 | % | $ | 111.12 | 553,000 | 553,000 | — | MFA Financial Inc., M&T Bank | |||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 275.37 | 18,000 | 18,000 | — | Fidelity Investments, AT&T Wireless, Valley National Bank | ||||||||||||||||
100.0 | % | 97.8 | % | 116.30 | 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, MassMutual*, | ||||||||||||||||||||||||
-Office | 100.0 | % | 99.3 | % | 78.89 | 938,000 | 938,000 | — | Factset Research Systems Inc., Foley & Lardner | ||||||||||||||||
-Retail | 100.0 | % | 72.8 | % | 154.93 | 18,000 | 18,000 | — | Citibank, Starbucks | ||||||||||||||||
100.0 | % | 98.8 | % | 80.32 | 956,000 | 956,000 | — | — | |||||||||||||||||
510 Fifth Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 162.01 | 66,000 | 66,000 | — | — | The North Face, Elie Tahari | |||||||||||||||
Total Grand Central | 1,022,000 | 1,022,000 | — | — | |||||||||||||||||||||
Madison/Fifth: | |||||||||||||||||||||||||
640 Fifth Avenue | Fidelity Investments, Owl Creek Asset Management LP, | ||||||||||||||||||||||||
-Office | 52.0 | % | 95.6 | % | 95.85 | 246,000 | 246,000 | — | Avolon Aerospace, GCA Savvian Inc. | ||||||||||||||||
-Retail | 52.0 | % | 100.0 | % | 937.44 | 69,000 | 69,000 | — | Victoria's Secret (guaranteed by L Brands, Inc.), Dyson | ||||||||||||||||
52.0 | % | 96.5 | % | 280.20 | 315,000 | 315,000 | — | 500,000 | |||||||||||||||||
666 Fifth Avenue | |||||||||||||||||||||||||
-Retail | 52.0 | % | 100.0 | % | 486.70 | 114,000 | (5) | 114,000 | — | — | Fast Retailing (Uniqlo), Hollister, Tissot | ||||||||||||||
595 Madison Avenue | Beauvais Carpets, Levin Capital Strategies LP, | ||||||||||||||||||||||||
-Office | 100.0 | % | 91.5 | % | 86.61 | 302,000 | 302,000 | — | Cosmetech Mably Int'l LLC. | ||||||||||||||||
-Retail | 100.0 | % | 39.2 | % | 1,315.73 | 29,000 | 29,000 | — | Coach | ||||||||||||||||
100.0 | % | 86.9 | % | 194.30 | 331,000 | 331,000 | — | — | |||||||||||||||||
650 Madison Avenue | Memorial Sloan Kettering Cancer Center, Sotheby's International Realty, Inc.*, | ||||||||||||||||||||||||
-Office | 20.1 | % | 97.9 | % | 114.64 | 564,000 | 564,000 | — | Polo Ralph Lauren, Willett Advisors LLC (Bloomberg Philanthropies) | ||||||||||||||||
-Retail | 20.1 | % | 87.4 | % | 1,060.23 | 36,000 | 36,000 | — | Moncler USA Inc., Tod's, Celine, Domenico Vacca* | ||||||||||||||||
20.1 | % | 97.3 | % | 171.37 | 600,000 | 600,000 | — | 800,000 | |||||||||||||||||
689 Fifth Avenue | |||||||||||||||||||||||||
-Office | 52.0 | % | 100.0 | % | 90.94 | 81,000 | 81,000 | — | Yamaha Artist Services Inc., Brunello Cucinelli USA Inc. | ||||||||||||||||
-Retail | 52.0 | % | 9.3 | % | 3,619.66 | 17,000 | 17,000 | — | MAC Cosmetics | ||||||||||||||||
52.0 | % | 84.3 | % | 703.07 | 98,000 | 98,000 | — | — | |||||||||||||||||
655 Fifth Avenue | |||||||||||||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 272.52 | 57,000 | 57,000 | — | — | 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 | 44.8 | % | 100.0 | % | $ | 2,979.07 | 26,000 | 26,000 | — | $ | 450,000 | Swatch Group USA, Harry Winston | |||||||||||||
Total Madison/Fifth | 1,541,000 | 1,541,000 | 1,750,000 | ||||||||||||||||||||||
Midtown South: | |||||||||||||||||||||||||
770 Broadway | |||||||||||||||||||||||||
-Office | 100.0 | % | 100.0 | % | 99.80 | 1,077,000 | 1,077,000 | — | Facebook, Oath (Verizon) | ||||||||||||||||
-Retail | 100.0 | % | 92.5 | % | 62.79 | 105,000 | 105,000 | — | Bank of America, Kmart Corporation | ||||||||||||||||
100.0 | % | 99.3 | % | 96.51 | 1,182,000 | 1,182,000 | — | 700,000 | |||||||||||||||||
One Park Avenue | New York University, Clarins USA Inc., | ||||||||||||||||||||||||
BMG Rights Management, Robert A.M. Stern Architect, | |||||||||||||||||||||||||
-Office | 55.0 | % | 100.0 | % | 59.81 | 865,000 | 865,000 | — | automotiveMastermind | ||||||||||||||||
-Retail | 55.0 | % | 100.0 | % | 87.50 | 78,000 | 78,000 | — | Bank of Baroda, Citibank, Equinox, Men's Wearhouse | ||||||||||||||||
55.0 | % | 100.0 | % | 62.10 | 943,000 | 943,000 | — | 300,000 | |||||||||||||||||
4 Union Square South | Burlington, Whole Foods Market, DSW, | ||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 117.55 | 206,000 | 206,000 | — | 120,000 | Forever 21 | |||||||||||||||
692 Broadway | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 96.47 | 36,000 | 36,000 | — | — | Equinox, Oath (Verizon) | |||||||||||||||
Total Midtown South | 2,367,000 | 2,367,000 | — | 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, Cella, Harper & Scinto, | |||||||||||||||||||||||||
-Office | 70.0 | % | 98.4 | % | 84.27 | 2,043,000 | 2,043,000 | — | Columbia University, LinkLaters* | ||||||||||||||||
-Retail | 70.0 | % | 100.0 | % | 189.96 | 75,000 | 75,000 | — | Duane Reade, JPMorgan Chase Bank, Sovereign Bank, Starbucks | ||||||||||||||||
70.0 | % | 98.4 | % | 88.02 | 2,118,000 | 2,118,000 | — | 950,000 | |||||||||||||||||
608 Fifth Avenue | |||||||||||||||||||||||||
(ground leased through 2033)** | |||||||||||||||||||||||||
-Office | 100.0 | % | 92.4 | % | 78.75 | 93,000 | 93,000 | — | |||||||||||||||||
-Retail | 100.0 | % | — | — | 44,000 | — | 44,000 | ||||||||||||||||||
100.0 | % | 92.4 | % | 78.75 | 137,000 | 93,000 | 44,000 | — | |||||||||||||||||
Total Rockefeller Center | 2,255,000 | 2,211,000 | 44,000 | 950,000 | |||||||||||||||||||||
Wall Street/Downtown: | |||||||||||||||||||||||||
40 Fulton Street | |||||||||||||||||||||||||
-Office | 100.0 | % | 77.2 | % | 52.53 | 246,000 | 246,000 | — | Market News International Inc., Fortune Media Group | ||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 118.70 | 5,000 | 5,000 | — | TD Bank | ||||||||||||||||
100.0 | % | 77.7 | % | 53.85 | 251,000 | 251,000 | — | — | |||||||||||||||||
Soho: | |||||||||||||||||||||||||
478-486 Broadway - 2 buildings | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 439.85 | 65,000 | 15,000 | 50,000 | Madewell, J. Crew | ||||||||||||||||
-Residential (10 units) | 100.0 | % | 100.0 | % | 20,000 | 20,000 | — | ||||||||||||||||||
100.0 | % | 100.0 | % | 85,000 | 35,000 | 50,000 | — | ||||||||||||||||||
- 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): | |||||||||||||||||||||||||
606 Broadway (19 East Houston Street) | |||||||||||||||||||||||||
-Office | 50.0 | % | 100.0 | % | $ | 115.00 | 30,000 | 30,000 | — | WeWork | |||||||||||||||
-Retail | 50.0 | % | 100.0 | % | 669.56 | 5,000 | 3,000 | 2,000 | HSBC | ||||||||||||||||
50.0 | % | 100.0 | % | 194.22 | 35,000 | 33,000 | 2,000 | $ | 67,500 | ||||||||||||||||
443 Broadway | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 105.96 | 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 | % | 103.21 | 4,000 | 4,000 | — | |||||||||||||||||
-Residential (4 units) | 100.0 | % | 100.0 | % | — | 11,000 | 11,000 | — | |||||||||||||||||
100.0 | % | 100.0 | % | 15,000 | 15,000 | — | — | ||||||||||||||||||
155 Spring Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 98.7 | % | 130.76 | 50,000 | 50,000 | — | — | Vera Bradley | |||||||||||||||
148 Spring Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 195.53 | 8,000 | 8,000 | — | — | Dr. Martens | |||||||||||||||
150 Spring Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 294.27 | 6,000 | 6,000 | — | Sandro | ||||||||||||||||
-Residential (1 unit) | 100.0 | % | 100.0 | % | 1,000 | 1,000 | — | ||||||||||||||||||
100.0 | % | 100.0 | % | 7,000 | 7,000 | — | — | ||||||||||||||||||
Total Soho | 229,000 | 177,000 | 52,000 | 67,500 | |||||||||||||||||||||
Times Square: | |||||||||||||||||||||||||
1540 Broadway | Forever 21, Planet Hollywood, Disney, Sunglass Hut, | ||||||||||||||||||||||||
-Retail | 52.0 | % | 100.0 | % | 287.85 | 161,000 | 161,000 | — | — | MAC Cosmetics, U.S. Polo | |||||||||||||||
1535 Broadway | |||||||||||||||||||||||||
-Retail | 52.0 | % | 95.3 | % | 1,052.11 | 45,000 | 45,000 | — | T-Mobile, Invicta, Swatch Group USA, Levi's, Sephora | ||||||||||||||||
-Theatre | 52.0 | % | 100.0 | % | 13.90 | 62,000 | 62,000 | — | Nederlander-Marquis Theatre | ||||||||||||||||
52.0 | % | 98.0 | % | 392.35 | 107,000 | 107,000 | — | — | |||||||||||||||||
Total Times Square | 268,000 | 268,000 | — | — | |||||||||||||||||||||
Upper East Side: | |||||||||||||||||||||||||
828-850 Madison Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 89.8 | % | 410.11 | 18,000 | 14,000 | 4,000 | — | Gucci, Christofle Silver Inc. | |||||||||||||||
677-679 Madison Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 522.29 | 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) | |||||||||||||||||||||||||
-Retail | 100.0 | % | 42.8 | % | 1,352.60 | 11,000 | 11,000 | — | John Varvatos | ||||||||||||||||
-Residential (5 units) | 100.0 | % | 100.0 | % | 12,000 | 12,000 | — | ||||||||||||||||||
100.0 | % | 72.7 | % | 23,000 | 23,000 | — | — | ||||||||||||||||||
- 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): | |||||||||||||||||||||||||
1131 Third Avenue | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | $ | 178.61 | 23,000 | 23,000 | — | $ | — | Nike, Crunch LLC, J.Jill | |||||||||||||
Other | |||||||||||||||||||||||||
-Retail - 2 buildings | 100.0 | % | — | — | 15,000 | — | 15,000 | ||||||||||||||||||
-Residential (8 units) | 100.0 | % | — | — | 7,000 | — | 7,000 | ||||||||||||||||||
100.0 | % | — | — | 22,000 | — | 22,000 | — | ||||||||||||||||||
Total Upper East Side | 99,000 | 73,000 | 26,000 | — | |||||||||||||||||||||
Long Island City: | |||||||||||||||||||||||||
33-00 Northern Boulevard (Center Building) | |||||||||||||||||||||||||
-Office | 100.0 | % | 95.5 | % | 36.28 | 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 | % | 52.84 | 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 | % | 100.0 | % | 89.07 | 584,000 | 584,000 | — | Moet Hennessy USA. Inc. | ||||||||||||||||
-Retail | 49.9 | % | 100.0 | % | 84.95 | 43,000 | 43,000 | — | IL Posto LLC, Toro NYC Restaurant, L'Atelier | ||||||||||||||||
49.9 | % | 100.0 | % | 88.80 | 627,000 | 627,000 | — | 625,000 | |||||||||||||||||
537 West 26th Street | |||||||||||||||||||||||||
-Retail | 100 | % | — | — | 14,000 | 14,000 | — | — | |||||||||||||||||
61 Ninth Avenue | |||||||||||||||||||||||||
(ground leased through 2115)** | |||||||||||||||||||||||||
-Office | 45.1 | % | 100.0 | % | 117.90 | 143,000 | 143,000 | — | Aetna Life Insurance Company | ||||||||||||||||
-Retail | 45.1 | % | 100.0 | % | 316.02 | 23,000 | 23,000 | — | Starbucks | ||||||||||||||||
45.1 | % | 100.0 | % | 145.35 | 166,000 | 166,000 | — | 167,500 | |||||||||||||||||
Total Chelsea/Meatpacking District | 991,000 | 991,000 | — | 792,500 | |||||||||||||||||||||
Upper West Side: | |||||||||||||||||||||||||
50-70 W 93rd Street | |||||||||||||||||||||||||
-Residential (325 units) | 49.9 | % | 96.9 | % | 283,000 | 283,000 | — | 79,877 | |||||||||||||||||
Tribeca: | |||||||||||||||||||||||||
Independence Plaza | |||||||||||||||||||||||||
-Residential (1,327 units) | 50.1 | % | 96.8 | % | — | 1,185,000 | 1,185,000 | — | |||||||||||||||||
-Retail | 50.1 | % | 100.0 | % | 65.47 | 72,000 | 38,000 | 34,000 | Duane Reade | ||||||||||||||||
50.1 | % | 96.9 | % | 65.47 | 1,257,000 | 1,223,000 | 34,000 | 675,000 | |||||||||||||||||
339 Greenwich Street | |||||||||||||||||||||||||
-Retail | 100.0 | % | 100.0 | % | 112.42 | 8,000 | 8,000 | — | — | Sarabeth's | |||||||||||||||
Total Tribeca | 1,265,000 | 1,231,000 | 34,000 | 675,000 | |||||||||||||||||||||
New Jersey: | |||||||||||||||||||||||||
Paramus | |||||||||||||||||||||||||
-Office | 100.0 | % | 87.2 | % | 25.72 | 129,000 | 129,000 | — | — | Vornado's Administrative Headquarters | |||||||||||||||
- 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 | $ | 106,425 | Warner Media* | ||||||||||||||
Farley Office and Retail Building (ground and building leased through 2116)** | |||||||||||||||||||||||||
-Office | 95.0 | % | — | — | 725,000 | — | 725,000 | ||||||||||||||||||
-Retail | 95.0 | % | — | — | 120,000 | — | 120,000 | ||||||||||||||||||
95.0 | % | — | — | 845,000 | — | 845,000 | — | ||||||||||||||||||
825 Seventh Avenue | |||||||||||||||||||||||||
-Office | 50.0 | % | — | — | 165,000 | — | 165,000 | 28,882 | |||||||||||||||||
-Retail | 100.0 | % | — | — | 4,000 | — | 4,000 | — | |||||||||||||||||
51.2 | % | — | — | 169,000 | — | 169,000 | 28,882 | ||||||||||||||||||
Total Property under Development | 1,187,000 | — | 1,187,000 | 135,307 | |||||||||||||||||||||
Properties to be Developed: | |||||||||||||||||||||||||
57th Street (3 properties) | |||||||||||||||||||||||||
-Office | 50.0 | % | — | — | — | — | — | ||||||||||||||||||
-Retail | 50.0 | % | — | — | — | — | — | ||||||||||||||||||
— | — | — | — | ||||||||||||||||||||||
Eighth Avenue and 34th Street (4 properties) | |||||||||||||||||||||||||
-Retail | 100.0 | % | — | — | — | — | — | — | |||||||||||||||||
Total Properties to be Developed | — | — | — | — | |||||||||||||||||||||
New York Office: | |||||||||||||||||||||||||
Total | 96.9 | % | $ | 78.30 | 20,686,000 | 19,060,000 | 1,626,000 | $ | 7,821,359 | ||||||||||||||||
Vornado's Ownership Interest | 96.8 | % | $ | 76.06 | 17,621,000 | 16,192,000 | 1,429,000 | $ | 5,271,208 | ||||||||||||||||
New York Retail: | |||||||||||||||||||||||||
Total | 95.7 | % | $ | 236.72 | 2,710,000 | 2,404,000 | 306,000 | $ | 1,119,794 | ||||||||||||||||
Vornado's Ownership Interest | 95.9 | % | $ | 198.80 | 2,241,000 | 1,959,000 | 282,000 | $ | 837,580 | ||||||||||||||||
New York Residential: | |||||||||||||||||||||||||
Total | 95.9 | % | 1,533,000 | 1,526,000 | 7,000 | $ | 754,877 | ||||||||||||||||||
Vornado's Ownership Interest | 96.8 | % | 800,000 | 793,000 | 7,000 | $ | 378,034 | ||||||||||||||||||
- 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 | % | $ | 118.85 | 936,000 | 936,000 | — | $ | 500,000 | Bloomberg | |||||||||||||
-Retail | 32.4 | % | 100.0 | % | 214.59 | 139,000 | 139,000 | — | 350,000 | Hennes & Mauritz, The Home Depot, The Container Store, Hutong | |||||||||||||||
32.4 | % | 100.0 | % | 130.60 | 1,075,000 | 1,075,000 | — | 850,000 | |||||||||||||||||
Rego Park I, Queens (4.8 acres) | 32.4 | % | 100.0 | % | 31.82 | 343,000 | 148,000 | 195,000 | — | Burlington, Bed Bath & Beyond, Marshalls, IKEA* | |||||||||||||||
Rego Park II (adjacent to Rego Park I), | |||||||||||||||||||||||||
Queens (6.6 acres) | 32.4 | % | 99.2 | % | 44.51 | 609,000 | 609,000 | — | 56,836 | (6) | 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 | % | 97.4 | % | — | 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 | % | 99.5 | % | 80.96 | 2,449,000 | 2,254,000 | 195,000 | 974,836 | ||||||||||||||||
Hotel Pennsylvania: | |||||||||||||||||||||||||
-Hotel (1,700 Rooms) | 100.0 | % | 1,400,000 | 1,400,000 | — | — | |||||||||||||||||||
Total New York | 97.0 | % | $ | 93.69 | 28,778,000 | 26,644,000 | 2,134,000 | $ | 10,670,866 | ||||||||||||||||
Vornado's Ownership Interest | 96.8 | % | $ | 87.57 | 22,855,000 | 21,074,000 | 1,781,000 | $ | 6,802,669 | ||||||||||||||||
____________________
* Lease not yet commenced.
** Term assumes all renewal options exercised, if applicable.
(1) | Weighted average annual rent per square foot for office properties excludes garages and diminimous 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 $13.48 PSF. |
(5) | 75,000 square feet is leased from 666 Fifth Avenue Office Condominium. |
(6) | Net of $195,708 of Alexander's participation in its Rego Park II shopping center mortgage loan which is considered partially extinguished as the participation interest is a reacquisition of debt. |
- 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), ANGI Home Services, Inc, | |||||||||||||||||||||||||
1871, Yelp Inc., Paypal, Inc., Allscripts Healthcare, | |||||||||||||||||||||||||
Chicago School of Professional Psychology, Kellogg Company, | |||||||||||||||||||||||||
Innovation Development Institute, Inc., Chicago Teachers Union, | |||||||||||||||||||||||||
-Office | 100.0 | % | 94.5 | % | $ | 43.26 | 2,046,000 | 2,046,000 | — | ConAgra Foods Inc., Allstate Insurance Company, | |||||||||||||||
Steelcase, Baker, Knapp & Tubbs, Holly Hunt Ltd., | |||||||||||||||||||||||||
-Showroom/Trade show | 100.0 | % | 95.6 | % | 53.21 | 1,533,000 | 1,533,000 | — | Allsteel Inc., Herman Miller Inc., Teknion LLC | ||||||||||||||||
-Retail | 100.0 | % | 95.8 | % | 55.05 | 95,000 | 95,000 | — | |||||||||||||||||
100.0 | % | 95.0 | % | 47.73 | 3,674,000 | 3,674,000 | — | $ | 675,000 | ||||||||||||||||
Other (2 properties) | 50.0 | % | 100.0 | % | 44.25 | 19,000 | 19,000 | — | 31,648 | ||||||||||||||||
Total theMART | 95.0 | % | $ | 47.71 | 3,693,000 | 3,693,000 | — | $ | 706,648 | ||||||||||||||||
Vornado's Ownership Interest | 95.0 | % | $ | 47.71 | 3,684,000 | 3,684,000 | — | $ | 690,824 | ||||||||||||||||
555 California Street: | |||||||||||||||||||||||||
555 California Street | 70.0 | % | 100.0 | % | $ | 80.72 | 1,506,000 | 1,506,000 | — | $ | 551,749 | Bank of America, N.A., 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 | % | 82.45 | 235,000 | 235,000 | — | — | Bank of America, N.A., Regus, Ripple Labs Inc., Lending Home Corporation, Blue Shield | |||||||||||||||
345 Montgomery Street | 70.0 | % | — | — | 78,000 | — | 78,000 | — | Regus* | ||||||||||||||||
Total 555 California Street | 100.0 | % | $ | 80.96 | 1,819,000 | 1,741,000 | 78,000 | $ | 551,749 | ||||||||||||||||
Vornado's Ownership Interest | 100.0 | % | $ | 80.96 | 1,273,000 | 1,218,000 | 55,000 | $ | 386,224 | ||||||||||||||||
____________________
* Lease not yet commenced.
** Term assumes all renewal options exercised, if applicable.
(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 | % | $ | 260.61 | 96,000 | 96,000 | — | Sephora, Bank of America | |||||||||||||||
-Residential (39 units) | 100.0 | % | 97.4 | % | 59,000 | 59,000 | — | ||||||||||||||||||
100.0 | % | 155,000 | 155,000 | — | $ | 142,927 | |||||||||||||||||||
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 | % | 99.4 | % | 158.27 | 50,000 | 50,000 | — | New York Sports Club, Krispy Kreme, BHT Broadway | ||||||||||||||||
-Office | 75.3 | % | 100.0 | % | 50.37 | 196,000 | 196,000 | — | American Management Association, Open Jar, Association for Computing Machinery* | ||||||||||||||||
75.3 | % | 99.9 | % | 72.30 | 246,000 | 246,000 | — | 270,443 | |||||||||||||||||
501 Broadway | 100.0 | % | 100.0 | % | 291.32 | 9,000 | 9,000 | — | 22,872 | Capital One Financial Corporation | |||||||||||||||
Miami, FL: | |||||||||||||||||||||||||
1100 Lincoln Road | |||||||||||||||||||||||||
-Retail | 100.0 | % | 65.4 | % | 166.51 | 51,000 | 51,000 | — | Banana Republic | ||||||||||||||||
-Theatre | 100.0 | % | 100.0 | % | 42.78 | 79,000 | 79,000 | — | Regal Cinema | ||||||||||||||||
100.0 | % | 86.5 | % | 77.25 | 130,000 | 130,000 | — | 82,750 | |||||||||||||||||
Total Real Estate Fund | 88.7 | % | 95.7 | % | 540,000 | 540,000 | — | $ | 518,992 | ||||||||||||||||
Vornado's Ownership Interest | 28.6 | % | 96.8 | % | 155,000 | 155,000 | — | $ | 113,048 | ||||||||||||||||
____________________
* Lease not yet commenced.
** Term assumes all renewal options exercised, if applicable.
(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 | % | 62.8 | % | $ | 45.04 | 736,000 | 432,000 | — | 304,000 | Gartner, Nathan Associates, Inc. | |||||||||||||||||
-Residential - 2 buildings (197 units) | 43.7 | % | 99.5 | % | 253,000 | 253,000 | — | — | ||||||||||||||||||||
989,000 | 685,000 | — | 304,000 | $ | 39,111 | |||||||||||||||||||||||
Fashion Centre Mall | 7.5 | % | 96.9 | % | 48.64 | 868,000 | 868,000 | — | — | 410,000 | Macy's, Nordstrom | |||||||||||||||||
Washington Tower | 7.5 | % | 100.0 | % | 50.80 | 170,000 | 170,000 | — | — | 40,000 | Computer Science Corp. | |||||||||||||||||
New Jersey: | ||||||||||||||||||||||||||||
Wayne Town Center, Wayne (ground leased through 2064)** | 100.0 | % | 100.0 | % | 32.00 | 676,000 | 233,000 | 443,000 | — | — | 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 | 91.7 | % | $ | 40.52 | 2,831,000 | 2,084,000 | 443,000 | 304,000 | $ | 489,111 | ||||||||||||||||||
Vornado's Ownership Interest | 92.9 | % | $ | 31.98 | 1,332,000 | 749,000 | 443,000 | 140,000 | $ | 53,466 | ||||||||||||||||||
____________________
** Term assumes all renewal options exercised, if applicable.
(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 | Vice Chairman | ||||
Michael J. Franco | President | ||||
Joseph Macnow | Executive Vice President - Chief Financial Officer and Chief Administrative Officer | ||||
Haim Chera | Executive Vice President - Head of Retail | ||||
Barry S. Langer | Executive Vice President - Development - Co-Head of Real Estate | ||||
Glen J. Weiss | Executive Vice President - Office Leasing - Co-Head of Real Estate | ||||
RESEARCH COVERAGE - EQUITY | |||||
James Feldman/Alexander Pernokas | Steve Sakwa/Jason Green | Nicholas Yulico/Joshua Burr | |||
Bank of America/Merrill Lynch | Evercore ISI | Scotia Capital (USA) Inc | |||
646-855-5808/646-556-3329 | 212-446-9462/212-446-9449 | 212-225-6904/212-225-5415 | |||
Ross Smotrich/Upal Rana | Daniel Ismail/Dylan Burzinski | John W. Guinee/Aaron Wolf | |||
Barclays Capital | Green Street Advisors | Stifel Nicolaus & Company | |||
212-526-2306/212-526-4887 | 949-640-8780 | 443-224-1307/443-224-1206 | |||
John P. Kim/Frank Lee | Anthony Paolone/Ray Zhong | Michael Lewis/Alexei Siniakov | |||
BMO Capital Markets | JP Morgan | SunTrust Robinson Humphrey | |||
212-885-4115/415-591-2129 | 212-622-6682/212-622-5411 | 212-319-5659/212-590-0986 | |||
Michael Bilerman/Emmanuel Korchman | Vikram Malhotra/Adam J. Gabalski | ||||
Citi | Morgan Stanley | ||||
212-816-1383/212-816-1382 | 212-761-7064/212-761-8051 | ||||
Derek Johnston/Tom Hennessy | Alexander Goldfarb/Daniel Santos | ||||
Deutsche Bank | Sandler O'Neill | ||||
904-520-4973/212-250-4063 | 212-466-7937/212-466-7927 | ||||
RESEARCH COVERAGE - DEBT | |||||
Andrew Molloy | Jesse Rosenthal | ||||
Bank of America/Merrill Lynch | CreditSights | ||||
646-855-6435 | 212-340-3816 | ||||
Thierry Perrein | Mark Streeter | ||||
Wells Fargo Securities | JP Morgan | ||||
704-410-3262 | 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. FFO for the three months ended September 30, 2018 has been adjusted to exclude the $7,966,000, or $0.04 per share, decrease in fair value of marketable equity securities previously reported. 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.
- i -
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS, AS ADJUSTED (unaudited) | ||||||||||||||||||||
(Amounts in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | |||||||||||||||||||
September 30, | June 30, 2019 | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Net income attributable to common shareholders | (A) | $ | 322,906 | $ | 190,645 | $ | 2,400,195 | $ | 2,904,589 | $ | 284,338 | |||||||||
Per diluted share | $ | 1.69 | $ | 1.00 | $ | 12.56 | $ | 15.20 | $ | 1.49 | ||||||||||
Certain (income) expense items that impact net income attributable to common shareholders: | ||||||||||||||||||||
Net gains on sale of real estate (primarily our 25% interest in 330 Madison Avenue in 2019) | $ | (178,769 | ) | $ | (3,350 | ) | $ | — | $ | (178,769 | ) | $ | (27,786 | ) | ||||||
After-tax net gain on sale of 220 CPS condominium units | (109,035 | ) | — | (88,921 | ) | (328,910 | ) | — | ||||||||||||
Mark-to-market decrease (increase) in PREIT common shares (accounted for as a marketable security from March 12, 2019) | 4,875 | — | (1,313 | ) | 19,211 | — | ||||||||||||||
Our share of (income) loss from real estate fund investments | (1,455 | ) | 748 | 20,758 | 22,207 | (617 | ) | |||||||||||||
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium | — | (134,032 | ) | — | — | (134,032 | ) | |||||||||||||
Mark-to-market decrease (increase) in Lexington common shares (sold on March 1, 2019) | — | 7,942 | — | (16,068 | ) | 24,934 | ||||||||||||||
Previously capitalized internal leasing costs(1) | — | (1,444 | ) | — | — | (3,883 | ) | |||||||||||||
Net gain on transfer to Fifth Avenue and Times Square retail JV, net of $11,945 attributable to noncontrolling interests | — | — | (2,559,154 | ) | (2,559,154 | ) | — | |||||||||||||
Non-cash impairment losses and related write-offs, substantially 608 Fifth Avenue | — | — | 108,592 | 108,592 | — | |||||||||||||||
Net gain from sale of UE common shares (sold on March 4, 2019) | — | — | — | (62,395 | ) | — | ||||||||||||||
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022 | — | — | — | 22,540 | — | |||||||||||||||
Our share of disputed additional New York City transfer taxes | — | — | — | — | 23,503 | |||||||||||||||
Preferred share issuance costs | — | — | — | — | 14,486 | |||||||||||||||
Other | (4,811 | ) | (4,035 | ) | 2,802 | (857 | ) | 2,061 | ||||||||||||
(289,195 | ) | (134,171 | ) | (2,517,236 | ) | (2,973,603 | ) | (101,334 | ) | |||||||||||
Noncontrolling interests' share of above adjustments | 18,913 | 8,332 | 159,593 | 189,386 | 6,303 | |||||||||||||||
Total of certain (income) expense items that impact net income attributable to common shareholders | (B) | $ | (270,282 | ) | $ | (125,839 | ) | $ | (2,357,643 | ) | $ | (2,784,217 | ) | $ | (95,031 | ) | ||||
Per diluted share (non-GAAP) | $ | (1.41 | ) | $ | (0.66 | ) | $ | (12.34 | ) | $ | (14.57 | ) | $ | (0.50 | ) | |||||
Net income attributable to common shareholders, as adjusted (non-GAAP) | (A+B) | $ | 52,624 | $ | 64,806 | $ | 42,552 | $ | 120,372 | $ | 189,307 | |||||||||
Per diluted share (non-GAAP) | $ | 0.28 | $ | 0.34 | $ | 0.22 | $ | 0.63 | $ | 0.99 | ||||||||||
____________________________________________________________
(1) | "Net income, as adjusted" for the three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, or $0.01 and $0.02 per diluted share, respectively, for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized. |
- ii -
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS (unaudited) | ||||||||||||||||||||
(Amounts in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | |||||||||||||||||||
September 30, | June 30, 2019 | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
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) | $ | 322,906 | $ | 190,645 | $ | 2,400,195 | $ | 2,904,589 | $ | 284,338 | |||||||||
Per diluted share | $ | 1.69 | $ | 1.00 | $ | 12.56 | $ | 15.20 | $ | 1.49 | ||||||||||
FFO adjustments: | ||||||||||||||||||||
Depreciation and amortization of real property | $ | 89,479 | $ | 105,015 | $ | 105,453 | $ | 303,415 | $ | 309,024 | ||||||||||
Net gains on sale of real estate | (178,769 | ) | (133,961 | ) | — | (178,769 | ) | (158,138 | ) | |||||||||||
Real estate impairment losses | — | — | 31,436 | 31,436 | — | |||||||||||||||
Net gain on transfer to Fifth Avenue and Times Square JV, net of $11,945 attributable to noncontrolling interests | — | — | (2,559,154 | ) | (2,559,154 | ) | — | |||||||||||||
Net gain from sale of UE common shares (sold on March 4, 2019) | — | — | — | (62,395 | ) | — | ||||||||||||||
Decrease (increase) in fair value of marketable securities: | ||||||||||||||||||||
PREIT | 4,875 | — | (1,313 | ) | 19,211 | — | ||||||||||||||
Lexington (sold on March 1, 2019) | — | 7,942 | — | (16,068 | ) | 24,934 | ||||||||||||||
Other | (7 | ) | (243 | ) | 1 | (48 | ) | (133 | ) | |||||||||||
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO: | ||||||||||||||||||||
Depreciation and amortization of real property | 37,696 | 23,688 | 34,631 | 97,317 | 77,282 | |||||||||||||||
Net gains on sale of real estate | — | (3,421 | ) | — | — | (3,998 | ) | |||||||||||||
Decrease in fair value of marketable securities | 291 | 267 | 1,709 | 1,988 | 1,801 | |||||||||||||||
(46,435 | ) | (713 | ) | (2,387,237 | ) | (2,363,067 | ) | 250,772 | ||||||||||||
Noncontrolling interests' share of above adjustments | 3,024 | 40 | 151,357 | 149,957 | (15,517 | ) | ||||||||||||||
FFO adjustments, net | (B) | $ | (43,411 | ) | $ | (673 | ) | $ | (2,235,880 | ) | $ | (2,213,110 | ) | $ | 235,255 | |||||
FFO attributable to common shareholders (non-GAAP) | (A+B) | $ | 279,495 | $ | 189,972 | $ | 164,315 | $ | 691,479 | $ | 519,593 | |||||||||
Convertible preferred share dividends | 14 | 15 | 14 | 43 | 47 | |||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | 279,509 | 189,987 | 164,329 | 691,522 | 519,640 | |||||||||||||||
Add back of FFO allocated to noncontrolling interests of the Operating Partnership | 18,328 | 12,181 | 10,684 | 44,860 | 33,197 | |||||||||||||||
FFO - OP Basis (non-GAAP) | $ | 297,837 | $ | 202,168 | $ | 175,013 | $ | 736,382 | $ | 552,837 | ||||||||||
FFO per diluted share (non-GAAP) | $ | 1.46 | $ | 0.99 | $ | 0.86 | $ | 3.62 | $ | 2.72 | ||||||||||
- 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) | ||||||||||||||||||||
(Amounts in thousands, except per share amounts) | ||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | |||||||||||||||||||
September 30, | June 30, 2019 | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | (A) | $ | 279,509 | $ | 189,987 | $ | 164,329 | $ | 691,522 | $ | 519,640 | |||||||||
Per diluted share (non-GAAP) | $ | 1.46 | $ | 0.99 | $ | 0.86 | $ | 3.62 | $ | 2.72 | ||||||||||
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: | ||||||||||||||||||||
After-tax net gain on sale of 220 CPS condominium units | $ | (109,035 | ) | $ | — | $ | (88,921 | ) | $ | (328,910 | ) | $ | — | |||||||
Our share of (income) loss from real estate fund investments | (1,455 | ) | 748 | 20,758 | 22,207 | (617 | ) | |||||||||||||
Previously capitalized internal leasing costs(1) | — | (1,444 | ) | — | — | (3,883 | ) | |||||||||||||
Non-cash impairment loss and related write-offs on 608 Fifth Avenue | — | — | 77,156 | 77,156 | — | |||||||||||||||
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022 | — | — | — | 22,540 | — | |||||||||||||||
Our share of disputed additional New York City transfer taxes | — | — | — | — | 23,503 | |||||||||||||||
Preferred share issuance costs | — | — | — | — | 14,486 | |||||||||||||||
Other | (5,229 | ) | (5,389 | ) | 1,092 | (2,931 | ) | (7,854 | ) | |||||||||||
(115,719 | ) | (6,085 | ) | 10,085 | (209,938 | ) | 25,635 | |||||||||||||
Noncontrolling interests' share of above adjustments | 7,176 | 378 | (639 | ) | 13,352 | (1,744 | ) | |||||||||||||
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net | (B) | $ | (108,543 | ) | $ | (5,707 | ) | $ | 9,446 | $ | (196,586 | ) | $ | 23,891 | ||||||
Per diluted share (non-GAAP) | $ | (0.57 | ) | $ | (0.03 | ) | $ | 0.05 | $ | (1.03 | ) | $ | 0.12 | |||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | (A+B) | $ | 170,966 | $ | 184,280 | $ | 173,775 | $ | 494,936 | $ | 543,531 | |||||||||
Per diluted share (non-GAAP) | $ | 0.89 | $ | 0.96 | $ | 0.91 | $ | 2.59 | $ | 2.84 | ||||||||||
____________________________________________________________
(1) | "FFO, as adjusted" for the three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, or $0.01 and $0.02 per diluted share, respectively, for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized. |
- iv -
NON-GAAP RECONCILIATIONS RECONCILIATION OF FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS TO FAD (unaudited) | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | |||||||||||||||||||
September 30, | June 30, 2019 | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | (A) | $ | 279,509 | $ | 189,987 | $ | 164,329 | $ | 691,522 | $ | 519,640 | |||||||||
Adjustments to arrive at FAD (non-GAAP): | ||||||||||||||||||||
Recurring tenant improvements, leasing commissions and other capital expenditures | (68,433 | ) | (44,918 | ) | (61,568 | ) | (170,979 | ) | (161,528 | ) | ||||||||||
Adjustments to FFO excluding FFO attributable to discontinued operations and sold properties | (115,087 | ) | (5,161 | ) | 10,145 | (209,383 | ) | 28,333 | ||||||||||||
Amortization of acquired below-market leases, net | (4,245 | ) | (9,937 | ) | (4,504 | ) | (14,837 | ) | (30,170 | ) | ||||||||||
Amortization of debt issuance costs | 4,775 | 8,348 | 6,236 | 18,558 | 24,486 | |||||||||||||||
Stock-based compensation expense | 5,871 | 5,546 | 10,520 | 48,045 | 26,190 | |||||||||||||||
Straight-line rentals | 4,713 | (157 | ) | 2,593 | 8,446 | (10,279 | ) | |||||||||||||
Non real estate depreciation | 1,673 | 1,463 | 1,571 | 4,757 | 4,562 | |||||||||||||||
Noncontrolling interests' share of above adjustments | 11,186 | 2,783 | 2,219 | 20,059 | 7,365 | |||||||||||||||
FAD adjustments, net | (B) | (159,547 | ) | (42,033 | ) | (32,788 | ) | (295,334 | ) | (111,041 | ) | |||||||||
FAD (non-GAAP) | (A+B) | $ | 119,962 | $ | 147,954 | $ | 131,541 | $ | 396,188 | $ | 408,599 | |||||||||
FAD payout ratio (1) | 104.8 | % | 81.8 | % | 95.7 | % | 95.7 | % | 88.3 | % | ||||||||||
_____________________________________________
(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) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, | ||||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income | $ | 363,849 | $ | 219,162 | $ | 2,596,693 | $ | 3,173,586 | $ | 324,782 | |||||||||
Depreciation and amortization expense | 96,437 | 113,169 | 113,035 | 326,181 | 333,701 | ||||||||||||||
General and administrative expense | 33,237 | 31,977 | 38,872 | 130,129 | 108,937 | ||||||||||||||
Transaction related costs, impairment losses and other | 1,576 | 2,510 | 101,590 | 103,315 | 16,683 | ||||||||||||||
Income from partially owned entities | (25,946 | ) | (7,206 | ) | (22,873 | ) | (56,139 | ) | (6,059 | ) | |||||||||
(Income) loss from real estate fund investments | (2,190 | ) | 190 | 15,803 | 13,780 | 37,973 | |||||||||||||
Interest and other investment income, net | (3,045 | ) | (2,893 | ) | (7,840 | ) | (15,930 | ) | (9,401 | ) | |||||||||
Interest and debt expense | 61,448 | 88,951 | 63,029 | 226,940 | 264,774 | ||||||||||||||
Net gain on transfer to Fifth Avenue and Times Square JV | — | — | (2,571,099 | ) | (2,571,099 | ) | — | ||||||||||||
Net gains on disposition of wholly owned and partially owned assets | (309,657 | ) | (141,269 | ) | (111,713 | ) | (641,664 | ) | (164,828 | ) | |||||||||
Income tax expense | 23,885 | 1,943 | 26,914 | 80,542 | 4,964 | ||||||||||||||
Loss (income) from discontinued operations | 8 | (61 | ) | (60 | ) | 85 | (381 | ) | |||||||||||
NOI from partially owned entities | 86,024 | 60,094 | 82,974 | 236,400 | 193,359 | ||||||||||||||
NOI attributable to noncontrolling interests in consolidated subsidiaries | (18,096 | ) | (16,943 | ) | (16,416 | ) | (51,915 | ) | (51,415 | ) | |||||||||
NOI at share | 307,530 | 349,624 | 308,909 | 954,211 | 1,053,089 | ||||||||||||||
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (4,037 | ) | (8,743 | ) | 9,748 | 530 | (39,172 | ) | |||||||||||
NOI at share - cash basis | $ | 303,493 | $ | 340,881 | $ | 318,657 | $ | 954,741 | $ | 1,013,917 | |||||||||
- vi -
NON-GAAP RECONCILIATIONS COMPONENTS OF NET OPERATING INCOME AT SHARE AND NET OPERATING INCOME AT SHARE - CASH BASIS (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
Total Revenues | Operating Expenses | NOI | Non-cash Adjustments(1) | NOI - cash basis | |||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
New York | $ | 380,568 | $ | 462,446 | $ | 188,159 | $ | 200,949 | $ | 192,409 | $ | 261,497 | $ | (314 | ) | $ | (8,937 | ) | $ | 192,095 | $ | 252,560 | |||||||||||||||||
Other | 85,393 | 79,602 | 38,200 | 34,626 | 47,193 | 44,976 | 1,586 | 429 | 48,779 | 45,405 | |||||||||||||||||||||||||||||
Consolidated total | 465,961 | 542,048 | 226,359 | 235,575 | 239,602 | 306,473 | 1,272 | (8,508 | ) | 240,874 | 297,965 | ||||||||||||||||||||||||||||
Noncontrolling interests' share in consolidated subsidiaries | (29,669 | ) | (27,403 | ) | (11,573 | ) | (10,460 | ) | (18,096 | ) | (16,943 | ) | 552 | 112 | (17,544 | ) | (16,831 | ) | |||||||||||||||||||||
Our share of partially owned entities | 129,873 | 97,960 | 43,849 | 37,866 | 86,024 | 60,094 | (5,861 | ) | (347 | ) | 80,163 | 59,747 | |||||||||||||||||||||||||||
Vornado's share | $ | 566,165 | $ | 612,605 | $ | 258,635 | $ | 262,981 | $ | 307,530 | $ | 349,624 | $ | (4,037 | ) | $ | (8,743 | ) | $ | 303,493 | $ | 340,881 | |||||||||||||||||
For the Three Months Ended June 30, 2019 | |||||||||||||||||||
Total Revenues | Operating Expenses | NOI | Non-cash Adjustments(1) | NOI - cash basis | |||||||||||||||
New York | $ | 376,381 | $ | 187,819 | $ | 188,562 | $ | 13,308 | $ | 201,870 | |||||||||
Other | 86,722 | 32,933 | 53,789 | 1,492 | 55,281 | ||||||||||||||
Consolidated total | 463,103 | 220,752 | 242,351 | 14,800 | 257,151 | ||||||||||||||
Noncontrolling interests' share in consolidated subsidiaries | (26,334 | ) | (9,918 | ) | (16,416 | ) | 218 | (16,198 | ) | ||||||||||
Our share of partially owned entities | 124,214 | 41,240 | 82,974 | (5,270 | ) | 77,704 | |||||||||||||
Vornado's share | $ | 560,983 | $ | 252,074 | $ | 308,909 | $ | 9,748 | $ | 318,657 | |||||||||
For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
Total Revenues | Operating Expenses | NOI | Non-cash Adjustments(1) | NOI - cash basis | |||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
New York | $ | 1,200,234 | $ | 1,369,482 | $ | 574,073 | $ | 599,768 | $ | 626,161 | $ | 769,714 | $ | 7,911 | $ | (34,637 | ) | $ | 634,072 | $ | 735,077 | ||||||||||||||||||
Other | 263,498 | 250,821 | 119,933 | 109,390 | 143,565 | 141,431 | 4,985 | 251 | 148,550 | 141,682 | |||||||||||||||||||||||||||||
Consolidated total | 1,463,732 | 1,620,303 | 694,006 | 709,158 | 769,726 | 911,145 | 12,896 | (34,386 | ) | 782,622 | 876,759 | ||||||||||||||||||||||||||||
Noncontrolling interests' share in consolidated subsidiaries | (84,235 | ) | (81,546 | ) | (32,320 | ) | (30,131 | ) | (51,915 | ) | (51,415 | ) | 710 | 806 | (51,205 | ) | (50,609 | ) | |||||||||||||||||||||
Our share of partially owned entities | 361,602 | 320,456 | 125,202 | 127,097 | 236,400 | 193,359 | (13,076 | ) | (5,592 | ) | 223,324 | 187,767 | |||||||||||||||||||||||||||
Vornado's share | $ | 1,741,099 | $ | 1,859,213 | $ | 786,888 | $ | 806,124 | $ | 954,211 | $ | 1,053,089 | $ | 530 | $ | (39,172 | ) | $ | 954,741 | $ | 1,013,917 | ||||||||||||||||||
___________________________________
(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 SEPTEMBER 30, 2019 COMPARED TO SEPTEMBER 30, 2018 (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended September 30, 2019 | $ | 307,530 | $ | 265,484 | $ | 24,862 | $ | 15,265 | $ | 1,919 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | ||||||||||||
Dispositions | (650 | ) | (650 | ) | — | — | — | ||||||||||||
Development properties | (14,704 | ) | (14,704 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (627 | ) | (107 | ) | (520 | ) | — | — | |||||||||||
Other non-same store (income) expense, net | (10,222 | ) | (8,410 | ) | (12 | ) | 119 | (1,919 | ) | ||||||||||
Same store NOI at share for the three months ended September 30, 2019 | $ | 281,322 | $ | 241,608 | $ | 24,330 | $ | 15,384 | $ | — | |||||||||
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: | |||||||||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (28,972 | ) | (28,972 | ) | — | — | — | ||||||||||||
Dispositions | (3,317 | ) | (3,317 | ) | — | — | — | ||||||||||||
Development properties | (23,256 | ) | (23,242 | ) | — | (14 | ) | — | |||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 1,578 | 1,797 | (219 | ) | — | — | |||||||||||||
Other non-same store (income) expense, net | (16,767 | ) | (3,248 | ) | 5 | — | (13,524 | ) | |||||||||||
Same store NOI at share for the three months ended September 30, 2018 | $ | 278,890 | $ | 240,346 | $ | 25,043 | $ | 13,501 | $ | — | |||||||||
Increase (decrease) in same store NOI at share for the three months ended September 30, 2019 compared to September 30, 2018 | $ | 2,432 | $ | 1,262 | $ | (713 | ) | $ | 1,883 | $ | — | ||||||||
% increase (decrease) in same store NOI at share | 0.9 | % | 0.5 | % | (1) | (2.8 | )% | 13.9 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 1.2%. |
- viii -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 COMPARED TO SEPTEMBER 30, 2018 (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the nine months ended September 30, 2019 | $ | 954,211 | $ | 806,544 | $ | 79,359 | $ | 45,124 | $ | 23,184 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (225 | ) | (225 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,479 | ) | (5,479 | ) | — | — | — | ||||||||||||
Dispositions | (7,277 | ) | (7,277 | ) | — | — | — | ||||||||||||
Development properties | (37,806 | ) | (37,806 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 4,362 | 4,882 | (520 | ) | — | — | |||||||||||||
Other non-same store (income) expense, net | (28,711 | ) | (3,983 | ) | (1,943 | ) | 399 | (23,184 | ) | ||||||||||
Same store NOI at share for the nine months ended September 30, 2019 | $ | 879,075 | $ | 756,656 | $ | 76,896 | $ | 45,523 | $ | — | |||||||||
NOI at share for the nine months ended September 30, 2018 | $ | 1,053,089 | $ | 881,791 | $ | 79,948 | $ | 40,686 | $ | 50,664 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (124 | ) | (124 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (55,337 | ) | (55,337 | ) | — | — | — | ||||||||||||
Dispositions | (10,288 | ) | (10,288 | ) | — | — | — | ||||||||||||
Development properties | (53,394 | ) | (53,380 | ) | — | (14 | ) | — | |||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 2,394 | 2,655 | (261 | ) | — | — | |||||||||||||
Other non-same store income, net | (62,284 | ) | (7,188 | ) | (4,432 | ) | — | (50,664 | ) | ||||||||||
Same store NOI at share for the nine months ended September 30, 2018 | $ | 874,056 | $ | 758,129 | $ | 75,255 | $ | 40,672 | $ | — | |||||||||
Increase (decrease) in same store NOI at share for the nine months ended September 30, 2019 compared to September 30, 2018 | $ | 5,019 | $ | (1,473 | ) | $ | 1,641 | $ | 4,851 | $ | — | ||||||||
% increase (decrease) in same store NOI at share | 0.6 | % | (0.2 | )% | (1) | 2.2 | % | 11.9 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 0.4%. |
- ix -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 COMPARED TO JUNE 30, 2019 (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended September 30, 2019 | $ | 307,530 | $ | 265,484 | $ | 24,862 | $ | 15,265 | $ | 1,919 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | ||||||||||||
Dispositions | (650 | ) | (650 | ) | — | — | — | ||||||||||||
Development properties | (14,704 | ) | (14,704 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | (627 | ) | (107 | ) | (520 | ) | — | — | |||||||||||
Other non-same store (income) expense, net | (10,220 | ) | (8,408 | ) | (12 | ) | 119 | (1,919 | ) | ||||||||||
Same store NOI at share for the three months ended September 30, 2019 | $ | 281,324 | $ | 241,610 | $ | 24,330 | $ | 15,384 | $ | — | |||||||||
NOI at share for the three months ended June 30, 2019 | $ | 308,909 | $ | 257,702 | $ | 30,974 | $ | 15,358 | $ | 4,875 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,479 | ) | (5,479 | ) | — | — | — | ||||||||||||
Dispositions | (3,401 | ) | (3,401 | ) | — | — | — | ||||||||||||
Development properties | (19,698 | ) | (19,698 | ) | — | — | — | ||||||||||||
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net | 2,933 | 2,933 | — | — | — | ||||||||||||||
Other non-same store expense (income), net | 214 | 4,983 | (98 | ) | 204 | (4,875 | ) | ||||||||||||
Same store NOI at share for the three months ended June 30, 2019 | $ | 283,473 | $ | 237,035 | $ | 30,876 | $ | 15,562 | $ | — | |||||||||
(Decrease) increase in same store NOI at share for the three months ended September 30, 2019 compared to June 30, 2019 | $ | (2,149 | ) | $ | 4,575 | $ | (6,546 | ) | $ | (178 | ) | $ | — | ||||||
% (decrease) increase in same store NOI at share | (0.8 | )% | 1.9 | % | (1) | (21.2 | )% | (1.1 | )% | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share increased by 2.4%. |
- x -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 COMPARED TO SEPTEMBER 30, 2018 (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended September 30, 2019 | $ | 303,493 | $ | 259,924 | $ | 26,588 | $ | 15,325 | $ | 1,656 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | ||||||||||||
Dispositions | (690 | ) | (690 | ) | — | — | — | ||||||||||||
Development properties | (20,306 | ) | (20,306 | ) | — | — | — | ||||||||||||
Lease termination income | (1,016 | ) | (157 | ) | (859 | ) | — | — | |||||||||||
Other non-same store (income) expense, net | (11,280 | ) | (9,658 | ) | (12 | ) | 46 | (1,656 | ) | ||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2019 | $ | 270,196 | $ | 229,108 | $ | 25,717 | $ | 15,371 | $ | — | |||||||||
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: | |||||||||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (27,452 | ) | (27,452 | ) | — | — | — | ||||||||||||
Dispositions | (3,370 | ) | (3,370 | ) | — | — | — | ||||||||||||
Development properties | (25,061 | ) | (25,047 | ) | — | (14 | ) | — | |||||||||||
Lease termination income | (268 | ) | (8 | ) | (260 | ) | — | — | |||||||||||
Other non-same store (income) expense, net | (17,319 | ) | (3,950 | ) | 5 | — | (13,374 | ) | |||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2018 | $ | 267,411 | $ | 228,376 | $ | 25,979 | $ | 13,056 | $ | — | |||||||||
Increase (decrease) in same store NOI at share - cash basis for the three months ended September 30, 2019 compared to September 30, 2018 | $ | 2,785 | $ | 732 | $ | (262 | ) | $ | 2,315 | $ | — | ||||||||
% increase (decrease) in same store NOI at share - cash basis | 1.0 | % | 0.3 | % | (1) | (1.0 | )% | 17.7 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 1.0%. |
- xi -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 COMPARED TO SEPTEMBER 30, 2018 (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the nine months ended September 30, 2019 | $ | 954,741 | $ | 802,803 | $ | 83,484 | $ | 45,665 | $ | 22,789 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (226 | ) | (226 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,183 | ) | (5,183 | ) | — | — | — | ||||||||||||
Dispositions | (7,716 | ) | (7,716 | ) | — | — | — | ||||||||||||
Development properties | (47,597 | ) | (47,597 | ) | — | — | — | ||||||||||||
Lease termination income | (2,943 | ) | (2,084 | ) | (859 | ) | — | — | |||||||||||
Other non-same store (income) expense, net | (39,399 | ) | (14,919 | ) | (1,942 | ) | 251 | (22,789 | ) | ||||||||||
Same store NOI at share - cash basis for the nine months ended September 30, 2019 | $ | 851,677 | $ | 725,078 | $ | 80,683 | $ | 45,916 | $ | — | |||||||||
NOI at share - cash basis for the nine months ended September 30, 2018 | $ | 1,013,917 | $ | 842,630 | $ | 81,312 | $ | 39,704 | $ | 50,271 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (124 | ) | (124 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (52,184 | ) | (52,184 | ) | — | — | — | ||||||||||||
Dispositions | (9,933 | ) | (9,933 | ) | — | — | — | ||||||||||||
Development properties | (57,495 | ) | (57,481 | ) | — | (14 | ) | — | |||||||||||
Lease termination income | (1,491 | ) | (1,069 | ) | (422 | ) | — | — | |||||||||||
Other non-same store income, net | (63,227 | ) | (8,524 | ) | (4,432 | ) | — | (50,271 | ) | ||||||||||
Same store NOI at share - cash basis for the nine months ended September 30, 2018 | $ | 829,463 | $ | 713,315 | $ | 76,458 | $ | 39,690 | $ | — | |||||||||
Increase in same store NOI at share - cash basis for the nine months ended September 30, 2019 compared to September 30, 2018 | $ | 22,214 | $ | 11,763 | $ | 4,225 | $ | 6,226 | $ | — | |||||||||
% increase in same store NOI at share - cash basis | 2.7 | % | 1.6 | % | (1) | 5.5 | % | 15.7 | % | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.4%. |
- xii -
NON-GAAP RECONCILIATIONS | |||||||||||||||||||
RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 COMPARED TO JUNE 30, 2019 (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Total | New York | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended September 30, 2019 | $ | 303,493 | $ | 259,924 | $ | 26,588 | $ | 15,325 | $ | 1,656 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | ||||||||||||
Dispositions | (690 | ) | (690 | ) | — | — | — | ||||||||||||
Development properties | (20,306 | ) | (20,306 | ) | — | — | — | ||||||||||||
Lease termination income | (1,016 | ) | (157 | ) | (859 | ) | — | — | |||||||||||
Other non-same store (income) expense, net | (11,280 | ) | (9,658 | ) | (12 | ) | 46 | (1,656 | ) | ||||||||||
Same store NOI at share - cash basis for the three months ended September 30, 2019 | $ | 270,196 | $ | 229,108 | $ | 25,717 | $ | 15,371 | $ | — | |||||||||
NOI at share - cash basis for the three months ended June 30, 2019 | $ | 318,657 | $ | 266,139 | $ | 31,984 | $ | 15,595 | $ | 4,939 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (5 | ) | (5 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV | (5,183 | ) | (5,183 | ) | — | — | — | ||||||||||||
Dispositions | (3,600 | ) | (3,600 | ) | — | — | — | ||||||||||||
Development properties | (22,438 | ) | (22,438 | ) | — | — | — | ||||||||||||
Lease termination income | (247 | ) | (247 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (9,613 | ) | (4,705 | ) | (98 | ) | 129 | (4,939 | ) | ||||||||||
Same store NOI at share - cash basis for the three months ended June 30, 2019 | $ | 277,571 | $ | 229,961 | $ | 31,886 | $ | 15,724 | $ | — | |||||||||
Decrease in same store NOI at share - cash basis for the three months ended September 30, 2019 compared to June 30, 2019 | $ | (7,375 | ) | $ | (853 | ) | $ | (6,169 | ) | $ | (353 | ) | $ | — | |||||
% decrease in same store NOI at share - cash basis | (2.7 | )% | (0.4 | )% | (1) | (19.3 | )% | (2.2 | )% | — | % | ||||||||
____________________
(1) | Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 0.1%. |
- xiii -
NON-GAAP RECONCILIATIONS | |||
RECONCILIATION OF CONSOLIDATED REVENUES TO OUR PRO RATA SHARE OF REVENUES (ANNUALIZED) (unaudited) | |||
(Amounts in thousands) | |||
For the Three Months Ended September 30, 2019 | |||
Consolidated revenues | $ | 465,961 | |
Noncontrolling interest adjustments | (29,669 | ) | |
Consolidated revenues at our share (non-GAAP) | 436,292 | ||
Unconsolidated revenues at our share (non-GAAP) | 129,873 | ||
Our pro rata share of revenues (non-GAAP) | $ | 566,165 | |
Our pro rata share of revenues (annualized) (non-GAAP) | $ | 2,264,660 | |
RECONCILIATION OF CONSOLIDATED DEBT, NET TO CONTRACTUAL DEBT (NON-GAAP) (unaudited) | |||||||||||
(Amounts in thousands) | |||||||||||
As of September 30, 2019 | |||||||||||
Consolidated Debt, net | Deferred Financing Costs, Net and Other | Contractual Debt (non-GAAP) | |||||||||
Mortgages payable | $ | 5,640,895 | $ | 32,776 | $ | 5,673,671 | |||||
Senior unsecured notes | 445,668 | 4,332 | 450,000 | ||||||||
$750 Million unsecured term loan | 745,585 | 4,415 | 750,000 | ||||||||
$2.75 Billion unsecured revolving credit facilities | 655,000 | — | 655,000 | ||||||||
$ | 7,487,148 | $ | 41,523 | $ | 7,528,671 | ||||||
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NON-GAAP RECONCILIATIONS RECONCILIATION OF NET INCOME TO EBITDAre (unaudited) | ||||||
(Amounts 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 Nine Months Ended September 30, 2019 | ||||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Reconciliation of net income to EBITDAre (non-GAAP): | |||||||||||||||||||
Net income | $ | 363,849 | $ | 219,162 | $ | 2,596,693 | $ | 3,173,586 | $ | 324,782 | |||||||||
Less net (income) loss attributable to noncontrolling interests in consolidated subsidiaries | (5,774 | ) | (3,312 | ) | (21,451 | ) | (34,045 | ) | 31,137 | ||||||||||
Net income attributable to the Operating Partnership | 358,075 | 215,850 | 2,575,242 | 3,139,541 | 355,919 | ||||||||||||||
EBITDAre adjustments at share: | |||||||||||||||||||
Net gains on sales of depreciable real estate | (178,769 | ) | (137,382 | ) | — | (178,769 | ) | (162,136 | ) | ||||||||||
Depreciation and amortization expense | 128,848 | 130,166 | 141,655 | 405,489 | 390,921 | ||||||||||||||
Interest and debt expense | 87,252 | 112,917 | 87,987 | 303,307 | 342,023 | ||||||||||||||
Income tax expense | 24,012 | 2,072 | 27,006 | 80,942 | 5,206 | ||||||||||||||
Net gain on transfer to Fifth Avenue and Times Square JV, net of $11,945 attributable to noncontrolling interests | — | — | (2,559,154 | ) | (2,559,154 | ) | — | ||||||||||||
Real estate impairment losses | — | — | 31,436 | 31,436 | — | ||||||||||||||
EBITDAre at share | 419,418 | 323,623 | 304,172 | 1,222,792 | 931,933 | ||||||||||||||
EBITDAre attributable to noncontrolling interests in consolidated subisidiaries | 20,309 | 16,192 | 20,563 | 60,681 | 7,079 | ||||||||||||||
EBITDAre (non-GAAP) | $ | 439,727 | $ | 339,815 | $ | 324,735 | $ | 1,283,473 | $ | 939,012 | |||||||||
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NON-GAAP RECONCILIATIONS RECONCILIATION OF EBITDAre TO EBITDAre, AS ADJUSTED (unaudited) | |||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended September 30, 2019 | ||||||||||||||||||
September 30, | June 30, 2019 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
EBITDAre (non-GAAP) | $ | 439,727 | $ | 339,815 | $ | 324,735 | $ | 1,283,473 | $ | 939,012 | |||||||||
EBITDAre attributable to noncontrolling interests in consolidated subsidiaries | (20,309 | ) | (16,192 | ) | (20,563 | ) | (60,681 | ) | (7,079 | ) | |||||||||
Certain (income) expense items that impact EBITDAre: | |||||||||||||||||||
Gain on sale of 220 CPS condominium units | (130,888 | ) | — | (111,713 | ) | (400,500 | ) | — | |||||||||||
Mark-to-market decrease (increase) in PREIT common shares (accounted for as a marketable security from March 12, 2019) | 4,875 | — | (1,313 | ) | 19,211 | — | |||||||||||||
Our share of (income) loss from real estate fund investments | (1,455 | ) | 748 | 20,758 | 22,207 | (617 | ) | ||||||||||||
Mark-to-market decrease (increase) in Lexington common shares (sold on March 1, 2019) | — | 7,942 | — | (16,068 | ) | 24,934 | |||||||||||||
Previously capitalized internal leasing costs(1) | — | (1,444 | ) | — | — | (3,883 | ) | ||||||||||||
Non-cash impairment loss and related write-offs on 608 Fifth Avenue | — | — | 77,156 | 77,156 | — | ||||||||||||||
Net gain from sale of UE common shares (sold on March 4, 2019) | — | — | — | (62,395 | ) | — | |||||||||||||
Our share of disputed additional New York City transfer taxes | — | — | — | — | 23,503 | ||||||||||||||
Other | (5,320 | ) | (7,333 | ) | 2,802 | (2,495 | ) | (22,315 | ) | ||||||||||
Total of certain (income) expense items that impact EBITDAre | (132,788 | ) | (87 | ) | (12,310 | ) | (362,884 | ) | 21,622 | ||||||||||
EBITDAre, as adjusted (non-GAAP) | $ | 286,630 | $ | 323,536 | $ | 291,862 | $ | 859,908 | $ | 953,555 | |||||||||
____________________________________________________________
(1) | "EBITDAre, as adjusted" for the three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, respectively for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized. |
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