Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Investor Presentation (September 2018)
42 slides from Vornado Realty Trust's investor presentation, September 2018
Slide 1: Vornado Realty Trust September 2018
4 is | & | & iat a VORNADO REALTY TRUST
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain statements contained in this investor presentation constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements
Slide 3: The Vornado Story
THE VORNADO STORY NEW YORK CITY FOCUSED LEADING OPERATING PREMIER ASSETS PLATFORM PENN DISTRICT FORTRESS BALANCE OPPORTUNITY SHEET TRACK RECORD OF VALUE CREATION 1
Slide 4: Vornado Overview
MAINCO VORNADO OVERVIEW Peerless NYC focused real estate company with premier office assets and the only publicly investable high street retail por olio of scale Peerless NYC focused real estate company with premier office and street retail assets D.C. spin-off, Vornado RemainCo will be a pure-play New
Slide 5: New York Office & Street Retail Portfolios by Submarket
NEW YORK OFFICE & STREET RETAIL PORTFOLIOS BY SUBMARKET NYC Office Submarket by Square Footage NYC Retail Submarket by NOI - cash basis As of 6/30/2018 for the Trailing Twelve Months Ended 6/30/2018 Other Chelsea/ Meatpacking 4% Other 5% Midtown South 18% 9% 36% Penn Plaza Upper Fifth Avenue 52% 7%
Slide 6: NYC Continues to Be a Magnet for Talent / NYC Job Growth Outpaces the Nation
NYC CONTINUES TO BE A MAGNET FOR TALENT/ NYC JOB GROWTH OUTPACES THE NATION • New York is the gateway city with the strongest projected population growth –– Population projected to increase on average 23,700 annually for the next three decades, surpassing 9 million by 2040 (NYC.gov) • Diversified em
Slide 7: Manhattan Is Well-Positioned to Absorb Upcoming Office Supply
MANHATTAN IS WELL-POSITIONED TO ABSORB UPCOMING OFFICE SUPPLY • Manhattan has benefited from negligible net new Manhattan Office Inventory supply over the past 20 years Manhattan Office Inventory 425 • New York City office-using jobs have grown at an 420 average of 34,000 per year over the past 8 ye
Slide 8: Consistent NYC Tourism Growth Supports Retail Sales
CONSISTENT NYC TOURISM GROWTH SUPPORTS RETAIL SALES 70 International 65.1 Domestic 62.8 CAG R: 3.4% 60.5 TOTAL 60 58.5 56.5 13.7 54.4 13.1 52.7 50.9 12.7 12.3 48.8 12.0 50 46.0 47.1 45.8 11.5 10.9 Millions of Tourists 43.8 10.6 42.6 9.8 39.9 8.9 9.5 8.8 40 37.8 7.3 36.4 36.2 6.8 35.2 35.3 6.1 33.1 4
Slide 9: Catalysts for Shareholder Value Creation
CATALYSTS FOR SHAREHOLDER VALUE CREATION • Trading at a significant discount to NAV • Only significant way to invest in fast growing West Side of Manhattan • Growth from creative-class new developments (895,000 SF at share) –– 61 Ninth Avenue –– 512 West 22nd Street For each $1 Billion invested at a
Slide 10: Components of Net Asset Value (at Share)
COMPONENTS OF NET ASSET VALUE (AT SHARE) (unaudited and in millions, except square feet and per share amounts) As of Trailing Twelve Months Ended June 30, 2018 December 31, 2017 Pro-forma NOI - cash basis Less: BMS NOI - cash basis Cap Rate(1) Value(1) New York - Office $ 707 $ (26) $ 681 4.50% $ 15
Slide 11: Components of Net Asset Value (at Share)
COMPONENTS OF NET ASSET VALUE (AT SHARE) (unaudited and in millions) Liabilities Q2 2018 Adjustments Net (3) Consolidated contractual mortgage notes payable, net of noncontrolling interests' share $ 7,561 $ (950) $ 6,611 (4) (5) Non-consolidated real estate debt 2,925 (701) 2,224 Corporate unsecured
Slide 12: Implied Value of VNO's NYC Office Portfolio at Substantial Discount to Private Market Sales
IMPLIED VALUE OF VNO’S NYC OFFICE PORTFOLIO AT SUBSTANTIAL DISCOUNT TO PRIVATE MARKET SALES 425 LEXINGTON 222 E 41ST 600 LEXINGTON 350 W 50TH 245 PARK 1745 BROADWAY 5 BRYANT PARK AVENUE STREET AVENUE STREET AVENUE Closing Date Pending 5/2018 4/2018 3/2018 1/2018 9/2017 5/2017 Sale Price ($) 705,000,
Slide 13: Fortress Balance Sheet
FORTRESS BALANCE SHEET(1) (Amounts in millions) AT 6/30/18 - PRO-FORMA FOR 8/03/18 SALE OF 666 FIFTH OFFICE CONDOMINIUM Secured debt $ 8,164 Unsecured debt 1,680 Pro rata share of non-consolidated debt (excluding Toys R Us) 2,803 Less: noncontrolling interests' share of consolidated debt (604) • Inv
Slide 14: Vornado Leader Among Best-in-Class REITs
VORNADO LEADER AMONG BEST-IN-CLASS REITS Vornado has delivered superior same-store NOI growth relative to blue-chip peers Vornado has delivered superior same-store NOI - cash basis growth relative to blue chip peers on both a 5-year and 10-year basis 5-Year Same-Store NOI - cash basis CAGR 10-Year S
Slide 15: Leader in Repositioning and Modernizing Properties: Select Case Studies
LEADER IN REPOSITIONING AND MODERNIZING PROPERTIES SELECT CASE STUDIES (Amounts in thousands) 1290 AVENUE OF THE AMERICAS 770 BROADWAY 330 WEST 34TH STREET 7 WEST 34TH STREET 2,113,000 SF 1,183,000 SF 709,000 SF 479,000 SF Incremental Stabilized Cash NOI $ 38,500 $ 37,300 $ 21,200 $ 15,700 Capital C
Slide 16: Vornado's Office Assets Located at the Epicenter of Growth
VORNADO'S OFFICE ASSETS LOCATED AT THE EPICENTER OF GROWTH NEW YORK CHICAGO SAN FRANCISCO MA NH HU AT DS T ON AN W YA ES RD T S T ISTRIC CIAL D RIVER NORTH FINAN PE NN PL AZ A W ES TS ID E 14
Slide 17: Select New York City Office Properties
SELECT NEW YORK CITY OFFICE PROPERTIES PLAZA DISTRICT GRAND CENTRAL 888 SEVENTH AVENUE 650 MADISON AVENUE 595 MADISON AVENUE 640 FIFTH AVENUE 689 FIFTH AVENUE 330 MADISON AVENUE 90 PARK AVENUE PENN PLAZA DISTRICT MIDTOWN 7 WEST 34TH STREET PENN11 330 WEST 34TH STREET PENN1/PENN2 FARLEY OFFICE BUILDI
Slide 18: Blue-Chip Office Tenant Roster
BLUE-CHIP OFFICE TENANT ROSTER FINANCIAL TAMI HEALTHCARE / INSURANCE REAL ESTATE LEGAL OTHER 16
Slide 19: Select New York City Street Retail Properties
SELECT NEW YORK CITY STREET RETAIL PROPERTIES 828-850 MADISON AVENUE 595 MADISON AVENUE 650 MADISON AVENUE 677 MADISON AVENUE 4 UNION SQUARE 666 FIFTH AVENUE 689 FIFTH AVENUE 1535 & 1540 BROADWAY 640 FIFTH AVENUE 510 FIFTH AVENUE 655 FIFTH AVENUE 697 FIFTH AVENUE 478-486 BROADWAY 435 SEVENTH AVENUE
Slide 20: Concentration in the Key High Street Retail Submarkets in Manhattan
TRAL RK CONCENTRATION IN THE KEY HIGH STREET RETAIL SUBMARKETS IN MANHATTAN 59 Cartier Apple PLAZA HOTEL Under Armour 58 Upper Fifth Avenue Bergdorf Bergdorf Men’s Times Square Own 23% of Frontage(1) Own Both Sides of the Bowtie Goodman Hublot Van Cleef Louis Vuitton & Arpels 57 Bvlgari Piaget Tiffa
Slide 21: Blue-Chip Retail Tenant Roster
BLUE-CHIP RETAIL TENANT ROSTER 19
Slide 22: Street Retail Portfolio: Upper Fifth & Times Square Buttoned Up for Term
STREET RETAIL PORTFOLIO UPPER FIFTH & TIMES SQUARE BUTTONED UP FOR TERM Over 50% of Vornado street retail NOI - cash basis comes from Upper Fifth Avenue and Times Square. Both are locked up for term with high quality tenants UPPER FIFTH AVENUE TIMES SQUARE New York Retail Expirations by Revenue as o
Slide 23: theMART
theMART theMART building (Chicago) – best example of contemporary office space outside of Silicon Valley. Transformed from a showroom building to the premier creative and tech hub in the Midwest, resulting in significant earnings growth and value creation • 3,675,000 SF – 99.3% Occupancy at 6/30/201
Slide 24: 555 California Street
555 CALIFORNIA STREET 555 California Street – the franchise office building in San Francisco and arguably the most iconic building on the west coast – further NOI growth expected from redeveloped concourse and 315/345 Montgomery • 1,805,000 SF – 97.3% Occupancy at 6/30/2018 at 100% share • 1.6 milli
Slide 25: Growth from Development
GROWTH FROM DEVELOPMENT 23
Slide 26: Well-Positioned with Existing Assets and New Developments
715 LEXINGTON 10th Av WELL-POSITIONED WITH EXISTING ASSETS AND NEW DEVELOPMENTS 11th Av W. 54th St 689 FIFTH E. 54th St 3rd Av 909 THIRD 640 FIFTH West Side Expwy 666 FIFTH CONCENTRATED IN THE FAST GROWING WEST SIDE W. 51st St 1290 AVE OF THE AMERICAS 655 FIFTH 350 PARK E. 51st St Broadway 1601 BROA
Slide 27: The Penn District: An Unprecedented Opportunity
THE PENN DISTRICT | AN UNPRECEDENTED OPPORTUNITY HUDSON YARDS MANHATTAN WEST PENN PLAZA 25
Slide 28: Penn Plaza: An Unprecedented Opportunity
PENN PLAZA | AN UNPRECEDENTED OPPORTUNITY 36TH STREET 35TH STREET 7 WEST MACY’S 34TH ST B A 1 N D C 34TH STREET 2 Q F E 3 R M EMPIRE 330 WEST PENN1 STATE 34TH ST BUILDING 33RD STREET PLAZA33 Unique Value Creation PENN15 / 100 WEST 33RD ST Opportunity HOTEL PENN MANHATTAN MALL MADISON • Existing offi
Slide 29: Penn Plaza: Best Positioned from Transit Standpoint
PENN PLAZA | BEST POSITIONED FROM TRANSIT STANDPOINT GRAND CENTRAL S BRYANT PARK 366,000 RIDERS PER DAY W. 40th St 650,000 RIDERS PER DAY A 1 N B 4 C 2 Q D 5 E 3 R F 6 M 7 MACY’S W. 34th St PENN1 EMPIRE STATE BUILDING AMTRAK LIRR MADISON PENN2 PENN15 HERALD High Line SQUARE SQUARE MOYNIHAN GARDEN FU
Slide 30: Current Development Projects
CURRENT DEVELOPMENT PROJECTS1 OUR CURRENT DEVELOPMENT PIPELINE IS EXPECTED TO INCREASE CASH NOI BY ~$100MM (AT SHARE) UPON STABILIZATION (Amounts in thousands) TOTAL CURRENT PENN1 61 NINTH AVENUE 512 WEST 22ND STREET 606 BROADWAY 345 MONTGOMERY STREET THE FARLEY BUILDING PROJECTS 2,535,000 SF 170,00
Slide 31: Future Development Pipeline
FUTURE DEVELOPMENT PIPELINE FUTURE REDEVELOPMENT OPPORTUNITIES PROVIDE BUILT-IN SOURCE OF ADDITIONAL GROWTH 7TH AVENUE A HOTEL PENNSYLVANIA PENN2 260 ELEVENTH AVENUE 2,800,000 SF 1,800,000 SF 340,000 SF 29 Note: Shown at estimated rentable SF, subject to change
Slide 32: Farley Office Building Development
FARLEY OFFICE BUILDING DEVELOPMENT BEGINNING THE TRANSFORMATION OF PENN PLAZA • A 50/50 joint venture between Vornado and the Related Companies recently commenced the conversion of the Farley Post Office in Penn Plaza into the new Farley Office Building and Train Hall • Total budget of $515 million
Slide 33: PENN1 Redevelopment
PENN1 REDEVELOPMENT Street North Lobby North Lobby Looking East Concierge Desk 34TH STREET LOBBY ENTRY 34TH STREET LOBBY 34TH STREET LOBBY RECEPTION DESK nding South Lobby North Lobby East Library SECOND FLOOR LOUNGE 33RD STREET LOBBY 33RD STREET LOBBY LIBRARY 31
Slide 34: PENN1 Redevelopment - Preliminary Projections
PENN1 REDEVELOPMENT - PRELIMINARY PROJECTIONS PENN1 2.54MM SF Development Cost $ 200MM In-Place Office Rent $ 64 PSF Average Market Rent After Development $ 84 PSF Incremental Rent $ 20 PSF Incremental NOI $ 48MM Yield on Capital 24% Value Created(1) $ 867MM Value Created Per Share $ 4.25 Average re
Slide 35: 260 Eleventh Avenue - Designed by Richard Rogers
260 ELEVENTH AVENUE - DESIGNED BY RICHARD ROGERS 33
Slide 36: A Leader in Sustainability
A LEADER IN SUSTAINABILITY NATIONALLY RECOGNIZED, INDUSTRY-LEADING SUSTAINABILITY PROGRAM SUSTAINABILITY 5-time Energy Star Partner of the Year, Sustained Excellence recipient 2018 23.6 million square feet of owned and managed LEED certified buildings Largest landlord of LEED certified buildings in
Slide 37: Appendix
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Slide 38: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This investor presentation contains certain non-GAAP financial measures, including net operating income (“NOI”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”). NOI represents total revenues less operating expenses. We consider NOI to be the
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (Amounts in millions) Reconciliation of net income to NOI at share - cash basis for the trailing NOI at share - cash basis by segment: twelve months ended June 30, 2018 For The For The TTM Ended TTM Ended June 30, 2018 June 30, 2018 Net income $ 148 New York: Office (include
Slide 40: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (Amounts in millions) Reconciliation of net income attributable to the Operating Partnership to EBITDA and EBITDA, as adjusted for the trailing twelve months ended June 30, 2018 For The TTM Ended June 30, 2018 Net income attributable to the Operating Partnership $ 171 Intere
Slide 41: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (Amounts in millions) Reconciliation of theMART net income to EBITDA, NOI - cash basis and NOI - cash basis adding back free rent for the year ended December 31, 2011 and for the trailing twelve months ended June 30, 2018 For the Trailing Twelve Months Ended For the year end
Slide 42: Vornado Realty Trust September 2018
4 is | & | & iat a VORNADO REALTY TRUST
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