Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Investor Presentation (September 2018)
42 slides from Vornado Realty Trust's investor presentation, Sep 25, 2018
Slide 1: Vornado Realty Trust
GAH Hw 2 8 Aal VORNADO REALTY TRUST
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS. VORNADO Section 21€ of performance. : Vornado Realty Tust Vornado") may differ elleves", “expects, "anticipates" estimates’, "intends", “plans”, “woule, "may veld, predict Improvements, 00 "Risk Factors” in 2017 the 1998. ooking Market Data Vornado has
Slide 3: The Vornado Story
THE VORNADO STORY VORNADO NEW YORK CITY FOCUSED LEADING OPERATING PREMIER ASSETS wo PENN DISTRICT : FORTRESS BALANCE. OPPORTUNITY : SHEET TRACK RECORD OF VALUE CREATION
Slide 4: Vornado Overview
VORNADO OVERVIEW VORNADO: Peerless NYC focused real estate company with premier office and street retail assets + Vornado RemainCo's 5 and 10-year same-store NOI growth is the best among blue chip REITs ‘Components of NOI - cash basi . 395MM . at share) + New York fesuged compa laceable NYC portfoli
Slide 5: New York Office & Street Retail Portfolios by Submarket
NEW YORK OFFICE & STREET RETAIL PORTFOLIOS BY SUBMARKET VORNADO Other Chelsea/ Meatpacking Midtown South Penn Plaza Upper Fifth Avenue imes Square Madison Avenue Midtown Soho Penn Plaza Plaza District
Slide 6: NYC Continues to Be a Magnet for Talent
NYC CONTINUES TO BE A MAGNET FOR TALENT/ VORNADO NYC JOB GROWTH OUTPACES THE NATION Reatrerausy + 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.go
Slide 7: Manhattan Is Well-Positioned to Absorb Upcoming Office Supply
MANHATTAN IS WELL-POSITIONED TO ABSORB UPCOMING OFFICE SUPPLY VORNADO + Manhattan has benefited from negligible net new en i apply over the past 20 years De anhattan Office ventory | + New York City office-using jobs have grown at an per year over the past 8 years + Average job growth of 15,120 per
Slide 8: Consistent NYC Tourism Growth Supports Retail Sales
CONSISTENT NYC TOURISM GROWTH SUPPORTS RETAIL SALES VORNADO I International 1 ome: 1998” 1998 2000 2001 2002 2008 2004 2005 2006 2007 2008 2009 2010-20 ~—«202«201B «20142015 «2016 -2017—«20KE
Slide 9: Catalysts for Shareholder Value Creation
CATALYSTS FOR SHAREHOLDER VALUE CREATION VORNADO: + Trading at a significant discount to NAV + Only significant way to invest in fast growing West Side of Manhattan + Growth new at share) ~ 61 Ninth Avenue = 512 West 22nd Street For each $1 Billion invested at an assumed ~ Farley Office Building inc
Slide 10: Components of Net Asset Value (At Share)
Vo COMPONENTS OF NET ASSET VALUE (AT SHARE) ‘ther Ase Values (a of ne 30,2018 enceot wher inca: [UE - S717 hare $217 per aare (2 Senter, 201) Pe1- 6250000 shares t $955 be sare Us of Senter 7,201) ‘ne construction roars at 1% ef back ehie) “G8. mon conmon shares oustanding on an OP bass 8 Jue 30,201
Slide 11: Components of Net Asset Value (At Share)
COMPONENTS OF NET ASSET VALUE (AT SHARE) Vo sonst ian = om mae 5 eee eens = mr = mre er easier 2 brcudes nemo he lease-up of S45 Montgomery Steet ‘S oeot eiteat920 Canal pvt South LK
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 VORNADO so opa7 sale Price) 2.725.000,000 2.210,000,000 Price PSF SD a0 ass caprate 50% a8 Closing Date o/2017 072017 Sale Price) 1359400000 174,700,000 Price PSF S) oss 1576 azn ses 2s 207 2.058 caprate ass
Slide 13: Fortress Balance Sheet
FORTRESS BALANCE SHEET” VORNADO: mount in tons) Pro rata share of non-consolidated debt (excluding Toys R Us) Less: noncontrolling interests’ share of consolidated debt Total debt 220 CPS (mortgage + term loan) Projected cash proceeds from 220 Central Park South in ‘excess of the $1,700 debt repaid
Slide 14: Vornado Leader Among Best-in-Class REITs
VORNADO LEADER AMONG BEST-IN-CLASS REITS VORNADO: 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 Same-Store NOI - cash basi (2012-2017) (2007-2017) sex 65x Bie ax aan s
Slide 15: Leader in Repositioning and Modernizing Properties
LEADER IN REPOSITIONING AND MODERNIZING PROPERTIES VORNADO SELECT CASE STUDIES mount in tsar) $38,500 $ 15,700 77,200 Incremental Stabilized Cash NO! Capital Cost (including Ti/L¢) 221,300 Viet 17.4% 15.5% 14.95 20.3% Value Created $444,000 ‘$388,900 ‘$328,400 $271,700" s 238 s 290 s 162 s 134 Value
Slide 16: Vornado's Office Assets Located at the Epicenter of Growth
VORNADO VORNADO'S OFFICE ASSETS LOCATED AT THE EPICENTER OF GROWTH CHICAGO c) a
Slide 17: Select New York City Office Properties
SELECT NEW YORK CITY OFFICE PROPERTIES VORNADO:
Slide 18: Blue-Chip Office Tenant Roster
BLUE-CHIP OFFICE TENANT ROSTER VORNADO FINANCIAL TAMI HEALTHCARE / INSURANCE REAL ESTATE Bloomberg Sse BankotAmerica a UBS coor HSBC. [vevarsnsn| seen] 3) Ma Bank TPG GLENCORE pwe (GUGGENHEIM GJ oman MeKinsey&Company MFA FACTSET KKR Fidelity Pic & amazon Google HE Microsoft T-Mobile etftettte Oath:
Slide 19: Select New York City Street Retail Properties
SELECT NEW YORK CITY STREET RETAIL PROPERTIES VORNADO
Slide 20: Concentration in the Key High Street Retail Submarkets in Manhattan
CONCENTRATION IN THE KEY HIGH STREET RETAIL SUBMARKETS IN MANHATTAN VORNADO Times Si n Both Sides of the Bowtie Upper Fifth Avenue Own 23% of Frontage TL Pn ian mi! | a 1540 BROADWAY 1835 BROADWAY 1 Bxouceschrches. cle ante vac by users
Slide 21: Blue-Chip Retail Tenant Roster
BLUE-CHIP RETAIL TENANT ROSTER VORNADO dyson SEPHORA Ceartier ~~ CELINE Christofle HARRY WINSTON ~oED TorsHoP antowan = EQEY CTOs @evrclasshut Leeda Faagaawe —“DYFSNep = Berluti = COACH stanauens nesenve + STARBUCKS. ViC7ORIA'S y ® croRi’s amazon j.CREW i cr Wagae FOREVER21 Chloé = Morimo Dutii rea
Slide 22: Street Retail Portfolio
STREET RETAIL PORTFOLIO VORNADO UPPER FIFTH & TIMES SQUARE BUTTONED UP FOR TERM ARID NORRT ‘Over 50% of Vornado street retall NOI - cash basis comes from Upper Fifth Avenue i and Times Square. Both are locked up for term with high quality tenants tout teorsttirton | arene tear ot xpration ma ou us o
Slide 23: theMART
theMART VORNADO theMART building (Chicago) - best example of contemporary office Silicon Valley. bul ‘and tech significant earnings growth and value creation + 3,675,000 SF - 99.3% Occupancy at 6/30/2018 + Located in River North, the hottest submarket in Chicago Between 2011 and 2a18, converted over
Slide 24: California Street
555 CALIFORNIA STREET VORNADO 555 California Street - the franchi : : office building in San 315/345 Montgomery + 805,000 SF - 97.3% Occupancy at 6/30/2018 at 100% share + 16 million SF of office space leased since 2012 + 6/30/2018 TTM Cash NOI (non-GAAP)” of $53.7 million at share etic dos et Hetil
Slide 25: Vornado Realty Trust
VORNADO REALTY TRUST
Slide 26: Well-Positioned with Existing Assets and New Developments
WELL-POSITIONED WITH EXISTING ASSETS AND NEW DEVELOPMENTS, VORNADO CONCENTRATED IN THE FAST GROWING WEST SIDE iia 170,000 SF 174,000SF 34,000SF Delivered Oct 2018 402018 260 Eleventh Avenue PENNI PENN2 340,000SF 2535,000SF 1800000 SF Ted 402020 Ted 4s of 6/50/2018: square fostage CSF) shown at OOK h
Slide 27: The Penn District | An Unprecedented Opportunity
THE PENN DISTRICT | AN UNPRECEDENTED OPPORTUNITY VORNADO
Slide 28: Penn Plaza | An Unprecedented Opportunity
PENN PLAZA | AN UNPRECEDENTED OPPORTUNITY VORNADO: Unique Value Creation ‘Opportunity + Existing office leasable space of 6.6MM SF with + Hudson Yards to the from $85-130 PSF + Transformation of the: Pennie renee
Slide 29: Penn Plaza | Best Positioned from Transit Standpoint
PENN PLAZA | BEST POSITIONED FROM TRANSIT STANDPOINT VORNADO:
Slide 30: Current Development Projects
CURRENT DEVELOPMENT PROJECTS’ VORNADO UR CURRENT DEVELOPMEN — UT A at heat I SHARE) UPON STABILIZATION Full Quarter Stabilized Operations ‘No share Remaining $196,061 Ss 13,966 8 “otal Incremental $200,000 Budget Es x g g 8 3 1 Saar tages town a 100% cot sown a share
Slide 31: Future Development Pipeline
FUTURE DEVELOPMENT PIPELINE VORNADO Note Shown ot estimated rentable SF sujet to change
Slide 32: Farley Office Building Development
FARLEY OFFICE BUILDING DEVELOPMENT VORNADO BEGINNING THE TRANSFORMATION OF PENN PLAZA menery rmeny + 450/50 joint venture between Vornado and the Related Companies recently commenced the conversion of the Farley Post Office Building and Train Hall + Total budget of $515 million at share + The joint
Slide 33: Penn1 Redevelopment
PENN] REDEVELOPMENT VORNADO:
Slide 34: Penn1 Redevelopment - Preliminary Projections
PENN1 REDEVELOPMENT - PRELIMINARY PROJECTIONS VORNADO: Development Cost $ 200MM In-Place Office Rent S$ 64PSF Average Market Rent After Development S$ 84 PSF Incremental Rent S$ 20PSF Incremental NOI $s 43MM Yield on Capital 24% Value Created $ 867MM Value Created Per Share s 4.25 Average remaining
Slide 35: a wi ° a « < = o az > a a w z
a 4 wi 9 ° 4 a « < = o az > a a w z 9 a Ww a w > Zz > < x= = Zz a > ii a: i ° © Nn
Slide 36: A Leader in Sustainability
A LEADER IN SUSTAINABILITY VORNADO NATIONALLY RECOGNIZED, INDUSTRY-LEADING s%, 2%, SUSTAINABILITY PROGRAM Ve tals ea @ 5-time Energy Star Partner of the Year, Sustained Excellence recipient 2018 a" @ 23.6 million square feet of owned and managed LEED certified buildings tae GRESB @ Largest landlord
Slide 37: Vornado Realty Trust
GAH H we 2 8 eel VORNADO REALTY TRUST
Slide 38: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES VORNADO NOI represents total revenues less operating expenses. We consider non: the unlevered performance of our assets Vornado Realty LP. the "Operating Partnership"). taxes, We use non-GAAP Vornado Realty LLP. the "Operating Partnership"). ‘These non-GAAP financial meas
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS VORNADO mount in tons) twelve months ended June 30, 2018 Loss from partially ned entitios Los from realestate fund investments Interest and other investment income, net Less from aiscontinued operations Renee ad sriztion mee [Non eash adjustments for straight-line rents amor
Slide 40: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS VORNADO mount in tons) EBITDA and EBITDA, as adjusted for the trailing twelve months ended June 30, 2018 Net income attributable to the Operating Partnership Interest and debt expense Depreciation and amortization Income tax expense EBITOA Adjustments, net EBITDA, as adjuste
Slide 41: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS VORNADO theMART tralling twelve months ended June 30, 2018 ‘hie 30,2018 et income oss) z ry emenh ements anther on 3 on me 1, 2011 and for the 'Non-csh agstmens and other as on for 1 2012
Slide 42: Vornado Realty Trust
GAH H we 2 8 el VORNADO REALTY TRUST
Vornado Realty Trust — Investor Presentation (September 2018) on 6ix