Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Investor Presentation (November 2017)
36 slides from Vornado Realty Trust's investor presentation, Nov 13, 2017
Slide 1: Vornado Realty Trust November 2017
VORNADO REALTY TRUST NOVEMBER 2017
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: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This investor presentation contains certain non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net operating income (“NOI”). EBITDA represents “Earnings Before Interest, Taxes, Depreciation and Amortization
Slide 4: Pure-play Northeastern shopping center business and DC spin-off overview
• Focused, pure-play Northeastern shopping center business with strong growth profile • Irreplaceable portfolio of properties concentrated in dense, high barrier to entry markets with attractive demographics • Embedded growth opportunities from redevelopment and anchor repositioning projects • Prove
Slide 5: Vornado RemainCo: pure-play New York City real estate company
• Following the Washington, D.C. spin-off, Vornado RemainCo will be a pure-play New York City real estate company, with an irreplaceable NYC portfolio generating 89% of the Company’s pro forma EBITDA1 • In addition, Vornado RemainCo will continue to own the prime franchise assets in San Francisco (55
Slide 6: Select New York City Office Properties
VORNADO SELECT NEW YORK CITY OFFICE PROPERTIES PLAZA DISTRICT PENN PLAZA DISTRICT MIDTOWN SOUTH CHELSEA / MEATPACKING 666 FIFTH AVENUE 640 FIFTH AVENUE 689 FIFTH AVENUE888 SEVENTH AVENUE 650 MADISON AVENUE 280 PARK AVENUE 350 PARK AVENUE 330 W 34TH STREET ONE PENN / TWO PENN PLAZA7 WEST 34TH STREET
Slide 7: Blue-Chip Office Tenant Roster
VORNADO BLUE-CHIP OFFICE TENANT ROSTER 4
Slide 8: New York Office - Well Positioned by Submarket with Staggered Lease Expirations
VORNADO NEW YORK OFFICE - WELL POSITIONED BY SUBMARKET WITH STAGGERED LEASE EXPIRATIONS Penn Plaza 39% Midtown 24% Plaza District 20% Midtown South 9% Chelsea/Meatpacking 3% Other 5% NEW YORK OFFICE SUBMARKET BY SQUARE FOOT AS OF 9/30/2017 1% 6% 5% 9% 7% 5% 11% 8% 5% 8% 6% 29% - 500 1,000 1,500 2,00
Slide 9: Vornado Select New York City Street Retail Properties
677 MADISON AVENUE 435 SEVENTH AVENUE 1535 & 1540 BROADWAY 640 FIFTH AVENUE 650 MADISON AVENUE 759-771 MADISON AVENUE 689 FIFTH AVENUE 595 MADISON AVENUE 666 FIFTH AVENUE 828-850 MADISON AVENUE 697 FIFTH AVENUE 478-486 BROADWAY655 FIFTH AVENUE 510 FIFTH AVENUE VORNADO SELECT NEW YORK CITY STREET RET
Slide 10: Dominance of the Key High Street Retail Submarkets in Manhattan
VORNADO DOMINANCE OF THE KEY HIGH STREET RETAIL SUBMARKETS IN MANHATTAN FIFTH A V EN U E 59 58 57 56 55 54 53 52 51 50 C EN TR A L PA R K Bergdorf Men’s Louis Vuitton Apple Bergdorf Goodman Bvlgari Tif_fany & Co. Trump Tower Gucci Armani Dolce & Gabanna Omega Breguet Ralph Lauren ST. REGIS HOTEL ST.
Slide 11: Blue-Chip Retail Tenant Roster
VORNADO BLUE-CHIP RETAIL TENANT ROSTER 8
Slide 12: Street Retail Portfolio - Largely Buttoned Up
VORNADO STREET RETAIL PORTFOLIO - LARGELY BUTTONED UP Over 50% of Vornado street retail NOI comes from Upper Fifth Avenue and Times Square. Both are locked up with high quality tenants: TENANT YEAR OF EXPIRATION Zara 2019 MAC Cosmetics 2024 Hollister 2024 Uniqlo 2026 Tissot 2026 Dyson 2027 Ferragamo
Slide 13: Near-Term Catalysts for Shareholder Value Creation
VORNADO NEAR-TERM CATALYSTS FOR SHAREHOLDER VALUE CREATION 1. Inclusive of $170MM in dividends already paid to shareholders through 9/30/2017 • Recent spin-merger of the DC Business with JBG SMITH creates the premier NYC pure-play REIT • Spotlights Vornado’s unique NYC franchise and irreplaceable po
Slide 14: Trading at a Significant Discount to Net Asset Value
VORNADO TRADING AT A SIGNIFICANT DISCOUNT TO NET ASSET VALUE VNO Share Price (11/08/17) 74.24$ Shares outstanding 203.8 Equity Market Capitalization 15,130$ Plus: Debt and preferred at share1 10,548 Other liabilities2 554 Gross Market Capitalization 26,232$ Less: theMART3 2,060 555 California Street
Slide 15: Vornado Fortress Balance Sheet
At 9/30/17 Secured debt 8,205$ Unsecured debt 1,225 864,3)sU R syoT gnidulcxe( tbed detadilosnoc-non fo erahs atar orP )106(tbed detadilosnoc fo erahs 'stseretni gnillortnocnon :sseL Total debt 12,297 )523,1()naol mret + egagtrom( SPC 022 )896(erahs ta tbed eciffO eunevA htfiF 666 Cash, restricted c
Slide 16: Leader Among Best-in-Class REITs
VORNADO LEADER AMONG BEST-IN-CLASS REITS 1 5.4% 3.5% 2.7% 2.6% 2.5% 4.0% 3.8% 3.5% 3.4% 3.3% 3.2% 2.8% 1.9% Vornado SLG BXP DEI KRC EQR PSA AVB SPG TCO VTR FRT PLD From 2006 to 2016, Vornado has delivered superior same-store NOI growth relative to blue-chip peers 2006-2016 Same-Store NOI CAGR 1. Sam
Slide 17: Consistent Track Record of Strong Growth
VORNADO CONSISTENT TRACK RECORD OF STRONG GROWTH $687 $764 $753 $833 $884 $863 $987 $1,019 $1,068 $1,176 $121 $45 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1. See page 29 2. Incremental cash NOI is derived solely from signed leases not yet commenced; GAAP reconciliation on page 30
Slide 18: Leader in Repositioning and Modernizing Properties
VORNADO LEADER IN REPOSITIONING AND MODERNIZING PROPERTIES 11 ASSETS TOTALING 10.3 MM SF 888 SEVENTH AVENUE –2008 888,000 SF • TPG Capital • United Talent Agency • Corcoran Sunshine • Lone Star • Principal Global Investors 350 PARK AVENUE –2008 571,000 SF • M&T Bank • Ziff Brothers • Citco • Marshall
Slide 19: Penn Plaza - An Unprecedented Opportunity
HUDSON YARDS MANHATTAN WEST PENN PLAZA VORNADO PENN PLAZA - AN UNPRECEDENTED OPPORTUNITY 16
Slide 20: Penn Plaza - An Unprecedented Opportunity: Value Creation Opportunity
253 305 Fifth EMPIRE STATE BUILDING MACY’S MOYNIHAN OFFICE BUILDING AND TRAIN HALL MADISON SQUARE GARDEN 11 PENN PLAZA 100 WEST 33RD ST MANHATTAN MALL 1 PENN PLAZA330 WEST34TH ST 7 WEST 34TH ST 15 PENN PLAZA HOTEL PENN 2 PENN PLAZA W 37TH STREET W 36TH STREET W 35TH STREET W 34TH STREET PLAZA33 W 33
Slide 21: Penn Plaza - An Unprecedented Opportunity
VORNADO PENN PLAZA - AN UNPRECEDENTED OPPORTUNITY EMPIRE STATE BUILDING MACY’S MOYNIHAN TRAIN HALL THE FARLEY BUILDING HUDSON YARDS MANHATTAN WEST HERALD SQUARE PENN STATION MADISON SQUARE GARDEN Hig h Lin e 11th A ve 10th A ve 9th A ve 8th A ve W. 40th St W. 34th St W. 31st St W. 28th St High Line
Slide 22: Penn Plaza - An Unprecedented Opportunity: Transformed Concourses
PROPOSED “PENN SOUTH” CONCOURSE NEW MOYNIHAN TRAIN HALL (FARLEY BUILDING) RAIL CONCOURSES 5 TRANSFORMED LONG ISLAND RAIL ROAD CONCOURSE RECENTLY OPENED WEST END CONCOURSE NEW ENTRANCES MODERNIZED SUBWAY STATIONS REDEVELOPED AMTRAK CONCOURSE NEW ENTRANCES MODERNIZED SUBWAY STATIONS VORNADO PENN PLAZA
Slide 23: Moynihan Office Building Development
VORNADO - MOYNIHAN OFFICE BUILDING DEVELOPMENT FURTHER TRANSFORMING THE PENN PLAZA NEIGHBORHOOD • A 50/50 joint venture between Vornado and the Related Companies recently closed and commenced on the conversion of the Farley Post Office in Penn Plaza into the new Moynihan Office Building and Train Ha
Slide 24: Growth from New Projects in Chelsea / Meatpacking
V O R N A D O R E M A I N C O – G R O W T H F R O M N E W P R O J E C T S I N C H E L S E A / M E A T P A C K I N G 85 TENTH AVENUE Size: 173,000 RSF Completion: 1Q 2018 Size: 170,000 RSF Completion: 4Q 2017 Size:627,000 RSF 260 ELEVENTH AVENUE Size: 300,000 RSF Est. Completion: 2021 Acquired: 4Q201
Slide 25: theMART
VORNADO theMART 1. As of 9/30/2017; square footage (“SF”) 2. Adds back free rent 3. See page 32 for GAAP Reconciliation theMART building (Chicago) – best example of contemporary office space outside of Silicon Valley. Transformed from a showroom building to the premier creative and tech hub in the M
Slide 26: 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 | 1,804,000 SF – 94.2% Occupancy1 Major Tenants: • Bank of America • Dodge & Cox • Fenwick &
Slide 27: A Leader in Sustainability
A LEADER IN SUSTAINABILITY NATIONALLY RECOGNIZED, INDUSTRY-LEADING SUSTAINABILITY PROGRAM • Energy Star Partner of the Year in 2013, 2014, 2015, and 2017, Sustained Excellence recipient • 20 million square feet of owned and managed LEED certified buildings • Largest landlord of LEED certified buildi
Slide 28: Appendix
A P P E N D I X
Slide 29: Why New York?
WHY NEW YORK? • Global city favored by businesses, residents, tourists and investors • US gateway city with the strongest long-term population growth1 – vibrant 24/7 environment benefits from trend towards urbanization • Diversified employment base continues path of outsized growth - In 1990, 1 in 2
Slide 30: Why New York? Strong Employment Growth
WHY NEW YORK? STRONG EMPLOYMENT GROWTH +33.8 +30.3 +32.9 +30.6 +44.6 +42.1 +30.4 +17.8 0 10 20 30 40 50 2010 2011 2012 2013 2014 2015 2016 2017 YTD Thousands of Persons SOURCE: U.S. BUREAU OF LABOR STATISTICS * Through 3Q 2017 27
Slide 31: Why New York? Consistent Tourism Growth
27.1 29.8 29.4 29.5 30.2 33 33.8 35.8 36.5 37.1 37.6 37.0 39.0 40.3 41.8 42.8 44.5 46.2 48.1 49.3 6 6.6 6.8 5.7 5.1 4.8 6.1 6.8 7.3 8.9 9.5 8.6 9.8 10.6 10.9 11.5 12.0 12.3 12.7 12.4 33.1 36.4 36.2 35.2 35.3 37.8 39.9 42.6 43.8 46.0 47.1 45.6 48.8 50.9 52.7 54.3 56.5 58.5 60.7 61.7 0 10 20 30 40 50
Slide 32: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION M. Roszkowski x0369 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 169pihsrentraP gnitarepO eht ot elbatubirtta emocni teN $ 804$ 913$ 501$ 663$ 718$ 703$ 131$ 415$ 611$ Interest and debt expense 507 470 654 759 761 798 828 827 822 853 Depreciation and amortization 694 665
Slide 33: Non-GAAP Reconciliation (Cont'd)
M. Roszkowski x0369 TTM September 30, 2017 209$pihsrentraP gnitarepO eht ot elbatubirtta emocni teN 974esnepxe tbed dna tseretnI 946noitazitroma dna noitaicerpeD Income tax expense 3 EBITDA (non-GAAP) 2,033 Adjustments, net(1) (755) EBITDA, as adjusted (non-GAAP) 1,278 )52(eciffO eunevA htfiF 666 :s
Slide 34: Non-GAAP Reconciliation (Cont'd)
NON-GAAP RECONCILIATION (CONT’D) 1. Adjustments at share for: straight-line rent, non-cash (FAS 141) income and elimination of non-cash EBITDA from 666 Fifth Avenue - Office (Amounts in millions) Reconciliation of trailing twelve months net income to EBITDA, EBITDA, as adjusted, Cash NOI, as adjuste
Slide 35: Non-GAAP Reconciliation (Cont'd)
NON-GAAP RECONCILIATION (CONT’D) (Amounts in millions) For the Trailing Twelve Months Ended September 30, 2017(1) For the year ended December 31, 2012(1) 1.3emocni teN )6.4( $ $ 5.91esnepxe tbed dna tseretnI 0.22 8.32noitazitroma dna noitaicerpeD 5.82 2.0esnepxe xat emocnI 3.0 6.64ADTIBE 2.64 -ADTIB
Slide 36: Vornado Realty Trust November 2017
VORNADO REALTY TRUST NOVEMBER 2017
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