Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Q1 2020 Earnings Presentation
61 slides from Vornado Realty Trust's earnings presentation, May 5, 2020
Slide 1: Supplemental Operating and Financial Data
VORNADO REALTY TRUST SUPPLEMENTAL OPERATING AND FINANCIAL DATA For the Quarter Ended March 31, 2020
Slide 2: Index
INDEX Page COVID-19 PANDEMIC 3 BUSINESS DEVELOPMENTS 4 FINANCIAL INFORMATION Financial Highlights 5 Net Income Attributable to Common Shareholders (Consolidated and by Segment) 6 - 7 Net Operating Income at Share (by Segment and by Subsegment) 8 - 9 Same Store NOI at Share and NOI at Share - Cash Ba
Slide 3: COVID-19 Pandemic
COVID-19 PANDEMIC In December 2019, a novel strain of coronavirus (“COVID-19”) was identified in Wuhan, China and by March 11, 2020, the World Health Organization had declared it a global pandemic. Many states in the U.S., including New York, New Jersey, Illinois and California have implemented stay
Slide 4: Business Developments
BUSINESS DEVELOPMENTS Disposition Activity Pennsylvania Real Estate Investment Trust ("PREIT") On January 23, 2020, we sold all of our 6,250,000 common shares of PREIT, realizing net proceeds of $28,375,000. We recorded a $4,938,000 loss (mark-to-market decrease) for the three months ended March 31,
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS (unaudited) (Amounts in thousands, except per share amounts) For the Three Months Ended March 31, December 31, 2020 2019 2019 Total revenues $ 444,532 $ 534,668 $ 460,968 Net income attributable to common shareholders $ 4,963 $ 181,488 $ 193,217 Per common share: Basic $ 0.03 $
Slide 6: Consolidated Net Income Attributable to Common Shareholders
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (unaudited) (Amounts in thousands) For the Three Months Ended March 31, December 31, 2020 2019 Variance 2019 Property rentals(1) $ 355,060 $ 428,380 $ (73,320) $ 360,139 Tenant expense reimbursements(1) 52,173 66,112 (13,939) 55,233 Amortiz
Slide 7: Net Income Attributable to Common Shareholders by Segment
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS BY SEGMENT (unaudited) (Amounts in thousands) For the Three Months Ended March 31, 2020 Total New York Other Property rentals(1) $ 355,060 $ 277,688 $ 77,372 Tenant expense reimbursements(1) 52,173 41,856 10,317 Amortization of acquired below-market lea
Slide 8: Net Operating Income at Share by Segment
NET OPERATING INCOME AT SHARE BY SEGMENT (unaudited) (Amounts in thousands) For the Three Months Ended March 31, 2020 Total New York(1) Other Total revenues $ 444,532 $ 355,615 $ 88,917 Operating expenses (230,007) (183,031) (46,976) NOI - consolidated 214,525 172,584 41,941 Deduct: NOI attributable
Slide 9: Net Operating Income at Share by Subsegment
NET OPERATING INCOME AT SHARE BY SUBSEGMENT (unaudited) (Amounts in thousands) For the Three Months Ended March 31, December 31, 2020 2019 2019 NOI at share: New York: Office(1) $ 183,205 $ 183,540 $ 183,925 Retail(1) 52,018 88,267 59,728 Residential 6,200 6,045 5,835 Alexander's Inc ("Alexander's")
Slide 10: Same Store NOI at Share and NOI at Share - Cash Basis
SAME STORE NOI AT SHARE AND NOI AT SHARE - CASH BASIS (NON-GAAP) (unaudited) 555 California Total New York(2) theMART(3) Street Same store NOI at share % (decrease) increase(1): Three months ended March 31, 2020 compared to March 31, 2019 (2.5)% (1.9)% (13.3)% 5.6% Three months ended March 31, 2020
Slide 11: Consolidated Balance Sheets
CONSOLIDATED BALANCE SHEETS (unaudited) (Amounts in thousands) As of Increase March 31, 2020 December 31, 2019 (Decrease) ASSETS Real estate, at cost: Land $ 2,589,800 $ 2,591,261 $ (1,461) Buildings and improvements 7,946,523 7,953,163 (6,640) Development costs and construction in progress 1,532,82
Slide 12: Leasing Activity
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
Slide 13: Lease Expirations - New York Segment
LEASE EXPIRATIONS (unaudited) NEW YORK SEGMENT Our Share of Weighted Average Annual Square Feet Rent of Expiring Leases Percentage of Period of Lease of Expiring Annualized Expiration Leases(1) Total Per Sq. Ft. Escalated Rent Office: Month to Month 47,000 $ 2,913,000 $ 61.98 0.3% Second Quarter 202
Slide 14: Lease Expirations - theMART
LEASE EXPIRATIONS (unaudited) theMART Our Share of Weighted Average Annual Square Feet Rent of Expiring Leases Percentage of Period of Lease of Expiring Annualized Expiration Leases(1) Total Per Sq. Ft. Escalated Rent Office / Showroom / Retail: Month to Month 17,000 $ 1,103,000 $ 64.88 0.7% Second
Slide 15: Lease Expirations - 555 California Street
LEASE EXPIRATIONS (unaudited) 555 California Street Our Share of Weighted Average Annual Square Feet Rent of Expiring Leases Percentage of Period of Lease of Expiring Annualized Expiration Leases(1) Total Per Sq. Ft. Escalated Rent Office / Retail: Month to Month — $ — $ — 0.0% Second Quarter 2020 5
Slide 16: Trailing Twelve Month Pro-Forma Cash NOI at Share
TRAILING TWELVE MONTH PRO-FORMA CASH NET OPERATING INCOME AT SHARE (unaudited) (Amounts in thousands) For the Trailing Twelve Months Ended For the Trailing Twelve Months Ended March 31, 2020 December 31, 2019 Adjustment for Transfer of 45.4% Interest in NOI at Share - Fifth Avenue and Times Pro Form
Slide 17: Capital Structure
CAPITAL STRUCTURE (unaudited) (Amounts in thousands, except per share and per unit amounts) As of March 31, 2020 Debt (contractual balances) (non-GAAP): Consolidated debt (1): Mortgages payable $ 5,670,928 Senior unsecured notes 450,000 $800 Million unsecured term loan 800,000 $2.75 Billion unsecure
Slide 18: Common Shares Data
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): First Quarter Fourth Quarter Third Quarter Second Quart
Slide 19: Debt Analysis
DEBT ANALYSIS (unaudited) (Amounts in thousands) As of March 31, 2020 Total Variable Fixed Weighted Weighted Weighted Average Average Average (Contractual debt balances) (non-GAAP) Amount Interest Rate Amount Interest Rate Amount Interest Rate Consolidated debt(1) $ 7,995,928 3.22% $ 2,196,562 2.32%
Slide 20: Debt Maturities
DEBT MATURITIES (CONTRACTUAL BALANCES) (NON-GAAP) (unaudited) (Amounts in thousands) Maturity Spread over Interest Property Date (1) LIBOR Rate 2020 2021 2022 2023 2024 Thereafter Total PENN11 12/20 3.95% $ 450,000 $ — $ — $ — $ — $ — $ 450,000 Borgata Land 02/21 5.14% — 53,152 — — — — 53,152 770 Br
Slide 21: Unconsolidated Joint Ventures
UNCONSOLIDATED JOINT VENTURES (unaudited) (Amounts in thousands) Percentage Company's Company's 100% of Spread Asset Ownership at Carrying Pro rata Joint Venture Maturity over Interest Joint Venture Name Category March 31, 2020 Amount Share of Debt(1) Debt(1) Date(2) LIBOR Rate Fifth Avenue and Time
Slide 22: Unconsolidated Joint Ventures - Income and NOI
UNCONSOLIDATED JOINT VENTURES (unaudited) (Amounts in thousands) Our Share of Our Share of NOI Net Income (Loss) for the (non-GAAP) for the Percentage Three Months Ended March 31, Three Months Ended March 31, Ownership at March 31, 2020 2020 2019 2020 2019 Joint Venture Name New York: Fifth Avenue a
Slide 23: Penn District Active Development/Redevelopment Summary
PENN DISTRICT ACTIVE DEVELOPMENT/REDEVELOPMENT SUMMARY - AS OF MARCH 31, 2020 (unaudited) (Amounts in thousands of dollars, except square feet) Property Projected Rentable Amount Remainder to Stabilization Incremental (1) Active Penn District Projects Segment Sq. Ft. Budget Expended be Expended Year
Slide 24: Other Development/Redevelopment Summary
OTHER DEVELOPMENT/REDEVELOPMENT SUMMARY - AS OF MARCH 31, 2020 (unaudited) (Amounts in thousands of dollars, except square feet) Property Rentable Amount Remainder to Stabilization Other Active Projects Segment Sq. Ft. Budget Expended be Expended Year (1) 220 CPS - residential condominiums Other 397
Slide 25: Capital Expenditures, Tenant Improvements and Leasing Commissions - Consolidated
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) CONSOLIDATED (Amounts in thousands) Three Months Ended Year Ended December 31, March 31, 2020 2019 2018 Amounts paid for capital expenditures: Expenditures to maintain assets $ 20,743 $ 93,226 $ 92,386 Tenant improvements
Slide 26: Capital Expenditures - New York Segment
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) NEW YORK SEGMENT (Amounts in thousands) Three Months Ended Year Ended December 31, March 31, 2020 2019 2018 Amounts paid for capital expenditures: Expenditures to maintain assets $ 18,012 $ 80,416 $ 70,954 Tenant improveme
Slide 27: Capital Expenditures - theMART
CAPITAL EXPENDITURES,TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) theMART (Amounts in thousands) Three Months Ended Year Ended December 31, March 31, 2020 2019 2018 Amounts paid for capital expenditures: Expenditures to maintain assets $ 1,923 $ 9,566 $ 13,282 Tenant improvements 776 9,24
Slide 28: Capital Expenditures - 555 California Street
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) 555 CALIFORNIA STREET (Amounts in thousands) Three Months Ended Year Ended December 31, March 31, 2020 2019 2018 Amounts paid for capital expenditures: Expenditures to maintain assets $ 808 $ 3,244 $ 8,150 Tenant improveme
Slide 29: Capital Expenditures - Other
CAPITAL EXPENDITURES, TENANT IMPROVEMENTS AND LEASING COMMISSIONS (unaudited) OTHER (Amounts in thousands) Three Months Ended Year Ended December 31, March 31, 2020 2019 2018 Amounts paid for development and redevelopment expenditures: 220 CPS $ 29,331 $ 181,177 $ 295,827 Other 348 285 3,822 $ 29,67
Slide 30: Square Footage
SQUARE FOOTAGE (unaudited) (Square feet in thousands) At Vornado's Share In Service At Under 100% Total Development Office Retail Showroom Other Segment: New York: Office 20,667 17,603 1,475 15,945 — 183 — Retail 2,713 2,242 412 — 1,830 — — Residential - 1,678 units 1,526 793 — — — — 793 Alexander's
Slide 31: Top 30 Tenants
TOP 30 TENANTS (unaudited) (Amounts in thousands, except square feet) Annualized % of Annualized Square Revenues Revenues Footage At Share At Share Tenants At Share(1) (non-GAAP)(1) (non-GAAP)(2) Facebook 757,653 $ 77,530 3.6% IPG and affiliates 967,552 65,520 3.0% Bloomberg L.P. 303,147 39,026 1.8%
Slide 32: Occupancy and Residential Statistics
OCCUPANCY (unaudited) New York theMART 555 California Street Occupancy rate at: March 31, 2020 96.7% 91.9% 99.8% December 31, 2019 96.7% 94.6% 99.8% March 31, 2019 97.0% 94.9% 99.4% RESIDENTIAL STATISTICS in service (unaudited) Vornado's Ownership Interest Average Monthly Number of Units Number of U
Slide 33: Ground Leases
GROUND LEASES (unaudited) (Amounts in thousands, except square feet) Fully Extended Current Annual Next Option Lease Property Rent at Share Renewal Date Expiration Rent Increases and Other Information Consolidated: New York: Farley (95.0% interest) $ 4,750 None 2116 None 260 Eleventh Avenue 4,191 No
Slide 34: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK: Penn District: PENN1 (ground leased thro
Slide 35: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): Penn District (Continued): 1
Slide 36: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): Park Avenue: 280 Park Avenue
Slide 37: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Square Feet Weighted Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): Midtown South: 770 Broadway
Slide 38: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): Soho (Continued): 606 Broadw
Slide 39: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): Upper East Side (Continued):
Slide 40: Property Table - New York Segment
NEW YORK SEGMENT PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): Properties under Development
Slide 41: Property Table - Alexander's, Inc.
NEW YORK SEGMENT PROPERTY TABLE Square Feet Weighted Average Under Escalated Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants NEW YORK (Continued): ALEXANDER'S, INC.: New York:
Slide 42: Property Table - Other
OTHER PROPERTY TABLE Weighted Square Feet Average Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants theMART: theMART, Chicago Motorola Mobility (guaranteed by Go
Slide 43: Property Table - Real Estate Fund
REAL ESTATE FUND PROPERTY TABLE Weighted Square Feet Average Fund Escalated Under Development Encumbrances % % Annual Rent Total or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property In Service for Lease (in thousands)(2) Major Tenants VORNADO CAPITAL PARTNERS REAL ESTATE FUND: Ne
Slide 44: Property Table - Other
OTHER PROPERTY TABLE Square Feet Weighted Average In Service Escalated Under Development Encumbrances % % Annual Rent Total Owned by Owned by or Not Available (non-GAAP) Property Ownership Occupancy PSF(1) Property Company Tenant(2) for Lease (in thousands)(3) Major Tenants OTHER: Virginia: Rosslyn
Slide 45: Investor Information
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 -
Slide 46: Appendix: Definitions and Non-GAAP Reconciliations
APPENDIX DEFINITIONS AND NON-GAAP RECONCILIATIONS
Slide 47: Financial Supplement Definitions
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 Operat
Slide 48: Non-GAAP Reconciliations
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 March 31, December 31, 2020 2019 2019 Net income attributab
Slide 49: Non-GAAP Reconciliations
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 March 31, December 31, 2020 2019 2019 Reconciliation o
Slide 50: Non-GAAP Reconciliations
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 March 31, December 31,
Slide 51: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS ASSUMED CONVERSIONS TO FAD (unaudited) (Amounts in thousands) For the Three Months Ended March 31, December 31, 2020 2019 2019 FFO attributable to common shareholders plus assumed conversions (non-GAAP) (A) $ 130
Slide 52: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET (LOSS) INCOME TO NET OPERATING INCOME AT SHARE AND NET OPERATING INCOME AT SHARE - CASH BASIS (unaudited) (Amounts in thousands) For the Three Months Ended March 31, December 31, 2020 2019 2019 Net (loss) income $ (104,503) $ 213,044 $ 160,676 Depreciat
Slide 53: Non-GAAP Reconciliations
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 March 31, Total Revenues Operating Expenses NOI Non-cash Adjustments(1) NOI - cash basis 2020 2019 2020 2019 2020 2019 202
Slide 54: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE THREE MONTHS ENDED MARCH 31, 2020 COMPARED TO MARCH 31, 2019 (unaudited) (Amounts in thousands) 555 California Total New York theMART Street Other NOI at share for the three months ended March 31, 2020 $ 280,9
Slide 55: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF NOI AT SHARE TO SAME STORE NOI AT SHARE FOR THE THREE MONTHS ENDED MARCH 31, 2020 COMPARED TO DECEMBER 31, 2019 (unaudited) (Amounts in thousands) 555 California Total New York theMART Street Other NOI at share for the three months ended March 31, 2020 $ 28
Slide 56: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE THREE MONTHS ENDED MARCH 31, 2020 COMPARED TO MARCH 31, 2019 (unaudited) (Amounts in thousands) 555 California Total New York theMART Street Other NOI at share - cash basis for the th
Slide 57: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF NOI AT SHARE - CASH BASIS TO SAME STORE NOI AT SHARE - CASH BASIS FOR THE THREE MONTHS ENDED MARCH 31, 2020 COMPARED TO DECEMBER 31, 2019 (unaudited) (Amounts in thousands) 555 California Total New York theMART Street Other NOI at share - cash basis for the
Slide 58: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF CONSOLIDATED REVENUES TO OUR PRO RATA SHARE OF REVENUES (ANNUALIZED) (unaudited) (Amounts in thousands) For the Three Months Ended March 31, 2020 Consolidated revenues $ 444,532 Noncontrolling interest adjustments (26,909) Consolidated revenues at our share
Slide 59: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF NET (LOSS) 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 EBITD
Slide 60: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS RECONCILIATION OF EBITDAre TO EBITDAre, AS ADJUSTED (unaudited) (Amounts in thousands) For the Three Months Ended March 31, December 31, 2020 2019 2019 EBITDAre (non-GAAP) $ 128,239 $ 519,011 $ 402,151 EBITDAre attributable to noncontrolling interests in consolidated subsidi
Slide 61: Supplemental Operating and Financial Data
VORNADO REALTY TRUST SUPPLEMENTAL OPERATING AND FINANCIAL DATA For the Quarter Ended March 31, 2020