Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Investor Presentation (March 2017)
34 slides from Vornado Realty Trust's investor presentation, Mar 3, 2017
Slide 1: 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 are not guarantees of perf
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP 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 is earnings before interest, taxes, depreciation and amo
Slide 3: GAAP Net Income and revenue; Non-GAAP Measures
GAAP Net Income and revenue Non-GAAP 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 is earnings before interest, taxes, depreciation and amo
Slide 4: Relentless Focus on Shareholder Value Creation
Relentless Focus on Shareholder Value Creation In the past few years, we have exited multiple business lines and non-core holdings - $15.7 Billion of total transactions Disposed of $6.1 Billion of non-core assets including regional malls, the Mart business (retaining theMART building in Chicago) and
Slide 5: Why New York?
2 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 New Y
Slide 6: 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 88% of the Company’s pro forma EBITDA1 In addition, Vornado RemainCo will continue to own the prime franchise assets in San Francisco (555 C
Slide 7: Near-Term Catalysts for shareholder value creation
Vornado remainco – Near-Term Catalysts for shareholder value creation 4 Spin-merger of the DC Business with JBG creates the market-leading DC focused REIT and the premier NYC pure-play REIT Spotlights Vornado’s unique NYC franchise and irreplaceable portfolio Significant near-term embedded NOI growt
Slide 8: Vornado RemainCo - Fortress Balance Sheet
5 Vornado Remainco - Fortress Balance Sheet Conservative, Low Cost of Capital Financing Strategy Over $4.2 Billion of liquidity ~$11 Billion of unencumbered assets Investment grade credit rating of Baa2/BBB/BBB (recently reaffirmed by all agencies post-DC spin announcement) (1) Includes $116MM for t
Slide 9: Deep and experienced management team
Vornado remainco – Deep and experienced management team 6 Vertically-integrated platform that includes best-in-class in-house development, leasing, operations and investment teams With over 680 associates, no other company offers more in-house expertise
Slide 10: Leader Among Best-in-Class REITs
Vornado remainco – LEADER AMONG BEST-in-CLASS REITs Per reports published by Green Street Advisors for all companies other than Vornado RemainCo (2016 peer data is not available at the time of publication). Vornado RemainCo NOI (after corporate G&A) includes New York office, New York retail, ALX, 55
Slide 11: Vornado RemainCo – consistent track record of strong growth
Vornado Remainco – consistent track record of strong growth 2006 – 2016 NOI CAGR (3) : 9.5% NOI from continuing operations (excludes sold properties and includes acquisitions from year of purchase); includes corporate G&A and excludes investment income, the Real Estate Fund, and Hotel Pennsylvania.
Slide 12: Premier New York City platform
Vornado remainco – Premier New York city platform NYC Gross Office Rents (PSF)2 NYC Trophy Office Buildings Square Feet (in MM’s) of Buildings With Signed Office Leases >$100 PSF Since 20133 NYC Gross Asset Value (GAV) (in BN’s)1 (Per Green Street Advisors) Notes All company information per 1Q16 pub
Slide 13: Premier New York City platform (continued)
Vornado remainco – Premier New York city platform (continued) For all companies except Vornado, represents information based upon analysis by Green Street Advisors prepared for VNO in August 2016; residential NOI included in Office NOI; represents 2Q16 NOI annualized for all companies except VNO. VN
Slide 14: Select New York City office properties
Vornado remainco – Select new York CITY office properties 11
Slide 15: Blue-chip office tenant roster
12 Vornado remainco – Blue-chip OFFICE tenant roster
Slide 16: Select New York City street retail properties
Vornado remainco – Select new York City street retail properties 13
Slide 17: Blue-chip retail tenant roster
14 Vornado remainco – Blue-chip retail tenant roster
Slide 18: Control of the key high street retail submarkets in Manhattan
15 Vornado remainco – Control of the key high Street RETAIL submarkets In Manhattan 1540 Broadway 1535 Broadway Control both sides of the bowtie UPPER FIFTH AVENUE - OWN 23% OF FRONTAGE1 TIMES SQUARE Note Excludes churches, clubs and retail owned by users.
Slide 19: New York Portfolio by Submarket
16 Vornado Remainco – New York Portfolio by Submarket New York Office By Square footage At 12/31/16 New York Retail By Gross revenue For the Year ended 12/31/16 Penn Plaza 39% Midtown 32% Plaza District 14% Midtown South 8% Chelsea/Meatpacking 3% Other 4% Penn Plaza 23% Soho/Tribeca 5% Madison Avenu
Slide 20: Staggered Lease expirations
17 Vornado remainco – Staggered Lease expirations at 12/31/16 Backup for schedules & WALTS from “Supplemental ‘Q4 16 NYO – Residential Breakout (values) v6 Office Weighted Average Lease Term: 9.9 years Retail Weighted Average Lease Term: 7.9 years Excludes all Month-to-Month leases and leases that e
Slide 21: Tenant Diversity
18 Vornado remainco Tenant Diversity Top 20 tenants represent only 24% of 2016 revenue Annualized Revenue % of Ties to Supp adj for DC? Office Industry Concentration – 10k pg 28 Rank Tenant At Share Total Industry % % Grossed Up 1 IPG and affiliates $56,184 2.4% Yes Financial Services 11% 15% 2 Swat
Slide 22: Office properties and major tenants
888 seventh avenue – 2008 885,000 SF TPG-Axon Capital United Talent Agency Corcoran Sunshine Lone Star US Acquisitions LLC Principal Global Investors 350 park avenue – 2008 571,000 SF M&T Bank Ziff Brothers Investment Inc. Citco Marshall Wace North America, L.P. 330 Madison avenue – 2012 842,000 SF
Slide 23: theMART and 555 California Street
VORNADO REMAINCO – theMART and 555 CALIFORNIA Street As of 12/31/2016; square footage (“SF”) shown at 100% share. theMART (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, resulti
Slide 24: Penn Plaza – an unprecedented opportunity
Vornado remainco – PENN PLAZA – an unprecedented opportunity As of 9/30/16 W 35TH STREET MACY’S W 34TH STREET W 33RD STREET W 32ND STREET W 31ST STREET SIXTH AVENUE FIFTH AVENUE SEVENTH AVENUE EIGHTH AVENUE NINTH AVENUE 330 WEST 34TH ST 1 PENN PLAZA 2 PENN PLAZA FARLEY POST OFFICE 11 PENN PLAZA 15 P
Slide 25: Farley Post Office development
Vornado remainco - Farley post office development Further Transforming the penn plaza neighborhood 22 A 50/50 joint venture between Vornado and the Related Companies has been conditionally designated as the developer to convert the Farley Post Office in Penn Plaza into the new Moynihan Train Station
Slide 26: Growth from new projects in Chelsea / Meatpacking
Vornado remainco – Growth from new Projects in Chelsea / meatpacking 85 TENTH AVENUE 23 Size: 173,000 RSF Completion: 4Q 2017 Size: 170,000 RSF Completion: 4Q 2017 Size:618,000 RSF 260 ELEVENTH AVENUE Size: 325,000 RSF Est. Completion: 2021
Slide 27: 220 Central Park South
220 Central Park south – the premier residential building in NYC 24 Topped out 4Q16, final scheduled completion for 3Q18 Incremental net proceeds after repayment of debt and taxes is expected to be $900MM 1 (1) $100MM of which is part of dividends paid to shareholders through 2016.
Slide 28: Leader in Sustainability
Global Real Estate Sustainability Benchmark (GRESB) “Green Star” Achieved 2016 NAREIT Leader in the Light Award Recipient, 2010 through 2016 4.8% reduction in same-store energy use, 2015 to 2016, representing over 18,500 tons of carbon emissions 30 Million Square Feet of Owned and Managed LEED Certi
Slide 29: Sustainability programs and policies
Asset-specific carbon emissions reduction goals, ranging from 30-50% reduction of Landlord-controlled energy by 2026 below a 2009 baseline, measured in metric tons CO2e / SF, in partnership with New York City’s 80 x 50 Initiative. Energy Efficiency Capital Improvement Program, dedicating funds to pr
Slide 30: Sustainability programs and policies
VORNADO REMAINCO - VORNADO SUSTAINABILITY PROGRAMS AND POLICIES Reatry TRUST + Asset-specific carbon emissions reduction goals, ranging from 30-50% reduction of Landlord-controlled energy by 2026 below a 2009 baseline, measured in metric tons CO,e / SF, in partnership with New York City’s 80 x 50 In
Slide 31: GAAP Reconciliation
GAAP Reconciliation Includes income from sold properties, gains on sale of real estate, impairment losses, and other adjustments. Includes interest on mezzanine debt, dividends on marketable securities, income on corporate investments and other adjustments. Reconciliation of Vornado Net Income to EB
Slide 32: GAAP Reconciliation (Cont'd)
GAAP Reconciliation (Cont’d) Reconciliation of Vornado RemainCo’s Total Incremental Revenue to Cash Incremental Revenue attributable to leases signed, but not yet commenced, for the twelve months ended December 31, 2017 and 2018 Reconciliation of Vornado Net Income to EBITDA and EBITDA, as adjusted
Slide 33: GAAP Reconciliation (Cont'd)
GAAP RECONCILIATION (CONT'D) All's in M's Reconciliation of Vornado Net income to EBITDA and EBITDA, as adjusted forthe twelve months ended December 31, 2016 2016 Netincome attributable to the Operating Partnership 967 Interest and debt expense 507 Depreciation and amortization 604 Income tax expens
Slide 34: Vornado Realty Trust, March 2017
VORNADO REALTY TRUST March 2017
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