Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Citi 2019 Global Property CEO Conference
41 slides from Vornado Realty Trust's conference presentation, March 2019
Slide 1: Vornado Realty Trust March 2019
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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 at share - Cash Basis As of 12/31/2018 for the Year Ended 12/31/2018 Other Chelsea/ Meatpacking 4% Other 5% Midtown South 18% 9% 36% Penn District 54% Upper Fifth Avenue & Times
Slide 6: NYC Continues to Be a Magnet for Talent
NYC CONTINUES TO BE A MAGNET FOR TALENT • New York is a global gateway city with strong 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 employment base NYC Versus National Job
Slide 7: Catalysts for Shareholder Value Creation
CATALYSTS FOR SHAREHOLDER VALUE CREATION • Trading at a significant discount to management's estimate of NAV • Only significant way to invest publicly in fast growing West Side of Manhattan • Growth from creative-class new developments (1,260,000 SF at share) –– 512 West 22nd Street –– Farley Office
Slide 8: 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) For the Year Ended December 31, 2018 Pro Forma NOI at Share - NOI at Share - Office: Cash Basis Adjustments Cash Basis Cap Rate Value(1) (2) New York $ 726 $ (27) $ 699 (3) theMART 94 12 10
Slide 9: Components of Net Asset Value (at Share)
COMPONENTS OF NET ASSET VALUE (AT SHARE) (unaudited and in millions) Liabilities As of December 31, 2018 Adjustments Net (4) Consolidated contractual mortgage notes payable, net of noncontrolling interests' share $ 7,598 $ (737) $ 6,861 (5) Non-consolidated real estate debt 2,683 (581) 2,102 Corpora
Slide 10: 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 10/2018 5/2018 4/2018 3/2018 1/2018 9/2017 5/2017 Sale Price ($) 705,000,
Slide 11: Fortress Balance Sheet
FORTRESS BALANCE SHEET (Amounts in millions) AT 12/31/18 Secured debt $ 8,216 Unsecured debt 1,680 Pro rata share of non-consolidated debt 2,683 • Investment grade — Baa2/BBB Less: noncontrolling interests' share of consolidated debt (618) • $2.4 BN in revolver capacity Total debt 11,961 220 CPS (mo
Slide 12: Vornado Leader Among Best-in-Class REITs
VORNADO LEADER AMONG BEST-IN-CLASS REITS 10-Year Same-Store NOI - Cash Basis CAGR (2008-2018) 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 ba
Slide 13: Leader in Repositioning and Modernizing Properties: Select Case Studies
LEADER IN REPOSITIONING AND MODERNIZING PROPERTIES SELECT CASE STUDIES (Amounts in thousands, except per share) 1290 AVENUE OF THE AMERICAS 770 BROADWAY 330 WEST 34TH STREET 7 WEST 34TH STREET 2,113,000 SF 1,183,000 SF 722,000 SF 477,000 SF Incremental Stabilized Cash NOI $ 38,500 $ 37,300 $ 21,200
Slide 14: 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 DI ST RIC T W ES TS ID E 12
Slide 15: 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 DISTRICT MIDTOWN 7 WEST 34TH STREET PENN11 330 WEST 34TH STREET PENN1/PENN2 FARLEY OFFICE & RETAIL BUI
Slide 16: Blue-Chip Office Tenant Roster
BLUE-CHIP OFFICE TENANT ROSTER FINANCIAL TAMI HEALTHCARE / INSURANCE REAL ESTATE LEGAL OTHER 14
Slide 17: 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 18: 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 Ermenegildo
Slide 19: Blue-Chip Retail Tenant Roster
BLUE-CHIP RETAIL TENANT ROSTER 17
Slide 20: 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 21: 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 building – 94.8% Occupancy at
Slide 22: 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 • 1,821,000 SF building – 99.4% Occupancy at 12/31/2018 • 1.7 million S
Slide 23: Growth from Development
550 West 27th Street | 260 Eleventh Avenue | 549 West 26th Street BCA | HQ | Vornado | Rogers Stirk Harbour + Partners GROWTH FROM DEVELOPMENT 21
Slide 24: Well-Positioned with Existing Assets and New Developments
West Side E W. 51st St 1290 AVE OF THE AMERICAS WELL-POSITIONED WITH EXISTING ASSETS West AND NEW DEVELOPMENTS 655 FIFTH 350 PARK Broadway 1601 BROADWAY 550 West 27th Street | 260 Eleventh Avenue | 549 West 26th Street 8th Av 7th Av 27th Street CONCENTRATED IN THE FAST GROWING WEST SIDE 280 PARK 608
Slide 25: Penn District: An Unprecedented Opportunity
PENN DISTRICT | AN UNPRECEDENTED OPPORTUNITY HUDSON YARDS MANHATTAN WEST PENN DISTRICT 23
Slide 26: Penn District: An Unprecedented Opportunity
PENN DISTRICT | AN UNPRECEDENTED OPPORTUNITY 38TH STREET Unique Value Creation Opportunity 37TH STREET • Existing office leasable space of 6.8MM SF with average in-place rents of $64 PSF(1) 36TH STREET • Hudson Yards to the west asking rents range from $90-130 PSF(1) 35TH STREET • Transformation of
Slide 27: Penn District: Best Positioned from Transit Standpoint
PENN DISTRICT | 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
Slide 28: Current Development Projects
CURRENT DEVELOPMENT PROJECTS(1) OUR CURRENT DEVELOPMENT PIPELINE IS EXPECTED TO INCREASE CASH NOI BY ~$130MM (AT SHARE) UPON STABILIZATION (Amounts in thousands) PENN1 512 WEST 22ND STREET 606 BROADWAY 345 MONTGOMERY STREET FARLEY OFFICE & TOTAL CURRENT RETAIL BUILDING(3) PROJECTS 2,545,000 SF 173,0
Slide 29: Future Development Pipeline
FUTURE DEVELOPMENT PIPELINE FUTURE REDEVELOPMENT OPPORTUNITIES PROVIDE BUILT-IN SOURCE OF ADDITIONAL GROWTH 550 West 27th Street | 260 Eleventh 550 West 27th Street | 260 Eleventh Avenue | 549 West 26th Street West 27th Street W 27 th St BCA | HQ | Vornado | Rogers Stirk Harbour + Partners BCA | HQ
Slide 30: Farley Office & Retail Building Development
FARLEY OFFICE & RETAIL BUILDING DEVELOPMENT BEGINNING THE TRANSFORMATION OF PENN DISTRICT • Recently acquired an additional 44.9% from the Related Companies, increasing Vornado’s ownership interest to 95%, in the joint venture that has a 99- year lease for the commercial space at the historic Farley
Slide 31: PENN1 Redevelopment
PENN1 REDEVELOPMENT 34TH STREET LOBBY ENTRY 34TH STREET LOBBY 34TH STREET LOBBY RECEPTION DESK SOCIAL STAIR SECOND FLOOR LOUNGE 33RD STREET LOBBY LIBRARY 29
Slide 32: PENN1 Redevelopment - Preliminary Estimates
PENN1 REDEVELOPMENT - PRELIMINARY ESTIMATES PENN1 2.54MM SF (1) Development Cost $ 200MM In-Place Office Rent $ 67 PSF Average Market Rent After Development $ 87 PSF Incremental Rent $ 20 PSF Incremental NOI $ 48MM Yield on Capital 24% Value Created(2) $ 867MM Value Created Per Share $ 4.25 Average
Slide 33: PENN2 Redevelopment
PENN2 REDEVELOPMENT PROPOSED PENN2 PENN2 LOOKING SOUTH ON 7TH AVENUE AND PLAZA33 PROPOSED PENN2 OFFICE LOBBY PROPOSED NORTH FACADE OF PENN2 LOOKING SOUTH AT PLAZA33 PROPOSED DOUBLE HEIGHT OFFICE SPACE LOCATED IN THE BUSTLE PROPOSED ROOFTOP TERRACE 31
Slide 34: 260 Eleventh Avenue - Designed by Richard Rogers
550 West 27th Street | 260 Eleventh Avenue | 549 West 26th Street 260 ELEVENTH AVENUE - DESIGNED BY RICHARD ROGERS 550 West 27th Street | 260 Eleventh Avenue | 549 West 26th Street West 27th Street BCA | HQ | Vornado | Rogers Stirk Harbour + PartnersBCA | HQ | Vornado | Rogers Stirk Harbour + Partne
Slide 35: 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 26 million square feet of owned and managed LEED certified buildings Largest landlord of LEED certified buildings in Ne
Slide 36: Appendix
giogg en amity af a a = ai & & VORNADO REALTY TRUST
Slide 37: 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 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (Amounts in millions) Reconciliation of Vornado Realty Trust Net income to NOI at share - Cash Basis NOI at share - Cash Basis by segment: for the year ended December 31, 2018 For the For the Year Ended Year Ended December 31, 2018 December 31, 2018 Net income $ 423 New York
Slide 39: 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 year ended December 31, 2018 For the Year Ended December 31, 2018 Net income attributable to the Operating Partnership $ 476 Interest and de
Slide 40: 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 year ended December 31, 2018 For the Year Ended For the Year Ended December 31, 2018 December 31
Slide 41: Vornado Realty Trust March 2019
VORNADO REALTY TRUST
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