Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Conference Presentation (June 2018)
40 slides from Vornado Realty Trust's conference presentation, Jun 4, 2018
Slide 1: Vornado Realty Trust June 2018
[ae VORNADO REALTY TRUST JUNE 2018
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS VORNADO Section 21E of 1934, ded, 1855 as amended, and Consaquenty the fre est fran contion aed buseas of Worn Reaty Tt etna aes thes as ‘estimates’, “intends” "plans", "would", "may" or similar expressions in apororimates” “belles” “expects, ariipates” vids, yields, estim
Slide 3: The Vornado Story
THE VORNADO STORY VORNADO PREMIER ASSETS PENN PLAZA OPPORTUNITY NEW YORK CITY FOCUSED LEADING OPERATING PLATFORM VORNARS FORTRESS BALANCE 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 5 and 10-year same-store NOI growth is the best among blue chip REITs Vornado's portfolio consists of 39.5MM SF (30.2MM SF at share) New York focused company, wi generé in
Slide 5: New York Office & Street Retail Portfolios by Submarket
NEW YORK OFFICE & STREET RETAIL PORTFOLIOS BY SUBMARKET VORNARS Other Chelsea/ Meatpacking Midtown South Penn Plaza Midtown Plaza District Upper Fifth Avenue & Times Square
Slide 6: NYC Continues to Be a Magnet for Talent
NYC CONTINUES TO BE A MAGNET FOR TALENT/ VORNAD NYC JOB GROWTH OUTPACES THE NATION ima icine + 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.gov)
Slide 7: Manhattan Is Well-Positioned to Absorb Upcoming Office Supply
VeRnAR MANHATTAN IS WELL-POSITIONED TO ABSORB UPCOMING OFFICE SUPPLY + Manhattan has benefited from negli supply over the past 20 years Manhattan Office Inventory + New York City office-using jobs have grown at an average of 31,000 per year over the past 8 years + Average job growth of 16,000 per ye
Slide 8: Consistent NYC Tourism Growth Supports Retail Sales
CONSISTENT NYC TOURISM GROWTH SUPPORTS RETAIL SALES VQ RNAD Millions of Tourists 1998 1999 Source: NYC #60 I International 1 Domestic 2000 2001 2002 2003 2004 2005, 2006 2007 2008, 2009 2010 20n 2012 2018 2014 2015 2016 2017 20186
Slide 9: Catalysts for Shareholder Value Creation
CATALYSTS FOR SHAREHOLDER VALUE CREATION VORNAPO + Trading at a significant discount to NAV + Only significant way to invest in fast growing West Side of Manhattan + Growth from creative-class new developments (950,000 SF at share) ~ 61 Ninth Avenue For each $1 Billion invested at an assumed ~ 512 W
Slide 10: Implied Cap Rate
IMPLIED CAP RATE VORNADO (Amounts n milion, exceotsouare feet and per share amounts) \VNO Share Price (05/31/18) soon Shares outstanding 2040 auity Market capitalization saz Plus: Debt and preferred at share! 10578 Price by thor Labiltios, m2 NYC Stroet Retail ‘Gross Market Capitalization 3 asa wre
Slide 11: Fortress Balance Sheet
FORTRESS BALANCE SHEET” VORNAD ‘Amounts in mitions) Secured debt 865 Unsecured debt 1,680 Pro rata share of non-consolidated debt (excluding Toys R Us) 3,460 Less: interests’ share of debt (603) + Investment grade — Baa2/BBB sTotsl eet i2.702 + $2.4 BN in outstanding revolver capacity 220 CPS (mortg
Slide 12: Vornado RemainCo Leader Among Best-in-Class REITs
VoORNa VORNADO REMAINCO LEADER AMONG BEST-IN-CLASS REITS. Vornado RemainCo 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 Sam fore NOI (2007-2017) 73% esx 65% 5.6% 48% ee aK aan 43% 50% 3.9% 36% 32% 32% 3.2% pd 3.0% Eee
Slide 13: Leader in Repositioning and Modernizing Properties
LEADER IN REPOSITIONING AND MODERNIZING PROPERTIES VORNADO SELECT CASE STUDIES ReAcTy TRUST amauntsin thousands) IE AMERICAS 770 BROADWAY Incremental stabilized Cash NOI $38,500 37,300 Capital Cost (Including TI/LC) 221,300 240,000 142,700 Yield 17.4% 15.5% 14.9% Value Created $444,000 $ 588,900 $32
Slide 14: Vornado's Office Assets Located at the Epicenter of Growth
VORNADO'S OFFICE ASSETS LOCATED AT THE EPICENTER OF GROWTH VORNADO
Slide 15: Select New York City Office Properties
SELECT NEW YORK CITY OFFICE PROPERTIES VORNADO
Slide 16: Blue-Chip Office Tenant Roster
BLUE-CHIP OFFICE TENANT ROSTER VORNARS FINANCIAL TAMI HEALTHCARE / INSURANCE REAL ESTATE Bloomberg IPG amazon Cs ee Os Bankof America se COLUMBIA UNIVERSITY. rer Deutsch ull S25ee84048 = a en [vzunencen| stray oat aa HSBC <> SEER inde Google @aAltstate. — C Unitedtieattheare PARSONS see oe Yerp se m
Slide 17: Select New York City Street Retail Properties
SELECT NEW YORK CITY STREET RETAIL PROPERTIES VORNADO mL ay i =
Slide 18: Dominance of the Key High Street Retail Submarkets in Manhattan
DOMINANCE OF THE KEY HIGH STREET RETAIL SUBMARKETS IN MANHATTAN VeERNADO 1 Brludes churches, lube and eto owned by users
Slide 19: Blue-Chip Retail Tenant Roster
BLUE-CHIP RETAIL TENANT ROSTER VORNABO dyson SEPHORA — Cuardier Christolle HARRY WINSTON oh TOPSHOP praxeran = EY 005 @svnvlasshot ——ebane Fagam = Denep = Berluti = COACH starsucks nesenve: © STARBUCKS: v . an ® igroxias amazon =). CREW fa WHOLE 5 ecsatnas Tutt FOREVER21 Chloé M. Duh INVICTA F003 te
Slide 20: Street Retail Portfolio
STREET RETAIL PORTFOLIO VORNAD' UPPER FIFTH & TIMES SQUARE BUTTONED UP FOR TERM hake ‘Over 50% of Vornado street retall NOI - cash basis comes from Upper Fifth Avenue and Times Square. Both are locked up for term with high quality tenants Pe Fem TRA SQUARE New York Retail Expirations by Revenue as o
Slide 21: theMART
theMART VORNADO i pe 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 + 3,674,000 SF - 99.1% Occupanc
Slide 22: California Street
555 CALIFORNIA STREET VORNADO 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 + 1,805,000 SF - 97.8% Occupancy” + 1.6 million SF of office sp
Slide 23: Vornado Realty Trust
VORNADO REALTY TRUST
Slide 24: Penn Plaza | An Unprecedented Opportunity
PENN PLAZA | AN UNPRECEDENTED OPPORTUNITY VORNAPO
Slide 25: Penn Plaza | An Unprecedented Opportunity
PENN PLAZA | AN UNPRECEDENTED OPPORTUNITY VORNADO EMPIRE STAT BUILDING Unique Value Creation tunity Existing office leasable space of 6.7MM SF with of $62 PSF Hudson Yards to the from $85-130 PSF Transformation of the neighborhood will also. substantially enhance the value of Vornado's Penn Plaza re
Slide 26: Penn Plaza | Best Positioned from Transit Standpoint
VORNADO PENN PLAZA | BEST POSITIONED FROM TRANSIT STANDPOINT Biinates JE __ Pennstation toe
Slide 27: Current Development Projects
CURRENT DEVELOPMENT PROJECTS VORNARS (OUR CURRENT DEVELOPMENT PIPELINE IS EXPECTED TO CREASE CASH NOI BY ~$100MM (AT SHARE) UPON STABILIZATION Full Quarter Stabilized Bashers N/A a2 2019 a1 2020 a2 2020 23 2020 922022 NO share 100.08 48.1% 55.0% 50.0% 70.0% 50.1% Development ‘Budget cat Sharey’ ‘Amo
Slide 28: Future Development Pipeline
FUTURE DEVELOPMENT PIPELINE VORNAPO Note: Shown at estimated rentable SF, sublect to change
Slide 29: Farley Office Building Development
FARLEY OFFICE BUILDING DEVELOPMENT VORNADO BEGINNING THE TRANSFORMATION OF PENN PLAZA eeu ret + A50/50 joint venture between Vornado and lie Relates Companing recently commenced he conversion of the Farley Post Office in Penn Plaza into the new Farley Office Building and Train Hall + Total budget of
Slide 30: PENN1 Redevelopment
PENN1 REDEVELOPMENT VORNADO a. im
Slide 31: PENN1 Redevelopment - Preliminary Projections
PENN1 REDEVELOPMENT - PRELIMINARY PROJECTIONS VORNADO Development Cost $ 200MM In-Place Office Rent $ 64 PSF Average Market Rent After Development $ B4PSF Incremental Rent $ 20 PSF Incremental NOI $ 48MM Yield on Capital 24% Value Created” $ 867MM Value Created Per Share $ 4.25 Average remaining off
Slide 32: Well-Positioned with Existing Assets and New Developments
WELL-POSITIONED WITH EXISTING ASSETS AND NEW DEVELOPMENTS VORNADO CONCENTRATED IN THE FAST GROWING WEST SIDE auaury raver 512 WEST 221 ‘nes sous sours 6 6! Be “f af A tire nay
Slide 33: Eleventh Avenue - Designed by Richard Rogers
260 ELEVENTH AVENUE - DESIGNED BY RICHARD ROGERS VORNADO
Slide 34: A Leader in Sustainability
A LEADER IN SUSTAINABILITY VERNER? NATIONALLY RECOGNIZED, INDUSTRY-LEADING SUSTAINABILITY PROGRAM 5-time Energy Star Partner of the Year, Sustained Excellence recipient 2018 @ 23.6 million square feet of owned and managed LEED certified buil ings @ Largest landlord of LEED certified buildings in New
Slide 35: Appendix
REALTY TRUST APPENDIX
Slide 36: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES VORNADO “NOM and before interest, taxes, CEBITOA') NOI represents total revenues loss operating expenses. We consider NO! to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our properties and segments as it relates
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS VORNADO amounts in mitions) 9 Not by segment: twelve months ended 3/31/2018 Forthe ‘sin Net income 3m Neen Office (includes $25MM of BMS NOI) 3 691 Dew Retail 324 Income from partially owned entities oO) Residentiat 2 Income from real estate fund investments 6 pineal y Inter
Slide 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS VORNAD amounts in mitions) Partnership to EBITDA and EBITDA, 3/31/18 Ended 3/31/18 Net income attributable to the Operating Partnership Interest and debt expense Depreciation and amortization Income tax expense EBITDA Adjustments, net EBITDA, as adjusted 1 1c segment aid pro
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS VORNARS ‘Amounts in mations) 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 trailing twelve months ended March 31, 2018 ox Depreciation and amortization BITDA Nomcam
Slide 40: Vornado Realty Trust June 2018
[a VORNADO REALTY TRUST JUNE 2018
Vornado Realty Trust — Conference Presentation (June 2018) on 6ix