Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Investor Presentation (November 2018)
42 slides from Vornado Realty Trust's investor presentation, November 2018
Slide 1: Vornado Realty Trust – November 2018
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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 - Cash Basis As of 9/30/2018 for the Trailing Twelve Months Ended 9/30/2018 Other Chelsea/ Meatpacking 4% Other 5% Midtown South 18% 9% 36% Penn District 53% Upper Fifth Avenue
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: Manhattan Is Well-Positioned to Absorb Upcoming Office Supply
MANHATTAN IS WELL-POSITIONED TO ABSORB UPCOMING OFFICE SUPPLY • Manhattan has benefited from negligible net new Manhattan Office Inventory supply over the past 20 years Manhattan Office Inventory 425 • New York City office-using jobs grew at an average of 420 34,000 per year from 2010 through 2017 4
Slide 8: Consistent NYC Tourism Growth Supports Retail Sales
CONSISTENT NYC TOURISM GROWTH SUPPORTS RETAIL SALES 70 International 65.1 Domestic 62.8 CAG R: 3.4% 60.5 TOTAL 60 58.5 56.5 13.7 54.4 13.1 52.7 50.9 12.7 12.3 48.8 12.0 50 46.0 47.1 45.8 11.5 10.9 Millions of Tourists 43.8 10.6 42.6 9.8 39.9 8.9 9.5 8.8 40 37.8 7.3 36.4 36.2 6.8 35.2 35.3 6.1 33.1 4
Slide 9: Catalysts for Shareholder Value Creation
CATALYSTS FOR SHAREHOLDER VALUE CREATION • Trading at a significant discount to NAV • Only significant way to invest publicly in fast growing West Side of Manhattan • Growth from creative-class new developments (1,336,000 SF at share) –– 61 Ninth Avenue –– 512 West 22nd Street –– Farley Office Build
Slide 10: Implied Value of VNO's NYC Office Portfolio at Substantial Discount
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(1) (Amounts in millions) AT 9/30/18 Secured debt $ 8,172 Unsecured debt 1,680 Pro rata share of non-consolidated debt (excluding Toys R Us) 2,800 Less: noncontrolling interests' share of consolidated debt (605) • Investment grade — Baa2/BBB Total debt 12,047 • $2.4 BN in revol
Slide 12: Vornado Leader Among Best-in-Class REITs
VORNADO LEADER AMONG BEST-IN-CLASS REITS 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 basis 5-Year Same-Store NOI - Cash Basis CAGR 10-Year S
Slide 13: Leader in Repositioning and Modernizing Properties
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 721,000 SF 477,000 SF Incremental Stabilized Cash NOI $ 38,500 $ 37,300 $ 21,200
Slide 14: 1535 Broadway (Marriott) Retail Acquisition
1535 BROADWAY (MARRIOTT) RETAIL ACQUISITION - VORNADO NOW OWNS 100% • On September 24, 2018, Vornado acquired from Host Hotels & Resorts ("Host") the remaining 46% interest in the retail condominium located at the base of the New York Marriott Marquis Times Square hotel (1535 Broadway) for $442MM, t
Slide 15: 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 13
Slide 16: 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 BUILDING 731
Slide 17: Blue-Chip Office Tenant Roster
BLUE-CHIP OFFICE TENANT ROSTER FINANCIAL TAMI HEALTHCARE / INSURANCE REAL ESTATE LEGAL OTHER 15
Slide 18: 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 19: Concentration in 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 Piaget Tiffa
Slide 20: Blue-Chip Retail Tenant Roster
BLUE-CHIP RETAIL TENANT ROSTER 18
Slide 21: 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 22: 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 – 95.5% Occupancy at
Slide 23: 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 • 1,819,000 SF building – 100% Occupancy at 9/30/2018 • 1.7 million SF
Slide 24: Growth from Development
550 West 27th Street | 260 Eleventh Avenue | 549 West 26th Street BCA | HQ | Vornado | Rogers Stirk Harbour + Partners GROWTH FROM DEVELOPMENT 22
Slide 25: Well-Positioned with Existing Assets and New Developments
595 MADISON 715 LEXINGT WELL-POSITIONED WITH EXISTING ASSETS AND NEW DEVELOPMENTS 10th Av 11th Av W. 54th St 689 FIFTH 3rd Av 909 640 FIFTH West Side Expwy 666 FIFTH CONCENTRATED IN THE FAST GROWING WEST SIDE W. 51st St 1290 AVE OF THE AMERICAS 655 FIFTH 350 PARK Broadway 1601 BROADWAY 8th Av 7th Av
Slide 26: Penn District: An Unprecedented Opportunity
PENN DISTRICT | AN UNPRECEDENTED OPPORTUNITY HUDSON YARDS MANHATTAN WEST PENN DISTRICT 24
Slide 27: Penn District: An Unprecedented Opportunity
PENN DISTRICT | AN UNPRECEDENTED OPPORTUNITY 36TH STREET 35TH STREET 7 WEST MACY’S 34TH ST B A 1 N D C 34TH STREET 2 Q F E 3 R M EMPIRE 330 WEST PENN1 STATE 34TH ST BUILDING 33RD STREET PLAZA33 Unique Value Creation PENN15 / 100 WEST 33RD ST Opportunity HOTEL PENN MANHATTAN MALL MADISON • Existing o
Slide 28: 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 29: 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) TOTAL CURRENT PENN1 61 NINTH AVENUE 512 WEST 22ND STREET 606 BROADWAY 345 MONTGOMERY STREET THE FARLEY BUILDING(3) PROJECTS 2,535,000 SF 1
Slide 30: 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 31: Moynihan Office Building Development
MOYNIHAN OFFICE 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 Post O
Slide 32: PENN1 Redevelopment
PENN1 REDEVELOPMENT 34TH STREET LOBBY ENTRY 34TH STREET LOBBY 34TH STREET LOBBY RECEPTION DESK SECOND FLOOR LOUNGE 33RD STREET LOBBY 33RD STREET LOBBY LIBRARY 30
Slide 33: PENN1 Redevelopment - Preliminary Estimates
PENN1 REDEVELOPMENT - PRELIMINARY ESTIMATES PENN1 2.54MM SF Development Cost $ 200MM In-Place Office Rent $ 64 PSF Average Market Rent After Development $ 84 PSF Incremental Rent $ 20 PSF Incremental NOI $ 48MM Yield on Capital 24% Value Created(1) $ 867MM Value Created Per Share $ 4.25 Average rema
Slide 34: 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 32
Slide 35: 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 36: 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 23.6 million square feet of owned and managed LEED certified buildings Largest landlord of LEED certified buildings in
Slide 37: Appendix
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Slide 38: 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 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (Amounts in millions) Reconciliation of net income to NOI at share - Cash Basis for the trailing NOI at share - Cash Basis by segment: twelve months ended September 30, 2018 For the For the TTM Ended TTM Ended September 30, 2018 September 30, 2018 Net income (loss) $ 378 New
Slide 40: 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 trailing twelve months ended September 30, 2018 For the TTM Ended September 30, 2018 Net income attributable to the Operating Partnership $
Slide 41: 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 trailing twelve months ended September 30, 2018 For the Trailing Twelve Months Ended For the Yea
Slide 42: Vornado Realty Trust – November 2018
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