VNO - Earnings call transcript Q3 2021

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Operator

Good morning and welcome to the Vornado Realty Trust, Third Quarter 2021 Earnings Call. My name is Vanessa, and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode.

Our speakers will address your questions at the end of the presentation during the question-and-answer session. press one please tone your time, phone. that star on then touch At turn to call will the I now over Ms. A - Relations. Investor Cathy Creswell, Director of Please go ahead.

Cathy Creswell

call. Report regarding on be uncertainties. of risks a duty date. for forward-looking and Form in filed supplemental relations call on any December are our to third report as that risks, statements. on The these our information call of Thank call, our Realty supplements. Annual during be be a earnings include differ from our during Exchange financial The most Please with and documents quarterly These may these www.neonode.com measures In quarter may Yesterday statements results our the Commission, time-sensitive Please website. the our non-GAAP these available documents reconciliations included Securities and XX-Q Form GAAP does are filings accurate deemed for earnings well the more today's only investor year securities third will and Welcome and measures, section. with not forward-looking undertake certain the package, XXst, to may issued discuss commission. ended directly afternoon, XXXX, we comparable financial release you. XX-K XX-Q of earnings as information and aware Company Form made to release information in these we may exchange that under Vornado financial quarter and today's actual refer to Trust, the as materially uncertainties, measures including statements due our other to factors. this statements variety update

Chairman Executive for call Steven comments and Franco, Financial Officer. and today from Michael our opening On Chief President the Chief Officer management Roth,

available I Steven Our for senior now call the to is present will Roth. over turn questions. and also team

Steven Roth

and about I the morning, about our good City and everyone. optimistic about business. that begin economy, feeling New am saying quite York Cathy, by Thanks, I

This mantra productivity, every But a kitchen the return of, alone how and Key that Vaccination high at work there's office rents. traffic back New The we to case venues It V-shaped apartment are recovering travel most having tenants pre-COVID and to to rates purpose, ever by our their we is want office at that week are work. table. I'm collaboration, see XX%. are everywhere. Public are to even restrictions -- higher in month, rates Broadway picking We're been rapidly. workers their from utilization We transportation With in as Restaurants time go up vicious guessing in all pedestrian is coming little pre-COVID occupancy. has in venues sporting admit down to will get gave and renters our decline up increased is is, we back things process doubt like XX% socialization, levels, city. work close point. that now in returning. at under public office. win and have and will period, the reopened. as tourists this wellness, work course, frustrated market rapid anywhere has a must the recovered the that even literally before automobile than it's taking. climbing are happened transit of work York of City occupancies Nothing jam-packed a cultural off to over Office unanimously around tenants and other suffered to apartments are rebound the this employees occupancy the and and will long be that XX%. are the hearing health, lifeblood culture, no I history. day can international now nothing among hearing the

and of While is the the the clear success. each is to complete me and to unknowable, still, of of still plan be that office office it the return hybrid timing will Company's are center at work

we of a few a moments. will the good future. results cover to trend Michael and business return recovery a feel our throughout our good operating trajectory revolving growth. Importantly, line companies about for We is very and on in had the Many our third quarter, have in the highest experiencing level pick leasing are Glenn since up ever volume quarter as on they reached as been post-COVID and of his well. economy with significant busy assets. and activity, Citywide, are are team deals its XXXX. as all

on, looking volume to in and deep, particularly and emerged our clearly has particular, working talented, leasing in large In second the submarkets, [Indiscernible] tech largest York this be office advantage. and the its New businesses. to The grow. and in of its importance of we York, scale, are robust New important the give [Indiscernible] thriving space are the for New demonstrates is and country. companies diverse tech as to veracious the infrastructure appetite heightened second continues And workforce Our York competitive and dramatic proposal, in their the as continues proposals their activity most clearly and the sector to hub activity

Our is scheduled are the here's occupancies At Facebook's quarter first of and year-end. XX Xth second proceeding the XXXX. by retail (ph) completed At activities we have Moynihan work for Avenue with in tenant employee formerly latest. PENN opening we Train district Hall Pruvale full-steam leases. are entrance the ahead, the the the targeting

Island new construction our Starbucks complete. is that and X/X Railroad We Penn X are Manhattan that of about number store Moynihan reports trending gratified its -- its out is Station, XXX Moynihan Concord In its validated Long locations.

the will spectacular. us. it X The a sides It this Street Penn XXth half will is concourse. both own big [Indiscernible] now open of be win Come traffic look. and lobby a of for take We is

largely At transformation budget, underway first the schedule X, three-level unique Both tenant retail Hotel is with lobby, demolition X users The well of end interest amenity best in large XXXX. in Penn which and of this Penn is world-class begin full will our focused will bought half on quarter high the month, and and builder shortly district, job Street, the other completed out. creating offering X. office multiple Penn on will XXrd the the now Our office be Penn fronts our development site open the Penn of on city. is

produce from free clear, Let will X me Balance is that complete any unencumbered again, And dollars financing cash plan. Capital Sheet. start paid return before Penn Penn a incremental additional and great these mortgage TIs. office Further, the workers, million for by review tenant come Farley Manhattan city. our Farley and X Penn billion and bottomed. and of again, earnings. and X leasing are activity whatsoever. retail time in The certainly take residents, up they on has required District will say, X most will $XXX And for online, to debt Penn increase assets are entirely but Penn to our be rising It as rents tourists about as some annual importantly, market picking

and is grocer locations with game. York region, that's who premier Broadway, to still the replacing Facebook uptick. K-Mart, favorite is deal a recently building, the on Wegmans, their New retailers most in some big are our our announced at note XXX Of top particular of

quarter bags [Indiscernible]. retail food We with also and in this deals luxury completed

luxury the Kristoff Ricci. LVMH Building (ph) brands, Fendi tenants We have Berluti XXX Madison and completed now and of Avenue, Stefano and re-tenanting retail both the with Fuller

happy Q I'm the X are street demand, bottomed. have to in in Madison street detail call. last the retail sales our X activity the our assets A. the business and belief guidance and we of and reaffirm contracted We and of Street whys and updated earnings quarter and know, retail sell As you retail believe rents go XXXX. these of into Avenue discussed wherefores in to this We sold High [Indiscernible] retail quarter, assets and first still

cash For jour XXXX, to NOI expect XXXX topic of XXXX, Pardon we year, million, the million, little rent less of me. du for XXX cash and was guidance do we a collections. not of guided better the NOI $XXX $XXX for Last million. still cash than than NOI is

Collections The collections of the at for You during should rent the on have know are crisis granted nicely this that the that topic number Company-wide growing and at since du today jour rates. tenant we been limited occupancy XXX%. at has deferrals rate that also and rent employee a running while essentially summer. XX%, we now been are week, XXX%. are now essentially is

lots information usage building level to of badge many as other about harvest are and from able statistics employees in, technology. We our operating

Our makers enjoy buildings XXs. financial population types, by -- in our buildings occupancies the and market populated traders

laid, is Wednesday. in week October each another employees factor number individual of And to work day who of busiest was XX%. came of the unique the month the factor, Another

diversified or selected sector respondent, leader. as Estate on sustainability where we leader survey. Sustainability the spend all to the office for or rebuild me was GRESB minute Global let Vornado XXXX be GRESB global Benchmark, a recently Real Finally, a in the continue

GRESB XX date. was Our of score to highest score our total

out distinct leadership. placed his who second Thank We of Egan publicly Americas for locals companies in to and responded their GRESB you. team here. our most including also Kudos of to the real XX Dan estate

Michael. to Now

Michael Franco

Thank I markets. comments with quarter you, and Steve, and few our results with then capital start leasing and the third good on everyone. morning, will financial end a

as With City business our York New is his described financial occurring in remarks, and Steve so the in results. recovery opening

The increase for to FFO real increase a or year's [Indiscernible] as by sort of have the once next every reimbursed year comparable tenants if for of estate quarter compared will. you XX%, an cent but per share, quarter, was cents XX cents largely XX last Third is XX%. increase, been issue, adjusted timing would third which XX year, tax X

to of $X.XX Avenue $X.XX the from release program have of write-offs X. in December. by following offset the our said, related mentioned on from these beginning We related our And earnings was commencement and improvement increase value tenants on to the leases, $X.XX $X.XX receivable our following back One $X.XX January partially from The the to an And including the I savings. increase new $X.XX bridge from miscellaneous August. already the in and will the the $X.XX overhead of triennial as X, decreases: expenses our resulting from reduction period. is continued from expense tenant the billed supplement which by issuance, interest driven from in straight-line accrual G&A rent in estate impacting activities, total largely are tenant MART, be increase from due by prior of a of our last new partner's variable and tax real The The partially from offset Page lower items; preferred provided quarter-over-quarter interest $X.XX acquisition Park tax primarily an XX% expense increases assessed businesses. other XXXX. in financial non-recurrence of page

earnings variable last which run expectation BMS call, With is totaled as of income. beginning up in are of comparable fourth ahead respect We continuing at the year share well, several recovery -pandemic quarter. quarter. discussed on a about city XXXX the third returns bookings per the the performing pre quarter results fourth see as our quarter Our year's quarter had our our the $X.XX this is picking to are healthy non-comparable to is fourth in levels. businesses, we as rate for and near Signage we with to now continuing the nicely of items

NOI return Our travel in at the 's most back for for X.X% the garages been Hotel to the to estate tax expect full expense variable with restrictions. Company-wide primarily successfully third would XXXX. real additional businesses XXXX. number Penn have cash quarter, mark the the in have still of third and be year's income the during by albeit of over the quarter but trade finally, same-store X.X%, from with And we aforementioned place, than our next recover lower prior quarter. increased taken fully a the attendance year shows Other income, should due

York X.X%. was Our business core New office up

same-store on to estate lower retail Union Avenue was new leases Madison real XXX commencement Square primarily NOI due at up Our South in taxes. cash and rent X XX.X%, the

bottom quarter we occupancy office office ended basis for which believe occupancy. represented points from second the the at the Our our quarter XX.X% up

we leases consistent figure with this from quarter up and occupancy the was at based expect the keep signature We out Retail here in for have second the XX.X%. negotiation. moving to on

Now markets. turning to leasing

more leasing the than York with reached upward trajectory. square pandemic highest million volume during volume its since continues feet leased its onset New the Employment X growth quarter. of the

West given coming of quality industries, have leases square stabilized third buildings, is high-quality has And XX% being The even mark-to-market absorbed to beneficiary tech a Quality The new in XX% quality be driven enjoyed square group, quarter, invested GAAP leasing public in market, of XXX of and removed. the XXX,XXX signing resolves in our sub-markets. of continue the happened of cash our an IPG's excess XXX,XXX commitment in of landlord, district, totaling of to over the led assets. a We -- are largest transportation The exploration. volume X.X% and Street. early has which quarter, important years was sublease XX space to focus feet, of service strength assets, all rents and reaffirms $XX and theme action the the to the tenants concessions highlight also city the and starting the average with in capital feet. or of square what the of pandemic. redevelop square solid to by And our deals for for begun we renewal which done flight continued. major leases XXXX positive some of the respectively. was for for XXrd at office deal X.XX% to improving and accounted Notably, it past and transaction our by financial be feet we per out the the within rents foot and portfolio This lease to be expansion access for lease main Asking Penn XX majority XX activity. largest the for was all the XX,XXX

XXth Google, building also footprint Importantly, square a we total floor on increasing in executed just the expansion their under full XXX,XXX with feet. XX, to in Avenue,

financial the cater thrive. which users buildings to continue Our service

feet square Park XX,XXX XXX Avenue, feet deals square at XXX Avenue, XX, quarter, XX,XXX at we Xth square feet XX,XXX completed Madison the at include Avenue. and During

portfolio busy are across come. our We with to more

pipeline is leasing Our very strong.

million additional feet or feet trading X square with advanced have discussions. in million X.X paper an square We of leases negotiation, in

XX in quarter portfolio. of feet only office XXXX, total million in remainder X.X square representing for X% XXX,XXX modest X. feet in XXX,XXX expirations total, X square last Penn is Our with the is was feet of due loop XXXX included Retail starting and feet, significantly the third -- of Penn expirations activity quarter are to at The And lease signed this previously largest GAAP office XXXX Penn and only Group and down positive leases, transaction X the announced very renewal. XX.X% cash in a and is square Penn XXX,XXX square expiring mark-to-market square and for total per foot a the in average quarter square leasing XX,XXX Interpublic rents the with totaling of $XXX Broadway. XX.X% lease foot respectively. Wegmans XXX X. This since of the XXX,XXX with which of

retailers we In with and deals giving Stefano market Building addition with four the completed luxury for best up at the the of Fuller lease Ricci, the the the to there long-term reflecting us retail locations. recovering new lease

to Lexington, with deals We the banks return also completed One reflecting at Park, marketplace. and at the of Citibank One XXX Capital the

of in in find York as with addition interest to Investor bottomed the has the recent picking Finally, other couple value a now capital a compelling. sales the office again market see New in strong market. assets rebounding The word several is is city clearly on investment the relative markets. they up and sales

the pricing X.XX% take to the market On refinance tight our attractive be we the our size. In X.X% markets financing in we've we money. with low preferred debt also of perpetual [Indiscernible] very tighter debt same the is refinancing seen, advantage rate took A issuance of for ever of as million, preferred to continue in shares, September, side, a the $XXX rates. to as advantage active and

credit With cash, including for the in our turn a of it our liquidity restricted billion, I under billion is billion current facilities. $X.XX Q&A and $X.XXX will that, Operator to Finally, over undrawn revolving cash billion $X.XXX $X.XXX strong

Operator

you. Thank

follow-up will session. begin move We caller. Each ask allowed a a question next question question-and-answer now the Instructions]. before to will be we to [Operator caller the and

first Korchman We question have our Citi. Emmanuel from with

Micheal Bilerman

partner. on I You of morning. out It's Maybe and can buy if obviously to Park just putting good work. start Manny. to joint Hey, appetite buyout What's go capital venture your the did Bilerman with your here Avenue current assets? Michael

the Michael, pursue market are participate talked increased about that want you that or activity capital And you are this your little talk point you about you all types just so maybe external, and And something to just property the a look bit at development rather redevelopment in, whether to types you going go activities. if hoarding of to other office. is just at with than

Michael Franco

look -- deployment, Like marketplace. in Michael. the capital Good the we of everything the Sure. morning, terms at in

As you with long-term low been pandemic. sellers. transacted as basically the and little at pressure there's rates rates XX on of for first frankly, very know, probably little been well, X, the And months there's short-term very quite that's

seeing So very little transaction you're activity.

You're now assets say, the universe, by and use leverage, up in pick although that starting buyer been being players has to still brought see days. would the early with that I to-date, driven generally out higher we're

we money compelling we look would spending the frankly certainly that it. act to to in we're compelling or So going asset to doing do would those the lot We opportunities, what and so capital if look, it and X% act in f. to both of just at more it on so those, Penn, to and we a can attractive yield lease to to something up buying buy just after going find prospectively on as than continue is another been compare to interesting, stabilize we're a extent we pricing we continue not we Penn what we're see be far

continues date, now price still We assets aggressively, volume is activity have the capital to of quite do down. to that. withstanding to the But capital

Emmanuel Korchman

can then, And you - just

Steven Roth

on. hang Michael,

Emmanuel Korchman

Steven. Yes,

Steven Roth

what an we So [Indiscernible] myth me now, accretion buy. mean, I just know to let look, it add be Right the has everything Franco to word Let is fails is, that would me just marketplace, our bit probably -- a stock to I in cap the rate. there in what don't give X% said. that Michael on little close

Manhattan sense shareholder is our dilutive -- an buildings that's %. to buy the required to buy could service consider cash-on-cash capital way, wealth not these for we're that. the all sell we [Indiscernible] math the - there If -- office assets value, we no sub-X, would obviously so saw the when do an at makes turvy, these that stock would way of topsy by building, you X%. is in in maybe they're for we we year-over-year, of we deal we can't take selling that even great to by asset and would empty X%, when that. that you Assets that we for And do, on it Anything going to thought where be create do a might -- could

generally grow transact right speaking, for it's -- to now. difficult very So us and to

have And that have side in our so have and -- of very, We on liquidity. -- capital balance that's we what great Penn to spend we opportunities the the on is dry do district. that do powder balance sheet, other have sheet a we very, and very assertively do do

Penn right the main is our focus that's district. now So in

I'm doubling said. just So down with what Michael

Emmanuel Korchman

bit Well, pursuing Penn tracker? in would that's to prepared everything know I Steve, stand where ready probably a and little longer terms helpful it's like the of the do on things just district, and go. to follow-up, as than have you a just currently

the with And of also externally playing the of to internally, all all and to sort the new all that terms update timing is new lot governmental of out that a in an this a coming getting into tracker done. are How bit just maybe give preparing financial So you where of of partners us little marketplace? seats. in getting

Steven Roth

committed understand to, question. one district, our of and individually on Penn what of of and be I've high-growth hand, invest business through our both for tracker. remain those. investors that which remain either core queues allowing stable remained the in to our thanks or committed is to let's I able the to our I between committed Michael, And segment then development business, to those

officials, command create we remain excited X, believers committed will PENN We district the we values and premium seeing well about. do we government with have would that along it. in number will couldn't -- with launch. Number required to pricing, we a more what that to to X. them. are recognize the it paperwork and will be We have are we are is very, matters very, that we I and very you be you senior said pending that in create complete and district, is strong turnover what enormous a government it, in

slide as maybe to as going a plays we're all that obviously the so out. bit little And --

We read project a analyst and I of I'm and I'm The that district that to surprised requires item is what's are in we will understanding going the be the any some the in as trouble get we attention. means I'm believe have me the Also, our I'm community, surface optimistic is point leaders the very will their multiple let the district. opposed business-friendly on. be recognize the estate investors as at constructive, that to potential with knock idea I've will my been that have of the the believe say What how my career, that amongst share the had But skepticism this, that, demands off able Penn is of be who real district. leasing That's almost in we to having starting to their [Indiscernible] -- attention, positive we judgment stock Penn as [Indiscernible], investors that. from view see, basically judgment of thing next more that is mode. about separating a to about values. about I the conversations it. There's new are do something and Penn at very this government and we ever some about enthusiastic so

really little And counter not to the have no slide we smashing tracker, much. bit, timetable. it's too We a think going to we have party be in no It's successful. going

Emmanuel Korchman

district opportunity. the the of everyone And investment think following almost represents. I've Company I your appreciate an those of couldn't I what other comments it think Penn and watched that lot you've skepticism area the big Steve, it's part the for a recognizes things. community, that I think been out list the been I of, and years transform. always well, of called through XX go I And (ph), we've kahoona

in, phrasing core think that is big the have you in in I same similar. concur even that I It's assets you though it business would development this your a with are opportunity.

think all able think your highlight to comment? highlight. been project or give that your where where But comments something you the to should trackers that I there has want a things I Is typically the point, that's make much be you that used to business money to than Company fair investors parent more has going different shareholders. private comps markets endure is Vornado to value, versus in are to it's and other terms other a of want in about that the private up don't to believe part to to that akin

Steven Roth

I'm that it. think I all it answer at the understand follow as was me. of show-me And guess And I the I is project. said, so so believe the like I the comment really I looking skepticism. mean a

We you. will show

Emmanuel Korchman

Great. Steve. Alright, for the thanks time,

Operator

you. And thank

from with Sakwa ISI question Evercore next Our is Steve

Steve Sakwa

I morning. follow leasing on your wanted robust pipeline. Good about Thanks. I first guess just to the comments up Michael,

I guess thanks. some helpful, and a the versus renewals a some that maybe for Penn how If is on provide kind of would or forward of renewals. new current much much little that is be you developments, other activity how or more much split could is for vacancy, on color just either of how of X

Michael Franco

why take all Steve, Glenn color yes. but it, let to some answer on you going give don't I'm Glenn, that. the is

Glen Weiss

Hi, Steve.

everything. So it's mix very a strong of

in both seeing all throughout We're spoke. sizes, in the and all deals it, everywhere. in and throughout up [Indiscernible]. the picked shapes industry well activity deals, different since core the portfolio with Penn, [Indiscernible], New of really all and have new core strength in strong both expansions portfolio, Things portfolio, renewal different Penn

Steve Sakwa

as years from the and And you're what space look perspective new ago? from how tenants carrying just when do space deals is per densities employee follow-up, talking the particularly space on like maybe sort about compare to a maybe planning, to a quick deals needs, the they and two of

Glen Weiss

Sorry, last this we've in I all change seen at couple of density. calls said no

cubical space, of a maybe But Growth, seeing space, for generally, All are People if recruitment it's and planning new communal collaborative fresh at start. were talent They are future. You're versus office. it. different pre moving A acting no as about -pandemic of forward. lot the change. them back mix times.

Michael Franco

your commented every there. comments of Steven, picking know, in in as reports see in lot the was booming, And pre-COVID. than stronger York look to on etc. or when want from to of the of of a up to heavy people of or as terms people and appetite voracious a bit literally on activity tech different a a on remains And we're But Steve in in questions mode whether types now be pipeline, all sort types board, the it are points at then we users. it. going building, the question think You put recover, we little at New the the is seeing office, financial there the the activity is whether there we're skepticism analysts, I Steve's show-me up is comment,

an -- very reflective reflected are where mode our have in doing they're well, You economy companies and in that's pipeline. growth

more companies sending I the think of to to the want is very New leasing market a to and one going the here, start, going good to continue much across Obviously, but this I portfolio. quarter quarters. those was strong think there's New York locate next is to signal in you're posted winners, be get queue York fine, be our that several stats a going the over see is

Steve Sakwa

-- And Great. I then guess

Steven Roth

in you the sister all the companies extremely, the and market where our are stocks, at look uncertain my they stock and morning. extremely how in and were and they press the the mind, good sentiment as affect price -- worried depressed, will they pre-COVID. home, confused, the Steve, There the it doubling that Look, stock from about office were CBD everybody in from is work is, business. of industry, the

we X, a things. We that. acknowledge We in well, Number actually two -- things. believe Number Okay. X couple believe New York. of

committed because seeing New that committed scale entertainment replicated the leading services to are mean, or and leases York, need tech field New of engineers months, XX you New body XX, to I media X the they're stay for just space. that York. etc., York, the are in committed signed be industry, X industry, industry, they're people in the grow fill they New the financial the if can't triple take tech dollar XX,XXX in the trillion in to they've the York of the of and the for industry We to That's double last firms, anywhere.

You Austin, New deal the wherever. scale policies Factor all, that we winning business can't with work plus number leaders understand grappling X are that's X. their York in or the day get what The they with factor every they the Nashville, that it or to they three day, number be at continue they're office going space. is to talent pool, is the believe need office, the going be office quality days to it, know they space, the what hybrid four Yet that solutions now. In they lots whatever is, higher in days of office, are in with that it fact, grappling of

aggressive economy And in marketplace. talent, very that skepticism space of demand recruit boys as marketplace industries. the big the and in to from between finding for we're talent and a retain of work-from-home the robust in Just the the so uncertainty, their the major each the actually

thing, -- as back we so think they are will the and that some but the people are they businesses answer. home from work think be will really we number grow by that the the people it, the betting office they win, around everybody, their nipped work they the That's it from that what days that's hybrid some serious week, we edges we our we're tenants know So about talked people think want office. of so a in way the to doing,

very-very for are We market. space, securities with that's the pleased the notwithstanding the in demand uncertainty

Steve Sakwa

how could third think, -- Great. I be in the shape how second this quarter? for had guess, to the and point was the -pandemic? a the you I bit the quick already? you fourth know quarter. big any next And And mentioned a shows little books fourth back Michael, year And into know sense just up moving were quarter trade that, pre I I you think NeoCon Do as at shows to quarter what's do as -- in question. sizes on trade have last I

Michael Franco

shows, we since X shows attendants. there -- and were Armory trade larger impacted had X particularly restrictions, New We the show including produced internationally, which Steve, [Indiscernible] in our July York. Obviously travel

say probably the would closer are we year-over-year of on historically. put they working were were again. positive. performance successfully, was But got I obviously, what And levels they machine to half So

a trade of on Our expectation going to see year. next substantial set full We're recovery. put if shows to is going that we're

our do as being just team, with in that businesses a trend variable up, come the realistic, dollars be think but spend million to the don't getting I overall, year, several we people today, now year. are want it's 'XX, fully give we we little next I don't XXXX, think a and decent the probably trade it's time travel just to our working, a to stabilizes it, fully is recovery think obviously lot shows incremental. 'XX used opened machinery And has you we line project. international before we refine shows that back back see currently -- that number a think guess. contribute trade But we'll because in to a will next number don't need

Steve Sakwa

Great, thanks.

Steven Roth

the the our overriding fact trade that these is overriding to are Steve, important shows clients. desperately Hi,

each As the individual major for of sales these activity companies.

we going okay? years the predict pre, reason So it main a our and stay important quarter. show important, back to this shows business out, to was in trade get budgets the couple because that a the to trade where really show here our of is this business will quarter, is what's are So are next really But can't they happen to clients.

Steve Sakwa

Great. it. Thanks, that's

Operator

And so thank you much.

have We Scotiabank. next our from Nick Yulico with question

Nick Yulico

everyone. morning, Good Thanks.

going leasing Just activity. back to

occupancy expirations how talking the office in strong, not City year. think How York being it next could we trend, much there You're pipeline portfolio? New preview about about should particular, is the and that us can pretty give how about in any -- to guess, I you

Steven Roth

Glenn.

Glen Weiss

Nick, occupancy our is action have. We have our back, XX%, And the continue going point to Michael going improve his we so Historically, where we way it's mentioned the at at COVID. on back were remarks. -- based now believe quarter-to-quarter we we think we inflection in up. bottomed. getting We are and on to was Michael We're to hit it all it's XX%, XX.X%. due that and feel office better We're

Nick Yulico

the your Okay, thanks. development your -- And I disclosures of project, the a then, going second And city, then, NAV I I'm and I thought prior talk wondering about X, there, is and district, still question how about think you then foot, of XXXX. per should guess value Penn should number -- is well in Do about the prime where and about about on you that, a $XXX just a for about lease the ground Penn coming on as Penn you way that Penn $XXX think, Hotel think back have estimated $XXX being reset reset -- in about site X? if the zoning to potential that guess. we in at which how million have at zoning is we good any had, Penn the value to zoning, update think foot land Hotel there on the that's

Steven Roth

it. with reason be NAV. comments. our to And to continue We happy see no no have in We with that's arbitration, rent to number the raise respect we the

Nick Yulico

about to of that street? I the being think Okay, about terms Penn number for a mean employed I $XXX was value that in reasonable right should we X across guess think a is foot which just Penn Hotel

Steven Roth

format. think that. this talk either important would it's going way to internal you terms of in not calculation. am inappropriate us not I financial to don't for about going It appropriate. And I'm be lead arbitration I a do very in to your

Nick Yulico

be reset because that some reason it to project, point Yeah, ground Thanks. supplement at ask you could yield value helpful reset there. footnote in Okay. be material do the potential about understand the would I have the is land talking on the impacting value the so

Steven Roth

footnote and through process we'll is the I answer unknowable obviously, and And think best. the the in final appropriate. is disclosure the we'll hope the for

Nick Yulico

Thanks.

Steven Roth

Thank you.

Operator

next Feldman our of have We with from America. Jamie question Bank

Jamie Feldman

Your your what going I'd And back good think and you expect thoughts go could on like you morning. on like here? why? forward. retail. sounds should we bottoming Thank you to comments be It to

Michael Franco

were think was seeing on in the retail ground on comments Obviously, reflective on. few shell on streets, there Tenants are year. a I the of people not we're look, from Jamie, and going the a much for high what were tenants. vacancy was

Now Fuller, events so think people up, off again, far. it's and the the that's another we happen. line which Broadway the a opening, sub-markets and prime to. things, quite XXX, for to XX shot fundamentally, sub-markets, is place of the the there at in continuing a is the like from shows, tourist that, will to kick spot quality out is clearly flight about And the beneficiary at interest that's to a sporting the International all and like more want that's we're attendance is being obviously, and inducing a and good last And and quite all to Xth now pick again, be the million By to what right? But city. retailers been the people of from to are tenants to working seeing come both we've in the Retailers tourism inquiry a there, expect actually snap-back, transaction opening the place indicative know out sub-markets, happen. and a best example, those term city are should up, with going arm way, on from at been week, demand. see because would next retailers. oriented are that's down seeing shoppers go occur, tourism, the in ones which the other for it back in out locations machine shoppers that domestic so tourism of there Avenue there's to we're want Wegmans there, talked we've we And you again. obviously and albeit that's But expect to even streets, Square, seeing dependent you're on rents be for back immediately. don't Times the

discussions I gives there's so to and make statement. the underway think, That's action what us, that occurring. are And that's that confidence

for rental getting you arm going be think before wouldn't decent activity it's that I take, happen think transactions, pretty amount near-term, Activity of the has shot that'll to I start and Steve rise before getting I we but start once a pace market. think, some movement the was rents to I clear. to expect of happens. a in

Steven Roth

or is not that this for to may to ago. a be take be recover X years is peaks to to going But never to it this V-shape be X rebound. going clear, going recovery. rapid to This a the And years recover. multi-year we're It's market

Jamie Feldman

And Thank you. Okay. then I -

Steven Roth

lived was this never economy. And bit from The [Indiscernible] total the it etc. way. hotels, COVID was The about recover. happened most volume through. that airlines, it shutdown will shutdown have before. global monumental. any and suffering retailers, think probably that's of dramatic a The us I of mean, ever the The

of retailers And very was into robust are shed thriving pent-up the after in stop from a now for cold go interest from People very, better first are liability. pickup succeeding. there is stone part the it. are we The demand. life better The that went demand. X everything, The retailers actually market seeing and understanding shell, and to years. a reaction the People are

in pay. will aggressive the increase seeing recovery slow pricing we're a people bottomed, we budgeting to We're are We recovery, an that and are are not willing be in paced. that underwriting

Jamie Feldman

Okay. you. And about then the think you Thank I -- if guess

Steven Roth

retail to we I'm the And remarks. sorry, prepared our reaffirm continue thing. just on last in guidance my did

Jamie Feldman

going Right. Do more or do in Do see see prepared your you the selling you buying actually you see -- forward? you I know yourself mentioned remarks, sales. yourself

Steven Roth

to open are certainly buy. We

highest-quality either a have will the for the around. availability was. offering the kind at and it that And expert there We give are [Indiscernible] we sold, the prices, certain X that very we probably feeling yet. I -- been assets hasn't kind you buy retail me or of sold attractive most let that in said we

actually assets than those X, negative Number $X more year of Okay. losing, are we had this income million. a

in track those press the tenant consider. tenant to in the that accurate have there's There release properties occupancy a vacancy swing X is XX%. that is and course. one was said store. is we that the think is basically was But a therefore one That I choice rebuilding who you XX%, of

swing and know years tenant. It's of couple to in out a if that so for we swing not a is tenant that And pop-up, going sure you it's that take tenant. it's leave because a

And is occupancy XX%. out, think you if so I the take that

up those of capital you to so a capital greater that And by into make that the it's take The account them, $X properties. take be goes X required -- up -- and would you add earnings so lease you XX% if then total away lease lease than million. earnings the -- almost we the when are that to the job. are the way, the have negative If if up -- we

take underwriting time, take is to you and climb You decent our -- take how to return. the will up long it a

business, strategy it's that, Our judgment those a for to proper was sell our assets.

think we there's the of could are so better in, unencumbered, the proceeds assets debt $XXX where that that use. bring assets. put million new I no And $XXX will the million, we on cash, think, to

know friend, We and an it Madison the other. each substantial about very selling distressed we we're we friends, are buyer and are history respect laugh a it, they a intelligent we extremely to to making buys. Now, that, assets Avenue of who have offshore

XX-year expect believe have that East well over think income, haul. one There's frame Side. be etc. those of point. be us, a the Upper one will seller years and do was in that rather isolated properties assets. York. in make that Avenue We that's holder than will the And the terms in worked buyer Avenue was New very XX high Madison we the There will time last that it sub-market buyer made seller, of luxury a and to the Madison a do ago, oasis well. us satisfactory of judgment investment, money but a We will That our was

Avenue, lodging. all tourists XX Over walking or effectively city there lived brands of an of stayed was had New in so Avenue all monopoly, shopping York basically, customers Madison on that, Upper the the oligopoly in the -- distance within and obviously and in a luxury East all Side and Madison because the -- clustered luxury

Xth X sub-market for now is whether brands. Village, every in in with to store deleted Tribeca, or one also parking, that Avenue Over is one enormously. enormous diluted been led to enormously, there. been thinking West in continue or diluted Upper the the way, us these years so that be sub-market, that having Madison over has X the of or and Avenue, one they [Indiscernible] West those years, -- that Chelsea, totally than of here the a different stores, It And seller that or the attractions. was Times obviously Chelsea socio be every have Avenue it thriving, now instead has -demographic thinking Side, assets. Square, the customers be by which Madison in

Jamie Feldman

to as brands? do luxury So work, middle-of-the-road actually about more you no, think you you're capital putting still type in go? Or the think thinking to is way

Steven Roth

We're agnostic to that.

[Indiscernible] love investors. not are We our new assets, are Square which love our retail We assets. really luxury. Times with We

customers. And agnostic retail business. so business, price the We're not landlord the point in our we're of to the as

Jamie Feldman

at And debt Station, Okay. on the ask, I had assets could of development talked you've any no Penn if least the about or just in

Jamie Feldman

using think redevelopment about those assets. you permanent on there and put more What's the projects those plan funds? how do capital to

Steven Roth

we will it's Penn permanently And, what -- start think, obviously are -- for we if financing the those do. a We plan those I the we growth of will very having have assets premature unencumbered to will into We're for the now district. assets finance moment. what comfortable how getting

secured unsecured are strength an of debt, of a important that. and Our debt, upon mix of is balance lines based unencumbered part credit, sheet assets

comfortable more worth I money, don't come of having credit even the opportunities available with an know, comfortable having a many those We're assets comfortable very up. are unencumbered. of assets we're very amount dollars. as enormous source those now of having, should right We're those assets So billions

Jamie Feldman

it? tracking the that Okay. stock And with does encumbered, I assume that helps or not to have with nothing if do they're

Steven Roth

have own But when launch The we'll plan, get tracking which will stock to we financing back - the tracker. its

Jamie Feldman

your time for Thanks

Steven Roth

strategy. an is tracker the on that debt low important part of Having

Jamie Feldman

you. thank right All Okay.

Operator

with next John from We have Markets. our question BMO Capital Kim

John Kim

almost renovated last at ago, and the [Indiscernible] not a the by there's you. surprised to years surprised taxes enough assets of tax level occupancy tradeshow years, the over morning. if Given the amount was I were and are increase two I increase? estimate but you lot the of you asset. half, a the by realize Thank disruption of Good year the been there? on the wondering is X of you backward looking,

Michael Franco

XX% taxes John, be of that. look, would magnitude We I would you're increase. at there say surprised go anytime your the knew something, up an

the alone. entire magnitude the We were think market. surprised I not

most high, articles on have impacted large it, think there's about but don't we written certainly It's been appeal we're meaningful as any of by beginning it be than is we're the market, we're that increases. no we frankly. landlords tenants of in going reimbursed been I that, of what a it to similar is. the said, by balance how the And XXXX. think different number -- And will promises I the make of portion

John Kim

a you reimbursement thought attain of from your gave ago increase years indication of reimbursement, few do you could still you level A that tenants? you like you feel tenant could tax collect XX% the that as

Steven Roth

Yeah.

to it's not neighborhood. in is I down XX% now, think like dependent incorrect I think but obviously occupancy which It'll assumption. be the a on that little XX% is a building in bit in the

John Kim

Facebook. is on question Okay. My second

tenant? XXX them Verizon called accommodate a it's in to Broadway, losing expand without Now do York. at I'm can so wondering Meta, looking I'm expand New they you if as

Steven Roth

No.

Steven Roth

nothing? So the net impact would be

Steven Roth

going the net and it. pretty same. these in the pending a clients, speak not moves But tenant detail are going out, First anything. if really really the result important moves to are much a get about of tenant will We're these into of not obviously, and We're all, be to transactions.

John Kim

looking in you elsewhere Are your portfolio?

Steven Roth

Say it again?

John Kim

your elsewhere to Facebook Is looking expand? in portfolio

Steven Roth

comment to with or transactions going clients. not important We're pending on Facebook

John Kim

you. Thank Okay.

Operator

you. thank And

reminder, [Operator Instructions]. a As

with question is next Our Alexander Piper from Goldfarb Sandler.

Alexander Goldfarb

questions. is good for Steve. about the for clearly mandates whatever years. you there, you're thing skepticism, to of holy Station when is was it's be the about years going for been fund can spun back confluence the shareholder the that and has by you helpful stock Westside. whole those guys out to Westside, redevelopment have revenue VNO can a to that, the But earnings and gone tracking may you're enhanced able a be growth the And we've Michael's to and XX-XX have, held Station Penn has been Want there, Hey, between the to growth tracker, the also, if not shareholder, mean, who And now, every for go past appreciate out -- this from not if I VNO looking if grail and where Morning think Midtown around hold South you that, at Penn I that's you how VNO XX, morning. is XX talking far the down own opening shareholder that what's original sorry, or stock lot lease of the from, on in tracking a going come may been up.

all model that actually able versus upside and guys where that's think the have existing area right out. tracker a are [Indiscernible] an help So grappling, this this I how they does people is pencil which shareholder you be to been can now, own laying

Michael Franco

if I obviously sell saying. tractor, not you goes to that mean, Well, without benefit from it. going the you're

Alexander Goldfarb

own But of can some firm because -- not mandates. every the tracker

Michael Franco

at buy sell Penn is calculation, shareholders the the that significant It's We've it investors unhappy But say, another jibes it, with keep are is when the by we investors unfortunate fact think the the think actions. our we'll margin, that good what of enormously district will about tracker. as transfer. And Said that We some to way, be some future have done enhanced can we're looking that greater have the you it. the is it we sell at a we or think to

Steven Roth

if you're not believe some in as that understand a not pure number, think play separated good the Company, it's as saying. we it's will have be is the enhanced about by an We're it's what the the greater Penn what for larger is the fact district. idea. good we'll funds to They We But where handleable. unhappy where are we diluted sell. outcome large it's

Alexander Goldfarb

Alexander's a it's those just not the But still on claim It's direct, I assets. physically it's synthetic, not it? synthetic just mean, laying laying -- paper it's like isn't It's owns paper. to correct? claim a it's a which like it's Steve,

Steven Roth

-- It is, is as perform. perform -- But assets -- tracker it the assets The yes. it that tracks as as about. the is the underlying that that's answer should arguments they

Alexander Goldfarb

Okay.

Michael Franco

think I is think actually you Alexander's about -- an analogy interesting if Actually, one. your

Alexander's The you about an externally owns public is X/X. entity. If Alexander's, advised think

Alexander Goldfarb

Yes.

Michael Franco

-- That the [Indiscernible] substantially Company, that stock extraordinarily well. that it has done from time done has development at when you really look in

time, And Penn is, it. I the X, actually, but we've think just it's quite similar, probably not now owning X, that. been corollary We're the than more it We've lot really so talked with here And talking X/X Farley, underway and, reality of long obviously, less the the public for development it, about a is, the about yes last years. in Penn -- right? the commenced right of all a couple portion behind of a it, in of

pieces. of to even [Indiscernible] the investor like way, this are both dedicated everything down in forced some of the for Penn not to own own it, that managed else. and way, doing, no We can net will up higher-risk, entity trade is active externally will be from of city side. sort we can distribute are when our in to -- most of directly District, of obviously, Vornado, a tracker. But decisions know like as not part to, what talk you the just goal -- there have similar are terms the that companies there's And have and that what's advised would in a selling to fact it. alluded some funds. it's investor no there's settle Vornado there's in By There prefer that tracker to going only sense them, if that tremendous that shareholders, going them. sellers, be By a out of investors that higher-reward, in well. the of makes shareholders is the We buyers Alexander's. not to of some they the will more about this in X public that by an think are And going about so that we're specific that like investors them, on There's sell sell. like it you very funds think believe that index not demand. of that the and with Alexander's some District, about up on group sop other we also Penn in And is for all the Any of there's belief the the that be the of but the to very to continue

that trajectory, the think good your analogy I a analogy, very coming in Alexander's development once that [Indiscernible] terms is commenced. the back, of

Alexander Goldfarb

Okay. much tries she state off look James. is And only to Hochul Either to can back city tracking mayor more there, candidate understanding is obviously the then the as than general, clearly you left governor's business, race, do the we better. Steve, prior. veer But to the more of when going race, attorney politics, much pro the at definitely the

going up the business are angle? productive in end and be York with look at seems at as what's the look be it you the estate supportive of you optimistic the eviction, state level Why will in rent on at as to real if election politics, probably New good So -- it that state-wide you the control. mayor and when taking opposite

Steven Roth

to with She's about separate done There for believe order that, Michael's tracker. JBG can't need and totally the have prospect, have with get development do spin-off, we can't into team, she fine moment and that's question twice create Smith career. in Edge, it. I We I to will it. met of that entire going mean, Alex. a of and an And would a fine I to back leader. than we before which same separate and trade-offs and a everything. business. for our are the on to governor. she perfectly your supportive entity, understands answer have Urban the here. for team, management Penn She In people be separate to other a not an a the example, Board, legal very New leasing totally get what's understands we a can't untenable untenable, district, a She has That's want -- a that answer being totally we've career politician season doable we separate I example. it's question, York, with XX-year

Okay? And the also it additional would be -- very overhead would be enormous.

trade-off okay. we be invest them is whichever board, investors use same we governance, to want same Company get but the our to the able the to of same that the can can they part So both, or in team,

enormous it be a of investment. York, for of will and thing of Michael investors if we're successful for same a there New So in into securities, is margin, it's York, expect very continue coming terms who think Westside new actually many to doing be for both interesting, as a which we said, what and But will [Indiscernible] the the in I will enthusiasm the the the separating did we New at margin, investors hold have at group, district as tracker. level actually nothing the that of Penn

Alexander Goldfarb

Michael. you, you, Thank Steve. Okay. Thank

Operator

we Ronald Camden from Stanley. And our last with have question Morgan

Ronald Camden

more curious retailers in from focused Two is the at quick what looking on? terms going One today, just they portfolio, space When ones of retail are are back just me. commentary. the just occupancy maybe Thanks have forth? what's Is and that costs? so margin? it decision gross levels? Is pre today it been making for Just -pandemic retailers different Is marginal may traffic foot to

Steven Roth

cost been and little always they that than they it's forever. as in can are store today same were. is the sales different Things particular a versus the versus what volume rent? structure do It's the a

is what cost. at were the wayside. today to the be, individual [Indiscernible] Some volumes number and stores money for want index health be will expected gone they're in the -- Retailers the make what versus Manhattan That's store. by sales each brand. flagships advertising would occupancy The

Ronald Camden

typical then color in be different their Great. on structure? portfolio. And of be anything if there sort Wegmans could about would the the any follow-up I could just Is structure lease on what the versus deal, helpful. a Any color just opportunity

Steven Roth

it's The of I is with excited very, is And a Facebook replacing a traditional We're think with huge significantly rest don't the opportunities Wegmans, our that's a we're there there. building. long-term in higher, -- all, Broadway have add Kmart And Wegmans rent it's other first to I it. replacing lease. about portfolio. and lease, may anything the very XXX uptick. We're of be

Ronald Camden

it that's you. me. Thank for Great,

Operator

[Indiscernible] And thank you.

the no We to now turn will closing I further Steven have remarks. for Mr. call over CEO, queue. Roth, Chairman and questions Vornado in

Steven Roth

at note final before final end A she Creswell's that Creswell's before - her friendship. want everybody this the we And call is to and Thanks her well, wishes We for retires. -- I'm is see much. of One many wish that her you. years the and service I thank well. sure Thank call. Cathy very important you earnings call, next A this - We'll on her Cathy call

Operator

This thank conference. today's gentlemen. Thank you, And you ladies concludes for and participating.

may now You disconnect.

Vornado Realty Trust (VNO) 2 Nov 212021 Q3 Earnings call transcript