VNO - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the Vornado Realty Trust Fourth Quarter 2024 Earnings Conference Call. My name is Betsy, and I will be your operator for today's call. This call is being recorded for replay purposes. [Operator Instructions]. I will now turn the call over to Mr. President Counsel. Vice Executive Borenstein, and Corporate Steve Please go ahead.

Steven Borenstein

XX-K Fourth Call. we quarter Commission. measures Yesterday measures. to under Investor comparable on are documents release Vornado financial supplement. we These the Earnings package Trust's today's Realty Form XX-K report call, these Reconciliations as annual directly Relations and fourth financial Welcome and non-GAAP these documents afternoon, In our as and our Quarter will issued section. are filed available the GAAP our the well with Securities and supplemental Exchange certain earnings website, information our included to earnings www.vno.com, most in financial of discuss release, during measures our on Form

this during Commission, and call may refer variety factors. made statements to may actual deemed of other filings statements, due that Securities annual aware materially risks, with be differ Exchange to forward-looking results Please report call including our company these our XX-K and regarding from statements duty uncertainties. today's a only and The for be of uncertainties Please and XXXX, undertake these not forward-looking information risks ended more The year on as December to for include may be update information time-sensitive date. that accurate Form a any statements. does may XX, the the

our Executive On Physical the team, Chief Franco, Steven and Officer; call for Financial senior and today available from Chairman Michael Officer; management and for are our opening President Roth, comments questions. President and Chief

Roth. turn now to the will call Steven I over

Steven Roth

better. everyone. really Steve, is and good getting good, morning, you, business Vornado and Thank At good

are in nation. the agrees New our is York hidden real everyone York New markets the estate and strongest shoulders that home,

And square ] not feet we versus of vendor said XX.X% the the XXX space. million better million have in evaporating in market. only in market Availability XX.X% space better XXX of very of availability quickly. has XX.X% that is market over compete I [ before, Newark space narrower a the As feet office, about really while square is

frozen. that, that Avenue with a a over X York new X Park the has And tower build X the started is in doubled building about delivery already a been supply years. new major years is X cost debt, of cost X%. to to in the to hasn't Add X start New and X% last There under new it's once of takes years. just

Taken together, creates this landlord market. all a

rents already We rents expect to to one fact, rents rise. might say And some rise have aggressively, in even spike.

very good, all So good.

physical World City, is Why New irreplaceable. capital is and human New York York? America's York's New

the best suburbs. commuting We educated most the have largest, workforce, transit vast for from system our

the are and on seem from the in left You though plug that for points we focus accomplishments. office. guess and may Yankees Penn even District of of few X back a read the headquarters, it professional the last Brooklyn and I a to handful to as sports a last. a largest teams like is best is beat as But at the their kitchen home restaurants recent was predicted, I the number not the uses not have scare. and Most tables would our this it can values. corporate dam would Work

XXXX, office cash X.X% million square we Our at X.XX was XXXX. price in with increasing of increased mark-to-markets which and square of York gap. XX.X% rents in after feet starting XX% market-leading stock XX% X.X $XXX XXXX In overall, leased feet million New

prime square XX-X the of rents in largest XX our Manhattan's New XX million $XXX second year completed leases York exceeding top office underwriting. For New deals deals the most feet wire the totaling X ] of XXX,XXX And XXX,XXX first X.XX in completed for we plus We square the feet. We retail transactions at row, and Penn completed we highlighted a starting offer. at square XX in in District. [ deals $XX by premium completed feet

Uniqlo the completed at million cash sale million Last at record on our our unsecured X.X%, bonds maturity balance lines. Avenue foot. Fifth and XXX out we We $XXX $XX,XXX a $XXX month, at repaid per price square of credit of sheet of

Our certified, was to LEED milestone. XXX% achieve the have and entire this portfolio we simulation

Broadway are at We complete end the to of deals. by complete will square on month. This our of foot XXX,XXX will handful deal eliminate line X.X and lease of relieve asset this finally we our finally debt of on feet with million the NYU million $XXX sheet master X-yard important a the We square -- XXX balance of the vacancy.

large this That's will will or I facility will edge It impressive Center. on be plans. have NYU their way, the be the building campus institution. great an Science education the which world-class New greater seen a for education York. lease of the that's NYU make By great even and higher and NYU to

of allow million $XXX retail preferreds. us the for we redeem in will several which sales Broadway, cash XXXX refinance And shortly to will our asset have works. JV We over

ever incremental weeks is a together, billion best with transactions from redevelopment Penn cash. and tenants commentary square foot is XXX,XXX X, lease. being the away At will shortly of generate signing that we new seen. anyone $X Taken very by brokers additional these received Penn has an well it X are only

the far package with by best anywhere. has together Penn biggest amenity X and And

an engaged be that year-end. also in multiple predicting I'm for headquarters by are tenant major proposals XX% at will PENN's lease. Vent, We LOI a leased likely including negotiating

underwriting. rents to achieving have Page accordingly, the on above are our supplement We here And of yield incremental we our increased XX.X%. XX

year-end West Manhattan's and on [indiscernible] ever fill XX that. XXXX, the Pier deliver Side in television first purpose-built by will We

X fully Rego Alexander Avenue, and interested located X at XXX,XXX Expressway Rego intersection bordering of at XX-year of pushed we the Queens as canvas renewed worth our quarter remaining thereby square creating at sale At owned vacant to land we Marshall, or Park Bloomberg Rego in those of to for XXX the Queens, Burlington in XXXX, Boulevard adjacent and X second are affiliate. center, is Island early out the the lease last more or for and whose blank Junction XX.X% parcel now In is Now office expiry X foot Rego moving than XXXX. tenants the the either unique this believe Obviously, shopping Boulevard at we filling up and Long development. land old a Rego X-acre building. wonderfully Lexington

on truly, best-in-class. something stock is new that. to Alexanders we it believe about now The development I being out building fully schedule. have will and designed substantially truly its Park will undervalues assets, XXX is as Avenue and do stand

Citadel, partner. district. We'll shortly process end Midtown Ken proud moving the and noting our so our into date the in are all the next out can Penn under I of by space, Griffin, Veneto tenant in our formal demolition We approval begin major are our to year. XXX begin the early how teams back zoning of accomplishments East and swing

Mina look X, Railroad a city. are and Penn Street we at even ] Penn XX a within the Mohan Plaza of the excited Long [ future ], how the at and Island Farley our [ X, Take Concourse, XXrd Penn training sit about the hall, all

hotel go. to Next PENN to is the ready and the down ground now site, up

District a is seen. be clearly PENN to Our site

said of it, already tour. call a please If you me haven't to range

Michael. Now to

Michael Franco

and FFO everyone. year. Steve, $X.XX the good share per Comparable was for morning, you, Thank

net discussed of to from XXXX As better expense. had in we throughout lower our the connection due in earlier we primarily activity executing NOI and with we higher is But year recognize income previously move-outs anticipated square lease our Amazon. results at This due XXX,XXX the that of XXth Street, year. than acceleration forecasted, lease the interest this to with foot termination down on where known the behalf from leasing XXX and were WeWork overall, West a

compared for. to rates we ended original already of coming down. was projection G&A $X.XX per up share move-outs. NOI West lower to from versus quarter and from expense Fourth at FFO the comparable almost the known due $X.XX for known share interest fourth vacant net income net primarily termination by have interest Street the short-term way, and By higher lower XXth XXXX. the Also, out offset expense decrease Partially move quarter space XX% expense. lower This attributable XXX our to being the was lease spoken per

earnings a of our Page supplement. our quarter-over-quarter on have and Page bridge financial on X We X of provided release

to by to XXX growth be until call, XXXX is can not XXXX, we as impact practice lease-up you And previously last PENN guidance, give we FFO. impact won't and with is our Street XXXX. income comparable resulting positively indicated X significant X in end lower in consensus, quarter's lease and at positive impacted Though tell backfilling that towards and turning the earnings than expect XXXX, of GAAP to the current slightly This mentioned XXXX. the that West XXth to vacancies Now termination the during PENN XXXX earnings similar the of of full occur due earnings to partly XXXX.

words on few A occupancy.

occupancy Our last was up XX.X% year-ended office quarter. from XX.X%,

With building basis office lease the by our to Broadway, pending XXX at occupancy points full increases XXX master XX.X%.

get to PENNX previously and decrease low will placed we into the this the As Pet XXXX decrease anticipate we our XXs. the occupancy will as We year quarter that to temporary mentioned, being service. over next first occupancy be stabilizes

New leasing robust York enter XXXX. Our remains pipeline we as

NYU in activity million our of at master lease portfolio square significant with the top have across foot on Broadway. X with feet finalized We square XXX,XXX negotiation being XXX

feet square another in various have negotiations. stages of we Additionally, and million proposals X.X

spreads with with and tightening XXX appropriate X Avenue have markets. the financing and for encouraging capital consistent spiral to ours signs metrics AAA is overall are CMBS past open such over structures. and assets wide recent sales Both showing on and as market months loan few financings the past the investment to over for levels high-quality shown The Park pre-COVID. months. the Turning markets the large, significant

we the borrowing While continue. smaller foreseeable we for some a remain XXX year, levels coming basis beginning last deals. costs look are is keeping expect financing hopeful short-term points one office largely rate first banks sign to will the this around down the future, expect likely to banks at trend high. negative after remain current to The look year, A sidelines

some investment by Avenue assets up Munich on XXX trading Re The sales in Park including also [indiscernible] recently, continues pick Blackstone. market Americas with and office to interest XXXX high-quality

With that, operator I'll turn it over the for to Q&A.

Operator

the Steve ISI Evercore the on question. with is Instructions]. [Operator line from Sakwa

Steve Sakwa

zone seeing here. comments those bit little a great guess, particular, yield the and more activity. some maybe the into like competitive But It or just maybe X, the timing the of PENN Glen things for about end the had leasing to around you're in a you're level raise provide close you PENN the punching commentary dynamic sounds on for could you X. few thanks Steve, I that and to for space that just confidence

Glen Weiss

see. to and PENN off X in what it large Hi, is Manhattan of top There than blocks in buildings only running head available X more feet were list Steve. with It's in X or has market every the Glen. XXX,XXX their of more.

We have best block. the

with order So in get we to going that's as in the feet. XXX,XXX heard you for lease remarks, X a out done tenant short have

We XX,XXX from anywhere have ages an large and all headquarter tenants for that, battling have space XXX,XXX behind And LOI for another serious very very tenant. we between and feet.

X eye people on and is in many year Pen for our bulls leasing. fifth searches, now So complete the we're

Steve Sakwa

I Okay. rents, that that to the being And pushed of the any just I speaks guess seeing, basis sort that points. comments at kind on up by you're of XX kind yields of just guess,

Glen Weiss

We've raised the entire bottom the building, to from our rents across top.

Operator

is Kim line the BMO with a John question. from on

John Kim

Steve's follow of expect. I on commentary billion $X wanted on you up cash new to proceeds

freed at down on up in And wondering anticipate? pay debt Broadway that I XXX you that million million new at was XXXX dispositions, of $XXX well. then new Broadway much $XX how dispositions have top as You

Steven Roth

million. will debt. a you on more million off It's $XXX-odd a building. the in short-term math be in said, million $XXX enough the to pay than what couple little is there million There's refinancing dollars coming from round $XXX up in going more just $X coming Well, to of of it billion. that dispositions hundred that to and

John Kim

of could on those past? will be office? in provide what you're Or any you kind color retail focused And the on or noncore

Steven Roth

get that, not John. to I'm going specific about

Operator

with line with Jeff America is of the Spector question. the on Bank

Jeffrey Spector

on slide... great comments you a the you Steve's on and XXXX. Thank congratulations tie Can

Steven Roth

go that let can't saying thank I by without you.

John Kim

Absolutely. Okay.

If growth any all you XX. the those could comments on for tie, in all I to a opening understand on XX expectation think you rent please we tie spike Michael's Can comment comments, of Steve, in at please? your to

Steven Roth

somewhat was space in through We've of which Xx cycles there's subset God. know. What thought in kinds York don't I compete smaller or I of been feet. Oh, is was Xx. New of square million that a said, better I which much below XXX clear these the but I pretty space, we lots

point. first the that's So

is quickly second of The there's that a is subset very space. point XX% current going because that of the shortage space and availability in down

expanding expanding and market in haven't businesses all is our a The New and are of good. clients stock York. good. We had recession The are aggressively

is demand New business is terrific. So tress healthy and actually and in pretty space York robust,

So shrinking and fallen the fallen on new the coming with supply late interest term that's not they've historically lots not availability actually limited no of new not construction have costs no and long are at have market supply, critical, high fallen all. for rates

the And market. to is limited, use that ability the I landlords so new frozen. together, Take very, and create word supply very that's all the

rents expect use up go next the word there year. significantly And We I spike. to

to...? about respect XXXX, want to you comments with Michael's Now

Michael Franco

portfolio, we've Yes. that got What I of a right, would say we at look our number drivers. is as

We filling have the up empties.

going come that part so PENN X. PENN we and from of extent, is to some to that -- have We know a and X significant

over. of where that other we into on the market have we mark-to-market. leases We move side roll landlords have the positive We're as a now

some takes will 'XX very we to it significant XXXX. that flow an for So improvement, think in be time through. comes but

if and albeit market Yards, rents I'll X Hudson $XXX PENN a new in maybe that than to are substantially and pinch else we now There's in range, especially but West -- Manhattan to PENN $XXX you think is you nothing about, just higher. monumentally if to something give to our said buildings okay? X higher go the for you go Now the leasing neighbors, buildings, they foot. buildings, those newer a are their you go

higher. and As foot can't tightens maybe go single rents market West matures, foot a says gets there's X as then $XXX the accepted Penn district to and this and as best from side, that substantially location to it in PENN market the $XXX the be a even nothing in X that PENN

increase kind will monumentally. to cause in of income appreciation That bad news

a me [indiscernible] $X.X year, okay? $X worth a billion help this, billion ratio to X $XXX any Tom, year on example, expense. for million without feet $XX million So million $XXX capital times is value of is

the the own. about inventory enthusiastic and we the tightening unbelievably about we're market, the So about market of that

Jeffrey Spector

looking who. And that anchor that it could not Very you technology, industry, a a Hotel large PENN broad-based? is follow-up working financials? to anchor the for question, with on don't particular know about you're demand of can space? for helpful. on Is And just more comment But the tie it site. specifics, the my you talk course, Is I if

Glen Weiss

the Jeff, and seeing, speaking, financial it's demand Glen. the big in Generally are just but drivers not legal we're portfolio. across tech. That's PENN entire what

Operator

from Dylan the Burzinski with Street a on is line Green question.

Dylan Burzinski

you Steve, your market are [ what talk in just the your about sort -- -- guys in we opinion, of back seeing comments mean doing guys' it. about to expect. comments Can wanted not that, public bit ] not you could to your anything value the Alexander's of on kind some in go you you by about

Steven Roth

Well, thanks.

you substantially and parts than that a construct any higher stock. analysis, has very out by of number trading to asset tenders sum If the price the of be you do the the take of

it's -- So by the NAV. you And it's greatly piece, stock exceeds based simple upon the concept. And asset if just the a piece calculate price. if value of very you it

Now second. think a about it for

Rego down. shopping at I might had shrinking guess is center. so say So We you move-out, failed X, a which

XX-year-old up we building. a So end with

obviously And not huge. is building that re-tenanting of cost capital The economic.

anyway. actually XX So Burlington very tenants time XX has simply we period Very two there took and what years. great long been is Marshall the we did years, Two remaining Marshalls. of for

X, or is to them -- fill shopping are and it So ago. center rego into the the the have part relatively which better built process, XX moving way, we we will which we move by a of new up into prices in we're documents, Rego the them signed years

So that a makes success. Rego X

X-acre And which piece which it go grand sold land, X, will Rego or out, developed. be empties is either of a

value. creates that So

Now it doesn't today. have income

we as to the be the substantially So somebody is at valuable. from piece of is is main, land think to in intersection going is Queens who's values of looking of main the middle main, at income are, what extraordinarily but approach and incorrect only Alexanders the the

see. we'll So

Dylan Burzinski

comments. tracking those ultimately Office in years idea stock york until did to the shelved you I Appreciate broader of one then the in started market. just and things strategic more ago, a recover guys slowed guess And several New doing

mean, recovering strategic things? that set Now significantly, that things of are something or I seemingly grand table? is quite of back on the talk the fits that's us you in sort kind through of Can that

Steven Roth

I But is about to answer that every tracking easy stock The day. at no. think least

never support can any from you from think I good guys I a guys idea inside. even very any the But think tell -- get continue the future. But very, come be the it my idea. about can't do to honestly it love no. very, and know useful in I up I from to it every I you, idea. of short-term sometime as day. continues answer being is may tool the you I it's a do think

Operator

on the Floris is Dikjum the with line question. Van

Floris Gerbrand van Dijkum

your being commentary underwrote. million about estimated on you X X, was you NOI curious, district originally about Farley. at higher and I X I recall probably at your I PENN PENN PENN or rents, of talking assets, $XXX PENN we've million, what obviously, Plaza just Plaza $XXX district we the guess -- growth than significantly

growth think NOI. you of $XXX of And on expectation mean now generate increased? progression As thing could market stabilized, million the than fully more has NOI I rents, your this

Steven Roth

will That but told was off. only roll The finance prediction be capitalized am, I will going up, answer has that who rolling. the I'm that, my up marginally. up, there will into it people that to that will go than it account rents by [indiscernible] is to go obviously, with that interest take And

looking And space up. leases offline. guys you a complicated retail to is a it's pen my is then basically, what the that as can help and But mean, completes in Farley some I'm building. I up, there PENN its fill for So is calculation

income buildings that part And that's were the customer beta happens, that all incrementally doesn't the As $XXX count. million. from going up. of That

be pick together. will that to it it more all So than

I mean, put out, I think that last So correct. directionally I your and absolutely think, read you piece week, is I it

Floris Gerbrand van Dijkum

Steve... So

Steven Roth

Forest by the bar.

remarks, we're is for and cost keep building site, the the I've sunk. in as I neighborhood, raised already to as office Pennsylvania the said we and as Hotel world-class XX is building, It's the site prepared if [indiscernible] PENN the a developing in we next the land that down up. old As but ground the a build to said frozen, is attack which going example,

So having if we building look moment, the cost off X it land as new for simply the at can ground. get we the

as will foot. look we So increase the X across or inure the of PENNXX, market That [indiscernible],as and world-class at $XX this $XX the you -- an least PENN X office as anyway, at a value building. build on if we a by to PENN

So say, continue substantial, think on quite creation we as I might be value work what neighborhood, enormous. we will to and our the even

Floris Gerbrand van Dijkum

Yes, transactions? the consider the assets. that on to going are I capital of know start The environment or Chicago guess, in if recovery talk phase? -- to hard at it's you're to of where or and San Francisco I think allocating more source you acquire you you further -- behind adding Manhattan source maybe that and question, where could looking outside to Maybe you're acquisitions to transactions And if types like the and markets about you is the would likely those follow-up little pieces. you're front, bit a

Steven Roth

That right alley. is Michael's question up

Michael Franco

Good morning, Floris.

York, here optimistic. it's through, and more terms sense a cycle going more as still getting being in you're next turning think challenging little that's year of there's and present are maturities the New work I said, is That lot or in in to the of in been think sellers acquisitions, I accurate opportunities to the So of a X.

is portfolio, quality our to a be So -- asset target it but the from fit into our perspective. right has to right,

going will the market. we Francisco, more to be in So rather fewer I We than believe San but think some, it's are there on. constructive be

I been that. think we've on consistent

corner. I certainly there, the positive turning a Citi are leadership, is signs think new

is So the answer yes.

are mine open San regarding Francisco, We Chicago.

other. what anything it's more us see for The has add time with we market going I have. think I we're some don't think the content you'll there. to challenges, and many take

that don't So look I we're think And that. focused on beyond not either. we'll

Operator

a Griffin question. Citi the Michael with is with on line

Michael Griffin

pricing Glen, whether I color demand. all and appreciate earlier to not drop power. try space the and you've this concessions just you to seen? insights to demand give pipeline to you've leasing I'm tenants as of a Have into landlord given limited you you us started could at are the that maybe around curious, some availability, renew or or coming Steve all off talked see result about

Glen Weiss

Glen. It's

multiple immediate from terms that and it the in seeing market expansions, immediately from every So of from for renewal is robust in the to discussions -- are for more angle, multiple deals tenants years. or years we're to new expiring demand demand, out who seen either want the many the are demand I've space move than

effectively, As not think rents things that but they're concessions, up. I better. neutralized. it generally to And They've are have come gone relates down yet,

this as more the come more landlords become the market will concessions market, and down. And

Michael Franco

If I to on said. what Glen add would

that there's result We're tenants last awfully of occurred And for know use I I lease they very that need, handful that. right? back they COVID of coming conservatism they're a First, occurred. how of couple One a much dynamics of didn't talk they tenants would is going the exactly behalf a they of need now of there, dynamics recently, a right? they've I backed more days. as they as level expansions. or was out we with pipeline recognize on think they and that let a more a space there me because that's in our how did And about reflection there's think that's space. think And leases come of through already few these couple

financial Steve booming, Law firms are and business services, is Glen said, booming, being et techs Two, cetera. as both right? booming,

growing. are So all businesses these

market level when you of supply very a tightening of take have where you want be. robust a of both tenants very these onto to dynamics, So overlaid those

the for think why of said said Steve expectation years. the over terms next I what in growth So rental several you that's

Michael Griffin

the appreciate then prepared your And CMBS comments commentary markets seems to Obviously, availability. just more maybe financing and up there. I market as around more recent, of on we've transactions market remarks and the capital additional seen the following come open. back

you this coming helpful. have it's or an give XX, due capital XXX a refinancing insight expect For relative where year, commentary to us you'd the you sense of markets guys properties leased. current very on whether that debt some any to those the rate would the other mortgages maybe be Do are be on well have the interest rate? And sort

Michael Franco

if are respect Bloomberg Look, we the were, and there's where to State, about and where financing. then, And the on I it's we New had financed. with I think you think ago, versus a night up office day. been really say, think the with year since market today office side high-quality let's floodgate a York opened certainly of we been

in of that them couple have of many transactions done, excess multibillion. of think the about in $X gotten cases, you So billion a

I think York just I -- it's So from fixed the of that income for demand think the high-quality City New office, very investors encouraging. is evidence

Obviously, in so plays portfolio And that. our

and Union lower. they the fixed rate So for be high-quality some Square of I -- particularly on in upticks like financings that roll low very in going off are couple demand see couple strong is like something this that we will of in of retail -- rates fixed we're on the the there. a look out think then same terms a we'll deals, cases, year, as At coming to rates time, a

a net downs $XXX I million, So think also probably some little but of the et higher, pay cetera. delevering debt, it's we're with

hits I of interest perspective, the think we going from So years I with couple took some significantly. think Vornado's expense pretty last up obviously

done little and a it we're of think, par of sort us. sort for be I could over by Could bit higher generally, lower, think is this I maybe little maybe be in year, bit we're think And large, total? a worst I the with year-over-year. that it

Operator

line is the Mizuho the with on proceed. Malhotra Vikram question. Please with

Vikram Malhotra

about the stabilized Steve, the job sequence on loss or in I an you sort you wondering the I I'm guess, redevelopment various opportunities penetrate pen? asset you've evolution How jump you from would development done great various standpoint, assets. of or what's in actual of talked next next have? on the And guess next parcels a sort other or an NOI.

Steven Roth

question, should independent that construction for the the to is best Vik. that years, Manhattan We for the and we would buildings Obviously, in I there the PENNXX X Avenue. X ex now. next or believe, ready announce under rolling yet. site we're We're studying have Thanks anything site believe probably, sitting forward but not XX Park

next So that obviously is the site.

We are considering an for also front office as the apartments building we're will site, all options that that There site. of clearly on well. considering be but

Vikram Malhotra

maybe just And then follow it. Got to up.

on Fifth on Madison. on how street retail leasing pipeline. talked evolving what sort and can your about how You more color Any color the into pricing may that there? the be office costs. I'm wondering you is market translates tenants and if give And a in bit little doing of

Michael Franco

Vikram. Yes,

market rates are retail certainly and pipeline, I'd vacancy strengthen the to spaces. on continues the to rents best The the So in on say market continued decline just for general.

returning peak close think levels. I to to

terms dynamic a that signed Fifth for retailers submarket. around in at peak in certainly, space. for tenants think very looking year. too of cruising off same not we lease Times most we've far of rents, Avenue, looking activity Again, we COVID, the two seen have some I since the there. in There's dialogue space, significant last activity So, best going own some active Square we strong blocks, the and

And pickup. so I that think

that to And far again, for if think I spaces, to right too off the not pay peak. aren't the the going have peak rents tenants recognize they're there,

is is to have in the #X retailers recognition have line they the U.S., city are and New And locations remains that bottom world, the sales the that in and all global the that So what's maybe York driving here. doing. figures the the this

we're to tenants some that lease tenants here. with close new-to-market So some already are sort as of as well

have throughout some We we're and the as working on there activity PENN District, continue well. good leases to

We own well. pretty tend to great market are we're most focused. constructive retailers as So assets where on be the the those and retail

Steven Roth

an anecdotal you give story. I'll

that to space X would family. important in on So actually like them. for important retailer that particular Actually, that come of I lease major have to renewal a an we had asset space that say, years an we tenant's now, a lot one for option. we had on [indiscernible], signed expiry and have no to knowing and asset in expire. incumbent But I'll in wait Trying the

and that for properties things that's extraordinary So markets. tight happen only

fun. So that kind of was

prefer The rent, other buy tenants by say to are risk. the higher and reflected market prices thing than that rather buy I'll would so Fifth would is Avenue the than on be

that So it's business. is sell we're the of arbitrage economic to these assets more And to for of open than rent these some assets. some there

Operator

with Michael question. on is Securities the line the True Lewis with

Michael Lewis

kind going XX-year we making flow business office at kind are inflection than in less levels? So we to maybe the context you per you money, and in a increase? cash often cash with. cost share space York before. longer. and emphasized XXXX down? of this focus $X.XX XX REITs kind the money the business, lot New of the of help a do to at of I rapidly up that of this we that on last you but us cash, as which pre-COVID back was the a run agree of trend The Steve, understand leasing probably expect consistently of an realize least of cash in lowest health like FAD ever And get years, And And yourself

Steven Roth

and cost the with our the over with colleagues we're familiar I'm I'm all you which spaces with our in the question. of turn in all business intensity of trend industry trend, familiar familiar creates the the fact I'm with turning the multi-tenant, business familiar I'm that the the we Complicated that of of those mentioned. the spaces multi-tenant over. are in where capital

So is only the go and clearly, to a struggling we're get to PI a over tight will alluded very inducements to Glen turn down and in floor the very a market. to and try down, go to sticky, them this, tenant in building they

not in past. our So future, in our that's

problem. of already up sort at other the rents, that you On if hand, have look rents the to gone alleviate

the -- or flow cash the whatever turn you or cash that expecting want actual to it. AFFO I'm So

go the that to tighter. cycle, which to at that's think is get a are market of and going in I much going bottom up We

something as be as cities York. I the Now, trend. for in nation. they that the that New believe New believe York might don't is are going predicting that to I unique country, I'm great Other from around is benefit

Michael Lewis

about Okay. New Great. And York just to versus rent. I my the ask then second market in-place question, office rent wanted

Where in-place rent $XX market operating right you for like So do compared a the to rent square looks around are the portfolio that? foot. think it's

Glen Weiss

this say and like to our will often, et that cetera. to We going We spot how where we not positive, next in it's But It's we're the feel expirations in predict means. flat, mark-to-market rolling now ebb positive. much quarter-to-quarter, We that years. terms our our flow few Glen. going confident I'm of be pegging like rents.

generally mentioned, we across we've the increased whole portfolio. rents As

good we feel about X to years. the X So over that metric next

Steven Roth

I'll predict. and not natural [ I'm ]

because minute a to go easy. that's PENN for just let's So

higher. and the happy X, the in higher that are the renewal lease get be Farley buildings more So a I short-term in-place substantially pinch the believe in that feet lease in the said of when that from wonderful X, depth I that today rents will for which already with. for now, substantially for believe or that only COVID, a XXX,XXX be X, the we PENN very years market square those PENN will very, I've out X I now, renewal believe signed comes to than years future, very from in middle and X we very for building markets the $XXX

on I bidding So what that. think. that's We're

Operator

Alexander the with Goldfarb is line on Piper question. from the Sandler

Alexander Goldfarb

the yields guys have congrats the at you first, PENN from reception positive market. the and improved [indiscernible] had and Steve,

for So quite market guys from compliment a questions. that's the you there. Two

Steven Roth

Alex, you, thank my friend.

Alexander Goldfarb

No, evident at your you I time it's environment. rethink true. it's walking mean campus us the ability to in through spend and

just off, What My eliminate instead that it's original would rents paying So the Vornado. the -- get a of your mean, comments. of what -- the now, Alexander's in you hoped. Why way into good assets questions price you not you'd think are X. and would a moving apartment the Alexanders, first to and sold dividend, would I see Rego cash I accrue on would G&A been have Vornado, be right blend the how could much I tower in that to given two had good appreciate flow for are

just What XXX, prevent fits not which Vornado. portfolio. into You have Why that? would certainly your in incorporate Alexander's

Steven Roth

the probably not my today. not is of to continue nothing not pricing [indiscernible] on Well, -- And XX-odd XX-odd years, been that's now, of will the tenacious. something That floated going the for of that it years. for idea has the and mind to front say is melting have it, actually, we're I do I it's said

Alexander Goldfarb

it off-line. Okay. certainly I to more, and I a just cash fit mean conversation would wound more it for but it's you guess and needs, has down, it as that's seem

Steven Roth

give let Alex, you fantasy. me a

Okay.

Alexander Goldfarb

I love that.

Steven Roth

property, sell have for had would and asset would as fantasy And the that I that in narrowed maybe the higher idea trading sell to Okay. income. current to going Vornado, you. Alexander saying, out it be happy. do, into for I That's than for left much, both a that, just no public trying approximately what in merged are it of Operatively, that market. or entity. please the that what debt, the you okay? $XXX though. which do, And If building, low stock. a if could office of to and much sell as only to freestanding shortly we the debt Bloomberg how we was -- nothing Very to submit million as how very we we would I'm we it that's net no have will stock the difficult get but price price sites down I'm independent to we would that And what

Alexander Goldfarb

Michael, walk... is, question Second you

Steven Roth

value value what saying What to and think the of from pursuing. we it and view, Alex that is, can we're willing I'm Alexander's will for be we then make [indiscernible]. shareholders what really a pay That's to might were point above be

Alexander Goldfarb

on Park vacating XXX sales outlined at Okay. have some But asset perspective. Michael, of you refinancing. you the guys some 'XX appreciate comments and just remnants the

addition, at interest, In burn effect. $XX X would from million off capitalized PENN I leases when as have you that those the think, take -- that

years, coming on from is to So as net how relative FFO much Vornado X TEN? coming the off FFO about next we think of

Michael Franco

Yes.

capitalized think One -- this things. year here. being lower as about couple roll I in last that and this versus year. appropriately, why a to look, think interest, is given off And that's right? said year going of down that's consensus of that terms I PENN We've we reflected talked is X is

relative don't an much to There'll we'll today. master be XXX lease has at interest we getting that on think that the we're get comes of capitalized So that. debt when asset point, impact off, the no that on

an to impact numbers. have that's the really So on not going

That's like leasing So XXX, year PENN. next the backfilling for and we've about materially last we've XXXX, year, to bit a year now little start through flowing had in more the at XXXX. success dramatically XXX, talked going this

that so that's comment, And you our model but think I want, to out that based as trajectory. on

Operator

with Ronald on Kamdem Morgan question. Stanley is from the a line

Ronald Kamdem

Just me. two quick ones for

one So office York the NOI X.X%. New for on just same-store is on ended down

could thoughts years, to environment? the X on high-level same-store in of just what about sort strong Just next look thinking X any that as number you're this like

Michael Franco

I don't Ronald, and are to my have too I you and that so a those fingertips, give want guest of much don't numbers numbers on. in

and at there. visibility we'll little that So to look try let more us give a

Ronald Kamdem

way. on Any 'XX, about think sort of about coming had place? the question year, the model. sort down of million of maybe sort back million CapEx, sort from those we're could Are we the what thinking I on look asking it which CapEx same numbers? includes $XX I of Going Are -- to this about any of the on as like? Just of space. spend When a different we staying thinking 'XX CapEx thoughts sort first-generation $XXX in

Michael Franco

think I up you leases year, right, best the we bit it's the timing actually guess necessarily and payments, -- finalize are the of because lease. in doesn't a it make we know raised line we every those of mean the little that when But it and terms in I until process.

we're expectation beyond what We get of have going that. an done to

I the capital. base it's in strong of And so some pretty building reflective leasing to addition think environment

of XXX bucket, our XXX, high that. I a taking years, is that you end I level think capital you're the on a not last particular So, up in still It's we're beyond same frankly right? were, think because not the year, prediction. portfolio of so on we're dead how guest Most directionally, just year, what spent is different, leasing a frankly, much matter in space

next in year, down back I portfolio some for But given are beyond. these what's directionally So will we'll I think leases see get as as the year, on number this the that's a And just left. of PENN coming works big into that up. and pretty that we good think number fills start

Operator

the question. Paolone is Anthony JPMorgan with with on the line

Anthony Paolone

Hotel Yes. what costs tell on you you PENN around the mentioned and you then? want? sunk think the it this like that And now you to just of building Steve, just basis What kind at vertical yield at something right costs? point. go do viewing would what side cost the us Can build

Steven Roth

development I to sauce building. test a A young my won't $X,XXX -- development By as have X for that. Class a foot land

Anthony Paolone

yield? the In

Steven Roth

is pick you And we know. -- number, the that, a don't build foot, but like land put to I a so you get some Well, it, you a what -- and XXXX which with of in, for number know, market $X,XXX debt on if yield a a I would now number X%. put don't and

you debt. valuable say, need something equity to more like or X% Let's get that because or X% is than

So what, X% times $X,XXX.

Michael Franco

million. XXX

Steven Roth

number Now that's operating that's costs. taxes net and a of

So that to get are new rents the so the that -- today, need that XXXs. in you to is building answer high a build the would

shaking why head? your your are you You're head, shaking

Michael Franco

math being work. frozen, you agree, is it's I which the why doesn't about -- talk

Steven Roth

for that about think second. but -- a So

because reasons $XXX maybe that is foot at the less, rents and So figure pinch rest something of so is maybe you a a PENNX like PENNX asked us enthusiastic one a and the from about foot or I'm build more. a our new the of $XXX that, perturbing that

That's better So the buildings inventory the in the will the to lines punch line much great more become bunch today. locations of and the -- that's in-place whole valuable.

Anthony Paolone

sunk. your cost of thus point that's guess sort mean far I what you vantage Okay. as being I mentioned to that I wanted understand.

do a it just whole you're that? looking area, and the $X,XXX about guess I so on and yield incremental at the for much And what that thinking so not could basis

Steven Roth

land matter have fact own the the have a I long Yes. that -- I on time the bought no But is is, ago. I of land. the the I land. debt

or leaving so those it, we paid to choice land get we'll That's choices. empty a on the building And between what given make do.

Anthony Paolone

Okay. I a understand. follow-up. then And quick just

you I us think plans that or any give on nonperforming what's a deal Can year. happening update last B there? a note bought on you Midtown or

Steven Roth

sir. No,

Operator

line the the on is Scotiabank with question. with Yulico Nick

Nicholas Yulico

Great.

Hudson bit if terms you In in of can are you're space the finding sublease looking any actually whether the be competitive just about little that tenants to your is available PENN when at project? a Yards project, that's talk

Glen Weiss

Glen. it's Nick,

near is and it, which answer not yes, the space. a thing. the pricing even competing as if pricing said, great So PENNX And you That's sublet their are about think pricing. our Steve is with PENNX new

squarely or Hudson Yours are PENNX, feel mix that or we whether side West about sublet So West good that it's Manhattan the touring availability in or fact every the PENNX in tenant we the day.

competitive we like So with We that. with it, very it. very comfortable feel

Nicholas Yulico

you just to us, include remind is yield think quote the does the yield second leasing on back into then cost the commissions question I and going PENNX, being TIs not yield that And you built just there. Okay. when the can

the that in to of TI Is still So on a I leasing closer assume notes, it foot. is right. X%? saw build like there around see around point that, if commission if that's correct? And to ballpark the if one we was $XXX was at cost like that inclusive think we yield I per that want just in, the X.X%, that project I

Michael Franco

what's the commissions given old mean, would spend to the the that quality dollars, right? building. economic mean have I to Yes, now, anyway, thesis when you're is generate not given calculate. the had those leasing that we'll of think typically, And that rents TI spending I we answer happened were yes. is the I

the spent cost have et the thought got -- right? the we how TIs, -- members supplemental. but the And would cost, factor we we So see, spent that we cetera, it wouldn't that the we yield on incremental money to spend, in we anyway. that to we so was would That's that had in what's have can that to

Nicholas Yulico

Okay.

just leasing as there $XXX, foot some TI then commission and per is So -- that was number? around the

Glen Weiss

It's touch deal. depending on about maybe a higher the right,

Operator

Brendan is the on Barclays line with question. a Lynch with

Brendan Lynch

expiring about optimistic in third general. sounds It the quarter California you like XX% year. in details you're on you've XXX at ABR looks that Any of got It Francisco on renewal XX% San for give can and like the discussions.

Just get some more color please.

Glen Weiss

the We It's city, country. San Francisco the of XXX. in Glen. probably on building It's certainly our the building the remain extremely states best bullish of in the X best and

forward, you back when look expiring a of from we full-loaded 'XX. XXXX feet 'XX to from had So hundreds thousands of

almost feet XXX,XXX far period. during We have leased thus that

some We coming attacking more in expirations more have 'XX then some in now. and 'XX. We're those

leading we our about roster And not market. close. Some what done of clearly It's to we've may our tenant rents those continues tenants But will not -- even great stay. feel are star. be stay but X that

we So sit here. we XXX as feel about great

Brendan Lynch

on the Great. in Is is between third is the follow-up different Maybe that tenant? that XX% one just one Or multiple split quarter, that. tenants?

Glen Weiss

of is None 'XX, of them third role. get in multiple up, different add tenants X as throughout expiring, year in huge. quarters. But it tenants there -- the The is call or quarter so that X you it, you to

Operator

the Steve Sakwa with Please with proceed. is question. Evercore on a line

Steve Sakwa

this? any to long-term straight-line GAAP we going if lot of unique different. adjustments it finish have of XXX, On nuances the because cash have is kind sounds any there get a would figure just realize follow-up. quick trying you out get Or a to but soon. deal unique into of adjustments. a rent, bit at accounting it's and lease taking what -- it I there rent is straight-line to the this we'll the need I be least one this normal But realize nature and think guess, I of upfront. to that just typical are little consideration Just is of Are given Steve that finished, quite sort isn't line like over

Steven Roth

actually. month. would final. be finalized -- to by not It I on of I'm is will transaction. it comment announced, will be going It this hope the that But will end it

all details prematurely. I that to you into announcements will so and that you need release get the it. to so want now don't the make we'll have understand detail press we you can And But -- give I mean, that guys so get the we

Operator

the BMO from with is question. Kim John line on a

John Kim

Park. stages. mentioned But many is some the the how same in of tough for a to ground Steve, these off several think the time been the get work as in how few will York of you there development math around out New projects right as as There's new on office do you lack XXX years. and far it sites. various getting

Steven Roth

None.

John Kim

There's not demand. enough

Steven Roth

of building know plenty cost the building stubbornly of that and of with demand. frozen. steel to capital who rates and not of going market knows. The but the aggressive There's what's interest don't high just availability the cost there's No, remain of happen will make cost fact the I backup now, the

is major point there. XXX different Now tenant, Park had have already for lease part capital of and a a XX% isolated view already because we a we a

off So XXX ground. Park the will get

way, My the term, will almost the PENNXX. by well that include other short for building that is no the get ground. prediction for off And could the very

John Kim

have justify rents go to new development. would to Where

Steven Roth

I've interesting a that bonus. is $XXX already answered foot an question.

Operator

time. this at questions further no are There

Steven Roth

all participating. for Thank you

I think you the remarks tell from our management team. can of

York the about We enthusiastic are District. extremely PENN extremely and enthusiastic wildly New about our about business and enthusiastic

and all you very quarter. we'll thank next for participating, So you see much

Operator

conference. today's concludes you participation. for this gentlemen, and Thank Ladies your

disconnect. You may now

Vornado Realty Trust (VNO) 11 Feb 252024 Q4 Earnings call transcript