Vornado’s Q4 FFO & Revenues Beat Estimates, Same-Store NOI Declines

Vornado Realty Trust’s (VNO Quick QuoteVNO – Free Report) fourth-quarter 2024 funds from operations (FFO) plus assumed conversions, on an adjusted basis, were 61 cents per share, which beat the Zacks Consensus Estimate of 51 cents. However, the figure declined 3.2% year over year.

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The results displayed better-than-anticipated top-line growth. Vornado witnessed decent leasing activity during the quarter. However, total same-store net operating income (NOI) declined year over year.

Total revenues were $457.8 million in the reported quarter, which beat the Zacks Consensus Estimate of $447.4 million. On a year-over-year basis, revenues gained nearly 3.6%.

For 2024, FFO plus assumed conversions, as adjusted per share, came in at $2.26, lower than the prior-year tally of $2.61, beating the Zacks Consensus Estimate of $2.16. Total revenues came in at $1.79 billion, down by 1.3% from the previous year, beating the consensus mark of $1.78 billion.

VNO’s Quarter in Detail

In the reported quarter, total same-store NOI (at share) came in at $262.7 million compared with $275.2 million in the prior-year quarter. The metric for the New York, THE MART and 555 California Street portfolios decreased 0.7%, 57.5% and 13.2%, respectively, from the prior-year period.

Interest and debt expenses rose 14.6% year over year to $100.5 million.

During the quarter, in the New York office portfolio, 583,000 square feet of office space (513,000 square feet at share) was leased for an initial rent of $87.48 per square foot and a weighted average lease term of 5.0 years. The tenant improvements and leasing commissions were $12.76 per square foot per annum or 14.6% of the initial rent.

In the New York retail portfolio, 50,000 square feet were leased (32,000 square feet at share) at an initial rent of $315.10 per square foot and a weighted average lease term of 11.3 years. The tenant improvements and leasing commissions were $15.40 per square foot per annum or 4.9% of the initial rent.

At THE MART, 64,000 square feet of space (all at share) was leased for an initial rent of $52.28 per square foot and a weighted average lease term of 6.8 years. The tenant improvements and leasing commissions were $11.30 per square foot per annum or 21.6% of the initial rent.

At 555 California Street, 62,000 square feet of office space (43,000 square feet at share) was leased for an initial rent of $133.87 per square foot and a weighted average lease term of 3.7 years. The tenant improvements and leasing commissions were $18.65 per square foot per annum or 13.9% of the initial rent.

Vornado ended the quarter with occupancy in the total New York portfolio at 87.6%, down 180 basis points (bps) year over year. Occupancy in THE MART was 80.1%, up 90 bps year over year. Occupancy in 555 California Street was 92.0%, down 250 bps year over year.

VNO’s Balance Sheet

Vornado exited the fourth quarter of 2024 with cash and cash equivalents of $733.9 million, down 6.3% from $783.6 million as of Sept. 30, 2024.

Vornado currently carries a Zacks Rank #3 (Hold).

 

 

Performance of Other REITs

SL Green Realty Corp. (SLG Quick QuoteSLG – Free Report) reported a fourth-quarter 2024 FFO per share of $1.45, which missed the Zacks Consensus Estimate of $1.53. The company had reported an FFO of 72 cents per share in the previous year.

Results reflected lower-than-anticipated revenues despite decent leasing activity in its Manhattan portfolio. Also, higher interest expenses and lower same-store NOI acted as dampeners. Presently, SLG carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BXP, Inc.’s (BXP Quick QuoteBXP – Free Report) fourth-quarter 2024 FFO per share of $1.79 was in line with the Zacks Consensus Estimate. However, the reported figure fell 1.6% year over year.

BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP also issued its guidance for 2025 FFO per share. Currently, BXP carries a Zacks Rank #3.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.