In This Article:
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Comparable FFO: $0.52 per share for Q3 2024, down from $0.66 per share in Q3 2023.
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Liquidity: $2.6 billion, including $1 billion in cash.
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Office Leasing: 2.5 million square feet leased year-to-date, with 2.1 million square feet in Manhattan.
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Office Occupancy: 87.5%, expected to increase to 90.8% with new leases.
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Interest Rate on Refinancing: 5% for a $400 million loan on 731 Lexington Avenue.
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Dividend: Expected to be approximately $0.68, similar to last year.
Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Alexander's Inc (NYSE:ALX) successfully refinanced a $400 million loan on the Bloomberg Headquarters Tower at a favorable 5% interest rate, saving the company $17 million annually.
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The refinancing was highly successful, being 8 times oversubscribed, indicating strong investor confidence in Alexander's Inc (NYSE:ALX).
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The company has a strong liquidity position with $2.6 billion, including $1 billion in cash, providing a solid financial foundation.
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Alexander's Inc (NYSE:ALX) has a strategic partnership with NYU for a master lease at 770 Broadway, which will help pay off a $700 million loan on the property.
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The company is open to acquisitions, looking for distressed assets at attractive prices, indicating a proactive approach to growth opportunities.
Negative Points
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The financial results for the quarter were down from last year, with comparable FFO as adjusted at $0.52 per share compared to $0.66 per share in the previous year.
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The decrease in financial performance was primarily due to lower NOI from known move-outs and higher net interest expenses.
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The office occupancy rate decreased to 87.5%, down from 89.3% last quarter, primarily due to move-outs at 770 Broadway.
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The company faces challenges in the San Francisco market, with city-wide vacancy rates at 36% and declining rents.
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Despite a strong liquidity position, Alexander's Inc (NYSE:ALX) has a handful of credits that are overleveraged, which do not currently contribute to FFO and have little to no equity value.
Q & A Highlights
Q: Does the leasing activity include the NYU lease, and how does the rent compare to the current rate at 770 Broadway? A: Yes, the leasing activity includes the NYU lease. The upfront prepaid rent is significant, resulting in a lower ongoing rent, but when capitalized, it approximates the current rate of $115 per square foot. The occupancy and rent commencement are expected in January. - Steven Roth, CEO