In This Article:
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Comparable FFO for 2024: $2.26 per share.
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Fourth-Quarter Comparable FFO: $0.61 per share, down from $0.63 per share in Q4 2023.
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Leasing Activity: 3.4 million square feet leased in 2024, with 2.65 million square feet in New York office at $104 starting rents.
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Office Occupancy: 88.8% at year-end, increasing to 92.1% with the master lease at 770 Broadway.
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Debt Repayment: $450 million unsecured bonds repaid at maturity.
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Lease Termination Income: Recognized from a 304,000 square foot lease with WeWork on behalf of Amazon.
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Retail Leases: 25 leases totaling 187,000 square feet completed.
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Interest Expense: Lower than projected due to short-term rates coming down.
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Incremental Yield at PENN 2: Increased to 10.2%.
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Projected 2025 Performance: Expected to be slightly lower than 2024.
Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Vornado Realty Trust (NYSE:VNO) reported a significant increase in stock price, up 49% in 2024 following a 35% increase in 2023.
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The company successfully leased 3.4 million square feet in 2024, with 2.65 million square feet in New York offices at market-leading rents.
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Vornado Realty Trust (NYSE:VNO) completed several high-profile deals, including three of the top 10 largest office deals in New York.
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The company repaid $450 million in unsecured bonds, demonstrating strong financial management.
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Vornado Realty Trust (NYSE:VNO) is on track to generate an additional $1 billion in cash from upcoming transactions, including asset sales and refinancing.
Negative Points
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Comparable FFO was down from 2023, primarily due to lower NOI from known move-outs and higher net interest expenses.
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The company anticipates 2025 earnings to be slightly lower than 2024 due to lease termination income that positively impacted 2024.
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Office occupancy is expected to temporarily decrease with PENN 2 being placed into service.
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Short-term interest rates are expected to remain high, impacting borrowing costs.
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The company faces challenges in the broader office market, with limited new supply due to high construction costs and interest rates.
Q & A Highlights
Q: Can you provide more details on the leasing activity and competitive dynamics for PENN 2? A: Glen Weiss, Executive Vice President - Office Leasing, Co-Head of Real Estate, explained that PENN 2 is highly competitive, with many large tenants considering it among their top choices. The building is attracting significant interest, with a lease for 330,000 square feet expected to be finalized soon and ongoing negotiations for additional large leases. Rents have been raised across the building due to strong demand.