VORNADO REALTY TRUST Q4 FY2024 earnings call

• New York real estate market is strong with better space availability at 10.7% and shrinking, no new supply due to high construction costs and interest rates.
• Leasing activity: 3.34 million sq ft leased in 2024, including 2.65 million sq ft in NY office with $104 starting rents. Completed top office deals and retail leases, including Primark in Penn District.
• Asset sales: Uniqlo sale at 666 Fifth Avenue at record price. Plans for asset sales and refinancing to redeem retail JV preferreds.
• Penn District developments: Penn Two close to signing 300,000 sq ft lease, likely 80% leased by year-end; Pier 94 to be delivered as film/TV sound stage by end-2025; 770 Broadway master lease near completion relieving debt and reducing vacancy.
• Alexander affiliate: Renewed Bloomberg lease at 731 Lexington Avenue, moving tenants in Rego Park.
• 350 Park Avenue development on schedule, fully designed.

Comparable FFO for the year was $2.26 per share. Fourth quarter comparable FFO was $0.61 per share. Overall, 3.34 million square feet were leased in 2024, with 2.65 million square feet in New York office. Alexander affiliate had a renewed Bloomberg office lease. Retail leases included 25 deals totaling 187,000 square feet. The portfolio was 100% LEED certified.

• 2025 expected to be slightly lower than 2024 due to factors like lease termination income impact.
• 2027 expected significant earnings growth as backfilling and lease-up of Penn properties take effect.
• Penn Two likely 80% leased by year-end 2024.
• Office occupancy to improve with leases, anticipating Penn Two occupancy to stabilize to low 90s.

• Market uncertainties affecting rent growth and development.
• Interest rate fluctuations impacting borrowing costs.
• Competition and potential challenges in asset sales and new development.

Q: Steve Sakwa on Penn Two timing and rents A: Glen Weiss on Penn Two leasing activity, being the bull's eye for tenants, and rent increases across the building Q: John Kim on Alexander's integration with Vornado A: Steven Roth on Alexander's not being merged into Vornado currently, and the idea not being front of mind Q: Jeff Spector on rent spike and 2027 growth A: Steven Roth on New York market dynamics, limited better space, and potential rent spike leading to value creation by 2027 Q: Dylan Burzinski on Alexander's valuation A: Steven Roth on Alexander's assets being undervalued and potential for value realization Q: Floris van Dijkum on NOI growth and acquisitions A: Steven Roth and Michael Franco on NOI growth potential and acquisition environment, including interest in San Francisco