VORNADO REALTY TRUST Q1 FY2025 earnings call

• Macro environment: Impact on customers and tenants, with the company noting the global kerfuffle may resolve quickly. - Key transactions: Completed UNIQLO sale, favorable PENN 1 ground lease ruling, finalized Universal Music lease at PENN 2, and master lease with NYU at 770 Broadway. - Liquidity: Cash balances at $1.4 billion, undrawn credit lines $1.6 billion, median liquidity $3 billion. - Sustainability: First in nation to achieve 100% certification across portfolio service business.

Comparable FFO for the first quarter was $0.63 per share, an increase of $0.08 from the previous year's first quarter. GAAP same-store NOI was up 3.5%. Leasing activity included significant deals such as the UNIQLO sale at 666 Fifth Avenue, favorable ruling on PENN 1 ground lease rent reset, a major lease with Universal Music Group at PENN 2, and a master lease with NYU at 770 Broadway. Revenue contribution details weren't broken down into distinct product segments but focused on overall leasing and transaction impacts.

• 2025 comparable FFO expected to be essentially flat compared to 2024. - Lease up of PENN 1 and PENN 2 to have full positive impact in 2027, leading to significant earnings growth. - New York office occupancy expected to tick up to the low-90s over the next year or so.

• Market volatility: Potential impact on tenants' decision making. - Refi headwinds: Maturing loans facing rising rate market. - Litigation risk: Pending litigation on PENN 1 ground lease with potential retroactive rent implications.

Q: Steve Sakwa asked about PENN 2 lease volume and 350 Park project.

A: Michael Franco and Steven Roth responded, with Michael noting confidence in PENN 2 leasing and Steven referring to 10-K and press release for 350 Park details.

Q: Dylan Burzinski asked about cash earmarks.

A: Michael Franco and Steven Roth responded, discussing cash use for investments, debt paydown, and deployment into new opportunities.

Q: John Kim asked about leasing pipeline and occupancy.

A: Glen Weiss and Michael Franco responded, discussing pipeline absorption and occupancy expectations.

Q: Floris van Dijkum asked about GAAP vs cash NOI and occupancy transparency.

A: Glen Weiss and Steven Roth responded, discussing timing of cash NOI inflection and considering core occupancy disclosure.

Q: Alexander Goldfarb asked about PENN 15 project and apartments.

A: Steven Roth responded, discussing development plans and apartment considerations in the Penn District.

Q: Jana Galan asked about owner occupiers in New York.

A: Michael Franco and Steven Roth responded, discussing owner occupier activity in retail and office, and its impact on dispositions.

Q: Seth Bergey asked about tenant behavior changes.

A: Glen Weiss and Michael Franco responded, discussing rent growth, reduced free rent, and capital requirements for high-quality buildings.

Q: Anthony Paolone asked about Penn District projects and federal involvement.

A: Steven Roth and Barry Langer responded, discussing development plans and federal partnership in Penn Station.

Q: Caitlin Burrows asked about macro uncertainty and refi headwinds.

A: Glen Weiss and Michael Franco responded, discussing no impact on leasing to date and refi progress.

Q: Ronald Kamdem asked about occupancy trajectory and capital allocation.

A: Michael Franco responded, discussing occupancy acceleration and capital allocation focus on existing business.

Q: Nick Yulico asked about NYU transaction and PENN 1 lease.

A: Thomas Sanelli and Glen Weiss responded, walking through NYU transaction details and PENN 1 lease numbers.

Q: Alexander Goldfarb asked about PENN 1 ground lease litigation.

A: Steven Roth responded, explaining the arbitration panel ruling and pending litigation implications.