UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☑
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File Number:
to
001-06064
ALEXANDERS INC
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
210 Route 4 East, Paramus,
New Jersey
(Address of principal executive offices)
51-0100517
(IRS Employer Identification No.)
07652
(Zip Code)
Registrant’s telephone number, including area code
(201) 587-8541
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1 par value per share
Trading Symbol(s)
ALX
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.
Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
☐ Large Accelerated Filer
☐ Non-Accelerated Filer
☑ Accelerated Filer
☐ Smaller Reporting Company
☐ Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report.
Yes ☑ No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the voting and non-voting shares of common stock held by non-affiliates of the registrant, (i.e., by persons other than officers and
directors of Alexander’s, Inc.) was $390,771,000 at June 30, 2023.
As of January 31, 2024, there were 5,107,290 shares of the registrant’s common stock outstanding.
Part III: Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2024.
DOCUMENTS INCORPORATED BY REFERENCE
INDEX
Page Number
Item
1.
1A.
1B.
1C.
2.
3.
4.
5.
6.
7.
Business
Risk Factors
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations
7A.
Quantitative and Qualitative Disclosures About Market Risk
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
14.
15.
16.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Directors, Executive Officers and Corporate Governance
(1)
Executive Compensation
(1)
(1)
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
(1)
Principal Accountant Fees and Services
(1)
Exhibits and Financial Statement Schedules
Form 10-K Summary
PART I.
PART II.
PART III.
PART IV.
Signatures
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8
20
21
22
24
24
24
25
26
34
35
55
55
58
58
58
59
59
59
59
60
68
69
__________________________
(1) These items are omitted in part or in whole because the registrant will file a definitive Proxy Statement pursuant to Regulation 14A under the Securities Exchange Act of 1934
with the Securities and Exchange Commission no later than 120 days after December 31, 2023, portions of which are incorporated by reference herein.
3
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our
intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business
may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as
“approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Annual Report on Form
10‑K. We also note the following forward-looking statements: in the case of our development projects, the estimated completion date, estimated project costs and
costs to complete; and estimates of dividends on shares of our common stock. Many of the factors that will determine the outcome of these and our other forward-
looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking
statements, see “Item 1A. Risk Factors” in this Annual Report on Form 10-K.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of
1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K or
the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our
behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release
publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report on Form 10-K.
4
ITEM 1. BUSINESS
General
PART I
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and
redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are
managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO).
We have five properties in New York City consisting of:
Operating properties
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731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 Street, Third
Avenue and East 58 Street in Manhattan. The building contains 939,000 and 140,000 of rentable square feet of office and retail space,
respectively. Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant;
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Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63 Road in Queens. The center is anchored by a 50,000 square
foot Burlington and a 36,000 square foot Marshalls.
rd
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030. The
lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional
termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On September 27, 2023, we entered into a
lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA
will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term;
Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens. The center is anchored by a
145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased;
Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is subleased to New World Mall LLC. The
property is ground leased through January 2027 with one 10-year extension option; and
The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.
Disposition
On May 19, 2023, we sold the Rego Park III land parcel in Queens, New York, for $71,060,000 inclusive of consideration for Brownfield tax benefits and
reimbursement of costs for plans, specifications and improvements to date. Net proceeds from the sale were $67,821,000 after closing costs and the financial
statement gain was $53,952,000.
Relationship with Vornado
We are managed by, and our properties are leased and developed by, Vornado, pursuant to various agreements which expire in March of each year and are
automatically renewable. Vornado is a fully-integrated REIT with significant experience in managing, leasing, developing, and operating office and retail
properties.
As of December 31, 2023, Vornado owned 32.4% of our outstanding common stock. Steven Roth is the Chairman of our Board of Directors and Chief
Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of
Trustees and Chief Executive Officer of Vornado. As of December 31, 2023, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and
Russell B. Wight, Jr. (who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.0% of our outstanding common stock, in
addition to the 2.3% they indirectly own through Vornado.
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Significant Tenant
Bloomberg accounted for revenue of $120,351,000, $115,129,000 and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively,
representing approximately 54%, 56% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental
revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results
of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial
information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as
publicly available data.
Environmental Sustainability Initiatives
We have long believed a focus on environmental sustainability is responsible management of our business and important to our tenants, investors, employees
and communities that we serve. Since we are externally managed by Vornado, Vornado’s Corporate Governance and Nominating Committee of its Board of
Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters at Alexander’s, which includes climate change risk. Environmental
sustainability initiatives are carried out by a dedicated team of professionals that work directly with Vornado’s business units. In the discussion below, when we
refer to Vornado’s buildings, it includes our buildings.
Vornado is an industry leader in sustainability, owning and operating more than 25 million square feet of LEED (Leadership in Energy and Environmental
Design) certified buildings, representing 95% of its in-service office portfolio, with over 24 million square feet at LEED Gold or Platinum. In 2023, Vornado (i)
ranked #1 in the US Diversified Office/Retail REIT peer group by GRESB, and received the “Green Star” distinction for the eleventh consecutive year and
GRESB's five star rating, (ii) received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for diversified
REITs for the thirteenth time, and (iii) was recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated eight years of
sustained excellence.
Vornado prioritizes addressing climate change and in 2019 adopted a 10-year plan to make its buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is
a multi-faceted approach that prioritizes energy reduction, recovery, and renewable power. Vornado relies on technology, as well as meaningful stakeholder
collaboration with its tenants, its employees, and its communities, to achieve this plan. Vornado’s commitment to carbon neutrality and associated emissions
reduction targets have been approved by the Science Based Targets Initiative as consistent with a 1.5°C climate scenario, the most ambitious goal of the Paris
Agreement.
Vornado considers sustainability in all aspects of its business, including the design, construction, retrofitting and ongoing maintenance and operations of its
portfolio of buildings. Vornado operates its buildings sustainably and efficiently by seeking to establish best practices in energy and water consumption, carbon
reduction, resource and waste management and ecologically sensitive procurement. Vornado’s policies, from 100% green cleaning to procuring 100% renewable
electricity certificates to energy efficiency, are implemented across its entire portfolio. Vornado undertakes significant outreach with its tenants, employees and
investors regarding Vornado’s sustainability programs and strategies.
Vornado gathers data to measure progress against its goals, aligns its goals with its tenants, plans for its longer-term projects and engages with its stakeholders
in meaningful ways. Vornado uses carbon accounting software, energy audits and models and building automation software to measure and track its portfolio-wide
waste, water and energy reduction strategies, create roadmaps for each building to understand how to achieve carbon neutrality and provide accurate and
actionable data for its measurement, verification and reporting requirements.
Vornado’s 2022 and 2023 long-term performance plan awards specifically tie a portion of senior management’s compensation to the achievement of certain
ESG targets, including reductions in greenhouse gas emissions, achieving a specified GRESB score and targeting a specified percentage of LEED Gold or
Platinum certified square footage in its office portfolio.
Vornado is committed to transparent reporting of sustainability performance indicators and publishes an annual ESG Report in accordance with the Global
Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and in 2023 published a report in accordance with the
Task Force on Climate-related Financial Disclosures. Vornado also submits public reports to CDP (formerly, the Carbon Disclosure Project), CSA (the S&P
Global Corporate Sustainability Assessment) and EP100 (global initiative led by Climate Group). Further details on Vornado’s environmental sustainability
initiatives and strategy, including its Vision 2030 Roadmap, can be found in Vornado’s 2022 ESG Report at (vno.com/sustainability). There can be no assurance
that Vornado’s Vision 2030 commitment will be achieved in the planned time frame. The ESG Report is not incorporated by reference and should not be
considered part of this Annual Report on Form 10-K.
6
Competition
We operate in a highly competitive environment located in New York City. We compete with a large number of real estate investors, property owners and
developers, some of whom may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, tenant concessions
offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors,
trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability
and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability
to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.
See “Item 1A. Risk Factors” in this Annual Report on Form 10-K for additional information regarding these factors.
Human Capital Resources
Since we are externally managed by Vornado, we do not have separate employees that provide management, leasing and development services. We currently
have 92 property-level employees who provide cleaning, engineering and security services. Our employees are managed by Vornado in accordance with its
employee policies and they have access to Vornado’s benefits, training and other programs.
Executive Office
Our executive office is located at 210 Route 4 East, Paramus, New Jersey, 07652 and our telephone number is (201) 587-8541.
Available Information
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, as well as
Reports on Forms 3, 4 and 5 regarding officers, directors, and 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities
Exchange Act of 1934, are available free of charge on our website (www.alx-inc.com) as soon as reasonably practicable after they are electronically filed with, or
furnished to, the Securities and Exchange Commission (“SEC”). Also available on our website are copies of our Audit Committee Charter, Compensation
Committee Charter, Code of Business Conduct and Ethics and Corporate Governance Guidelines. In the event of any changes to these items, revised copies will
be made available on our website. Copies of these documents are also available directly from us free of charge. The SEC also maintains a website (www.sec.gov)
that contains reports, proxy and information statements and other information that is filed electronically with the SEC. The contents of our website provided above
are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
In May 2009, Vornado and Interstate each filed with the SEC an amendment to their respective Schedule 13D indicating that they, as a group, own 47.2% of
our common stock. This ownership level, together with the shares owned by Messrs. Roth, Mandelbaum and Wight, makes us a “controlled” company for the
purposes of the New York Stock Exchange, Inc.’s Corporate Governance Standards (the “NYSE Rules”). This means that we are not required to, among other
things, have a majority of the members of our Board of Directors be independent under the NYSE Rules, have all of the members of our Compensation Committee
be independent under the NYSE Rules or to have a Nominating Committee. While we have voluntarily complied with a majority of the independence
requirements of the NYSE Rules, we are under no obligation to do so and this situation may change at any time.
7
ITEM 1A. RISK FACTORS
Material factors that may adversely affect our business, operations and financial condition are summarized below. The risks and uncertainties described herein
may not be the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely
affect our business, operations and financial condition. See “Forward-Looking Statements” contained herein on page 4.
RISKS RELATED TO OUR BUSINESS AND OPERATIONS
We may be adversely affected by trends in office real estate, including work from home trends.
In 2023, approximately 54% of our rental revenue was from Bloomberg, the office tenant at our 731 Lexington Avenue office property. Work from home,
flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing remain prevalent in certain situations, following the COVID-19
pandemic. Changes in tenant space utilization, including from the continuation of work from home and flexible work arrangement policies, may cause office
tenants to reassess their long-term physical space needs, which could have an adverse effect on our business.
All of our properties are in New York City and are affected by the economic cycles and risks inherent to this area.
All of our revenues come from properties located in New York City. Real estate markets are affected by economic downturns and we cannot predict how
economic conditions will impact this market in either the short or long term. Declines in the economy and declines in the real estate markets in New York City
have affected and could affect our financial performance and the value of our properties. In addition to the factors affecting the national economic condition
generally, the factors affecting economic conditions in this area include:
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financial performance and productivity of the media, advertising, professional services, financial, technology, retail, insurance and real estate
industries;
business layoffs or downsizing;
any oversupply of, or reduced demand for, real estate;
industry slowdowns;
the effects of inflation;
rising interest rates;
relocations of businesses;
changing demographics;
increased work from home and use of alternative work places;
changes in the number of domestic and international tourists to our markets (including as a result of changes in the relative strengths of world
currencies);
the fiscal health of New York State and New York City governments and local transit authorities;
quality of life conditions;
infrastructure quality;
increased government regulation and costs of complying with such regulations; and
changes in rates or the treatment of the deductibility of state and local taxes.
It is impossible for us to predict the future effects of trends in the economic and investment climates of the New York City metropolitan region, and more
generally of the United States, on the real estate market in this area. Local, national or global economic downturns could negatively affect the value of our
properties, our business and profitability.
We are subject to risks that affect the general and New York City retail environments.
Certain of our properties are New York City retail properties and thus are affected by the general and New York City retail environments, including the level of
consumer spending and consumer confidence, New York City tourism, office and residential occupancy rates, employer remote-working policies, the threat of
terrorism or other criminal acts, increasing competition from online retailers and other retail centers, and the impact of technological change upon the retail
environment generally. These factors could adversely affect the financial condition of our retail tenants, or result in the bankruptcy of such tenants, and the
willingness of retailers to lease space in our retail locations, which could have an adverse effect on the value of our properties, our business and profitability.
8
Our performance and the value of an investment in us are subject to risks associated with our real estate assets and with the real estate industry.
The value of our real estate and the value of an investment in us fluctuates depending on conditions in the general economy and the real estate business. These
conditions may also adversely affect our revenues and cash flows.
The factors that affect the value of our real estate include, among other things:
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global, national, regional and local economic conditions and geopolitical events;
competition from other available space, including co-working space and subleases;
local conditions such as an oversupply of space or a reduction in demand for real estate in the area;
how well we manage our properties;
the development and/or redevelopment of our properties;
changes in market rental rates;
increased competition from online shopping and its impact on retail tenants and their demand for retail space;
the timing and costs associated with property improvements and rentals;
whether we are able to pass all or portions of any increases in operating costs through to tenants;
changes in real estate taxes and other expenses;
the ability of state and local governments to operate within their budgets;
whether tenants and users such as customers and shoppers consider a property attractive;
changes in consumer preferences adversely affecting retailers and retail store values;
changes in tenant space utilization;
the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
consequences of any armed conflict involving, or terrorist attacks against, the United States or individual acts of violence in public spaces;
trends in office real estate, including many tenants’ preferences for space in modern amenitized buildings which may require the landlord to incur
significant capital expenditures;
availability of financing on acceptable terms or at all;
inflation or deflation;
fluctuations in interest rates;
our ability to obtain adequate insurance;
government regulation, including changes in fiscal policies, taxation, and zoning laws;
potential liability and compliance costs associated with environmental or other laws or regulations;
natural disasters;
general competitive factors;
climate change; and
the impact of pandemics or outbreaks of other infectious diseases.
The rents or sales proceeds we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors. If rental
revenues, sales proceeds and/or occupancy levels decline, we generally would expect to have less cash available for operating costs, to pay indebtedness and for
distribution to our stockholders. In addition, some of our major expenses, including mortgage interest payments, real estate taxes and maintenance costs generally
do not decline when the related rents decline, and maintenance costs can increase substantially in an inflationary environment. These factors may cause the value
of our real estate assets to decline, which may result in non-cash impairment charges and the impact could be material.
Real estate is a competitive business and that competition may adversely affect us.
We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their
investments. Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth
and the quality of services provided. Substantially all of our properties face competition from similar properties in the same market, which may adversely affect
the rents we can charge at those properties and our results of operations.
9
We may be unable to renew leases, lease vacant space or relet space as leases expire on favorable terms.
When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if tenants do renew or we can relet the
space, the terms of renewal or reletting, considering among other things, rent and concessions, the cost of improvements to the property and leasing commissions,
may be on less economically favorable terms. In addition, changes in space utilization by our tenants may impact our ability to renew or relet space without the
need to incur substantial costs in renovating or redesigning the internal configuration of the relevant property and/or space. If we are unable to promptly renew the
leases or relet the space at similar rates, lease vacant space, or if we are otherwise not able to maintain occupancy on favorable terms, our cash flow and ability to
service debt obligations and pay dividends and distributions to stockholders could be adversely affected.
731 Lexington Avenue accounts for a majority of our revenues. Loss of or damage to the building would adversely affect our financial condition and
results of operations.
731 Lexington Avenue accounted for revenue of $148,806,000, $138,778,000 and $140,524,000 in the years ended December 31, 2023, 2022 and 2021,
respectively, representing approximately 66%, 67% and 68% of our rental revenues in each year, respectively. Loss of or damage to the building in excess of our
insurance coverage, including as a result of a terrorist attack, would adversely affect our results of operations and financial condition.
Bloomberg represents a majority of our revenues. Loss of Bloomberg as a tenant or deterioration in Bloomberg’s credit quality could adversely affect our
financial condition and results of operations.
Bloomberg accounted for revenue of $120,351,000, $115,129,000 and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively,
representing approximately 54%, 56% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental
revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results
of operations and financial condition.
We depend upon anchor tenants to attract shoppers at our Rego Park I and II retail properties and decisions made by these tenants, or adverse
developments in the businesses of these tenants, could materially affect our financial condition and results of operations.
Our Rego Park I and II retail properties are anchored by well-known department stores and other tenants who generate shopping traffic. The value of these
properties would be adversely affected if our anchor tenants failed to meet their contractual obligations, sought concessions in order to continue operations or
ceased their operations, including as a result of bankruptcy. If the level of sales at stores operating in our properties were to decline significantly due to economic
conditions, increased competition from online shopping, closing of anchors or for other reasons, tenants may be unable to pay their minimum rents or expense
recovery charges. In the event of a default by a tenant or anchor, we may experience delays and costs in enforcing our rights as landlord. Additionally, closure of
an anchor or major tenant could result in lease terminations by, or reductions of rent from other tenants if the other tenants’ leases have co-tenancy clauses.
Bankruptcy or insolvency of tenants may decrease our revenues, net income and available cash.
From time-to-time, some of our tenants have declared bankruptcy, and other tenants may declare bankruptcy, become insolvent or experience a material
business downturn adversely affecting their ability to make timely rental payments in the future. If a tenant does not pay its rent, we may face delays enforcing our
rights as landlord and may incur substantial legal and other costs. Even if we are able to enforce our rights, a tenant may not have recoverable assets. The
bankruptcy or insolvency of a major tenant may delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of
these amounts altogether. As a result, the bankruptcy or insolvency of, or nonpayment by, a major tenant could cause us to suffer lower revenues and operational
difficulties, including leasing the remainder of the property, which could in turn result in decreased net income and funds available to pay our indebtedness and
make distributions to stockholders.
10
Our business, financial condition, results of operations and cash flows have been and may continue to be adversely affected by outbreaks of highly
infectious or contagious diseases.
Our business has been, and may continue to be, adversely affected by the economic and industry challenges created by highly infectious or contagious diseases,
including the COVID-19 pandemic. The impact of the COVID-19 pandemic caused retailers to reduce the number and size of their physical locations and further
increase reliance on e-commerce, and future infectious or contagious diseases could have a similar impact. Additionally, our office tenant may adjust its employee
work from home arrangements which may lead to a reassessment of its long-term physical space needs. Any future outbreak of a highly infectious or contagious
disease could impact how people live, work and travel in ways that have affected and may in the future affect our properties. Over time, these factors could
decrease the demand for office and retail space and ultimately decrease occupancy and/or rent levels across our portfolio, which may have a negative impact on
our financial condition and/or access to capital.
Some of our potential losses may not be covered by insurance.
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable
disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism,
with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.
Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism,
including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which
has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the
aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no
exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is
responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism or other events. However, we cannot
anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses
in excess of our insurance coverage, which could be material and adversely affect our business, results of operations and financial condition.
Our loans contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of
these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are
able to obtain, it could adversely affect our ability to finance or refinance our properties.
Actual or threatened terrorist attacks or other criminal acts may adversely affect the value of our properties and our ability to generate cash flow.
All of our properties are located in New York City, and our most significant property, 731 Lexington Avenue, is located on Lexington Avenue and 59th Street
in Manhattan. In response to a terrorist attack, the perceived threat of terrorism or other criminal acts, tenants in this area may choose to relocate their businesses
to less populated, lower-profile areas of the United States that may be perceived to be less likely targets of future terrorist activity or have lower rates of crime and
fewer customers may choose to patronize businesses in this area. This, in turn, could trigger a decrease in the demand for space in this area, which could increase
vacancies in our properties and force us to lease space at our properties on less favorable terms. Furthermore, we may experience increased costs for security,
equipment and personnel. As a result, the value of our properties and the level of our revenues and cash flows could decline materially.
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Natural disasters and the effects of climate change could have a concentrated impact on the area where we operate and could adversely affect our results.
Our properties are located in New York City. Physical climate change and natural disasters, including earthquakes, storms, storm surges, tornados, floods and
hurricanes, could cause significant damage to our properties and the surrounding environment or area. Potentially adverse consequences of climate change,
including rising sea levels and increased temperature fluctuations, could similarly have an impact on our properties and the economies of the metropolitan area in
which we operate. Government efforts to combat climate change may impact the cost of operating our properties. Over time, these conditions could result in
declining demand for space in our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by
increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy at our properties and requiring us to
expend funds as we seek to repair and protect our properties against such risks. The incurrence of these losses, costs or business interruptions may adversely affect
our operating and financial results.
Our properties are located in an urban area, which means the vitality of our properties is reliant on sound transportation and utility infrastructure. If that
infrastructure is compromised in any way by an extreme weather event, such a compromise could have an adverse effect on our local economies and populations,
as well as on our tenants’ ability to do business in our buildings.
Our properties are subject to transitional risks related to climate-related policy change.
De-carbonization of grid-supplied energy could lead to increased energy costs and operating expenses for our buildings. Retrofitting our building systems to
consume less energy could lead to increased capital costs. Buildings which consume fossil fuels onsite may be subject to penalties in the future. In addition, the
full transition of grid-supplied energy to renewable sources (as has been mandated by the Climate Leadership and Community Protection Act in New York State)
could lead to increased energy costs and operating expenses for our buildings. Although these laws and regulations have not had any material adverse effects on
our business to date, they could result in substantial costs, including compliance costs, increased energy costs, retrofit costs and construction costs. We cannot
predict how future laws and regulations, or future interpretations of current laws and regulations, related to climate change will affect our business, results of
operations and financial condition.
We may become subject to costs, taxes or penalties, or increases therein, associated with natural resource or energy usage, such as a “carbon tax” and by local
legislation such as New York City’s Local Law 97, which sets limits on carbon emissions in our buildings and imposes penalties if we exceed those limits, and
New York City’s Intro 2317, or the “gas ban” bill, which limits any onsite fossil fuel combustion in new construction and major renovations. These costs, taxes or
penalties could increase our operating costs and decrease the cash available to pay our indebtedness and make distributions to our stockholders.
Changes to tax laws could affect REITs generally, the trading of our shares and our results of operations, both positively and negatively, in ways that are
difficult to anticipate.
The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the IRS
and the Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect the taxation of REITs and their
shareholders. We cannot predict whether, when, in what form, or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or
decided, or technical corrections made, which could result in an increase in our, or our stockholders’, tax liability or require changes in the manner in which we
operate in order to minimize increases in our tax liability. If such changes occur, we may be required to pay additional taxes on our assets or income and/or be
subject to additional restrictions. These increased tax costs could, among other things, adversely affect the trading price for our common shares, our financial
condition, our results of operations and the amount of cash available to pay our indebtedness and make distributions to our stockholders.
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Significant inflation and continuing increases in the inflation rate could adversely affect our business and financial results.
Recent substantial increases in the rate of inflation and potential future elevated rates of inflation, both real and anticipated, may impact our business and
results of operations. In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit
margins. In addition, our cost of labor and materials could increase, which could have an adverse effect on our business or financial results. Increased inflation
could also adversely affect us by increasing costs of construction and renovation. While increases in most operating expenses at our properties can be passed on to
our office and retail tenants, some tenants have fixed reimbursement charges, and expenses at our residential property may not be able to be passed on to
residential tenants. Unreimbursed increased operating expenses may reduce cash flow available to pay our indebtedness and make distributions to our
stockholders.
We may acquire, develop, or redevelop properties and this may create risks.
Although our current business strategy is not to engage in acquisitions, we may acquire, develop or redevelop properties when we believe that an acquisition,
development or redevelopment project is otherwise consistent with our business strategy. We may not succeed in (i) acquiring, developing, or redeveloping
properties; (ii) completing these activities on time or within budget; and (iii) leasing or selling acquired, developed, or redeveloped properties at amounts sufficient
to cover our costs. Competition in these activities could also significantly increase our costs. Difficulties in integrating acquisitions may prove costly or time-
consuming and could divert management’s attention. Acquisitions, developments or redevelopments in new markets or types of properties where we do not have
the same level of market knowledge may result in weaker than anticipated performance. We may also abandon acquisition, development or redevelopment
opportunities that we have begun pursuing and consequently fail to recover expenses already incurred. Furthermore, we may be exposed to the liabilities of
properties acquired, some of which we may not be aware of at the time of acquisition.
We are exposed to risks associated with property development, redevelopment and repositioning that could adversely affect us, including our financial
condition and results of operations.
We continue to engage in development, redevelopment and repositioning activities with respect to our properties. We are subject to certain risks in connection
with development and redevelopment activities, which could adversely affect us, including our financial condition and results of operations. These risks include,
without limitation, (i) the availability and pricing of financing on favorable terms or at all; (ii) the availability and timely receipt of zoning and other regulatory
approvals; (iii) cost overruns, especially in an inflationary environment, and untimely completion of construction (including risks beyond our control, such as
weather or labor conditions, material shortages or supply chain delays); (iv) the potential for the fluctuation of occupancy rates and rents at redeveloped properties,
which may result in our investment not being profitable; (v) start up, repositioning and redevelopment costs may be higher than anticipated; (vi) the potential that
we may fail to recover expenses already incurred if we abandon development or redevelopment opportunities after we begin to explore them; (vii) the potential
that we may expend funds on and devote management’s time to projects which we do not complete; (viii) the inability to complete leasing of a property on
schedule or at all, resulting in an increase in carrying or redevelopment costs; (ix) the possibility that properties will be leased at below expected rental rates.
These risks could result in substantial unanticipated delays or expenses and could prevent the initiation or the completion of redevelopment activities or reduce the
ultimate rents achieved on new developments. These outcomes could have an adverse effect on our financial condition, results of operations, cash flow, the market
value of our common shares and ability to pay our indebtedness and make distributions to our stockholders.
It may be difficult to sell real estate on a timely basis, which may limit our flexibility.
Real estate investments are relatively illiquid. Consequently, we may have limited ability to dispose of assets in our portfolio promptly in response to changes
in economic or other conditions which could have an adverse effect on our sources of working capital and our ability to satisfy our indebtedness.
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RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL
Significantly tighter capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the
value of an investment in our common stock.
There are many factors that can affect the value of our equity securities and any debt securities we may issue in the future, including the state of the capital
markets and the economy. Demand for office and retail space typically declines nationwide due to an economic downturn, bankruptcies, downsizing, layoffs and
cost cutting. Government action or inaction may adversely affect the state of the capital markets. The cost and availability of credit may be adversely affected by
illiquid credit markets and wider credit spreads, which may adversely affect our liquidity and financial condition, including our results of operations, and the
liquidity and financial condition of our tenants. Recently, domestic and international financial markets have experienced unusual volatility, significant interest rate
increases and continuing uncertainty. Liquidity has significantly tightened in overall financial markets. Consequently, there is greater uncertainty regarding our
ability to access the credit markets in order to obtain financing on reasonable terms. Additionally, the recent inflation environment has led to an increase in interest
rates, which has had a direct and material increase on the interest expense of our borrowings. Our inability or the inability of our tenants to timely refinance
maturing liabilities and access the capital markets to meet liquidity needs may materially affect our financial condition and results of operations and the value of
our common stock.
We have outstanding debt, and the amount of debt and its cost may continue to increase and refinancing may not be available on acceptable terms, which
could affect our future operations.
As of December 31, 2023, total mortgages payable, excluding deferred debt issuance costs, was $1,096,544,000, and our rate of total debt to total enterprise
value was 66%. “Enterprise value” means the market equity value of our common stock, plus debt, less cash and cash equivalents at such date. We are subject to
the risks normally associated with debt financing, including the risk that our cash flow from operations will be insufficient to meet our required debt service. Our
debt service costs generally will not be reduced if conditions in the market or at our properties, such as the entry of new competitors or the loss of major tenants,
cause a reduction in the income from our properties. Should such events occur, our operations may be adversely affected.
If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be
foreclosed upon by the mortgagee resulting in a loss of the asset.
If we are unable to obtain additional debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would
likely be adversely affected. In addition, the current rising interest rate environment has led to an increase in interest rates on our variable rate debt and an increase
in the cost of refinancing our existing debt, entering into new debt and for interest rate hedge instruments, reducing our operating cash flows. While certain of our
debt is fixed by an interest rate swap arrangement, the arrangement expires earlier than the mortgage loan maturity, resulting in future exposure to rising interest
rates, which could further reduce our available cash. If the cost or amount of our indebtedness continues to increase or we cannot refinance our debt in sufficient
amounts or on acceptable terms, we are at risk of default on our obligations that could adversely affect our financial condition and results of operations.
Our existing financing documents contain covenants and restrictions that may restrict our operational and financial flexibility.
As of December 31, 2023, we had outstanding mortgage indebtedness of $1,096,544,000, secured by three of our properties. These mortgages contain
covenants that limit our ability to incur additional indebtedness on these properties, provide for lender approval of tenants’ leases in certain circumstances, and in
certain cases provide for yield maintenance or defeasance premiums to prepay them. These mortgages may significantly restrict our operational and financial
flexibility. In addition, if we were to fail to perform our obligations under existing indebtedness or become insolvent or were liquidated, secured creditors would
be entitled to payment in full from the proceeds of the sale of the pledged assets prior to any proceeds being paid to other creditors or to any holders of our
securities. In such an event, it is possible that we would have insufficient assets remaining to make payments to other creditors or to any holders of our securities.
The hedge instruments we may use to manage our exposure to interest rate volatility involve risks.
The interest rate hedge instruments we may use to manage some of our exposure to interest rate volatility involve risks, including the risk that counterparties
may fail to perform under these arrangements. If interest rates were to fall, these arrangements may cause us to pay higher interest on our debt obligations than
would otherwise be the case. In addition, the use of such instruments may generate income that may not be treated as qualifying REIT income for purposes of the
75% gross income test or 95% gross income test. Furthermore, there can be no assurance that our hedging arrangements will qualify as “highly effective” cash
flow hedges under applicable accounting standards. If our hedges do not qualify as “highly effective,” the changes in the fair value of these instruments would be
reflected in our results of operations and could adversely affect our earnings.
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RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE
Substantially all of our assets are owned by subsidiaries. We depend on dividends and distributions from these subsidiaries. The creditors of these
subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or make distributions to us.
Substantially all of our properties and assets are held through our subsidiaries. We depend on cash distributions and dividends from our subsidiaries for
substantially all of our cash flow. The creditors of each of our subsidiaries are entitled to payment of that subsidiary’s obligations to them when due and payable
before that subsidiary may pay dividends or make distributions to us. Thus, our ability to pay dividends, if any, to our security holders depends on our subsidiaries’
ability to first satisfy their obligations to their creditors and our ability to satisfy our obligations, if any, to our creditors.
In addition, our participation in any distribution of the assets of any of our subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary, is
only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the applicable subsidiary, are satisfied.
Alexander’s charter documents and applicable laws may hinder any attempt to acquire us.
Provisions in Alexander’s certificate of incorporation and by laws, as well as provisions of the Code and Delaware corporate law, may delay or prevent a
change in control of the Company or a tender offer, even if such action might be beneficial to stockholders, and limit the stockholders’ opportunity to receive a
potential premium for their shares of common stock over then prevailing market prices.
In order to qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, actually or constructively, more than 50% in value of the issued
and outstanding shares of our stock at any time during the last half of each taxable year. Additionally, at least 100 persons must beneficially own shares of our
stock during at least 335 days of a taxable year for each taxable year. To help ensure that we meet these tests, among other purposes, our charter restricts the
acquisition and ownership of shares of our stock. Primarily to facilitate maintenance of its qualification as a REIT, Alexander’s certificate of incorporation
generally prohibits ownership, directly, indirectly or beneficially, by any single stockholder of more than 9.9% of the outstanding shares of preferred stock of any
class or 4.9% of outstanding common stock of any class. The Board of Directors may waive or modify these ownership limits with respect to one or more persons
if it is satisfied that ownership in excess of these limits will not jeopardize Alexander’s status as a REIT for federal income tax purposes. In addition, the Board of
Directors has, subject to certain conditions and limitations, exempted Vornado and certain of its affiliates from these ownership limitations. Stock owned in
violation of these ownership limits will be subject to the loss of rights and other restrictions. These ownership limits may have the effect of inhibiting or impeding
a change in control.
Alexander’s Board of Directors is divided into three classes of directors. Directors of each class are chosen for three-year staggered terms. Staggered terms of
directors may have the effect of delaying or preventing changes in control or management, even though changes in management or a change in control might be in
the best interest of our stockholders.
In addition, Alexander’s charter documents authorize the Board of Directors to:
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cause Alexander’s to issue additional authorized but unissued common stock or preferred stock;
classify or reclassify, in one or more series, any unissued preferred stock; and
set the preferences, rights and other terms of any classified or reclassified stock that Alexander’s issues.
The Board of Directors could establish a series of preferred stock with terms that could delay, deter or prevent a change in control of Alexander’s or other
transaction that might involve a premium price or otherwise be in the best interest of our stockholders, although the Board of Directors does not, at present, intend
to establish a series of preferred stock of this kind. Alexander’s charter documents contain other provisions that may delay, deter or prevent a change in control of
the Company or other transaction that might involve a premium price or otherwise be in the best interest of our stockholders.
In addition, Vornado, Interstate and its three general partners (each of whom are both trustees of Vornado and Directors of Alexander’s) together beneficially
own approximately 58.4% of our outstanding shares of common stock. This degree of ownership is likely to reduce the possibility of a tender offer or an attempt
to change control of the Company by a third party.
We may change our policies without obtaining the approval of our stockholders.
Our operating and financial policies, including our policies with respect to acquisitions of real estate or other assets, growth, operations, indebtedness,
capitalization and dividends, are exclusively determined by our Board of Directors. Accordingly, our stockholders do not control these policies.
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Steven Roth, Vornado and Interstate may exercise substantial influence over us. They and some of our other directors and officers have interests or
positions in other entities that may compete with us.
As of December 31, 2023, Interstate and its partners owned approximately 7.0% of the common shares of beneficial interest of Vornado and approximately
26.0% of our outstanding common stock. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the partners of Interstate. Mr. Roth is the Chairman of our
Board of Directors and our Chief Executive Officer, the Chairman of the Board of Trustees and Chief Executive Officer of Vornado and the Managing General
Partner of Interstate. Mr. Wight and Mr. Mandelbaum are both trustees of Vornado and members of our Board of Directors. In addition, Vornado manages and
leases the real estate assets of Interstate.
As of December 31, 2023, Vornado owned 32.4% of our outstanding common stock, in addition to the 26.0% owned by Interstate and its partners. In addition
to the relationships described in the immediately preceding paragraph, Ms. Mandakini Puri is a trustee of Vornado and a member of our Board of Directors.
Additionally, personnel and services that we require are provided to us under contracts with Vornado. We depend on Vornado to manage our operations and to
acquire and manage our portfolio of real estate assets. Vornado makes all decisions regarding the day-to-day management of our company, subject to the
supervision of, and any guidelines established by, our Board of Directors.
Because of their overlapping interests, Vornado, Mr. Roth, Interstate and the other individuals noted in the preceding paragraphs may have substantial
influence over Alexander’s, and on the outcome of any matters submitted to Alexander’s stockholders for approval. In addition, certain decisions concerning our
operations or financial structure may present conflicts of interest among Vornado, Messrs. Roth, Mandelbaum and Wight and Interstate and other security holders.
Vornado, Mr. Roth and Interstate may, in the future, engage in a wide variety of activities in the real estate business which may result in conflicts of interest with
respect to matters affecting us, such as, which of these entities or persons, if any, may take advantage of potential business opportunities, the business focus of
these entities, the types of properties and geographic locations in which these entities make investments, potential competition between business activities
conducted, or sought to be conducted, by us, competition for properties and tenants, possible corporate transactions such as acquisitions, and other strategic
decisions affecting the future of these entities.
There may be conflicts of interest between Vornado, its affiliates and us.
Vornado manages, develops and leases our properties under agreements that have one-year terms expiring in March of each year, which are automatically
renewable. Because we share common senior management with Vornado and because four of the trustees of Vornado are on our Board of Directors, the terms of
the foregoing agreements and any future agreements may not be comparable to those we could have negotiated with an unaffiliated third party.
For a description of Interstate’s ownership of Vornado and Alexander’s see “Steven Roth, Vornado and Interstate may exercise substantial influence over
us. They and some of our other directors and officers have interests or positions in other entities that may compete with us.” above. For a description of our related
party transactions with Vornado, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Party Transactions.”
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RISKS RELATED TO TECHNOLOGY, CYBERSECURITY AND DATA PROTECTION
The occurrence of cyber incidents, or a deficiency in our cybersecurity, as well as other disruptions to our IT networks and related systems, could adversely
affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business
relationships or reputation, all of which could adversely affect our financial results.
Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations (including managing our
building systems) and, in some cases, may be critical to the operations of certain of our tenants. We face risks associated with security breaches, whether through
cyber attacks or cyber intrusions over the Internet, malware, ransomware, computer viruses, phishing, attachments to e-mails, persons who access our systems
from inside or outside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption,
particularly through a cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the
number, intensity and sophistication of attempted attacks and intrusions from around the world have increased, including through the use of artificial intelligence.
Although we have not experienced cyber incidents that are individually, or in the aggregate, material, we have experienced cyber attacks in the past, which have
thus far been mitigated by preventative, detective, and responsive measures that we have put in place. Although we make efforts to maintain the security and
integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there
can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business,
through human error, misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, computer
viruses or other malicious codes, and similar means of unauthorized and destructive tampering. Even the most well protected information, networks, systems and
facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched
against a target, and in some cases are designed to not be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques
or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
A security breach or other significant disruption involving our IT networks and related systems could disrupt the proper functioning of our networks and
systems and therefore our operations and/or those of certain of our tenants; result in the unauthorized access to, and destruction, loss, theft, misappropriation or
release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or which could
expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes; result in our inability to maintain the building
systems relied upon by our tenants for the efficient use of their leased space; require significant management attention and resources to remedy any damages that
result; may require payments to the attackers; subject us to litigation claims for breach of contract, damages, credits, fines, penalties, governmental investigations
and enforcement actions or termination of leases or other agreements; or damage our reputation among our tenants and investors generally. Any or all of the
foregoing could have a material adverse effect on our results of operations, financial condition and cash flows.
A cyber attack or systems failure could interfere with our ability to comply with financial reporting requirements, which could adversely affect us. A cyber
attack could also compromise the confidential information of our employees, tenants, customers and vendors. A successful attack could disrupt and materially
affect our business operations, including damaging relationships with tenants, customers and vendors. Any compromise of our information security systems could
also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information
(which may be confidential, proprietary and/or commercially sensitive in nature) and a loss of confidence in our security measures, which could harm our
business.
For additional information on our cybersecurity risk management process, see “Item 1C. Cybersecurity” in this Annual Report on Form 10-K.
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RISKS RELATED TO OUR COMMON STOCK
The trading price of our common stock has been volatile and may continue to fluctuate.
The trading price of our common stock has been volatile and may continue to fluctuate widely as a result of several factors, many of which are outside of our
control. These factors include:
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our financial condition and performance;
the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
actual or anticipated quarterly fluctuations in our operating results and financial condition;
our dividend policy;
the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities,
including securities issued by other real estate companies, and fixed income securities;
uncertainty and volatility in the equity and credit markets;
fluctuations in interest rates;
changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies
with respect to our securities or those of other REITs;
failure to meet analysts’ revenue or earnings estimates;
speculation in the press or investment community;
strategic actions by us or our competitors, such as acquisitions or restructurings;
the extent of institutional investor interest in us;
the extent of short-selling of our common stock and the shares of our competitors;
fluctuations in the stock price and operating results of our competitors;
general financial and economic market conditions and, in particular, developments related to market conditions for office REITs and other real estate
related companies and the New York City real estate market;
the impact of inflation;
local, domestic and international economic factors unrelated to our performance (including the macro-economic impact of geopolitical conflict);
fiscal policies or inaction at the U.S. federal government level that may lead to federal government shutdowns or negative impacts on the U.S. economy;
changes in tax laws and rules; and
all other risk factors addressed elsewhere in this Annual Report on Form 10-K.
In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many
companies. These broad market fluctuations have in the past and may in the future adversely affect the market price of our common stock. A significant decline in
our stock price could result in substantial losses for stockholders.
Alexander’s has additional shares of its common stock available for future issuance, which could decrease the market price of the common stock currently
outstanding.
The interest of our current stockholders could be diluted if we issue additional equity securities. As of December 31, 2023, we had authorized but unissued
4,826,550 shares of common stock, par value of $1.00 per share and 3,000,000 shares of preferred stock, par value $1.00 per share; of which 23,388 shares of
common stock are reserved for issuance upon redemption of the deferred stock units previously granted to our Board of Directors. In addition, 482,399 shares are
available for future grant under the terms of our 2016 Omnibus Stock Plan. These awards may be granted in the form of options, restricted stock, stock
appreciation rights, deferred stock units, or other equity-based interests, and if granted, would reduce that number of shares available for future grants, provided
however that an award that may be settled only in cash, would not reduce the number of shares available under the plan. We cannot predict the impact that future
issuances of common or preferred stock or any exercise of outstanding options or grants of additional equity-based interests would have on the market price of our
common stock.
Loss of our key personnel could harm our operations and adversely affect the value of our common stock.
We are dependent on the efforts of Steven Roth, the Chairman of our Board of Directors and our Chief Executive Officer. Although we believe that we could
find a replacement, the loss of his services could harm our operations and adversely affect the value of our common stock.
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RISKS RELATED TO REGULATORY COMPLIANCE
We might fail to qualify or remain qualified as a REIT, and may be required to pay federal income taxes at corporate rates, which could adversely affect
the value of our common stock.
Although we believe that we will remain organized and will continue to operate so as to qualify as a REIT for federal income tax purposes, we might fail to
remain qualified. Qualification are governed by highly technical and complex provisions of the Internal Revenue Code for which there are only limited judicial or
administrative interpretations and depends on various facts and circumstances that are not entirely within our control. In addition, legislation, new regulations,
administrative interpretations or court decisions may significantly change the relevant tax laws and/or the federal income tax consequences of qualifying as a
REIT. If, with respect to any taxable year, we fail to maintain our qualification as a REIT and do not qualify under statutory relief provisions, we could not deduct
distributions to stockholders in computing our taxable income and would have to pay federal income tax on our taxable income at regular corporate rates. The
federal income tax payable would include any applicable alternative minimum tax. If we had to pay federal income tax, the amount of money available to
distribute to stockholders and pay our indebtedness would be reduced for the year or years involved, and we would not be required to make distributions to
stockholders in that taxable year and in future years until we were able to qualify as a REIT and did so. In addition, we would also be disqualified from treatment
as a REIT for the four taxable years following the year during which qualification was lost, unless we were entitled to relief under the relevant statutory
provisions. Our failure to qualify as a REIT could adversely affect our business and the value of our common stock.
We may face possible adverse federal tax audits and changes in federal tax laws, which may result in an increase in our tax liability.
In the normal course of business, certain entities through which we own real estate either have undergone or may undergo tax audits. Although we believe that
we have substantial arguments in favor of our positions, in some instances there is no controlling precedent or interpretive guidance. There can be no assurance
that audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict if or
when any new U.S. federal income tax law, regulation, or administrative interpretation, or any amendment to any existing U.S. federal income tax law, Treasury
regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect
retroactively. Alexander’s, its taxable REIT subsidiaries, and our security holders could be adversely affected by any such change in, or any new, U.S. federal
income tax law, Treasury regulation or administrative interpretation.
We may face possible adverse state and local tax audits and changes in state and local tax law.
Because we are organized and qualify as a REIT, we are generally not subject to federal income taxes, but we are subject to certain state and local taxes. In the
normal course of business, certain entities through which we own real estate have undergone, tax audits. There can be no assurance that future audits will not
occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
From time-to-time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. A shortfall in tax revenues
for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes in laws, regulations and administration of
property and transfer taxes. If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely
affect our financial condition and results of operations and the amount of cash available to pay our indebtedness and make distributions to our stockholders.
Compliance or failure to comply with the Americans with Disabilities Act (“ADA”) or other safety regulations and requirements could result in substantial
costs.
The ADA generally requires that public buildings, including our properties, meet certain Federal requirements related to access and use by disabled
persons. Noncompliance could result in the imposition of fines by the Federal government or the award of damages to private litigants and/or legal fees to their
counsel. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our properties, including the removal of
access barriers, it could adversely affect our financial condition and results of operations, as well as the amount of cash available for distribution to stockholders.
Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to
comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether
compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations.
19
We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate.
Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including air
and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous owner or operator of real estate may
be required to investigate and clean up hazardous or toxic substances released at a property. The owner or operator may also be held liable to a governmental
entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination.
These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. The presence of
contamination or the failure to remediate contamination may also impair our ability to sell or lease real estate or to borrow using the real estate as collateral. Other
laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event
of damage, demolition, renovation or remodeling and govern emissions of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint
and certain electrical equipment containing polychlorinated biphenyls (PCBs) are also regulated by federal and state laws. We are also subject to risks associated
with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be
connected to allergic or other health effects and symptoms in susceptible individuals. We could incur fines for environmental compliance and be held liable for the
costs of remedial action with respect to the foregoing regulated substances or related claims arising out of environmental contamination or human exposure to
contamination at or from our properties.
Each of our properties has been subjected to varying degrees of environmental assessment. To date, these environmental assessments have not revealed any
environmental condition material to our business. However, identification of new compliance concerns or undiscovered areas of contamination, changes in the
extent or known scope of contamination, human exposure to contamination or changes in clean-up or compliance requirements could result in significant costs to
us.
ITEM 1B. UNRESOLVED STAFF COMMENTS
There are no unresolved comments from the staff of the Securities and Exchange Commission as of the date of this Annual Report on Form 10-K.
20
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
Our comprehensive risk management strategy for the assessment, identification and management of material risks stemming from cybersecurity threats is
aligned with Vornado’s strategy as the Company’s manager, which involves a systematic evaluation of potential threats, vulnerabilities, and their potential impacts
on our organization’s operations, data, and systems.
Our manager’s cybersecurity risk management program, which is subject to our oversight, is integrated into our overall enterprise risk management program,
and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program, including legal,
compliance, strategic, operational, and financial risk areas.
The cybersecurity risk management program includes:
•
Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, and broader enterprise IT environment;
• A team principally responsible for managing (i) cybersecurity risk assessment processes, (ii) security controls and (iii) response to cybersecurity
•
•
incidents;
The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of security controls;
Cybersecurity awareness training for users and senior management, including through the use of third-party providers for regular mandatory
trainings;
• A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
• A risk management process for third-party service providers, suppliers and vendors, which includes a rigorous vetting process and ongoing
monitoring mechanisms designed to ensure their compliance with cybersecurity standards.
As of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity incidents, that have had a materially adverse effect on our
operations, business, results of operations, or financial condition.
Governance
Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”)
oversight of cybersecurity and other information technology risks. The Committee oversees the implementation of the cybersecurity risk management program.
The Committee receives periodic reports from management on potential cybersecurity risks and threats and receives presentations on cybersecurity topics from
Vornado’s Chief Information Officer. The Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The
full Board of Directors also receives briefings from management on the cybersecurity risk management program as needed.
Management, along with Vornado’s Chief Information Officer, is responsible for assessing and managing our material risks from cybersecurity threats.
Management and Vornado’s Chief Information Officer have primary responsibility for our overall cybersecurity risk management program and supervise both the
internal cybersecurity personnel and external cybersecurity consultants. Vornado’s Chief Information Officer has many years of experience leading cybersecurity
oversight and overall has broad, extensive experience with information technology, including security, auditing, compliance, systems and programming.
The management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may
include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including
external consultants; and alerts and reports produced by security tools deployed in the IT environment. Our cybersecurity incident response plan governs our
assessment and response upon the occurrence of a material cybersecurity incident, including the process for informing senior management and our Board of
Directors.
21
ITEM 2. PROPERTIES
The following table shows the location, approximate size (excluding parking garages) and occupancy of each of our properties as of December 31, 2023.
Property
Operating Properties:
731 Lexington Avenue
New York, NY
Office
Retail
Rego Park I
Queens, NY
Rego Park II
Queens, NY
Flushing
Queens, NY (5)
The Alexander apartment
tower, 312 units
Queens, NY
Square Feet
Land
Acreage
Total
Property
In
Service
Under
Development or
Not Available
for Lease
Occupancy
Rate
Weighted
Average
Escalated
Annual
Rent PSF (1)
Tenants
Expiration
Date (2)
939,000
939,000
83,000
45,000
12,000
140,000
1,079,000
83,000
45,000
12,000
140,000
1,079,000
112,000
50,000
36,000
16,000
124,000
338,000
145,000
133,000
194,000
144,000
616,000
112,000
50,000
36,000
16,000
—
214,000
145,000
133,000
194,000
144,000
616,000
167,000
2,200,000
167,000
2,076,000
255,000
2,455,000
255,000
2,331,000
1.9
4.8
6.6
1.0
—
—
—
—
—
—
—
—
—
—
—
124,000
124,000
—
—
—
—
—
—
124,000
—
124,000
100.0 % $
135.44
Bloomberg L.P.
2029
The Home Depot
Various
Vacant
2025
Various
N/A
90.3 %
98.9 %
252.89
147.65
100.0 %
53.08
IKEA (3)
Burlington
Marshalls
Old Navy
Vacant
Costco
Kohl’s (4)
Various
Vacant
2024
2027
2032
2024
N/A
2034
2031
Various
N/A
76.9 %
70.28
100.0 %
92.6 %
32.82
107.78
New World Mall LLC
2037
95.2 %
49.35 (6)
Residential
(7)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Represents the weighted average escalated annual rent per square foot, which includes tenant reimbursements and excludes the impact of tenant concessions (such as free rent), as of December 31, 2023. For a
discussion of our leasing activity, see Item 7 - Overview - Square Footage, Occupancy and Leasing Activity.
Represents the year in which the tenant’s lease expires, without consideration of any renewal or extension options. Lease expiration dates are based on non-cancelable lease terms and do not extend beyond any
early termination rights that the tenant may have under its lease.
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030. The lease included a right to terminate effective no earlier
than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On
September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its
remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
Subleased through remaining original lease term.
Ground leased through January 2027 with one 10-year extension option.
Average monthly rent per unit is $3,394.
Residential tenants generally have one or two year leases.
22
Operating Properties
731 Lexington Avenue
731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 Street, Third
Avenue and East 58 Street in Manhattan, New York, and is situated in the heart of one of Manhattan’s busiest business and shopping districts, with
convenient access to several subway and bus lines. The building contains 939,000 and 140,000 of rentable square feet of office and retail space,
respectively. Bloomberg occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant.
th
th
The office portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $500,000,000 which matures in June 2024. The
interest-only loan was at LIBOR plus 0.90% through July 15, 2023 and currently bears interest at the Prime Rate (8.50% as of December 31, 2023)
through loan maturity. In June 2023, we purchased an interest rate cap for $11,258,000, which capped LIBOR at 6.00% through July 15, 2023 and caps
the Prime Rate at 6.00% through loan maturity.
The retail portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $300,000,000 which matures in August 2025. The
interest-only loan is at SOFR plus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
Rego Park I
Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63rd Road in Queens, New York. The center is anchored by a
50,000 square foot Burlington and a 36,000 square foot Marshalls. The center contains a parking deck (1,241 spaces) that provides for paid parking.
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030.
The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional
termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On September 27, 2023, we entered into a
lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA
will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
On April 23, 2023, Bed Bath & Beyond ($1,533,000 of annual revenue) filed for Chapter 11 bankruptcy and its 46,000 square foot lease at the
property was rejected in the bankruptcy proceedings on July 31, 2023.
Rego Park II
Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens, New York. The center is
anchored by a 145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased. The center contains a parking deck (1,326
spaces) that provides for paid parking.
This center is encumbered by a mortgage loan in the amount of $202,544,000 which matures in December 2025. The interest-only loan is at SOFR
plus 1.45% (6.80% as of December 31, 2023). In connection therewith, we purchased an interest rate cap with a notional amount of $202,544,000 that
caps SOFR at a rate of 4.15% through November 2024.
Flushing
Our Flushing property is located on Roosevelt Avenue and Main Street in the downtown, commercial section of Flushing, Queens, New
York. Roosevelt Avenue and Main Street are active shopping districts and there are many national retailers located in the area. A subway entrance is
located directly in front of the property with bus service across the street. The property comprises a four-floor building containing 167,000 square feet
and a parking garage, which is subleased to New World Mall LLC through January 2037. The property is ground leased through January 2027 with one
10-year extension option.
The Alexander Apartment Tower
The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.
The property is encumbered by a mortgage loan in the amount of $94,000,000 which matures in November 2027. The interest-only loan has a fixed
rate of 2.63%.
23
ITEM 3. LEGAL PROCEEDINGS
We are from time-to-time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with our legal counsel, the
outcome of such pending matters will not have a material effect on our financial condition, results of operations or cash flows.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange under the symbol “ALX.”
As of January 31, 2024, there were 181 holders of record of our common stock.
Recent Sales of Unregistered Securities
None.
Information relating to compensation plans under which our equity securities are authorized for issuance is set forth under Part III, Item 12 of this Annual
Report on Form 10-K and such information is incorporated by reference herein.
Recent Purchases of Equity Securities
None.
24
Performance Graph
The following graph is a comparison of the five-year cumulative return of our common stock, the Standard & Poor’s 400 MidCap Index (the “S&P 400
MidCap Index”), Standard & Poor’s 500 Index (the “S&P 500 Index”), and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity
Index, a peer group index. The graph assumes that $100 was invested on December 31, 2018 in our common stock, the S&P 400 MidCap Index, the S&P 500
Index, and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions. There can be no assurance that the
performance of our stock will continue in line with the same or similar trends depicted in the graph below.
Alexander’s, Inc.
S&P 400 MidCap Index
S&P 500 Index
The NAREIT All Equity Index
$
100 $
100
100
100
114 $
126
131
129
102 $
143
156
122
102 ` $
179
200
172
93 $
156
164
129
2018
2019
2020
2021
2022
2023
ITEM 6. RESERVED
25
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The following discussion should be read in conjunction with the consolidated financial statements and related notes included under Part II, Item 8 of this
Annual Report on Form 10-K.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) within this section is focused on the years ended
December 31, 2023 and 2022, including year-to-year comparisons between these years. Our MD&A for the year ended December 31, 2021, including year-to-year
comparisons between 2022 and 2021, can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Overview
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and
redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are
managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO). We have five properties in New York City.
We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their
investments. Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of
current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation,
population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our
ability to refinance existing debt on acceptable terms as it comes due. See “Item 1A. Risk Factors” in this Annual Report on Form 10-K for additional information
regarding these factors.
Our business has been, and may continue to be, affected by the increase in inflation and interest rates, and other uncertainties including the potential for an
economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows.
26
Overview - continued
Year Ended December 31, 2023 Financial Results Summary
Net income for the year ended December 31, 2023 was $102,413,000 or $19.97 per diluted share, compared to $57,632,000 or $11.24 per diluted share for the
year ended December 31, 2022. Net income for the year ended December 31, 2023 included $53,952,000, or $10.52 per diluted share, of income as a result of a
net gain on the sale of real estate.
Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 2023 was $81,067,000, or $15.80 per diluted share, compared to $87,090,000,
or $16.99 per diluted share for the year ended December 31, 2022.
Square Footage, Occupancy and Leasing Activity
As of December 31, 2023, our portfolio was comprised of five properties aggregating 2,455,000 square feet. The commercial occupancy rate was 92.6% and
the residential occupancy rate was 95.2%.
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030. The lease
included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination
payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On September 27, 2023, we entered into a lease modification
agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its remaining rent due
through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
On April 23, 2023, Bed Bath & Beyond ($1,533,000 of annual revenue) filed for Chapter 11 bankruptcy and its 46,000 square foot lease at our Rego Park I
property was rejected in the bankruptcy proceedings on July 31, 2023.
Significant Tenant
Bloomberg accounted for revenue of $120,351,000, $115,129,000, and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively,
representing approximately 54%, 56% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental
revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results
of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial
information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as
publicly available data.
Disposition
On May 19, 2023, we sold the Rego Park III land parcel in Queens, New York, for $71,060,000 inclusive of consideration for Brownfield tax benefits and
reimbursement of costs for plans, specifications and improvements to date. Net proceeds from the sale were $67,821,000 after closing costs and the financial
statement gain was $53,952,000.
Financing
On June 9, 2023, we exercised our remaining one-year extension option on the $500,000,000 interest-only mortgage loan on the office condominium of our
731 Lexington Avenue property. The interest rate on the loan remained at LIBOR plus 0.90% through July 15, 2023 and currently bears interest at the Prime Rate
(8.50% as of December 31, 2023) through loan maturity on June 11, 2024. In June 2023, we purchased an interest rate cap for $11,258,000, which capped LIBOR
at 6.00% through July 15, 2023 and caps the Prime Rate at 6.00% through loan maturity.
27
Critical Accounting Estimate
In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates are deemed critical if they
involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of
operations. Below is the critical accounting estimate used in the preparation of our consolidated financial statements. A discussion of our accounting policies is
included in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K.
Impairment Analyses for Real Estate
Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are
prepared. Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating
the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of
future rental revenues, operating expenses, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by
our expectations about future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows or estimated fair value
of an asset and could thereby affect the value of our real estate on our consolidated balance sheets as well as any potential impairment losses recognized on our
consolidated statements of income.
Recent Accounting Pronouncements
See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion
concerning recent accounting pronouncements.
28
Results of Operations – Year Ended December 31, 2023 compared to December 31, 2022
Rental Revenues
Rental revenues were $224,962,000 in the year ended December 31, 2023, compared to $205,814,000 in the prior year, an increase of $19,148,000. This was
primarily due to (i) $8,065,000 of higher straight-line rental revenue from IKEA’s lease modification, (ii) $4,184,000 of higher reimbursable operating expenses
and capital expenditures, (iii) $3,750,000 of higher real estate tax reimbursements due to higher real estate tax expense, and (iv) $3,359,000 of higher revenue due
to leasing activity, partially offset by (v) $1,467,000 of lower lease termination fee income.
Operating Expenses
Operating expenses were $101,210,000 in the year ended December 31, 2023, compared to $90,446,000 in the prior year, an increase of $10,764,000. This
was primarily due to higher real estate tax expense and operating expenses, including the impact of lower capitalized expenses during the current year.
Depreciation and Amortization
Depreciation and amortization was $32,898,000 in the year ended December 31, 2023, compared to $29,797,000 in the prior year, an increase of $3,101,000.
This was primarily due to higher depreciation expense on capital projects placed into service during the current year.
General and Administrative Expenses
General and administrative expenses were $6,341,000 in the year ended December 31, 2023, compared to $6,106,000 in the prior year, an increase of
$235,000. This was primarily due to higher professional fees.
Interest and Other Income
Interest and other income was $22,245,000 in the year ended December 31, 2023, compared to $6,769,000 in the prior year, an increase of $15,476,000. This
was primarily due to an increase in average interest rates.
Interest and Debt Expense
Interest and debt expense was $58,297,000 in the year ended December 31, 2023, compared to $28,602,000 in the prior year, an increase of $29,695,000. This
was primarily due to $21,614,000 of higher interest expense resulting from increases in rates and $7,770,000 of higher interest rate cap premium amortization.
Net Gains on Sale of Real Estate
Net gains on the sale of real estate were $53,952,000 in the year ended December 31, 2023, resulting from the sale of the Rego Park III land parcel in Queens,
New York in May 2023.
29
Related Party Transactions
Vornado
As of December 31, 2023, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by,
Vornado, pursuant to various agreements, which expire in March of each year and are automatically renewable. These agreements are described in Note 5 –
Related Party Transactions, to our consolidated financial statements in this Annual Report on Form 10-K.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a
New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2023, Mr. Roth,
Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr. (who are also directors of the Company and trustees of Vornado) owned,
in the aggregate, 26.0% of our outstanding common stock, in addition to the 2.3% they indirectly own through Vornado.
Liquidity and Capital Resources
Our cash requirements include property operating expenses, capital improvements, tenant improvements, debt service, leasing commissions, dividends to
stockholders as well as development costs. The sources of liquidity to fund these cash requirements include rental revenue, which is our primary source of cash
flow and is dependent upon the occupancy and rental rates of our properties, as well as our existing cash, proceeds from financings, including mortgage or
construction loans secured by our properties and proceeds from asset sales.
As of December 31, 2023, we had $552,977,000 of liquidity comprised of cash and cash equivalents and restricted cash. Recent increases in interest rates and
inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months,
together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures. We
may refinance our maturing debt as it comes due or choose to pay it down. However, there can be no assurance that additional financing or capital will be
available to refinance our debt, or that the terms will be acceptable or advantageous to us.
Cash Flows for the Year Ended December 31, 2023
Cash and cash equivalents and restricted cash were $552,977,000 at December 31, 2023, compared to $214,478,000 at December 31, 2022, an increase of
$338,499,000. This resulted from (i) $321,812,000 of net cash provided by investing activities and (ii) $109,111,000 of net cash provided by operating activities,
partially offset by (iii) $92,424,000 of net cash used in financing activities.
Net cash provided by investing activities of $321,812,000 was comprised of (i) proceeds from maturities of U.S. Treasury bills of $264,881,000, (ii) proceeds
from sale of real estate of $67,821,000 and (iii) proceeds from interest rate cap of $5,049,000, partially offset by (iv) the purchase of interest rate cap of
$11,258,000 and (v) construction in progress and real estate additions of $4,681,000.
Net cash provided by operating activities of $109,111,000 was comprised of (i) net income of $102,413,000 and (ii) the net change in operating assets and
liabilities of $16,753,000, partially offset by (iii) adjustments for non-cash items of $10,055,000. The adjustments for non-cash items were comprised of (i) net
gain on sale of real estate of $53,952,000 and (ii) other non-cash adjustments of $1,559,000, partially offset by (iii) depreciation and amortization (including
amortization of debt issuance costs) of $34,605,000, (iv) interest rate cap premium amortization of $7,770,000, (v) straight-lining of rents of $2,631,000 and (vi)
stock-based compensation expense of $450,000.
Net cash used in financing activities of $92,424,000 was comprised of dividends paid of $92,320,000 and debt issuance costs of $104,000.
30
Liquidity and Capital Resources - continued
Cash Flows for the Year Ended December 31, 2022
Cash and cash equivalents and restricted cash were $214,478,000 at December 31, 2022, compared to $483,505,000 at December 31, 2021, a decrease of
$269,027,000. This resulted from (i) $279,266,000 of net cash used in investing activities and (ii) $92,310,000 of net cash used in financing activities, partially
offset by (iii) $102,549,000 of net cash provided by operating activities.
Net cash provided by operating activities of $102,549,000 was comprised of (i) net income of $57,632,000, (ii) adjustments for non-cash items of
$36,936,000 and (iii) the net change in operating assets and liabilities of $7,981,000. The adjustments for non-cash items were comprised of (i) depreciation and
amortization (including amortization of debt issuance costs) of $31,454,000, (ii) straight-lining of rental income of $7,960,000 and (iii) stock-based compensation
expense of $450,000, partially offset by (iv) other non-cash adjustments of $2,928,000.
Net cash used in investing activities of $279,266,000 was comprised of (i) the purchase of U.S. Treasury bills of $364,238,000 and (ii) $14,386,000 of
construction in progress and real estate additions, partially offset by (iii) $99,358,000 of proceeds from maturities of U.S. Treasury bills.
Net cash used in financing activities of $92,310,000 was primarily comprised of dividends paid of $92,264,000.
Dividends
On February 7, 2024, our Board of Directors declared a regular quarterly dividend of $4.50 per share (an indicated annual rate of $18.00 per share). The
dividend, if declared by the Board of Directors at the same rate for all of 2024, would require us to pay out approximately $92,350,000 in 2024.
Debt
Below is a summary of our outstanding debt and maturities as of December 31, 2023. We may refinance our maturing debt as it comes due or choose to repay
it.
(Amounts in thousands)
731 Lexington Avenue, office condominium
731 Lexington Avenue, retail condominium
Rego Park II shopping center
The Alexander apartment tower
Total
Deferred debt issuance costs, net of accumulated amortization of $17,639
(2)(3)
(2)(4)
(1)
Total, net
Balance
Interest Rate
Maturity
$
$
500,000
300,000
202,544
94,000
1,096,544
(3,993)
1,092,551
6.00 %
1.76 %
5.60 %
2.63 %
Jun. 11, 2024
Aug. 05, 2025
Dec. 12, 2025
Nov. 01, 2027
(1) Interest at the Prime Rate (capped at 6.00% through loan maturity).
(2) Interest rate listed represents the rate in effect as of December 31, 2023 based on SOFR as of contractual reset date plus contractual
spread, adjusted for hedging instruments as applicable.
(3) Interest at SOFR plus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
(4) Interest at SOFR plus 1.45% (SOFR is capped at a rate of 4.15% through November 2024).
Below is a summary of our principal and interest repayments scheduled as of December 31, 2023.
(Amounts in thousands)
Long-term debt obligations
Total principal and interest repayments
(1)
Total
Less than
One Year
One to
Three Years
Three to
Five Years
More than
Five Years
$
$
1,157,131 $
1,157,131 $
533,204 $
533,204 $
527,839 $
527,839 $
96,088 $
96,088 $
—
—
(1) Interest on variable rate debt is computed using rates in effect as of December 31, 2023 adjusted for hedging instruments as applicable.
31
Liquidity and Capital Resources - continued
Capital Expenditures
Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances and leasing commissions. During 2024, we
expect to incur approximately $29,000,000 of capital expenditures at our properties. We plan to fund these capital expenditures from operating cash flow, existing
liquidity, and/or borrowings.
Commitments and Contingencies
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable
disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism,
with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.
Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism,
including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which
has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the
aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no
exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is
responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism or other events. However, we cannot
anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses
in excess of our insurance coverage, which could be material.
Our loans contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of
these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are
able to obtain, it could adversely affect our ability to finance or refinance our properties.
Letters of Credit
Approximately $900,000 of standby letters of credit were issued and outstanding as of December 31, 2023.
Other
There are various legal actions brought against us from time-to-time in the ordinary course of business. In our opinion, the outcome of such pending matters in
the aggregate will not have a material effect on our financial position, results of operations or cash flows.
32
Funds from Operations (“FFO”) (non-GAAP)
FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts
(“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of certain real estate assets, real estate impairment
losses, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated
subsidiaries. FFO and FFO per diluted share are used by management, investors and analysts to facilitate meaningful comparisons of operating performance
between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on
historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions.
FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be
considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures
employed by other companies. A reconciliation of our net income to FFO is provided below.
FFO (non-GAAP) for the years ended December 31, 2023 and 2022
FFO (non-GAAP) for the year ended December 31, 2023 was $81,067,000, or $15.80 per diluted share, compared to $87,090,000, or $16.99 per diluted share
for the year ended December 31, 2022.
The following table reconciles our net income to FFO (non-GAAP):
(Amounts in thousands, except share and per share amounts)
Net income
Depreciation and amortization of real property
Net gain on sale of real estate
FFO (non-GAAP)
FFO per diluted share (non-GAAP)
Weighted average shares used in computing FFO per diluted share
For the Year Ended
December 31,
2023
2022
102,413 $
32,606
(53,952)
81,067 $
57,632
29,458
—
87,090
15.80 $
16.99
5,129,330
5,126,100
$
$
$
33
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. Our exposure to a change in interest rates is
summarized in the table below.
(Amounts in thousands, except per share amounts)
Variable rate
Fixed rate
2023
2022
December 31,
Balance
$
$
702,544
394,000
1,096,544
Weighted Average
Interest Rate
5.88%
1.97%
4.48%
$
$
Effect of 1%
Change in Base
Rates
December 31,
Balance
7,025 $
—
7,025 $
702,544
394,000
1,096,544
Weighted Average
Interest Rate
5.33%
1.97%
4.12%
Total effect on diluted earnings per share
$
1.37
We have an interest rate cap relating to the mortgage loan on the office condominium of our 731 Lexington Avenue property with a notional amount of
$500,000,000 that capped LIBOR at 6.00% through July 15, 2023 and caps the Prime Rate (8.50% as of December 31, 2023) at 6.00% through loan maturity.
We have an interest rate cap relating to the mortgage loan on Rego Park II shopping center with a notional amount of $202,544,000 that caps SOFR at 4.15%
through November 2024.
We have an interest rate swap relating to the mortgage loan on the retail condominium of our 731 Lexington Avenue property with a notional amount of
$300,000,000 that swaps SOFR plus 1.51% for a fixed rate of 1.76% through May 2025.
Fair Value of Debt
The fair value of our consolidated debt is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates
available to borrowers with similar credit ratings, which are provided by a third-party specialist. As of December 31, 2023 and 2022, the estimated fair value of
our consolidated debt was $1,071,887,000 and $1,061,221,000, respectively. Our fair value estimates, which are made at the end of the reporting period, may be
different from the amounts that may ultimately be realized upon the disposition of our financial instruments.
34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
Index to Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Income for the
Years Ended December 31, 2023, 2022 and 2021
Consolidated Statements of Comprehensive Income for the
Years Ended December 31, 2023, 2022 and 2021
Consolidated Statements of Changes in Equity for the
Years Ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the
Years Ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
35
Page
Number
36
38
39
40
41
42
44
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Alexander’s, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alexander’s, Inc. and subsidiaries (the "Company") as of December 31, 2023, and 2022, the
related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31,
2023, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of
America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal
control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2024, expressed an unqualified opinion on the
Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements
based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be
communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements,
taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
Real Estate Impairment – Refer to Note 2 to the financial statements
Critical Audit Matter Description
The Company’s real estate assets are individually evaluated for impairment when events or changes in circumstances indicate the carrying amount may not be
recoverable. The Company’s evaluation of the recoverability of real estate assets consists of the comparison of undiscounted future cash flows expected to be
generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount. The Company’s undiscounted future cash flow
analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates.
Given the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets is a significant assumption made by management,
performing audit procedures to evaluate the reasonableness of management’s undiscounted future cash flow analyses required a high degree of auditor judgment
and an increased extent of effort, including the need to involve our fair value specialists.
36
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets included the following,
among others:
• We tested the effectiveness of controls over management’s evaluation of the recoverability of real estate, including controls over management’s
•
determination of the reasonableness of the applicable capitalization rates.
Inquired with management regarding their determination of the capitalization rates, and evaluated the consistency of the capitalization rates used with
evidence obtained in other areas of the audit.
• With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s estimated capitalization rates by:
•
•
Testing the source information underlying the determination of the capitalization rates by evaluating the reasonableness of the
capitalization rates used by management with independent market data, focusing on key factors, including geographical location, tenant
composition, and property type.
Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by
management.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 12, 2024
We have served as the Company’s auditor since 1969.
37
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
ASSETS
December 31,
2023
2022
$
32,271 $
Real estate, at cost:
Land
Buildings and leasehold improvements
Development and construction in progress
Total
Accumulated depreciation and amortization
Real estate, net
Cash and cash equivalents
Restricted cash
Investments in U.S. Treasury bills
Tenant and other receivables
Receivable arising from the straight-lining of rents
Deferred leasing costs, net, including unamortized leasing fees to Vornado of
$19,540 and $22,174, respectively
Other assets
LIABILITIES AND EQUITY
Mortgages payable, net of deferred debt issuance costs
Amounts due to Vornado
Accounts payable and accrued expenses
Other liabilities
Total liabilities
Commitments and contingencies
Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares;
issued and outstanding, none
Common stock: $1.00 par value per share; authorized, 10,000,000 shares;
issued, 5,173,450 shares; outstanding, 5,107,290 shares
Additional capital
Retained earnings
Accumulated other comprehensive income
Treasury stock: 66,160 shares, at cost
Total equity
See notes to consolidated financial statements.
38
1,034,068
281
1,066,620
(415,903)
650,717
531,855
21,122
—
6,076
124,866
24,888
44,156
1,403,680 $
1,092,551 $
715
51,750
21,007
1,166,023
33,050
1,029,504
22,044
1,084,598
(396,268)
688,330
194,933
19,545
266,963
4,705
127,497
28,490
67,313
1,397,776
1,091,051
801
48,785
20,640
1,161,277
—
—
5,173
34,315
182,336
16,201
238,025
(368)
237,657
1,403,680 $
5,173
33,865
172,243
25,586
236,867
(368)
236,499
1,397,776
$
$
$
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share amounts)
REVENUES
Rental revenues
EXPENSES
Operating, including fees to Vornado of $6,480, $6,037 and $5,952, respectively
Depreciation and amortization
General and administrative, including management fees to Vornado of $2,440, $2,440 and $2,380,
respectively
Total expenses
Interest and other income
Interest and debt expense
Change in fair value of marketable securities
Net gains on sale of real estate
Income from continuing operations
Income from discontinued operations (see Note 8)
Net income
Income per common share - basic and diluted:
Income from continuing operations
Income from discontinued operations (see Note 8)
Net income per common share
2023
Year Ended December 31,
2022
2021
$
224,962 $
205,814 $
206,148
(101,210)
(32,898)
(6,341)
(140,449)
22,245
(58,297)
—
53,952
102,413
—
102,413 $
19.97 $
—
19.97 $
(90,446)
(29,797)
(6,106)
(126,349)
6,769
(28,602)
—
—
57,632
—
57,632 $
11.24 $
—
11.24 $
(91,089)
(32,938)
(5,924)
(129,951)
639
(19,686)
3,482
69,950
130,582
2,348
132,930
25.48
0.46
25.94
$
$
$
Weighted average shares outstanding - basic and diluted
5,129,330
5,126,100
5,123,613
See notes to consolidated financial statements.
39
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Net income
Other comprehensive (loss) income:
Change in fair value of interest rate derivatives and other
Comprehensive income
2023
Year Ended December 31,
2022
2021
102,413 $
57,632 $
132,930
(9,385)
93,028 $
18,092
75,724 $
8,201
141,131
$
$
See notes to consolidated financial statements.
40
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)
Common Stock
Shares
Amount
Additional
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Treasury
Stock
Total
Equity
$
5,173
—
—
—
—
5,173
—
—
—
—
5,173
—
—
—
—
$
5,173
—
—
—
—
5,173
—
—
—
—
5,173
—
—
—
—
$
32,965
—
—
—
450
33,415
—
—
—
450
33,865
—
—
—
450
$
166,165
132,930
(92,220)
—
—
206,875
57,632
(92,264)
—
—
172,243
102,413
(92,320)
—
—
$
(707)
—
—
8,201
—
7,494
—
—
18,092
—
25,586
—
—
(9,385)
—
$
(368)
—
—
—
—
(368)
—
—
—
—
(368)
—
—
—
—
203,228
132,930
(92,220)
8,201
450
252,589
57,632
(92,264)
18,092
450
236,499
102,413
(92,320)
(9,385)
450
5,173
$
5,173
$
34,315
$
182,336
$
16,201
$
(368)
$
237,657
Balance, December 31, 2020
Net income
Dividends paid ($18.00 per common share)
Change in fair value of interest rate derivatives
Deferred stock unit grants
Balance, December 31, 2021
Net income
Dividends paid ($18.00 per common share)
Change in fair value of interest rate derivatives
and other
Deferred stock unit grants
Balance, December 31, 2022
Net income
Dividends paid ($18.00 per common share)
Change in fair value of interest rate derivatives
and other
Deferred stock unit grants
Balance, December 31, 2023
See notes to consolidated financial statements.
41
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amortization of debt issuance costs
Net gains on sale of real estate (2021 includes $2,348 from discontinued operations)
Straight-lining of rents
Stock-based compensation expense
Change in fair value of marketable securities
Interest rate cap premium amortization
Other non-cash adjustments
Change in operating assets and liabilities:
Tenant and other receivables
Other assets
Amounts due to Vornado
Accounts payable and accrued expenses
Other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Construction in progress and real estate additions
Purchase of U.S. Treasury bills
Proceeds from maturities of U.S. Treasury bills
Proceeds from sales of real estate
Purchase of interest rate cap
Proceeds from interest rate cap
Return of short-term investment
Proceeds from sale of marketable securities
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
Debt issuance costs
Debt repayments
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents and restricted cash
Cash and cash equivalents and restricted cash at beginning of year
Cash and cash equivalents and restricted cash at end of year
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of year
Restricted cash at beginning of year
Cash and cash equivalents and restricted cash at beginning of year
Cash and cash equivalents at end of year
Restricted cash at end of year
Cash and cash equivalents and restricted cash at end of year
See notes to consolidated financial statements.
42
Year Ended December 31,
2022
2023
2021
$
102,413 $
57,632 $
132,930
34,605
(53,952)
2,631
450
—
7,770
(1,559)
(572)
14,141
(60)
3,263
(19)
109,111
(4,681)
—
264,881
67,821
(11,258)
5,049
—
—
321,812
(92,320)
(104)
—
(92,424)
31,454
—
7,960
450
—
—
(2,928)
1,680
2,782
40
3,141
338
102,549
(14,386)
(364,238)
99,358
—
—
—
—
—
(279,266)
(92,264)
(46)
—
(92,310)
338,499
214,478
552,977 $
(269,027)
483,505
214,478 $
194,933 $
19,545
214,478 $
531,855 $
21,122
552,977 $
463,539 $
19,966
483,505 $
194,933 $
19,545
214,478 $
$
$
$
$
$
34,592
(72,298)
9,817
450
(3,482)
—
—
1,731
3,099
(211)
12,501
(664)
118,465
(19,520)
—
—
81,871
—
—
3,600
9,506
75,457
(92,220)
(74)
(68,000)
(160,294)
33,628
449,877
483,505
428,710
21,167
449,877
463,539
19,966
483,505
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Amounts in thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest (net of amounts capitalized)
NON-CASH TRANSACTIONS
Write-off of fully depreciated assets
Liability for real estate additions, including $141 for development fees due to Vornado in 2021
Additional estimated lease liability arising from the recognition of right-of-use asset
Year Ended December 31,
2022
2023
2021
53,975 $
25,934 $
18,568
8,097 $
1,969
—
23 $
2,254
16,099
5,628
1,445
—
$
$
See notes to consolidated financial statements.
43
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and
redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are
managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO).
We have five properties in New York City consisting of:
Operating properties
•
•
•
•
•
731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 Street, Third
Avenue and East 58 Street in Manhattan. The building contains 939,000 and 140,000 of rentable square feet of office and retail space,
respectively. Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant;
th
th
Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63 Road in Queens. The center is anchored by a 50,000 square
foot Burlington and a 36,000 square foot Marshalls.
rd
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030. The
lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional
termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On September 27, 2023, we entered into a
lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA
will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term;
Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens. The center is anchored by a
145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased;
Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is subleased to New World Mall LLC. The
property is ground leased through January 2027 with one 10-year extension option; and
The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.
We have determined that our properties have similar economic characteristics and meet the criteria that permit the properties to be aggregated into one
reportable segment (the leasing, management, development and redeveloping of properties in New York City). Our chief operating decision-maker assesses and
measures segment operating results based on a performance measure referred to as net operating income at the individual operating segment. Net operating
income for each property represents net rental revenues less operating expenses.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation – The accompanying consolidated financial statements include our accounts and those of our consolidated subsidiaries. All
intercompany amounts have been eliminated. Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in
the United States of America (“GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Recently Issued Accounting Literature - In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2020-04 establishing Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform, and in January 2021, the FASB issued ASU 2021-01,
Reference Rate Reform (Topic 848): Scope (collectively, “ASC 848”). ASC 848 contains practical expedients for reference rate reform related activities that impact
debt, leases, derivatives and other contracts. The guidance in ASC 848 is optional and may be elected over time as reference rate reform activities occur. We have
elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that
the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the
presentation of derivatives consistent with past presentation. In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU
2022-06”), which was issued to defer the sunset date of ASC 848 to December 31, 2024. ASU 2022-06 is effective immediately for all companies. As of
December 31, 2023, we have transitioned all of our LIBOR-indexed debt and derivatives and, for our derivatives in hedge accounting relationships, utilized the
elective relief in ASC 848, allowing for the continuation of hedge accounting through the transition process.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”).
ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU
2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported
measure of segment profit or loss. The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure
requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15,
2024, with early adoption permitted. We are currently evaluating the impact of ASU 2023-07 on our consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09
requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income
tax expense and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently
evaluating the impact of ASU 2023-09 on our consolidated financial statements.
Real Estate – Real estate is carried at cost, net of accumulated depreciation and amortization. As of December 31, 2023 and 2022, the carrying amount of our
real estate, net of accumulated depreciation and amortization, was $650,717,000 and $688,330,000, respectively. Maintenance and repairs are generally expensed
as incurred. Depreciation requires an estimate by management of the useful life of each property and improvement as well as an allocation of the costs associated
with a property to its various components. We capitalize all property operating expenses directly associated with and attributable to, the development and
construction of a project, including interest expense. The capitalization period begins when development activities are underway and ends when it is determined
that the asset is substantially complete and ready for its intended use, which is typically evidenced by the receipt of a temporary certificate of occupancy. General
and administrative costs are expensed as incurred.
Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not
be recoverable. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and
eventual disposition of the asset, including an estimated terminal value calculated using an appropriate capitalization rate. Estimates of future cash flows are
based on our current plans, intended holding periods and available market information at the time the analyses are prepared. For our development properties,
estimates of future cash flows also include all future expenditures necessary to develop the asset, including interest payments that will be capitalized as part of the
cost of the asset. An impairment loss is recognized only if the carrying amount of the asset is not recoverable and is measured based on the excess of the property’s
carrying amount over its estimated fair value. If our estimates of future cash flows, anticipated holding periods, or fair values change, based on market conditions
or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. Estimates of
future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ
materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenue Recognition – Rental revenues include revenues from the leasing of space at our properties to tenants, tenant services and parking garage
revenues.We have the following revenue recognition policies:
• Revenues from the leasing of space at our properties to tenants include (i) lease components, including fixed and variable lease payments, and nonlease
components which include reimbursement of common area maintenance expenses, and (ii) reimbursement of real estate taxes and insurance expenses. As
lessor, we have elected to combine the lease and nonlease components of our operating lease agreements and account for the components as a single lease
component in accordance with ASC Topic 842, Leases (“ASC 842”).
◦ Revenues from fixed lease payments for operating leases are recognized on a straight-line basis over the non-cancelable term of the lease,
together with renewal options that are reasonably certain of being exercised. We commence revenue recognition when the tenant takes possession
of the leased space and the leased space is substantially ready for its intended use.
◦ Revenues derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally
recognized in the same period as the related expenses are incurred.
• Revenues derived from sub-metered electric, elevator, trash removal and other services provided to our tenants at their request are recognized as the
services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606").
• Revenues derived from the operations of our parking facilities, which charge hourly or monthly fees to provide parking services to customers, are
recognized as the services are transferred in accordance with ASC 606.
We evaluate on an individual lease basis whether it is probable that we will collect substantially all amounts due from our tenants and recognize changes in the
collectability assessment of our operating leases as adjustments to rental revenue. Management exercises judgment in assessing collectability of tenant receivables
and considers payment history, current credit status and publicly available information about the financial condition of the tenant, and other factors. Tenant
receivables, including receivables arising from the straight-lining of rents, are written off when management deems that the collectability of substantially all future
lease payments from a specific lease is not probable of collection, at which point, the Company will limit future rental revenues to cash received.
Cash and Cash Equivalents – Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less when purchased
and are carried at cost, which approximates fair value, due to their short-term maturities. The majority of our cash and cash equivalents consist of (i) deposits at
major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation limit, (ii) money market funds, which invest in U.S. Treasury bills
and (iii) certificates of deposit placed through an account registry service (“CDARS”). To date we have not experienced any losses on our invested cash.
Restricted Cash – Restricted cash primarily consists of security deposits and other cash escrowed under loan and interest rate derivative agreements, including
for debt service, real estate taxes, property insurance and capital improvements.
Investments in U.S. Treasury Bills – Treasury bills are short-term debt obligations with maturities of one year or less backed by the U.S. Treasury Department.
Treasury bills yield no interest, but are issued at a discount on their redemption prices. We classify our investments in U.S. Treasury bills as available-for-sale debt
investments, recorded at fair value with any changes in fair value during the period recorded in other comprehensive income. These investments are considered
Level 1 within the fair value hierarchy as they are highly liquid and are traded in an active secondary market. We use quoted market prices to determine the fair
value of our investments in U.S. Treasury bills.
Deferred Charges – Direct financing costs are deferred and amortized over the terms of the related agreements as a component of interest and debt expense.
Direct and incremental costs related to successful leasing activities are capitalized and amortized on a straight-line basis over the lives of the related leases. All
other deferred charges are amortized on a straight-line basis, which approximates the effective interest rate method, in accordance with the terms of the agreements
to which they relate.
46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Income Taxes – We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856 – 860 of the Internal Revenue Code of
1986, as amended (the “Code”). In order to maintain our qualification as a REIT under the Code, we must distribute at least 90% of our taxable income to
stockholders each year. We distribute to our stockholders 100% of our taxable income and therefore, no provision for Federal income taxes is required. Dividends
distributed for the year ended December 31, 2023 were characterized, for federal income tax purposes, as 41.5% ordinary income and 58.5% of long-term capital
gain income. Dividends distributed for the year ended December 31, 2022 were characterized, for federal income tax purposes, as 100% ordinary income.
Dividends distributed for the year ended December 31, 2021 were characterized, for federal income tax purposes, as 58.3% ordinary income and 41.7% of long-
term capital gain income.
The estimated taxable income attributable to our common stockholders (unaudited) for the years ended December 31, 2023, 2022 and 2021 was approximately
$98,555,000, $64,960,000, and $101,184,000, respectively. The book to tax differences between net income and estimated taxable income primarily result from
differences in the income recognition or deductibility of depreciation and amortization, gains or losses from the sale of real estate and other capital transactions,
straight-line rent adjustments, the change in fair value of marketable securities and income from discontinued operations.
As of December 31, 2023, the net basis of our assets and liabilities for tax reporting purposes was approximately $145,246,000 lower than the amount reported
for financial statement purposes.
3. REVENUE RECOGNITION
The following is a summary of revenue sources for the years ended December 31, 2023, 2022 and 2021.
(Amounts in thousands)
Lease revenues
Parking revenue
Tenant services
Rental revenues
2023
Year Ended December 31,
2022
2021
$
$
216,468 $
4,456
4,038
224,962 $
197,230 $
4,897
3,687
205,814 $
198,109
4,407
3,632
206,148
The components of lease revenues for the years ended December 31, 2023, 2022 and 2021 are as follows:
(Amounts in thousands)
Fixed lease revenues
Variable lease revenues
Lease revenues
4. REAL ESTATE SALES
2023
Year Ended December 31,
2022
2021
$
$
147,569 $
68,899
216,468 $
135,668 $
61,562
197,230 $
129,509
68,600
198,109
On May 19, 2023, we sold the Rego Park III land parcel in Queens, New York, for $71,060,000 inclusive of consideration for Brownfield tax benefits and
reimbursement of costs for plans, specifications and improvements to date. Net proceeds from the sale were $67,821,000 after closing costs and the financial
statement gain was $53,952,000.
On June 4, 2021, we sold a parcel of land in the Bronx, New York for $10,000,000. Net proceeds from the sale were $9,291,000 after closing costs and the
financial statement gain was $9,124,000.
On October 4, 2021, we sold 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc., the tenant at the property, for $75,000,000, pursuant to
the tenant’s purchase option contained in the lease. Net proceeds from the sale were $4,580,000 after closing costs and the repayment of the $68,000,000 mortgage
loan. The financial statement gain was $60,826,000.
47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
5. RELATED PARTY TRANSACTIONS
Vornado
As of December 31, 2023, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by,
Vornado, pursuant to the agreements described below, which expire in March of each year and are automatically renewable.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a
New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2023, Mr. Roth,
Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr. (who are also directors of the Company and trustees of Vornado) owned,
in the aggregate, 26.0% of our outstanding common stock, in addition to the 2.3% they indirectly own through Vornado.
Management and Development Agreements
We pay Vornado an annual management fee equal to the sum of (i) $2,800,000, (ii) 2% of gross revenue from the Rego Park II shopping center, (iii) $0.50 per
square foot of the tenant-occupied office and retail space at 731 Lexington Avenue, and (iv) $365,000, escalating at 3% per annum, for managing the common area
of 731 Lexington Avenue. Vornado is also entitled to a development fee equal to 6% of development costs, as defined.
Leasing and Other Agreements
Vornado also provides us with leasing services for a fee of 3% of rent for the first ten years of a lease term, 2% of rent for the eleventh through the twentieth
year of a lease term, and 1% of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by tenants. In the event third-party
real estate brokers are used, the fees to Vornado increase by 1% and Vornado is responsible for the fees to the third-party real estate brokers.
Vornado is also entitled to a commission upon the sale of any of our assets equal to 3% of gross proceeds, as defined, for asset sales less than $50,000,000 and
1% of gross proceeds, as defined, for asset sales of $50,000,000 or more.
We also have agreements with Building Maintenance Services, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security
services at our Lexington Avenue property and (ii) security services at our Rego Park I and Rego Park II properties and The Alexander apartment tower. In
addition, we have an agreement with a wholly owned subsidiary of Vornado to manage the parking garages at our Rego Park I and Rego Park II properties.
The following is a summary of fees earned by Vornado under the various agreements discussed above.
(Amounts in thousands)
Company management fees
Development fees
Leasing fees
Commissions on sales of real estate
Property management, cleaning, engineering, parking and security fees
2023
Year Ended December 31,
2022
2021
$
$
2,800 $
—
1,213
711
6,005
10,729 $
2,800 $
3
1,378
—
5,912
10,093 $
2,800
141
1,800
1,050
5,540
11,331
As of December 31, 2023, the amounts due to Vornado were $646,000 for management, property management, cleaning, engineering and security fees and
$69,000 for leasing fees. As of December 31, 2022, the amounts due to Vornado were $742,000 for management, property management, cleaning, engineering and
security fees and $59,000 for leasing fees.
6. MORTGAGES PAYABLE
On June 9, 2023, we exercised our remaining one-year extension option on the $500,000,000 interest-only mortgage loan on the office condominium of our
731 Lexington Avenue property. The interest rate on the loan remained at LIBOR plus 0.90% through July 15, 2023 and currently bears interest at the Prime Rate
(8.50% as of December 31, 2023) through loan maturity on June 11, 2024. In June 2023, we purchased an interest rate cap for $11,258,000, which capped LIBOR
at 6.00% through July 15, 2023 and caps the Prime Rate at 6.00% through loan maturity.
48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
6. MORTGAGES PAYABLE - continued
The following is a summary of our outstanding mortgages payable. We may refinance our maturing debt as it comes due or choose to repay it.
(Amounts in thousands)
First mortgages secured by:
731 Lexington Avenue, office condominium
731 Lexington Avenue, retail condominium
Rego Park II shopping center
The Alexander apartment tower
Total
(2)(4)
(1)
(2)(3)
Deferred debt issuance costs, net of accumulated amortization of $17,639
and $16,071, respectively
(1)
Interest at the Prime Rate (capped at 6.00% through loan maturity).
Maturity
Interest Rate at December
31, 2023
Balance at December 31,
2023
2022
Jun. 11, 2024
Aug. 05, 2025
Dec. 12, 2025
Nov. 01, 2027
6.00%
1.76%
5.60%
2.63%
$
$
$
500,000
300,000
202,544
94,000
1,096,544
(3,993)
1,092,551
$
500,000
300,000
202,544
94,000
1,096,544
(5,493)
1,091,051
(2)
(3)
(4)
Interest rate listed represents the rate in effect as of December 31, 2023 based on SOFR as of contractual reset date plus contractual spread, adjusted for hedging instruments as applicable.
Interest at SOFR plus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
Interest at SOFR plus 1.45% (SOFR is capped at a rate of 4.15% through November 2024).
The net carrying value of real estate collateralizing the debt amounted to $594,681,000 as of December 31, 2023. Our existing financing documents contain
covenants that limit our ability to incur additional indebtedness on these properties, and in certain circumstances, provide for lender approval of tenants’ leases and
yield maintenance to prepay them. As of December 31, 2023, the principal repayments (based on the extended loan maturity dates) for the next five years and
thereafter are as follows:
(Amounts in thousands)
Year Ending December 31,
2024
2025
2026
2027
2028
Thereafter
7. MARKETABLE SECURITIES
$
Amount
500,000
502,544
—
94,000
—
—
In December 2021, we sold our 564,612 common shares of The Macerich Company (“Macerich”), realizing cash proceeds of $9,506,000. These shares were
received in connection with the sale of Kings Plaza Regional Shopping Center (“Kings Plaza”) to Macerich in 2012. The gains and losses resulting from the mark-
to-market of these securities during 2021 were presented as “change in fair value of marketable securities” on our consolidated statement of income.
8. DISCONTINUED OPERATIONS
In 2012, when we sold Kings Plaza to Macerich, $2,348,000 of the financial statement gain was deferred since a portion of the sales price was received in
Macerich common shares. In December 2021, we recognized the $2,348,000 gain upon the disposition of our Macerich common shares.
As the results related to Kings Plaza were previously classified as discontinued operations, we have classified the gain as “income from discontinued
operations” on our consolidated statement of income for the year ended December 31, 2021 in accordance with the provisions of ASC Topic 360, Property, Plant
and Equipment.
49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
9. FAIR VALUE MEASUREMENTS
ASC Topic 820, Fair Value Measurement (“ASC 820”) defines fair value and establishes a framework for measuring fair value. ASC 820 establishes a fair
value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active
markets that are accessible at the measurement date for assets or liabilities as well as certain U.S. Treasury securities that are highly liquid and are actively traded
in secondary markets; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 –
unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest
priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.
Financial Assets and Liabilities Measured at Fair Value
Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2023 consist of interest rate derivatives, which are presented in
the table below based on their level in the fair value hierarchy. There were no financial liabilities measured at fair value as of December 31, 2023.
(Amounts in thousands)
Interest rate derivatives (included in other assets)
As of December 31, 2023
Total
Level 1
Level 2
Level 3
$
22,608 $
— $
22,608 $
—
Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2022 consist of U.S. Treasury bills (classified as available for-
sale) and interest rate derivatives, which are presented in the table below based on their level in the fair value hierarchy. There were no financial liabilities
measured at fair value as of December 31, 2022.
(Amounts in thousands)
Investments in U.S. Treasury bills
Interest rate derivatives (included in other assets)
Interest Rate Derivatives
As of December 31, 2022
Total
Level 1
Level 2
Level 3
$
$
266,963 $
29,351
296,314 $
266,963 $
—
266,963 $
— $
29,351
29,351 $
—
—
—
We recognize the fair value of all interest rate derivatives in “other assets” or “other liabilities” on our consolidated balance sheets and since all of our interest
rate derivatives have been designated as cash flow hedges, changes in the fair value are recognized in other comprehensive income. The table below summarizes
our interest rate derivatives, all of which hedge the interest rate risk attributable to the variable rate debt noted as of December 31, 2023 and 2022, respectively.
(Amounts in thousands)
Interest rate swap related to:
731 Lexington Avenue mortgage loan, retail condominium
Interest rate caps related to:
Rego Park II shopping center mortgage loan
731 Lexington Avenue mortgage loan, office condominium
Included in other assets
Fair Value Asset as of December 31,
As of December 31, 2023
2023
2022
Notional
Amount
Swapped Rate
Expiration
Date
$
$
16,315 $
26,718 $
300,000
1.76%
1,370
4,923
22,608 $
2,622
11
29,351
202,544
500,000
(1)
(2)
5/25
11/24
06/24
(1) SOFR cap strike rate of 4.15%.
(2)
In June 2023, we purchased an interest rate cap for $11,258, which capped LIBOR at 6.00% through July 15, 2023 and caps the Prime Rate (8.50% as of December 31, 2023) at 6.00% through
loan maturity. See Note 6 - Mortgages Payable for further information.
50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
9. FAIR VALUE MEASUREMENTS - continued
Financial Assets and Liabilities not Measured at Fair Value
Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents and mortgages payable. Cash
equivalents are carried at cost, which approximates fair value due to their short-term maturities and are classified as Level 1. The fair value of our mortgages
payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar
credit ratings, which are provided by a third-party specialist, and is classified as Level 2. The table below summarizes the carrying amount and fair value of these
financial instruments as of December 31, 2023 and 2022.
(Amounts in thousands)
Assets:
Cash equivalents
Liabilities:
Mortgages payable (excluding deferred debt issuance costs, net)
10. LEASES
As Lessor
As of December 31, 2023
Fair
Value
Carrying
Amount
As of December 31, 2022
Fair
Value
Carrying
Amount
$
$
363,535 $
363,535 $
47,852 $
47,852
1,096,544 $
1,071,887 $
1,096,544 $
1,061,221
We lease space to tenants under operating leases in an office building and in retail centers. The rental terms range from approximately 5 to 25 years. The
leases provide for the payment of fixed base rents payable monthly in advance as well as reimbursements of real estate taxes, insurance and maintenance costs.
Retail leases may also provide for the payment by the lessee of additional rents based on a percentage of their sales. We also lease residential space at The
Alexander apartment tower which generally have a 1 or 2 year lease terms.
Future undiscounted cash flows under our contractual non-cancelable operating leases are as follows:
(Amounts in thousands)
For the year ending December 31,
2024
2025
2026
2027
2028
Thereafter
As of December 31, 2023
$
157,833
129,407
125,014
122,495
130,203
190,503
These amounts do not include reimbursements or additional rents based on a percentage of retail tenants’ sales.
Bloomberg accounted for revenue of $120,351,000, $115,129,000, and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively,
representing approximately 54%, 56% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental
revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results
of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial
information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as
publicly available data.
51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
10. LEASES - continued
As Lessee
We are the lessee under a ground lease at our Flushing property, classified as an operating lease, which expires in 2027 and has one 10-year extension option.
In January 2022, New World Mall LLC, the subtenant at the property, exercised its one remaining 10-year extension option through January 2037. As a result of
the subtenant exercising its extension option, we were required by GAAP to remeasure our ground lease liability based upon an estimate of lease payments to be
made during the 10-year extension period of our ground lease resulting in an incremental right-of-use asset and lease liability of approximately $16,000,000. The
discount rate applied in the remeasurement of the lease liability was based on the incremental borrowing rate (“IBR”) of 5.86% at the time of the remeasurement.
We considered the general economic environment and factored in various Company specific adjustments to arrive at the IBR. As of December 31, 2023, the
remaining right-of-use asset of $17,522,000 and lease liability of $20,452,000, are included in “other assets” and “other liabilities,” respectively, on our
consolidated balance sheet.
Future lease payments under this operating lease, including our estimated payments during the extension period, are as follows:
(Amounts in thousands)
For the year ending December 31,
2024
2025
2026
2027
2028
Thereafter
Total undiscounted cash flows
Present value discount
Lease liability as of December 31, 2023
As of December 31, 2023
800
800
800
2,707
2,880
23,280
31,267
(10,815)
20,452
$
$
We recognize rent expense as a component of “operating” expenses on our consolidated statements of income on a straight-line basis. Rent expense was
$2,161,000, $2,161,000 and $746,000 in each of the years ended December 31, 2023, 2022 and 2021, respectively. Cash paid for rent expense was $800,000 in
each of the years ended December 31, 2023, 2022 and 2021, respectively.
11. STOCK-BASED COMPENSATION
We account for stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Our 2016 Omnibus Stock
Plan (the “Plan”) provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, deferred stock units (“DSUs”) and
performance shares, as defined, to the directors, officers and employees of the Company and Vornado.
In May 2023, we granted each of the members of our Board of Directors 449 DSUs with a market value of $75,000 per grant. The grant date fair value of these
awards was $56,250 per grant, or $450,000 in the aggregate, in accordance with ASC 718. The DSUs entitle the holders to receive shares of the Company’s
common stock without the payment of any consideration. The DSUs vested immediately and accordingly, were expensed on the date of grant, but the shares of
common stock underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Company’s Board of Directors. As of December
31, 2023, there were 23,388 DSUs outstanding and 482,399 shares were available for future grant under the Plan.
52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
12. COMMITMENTS AND CONTINGENCIES
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable
disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism,
with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.
Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism,
including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which
has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the
aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no
exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is
responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism or other events. However, we cannot
anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses
in excess of our insurance coverage, which could be material.
Our loans contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of
these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are
able to obtain, it could adversely affect our ability to finance or refinance our properties.
Letters of Credit
Approximately $900,000 of standby letters of credit were issued and outstanding as of December 31, 2023.
Other
There are various legal actions brought against us from time-to-time in the ordinary course of business. In our opinion, the outcome of such pending matters in
the aggregate will not have a material effect on our financial position, results of operations or cash flows.
13. MULTIEMPLOYER BENEFIT PLANS
Our subsidiaries make contributions to certain multiemployer defined benefit plans (“Multiemployer Pension Plans”) and health plans (“Multiemployer Health
Plans”) for our union represented employees, pursuant to the respective collective bargaining agreements.
Multiemployer Pension Plans
Multiemployer Pension Plans differ from single-employer pension plans in that (i) contributions to multiemployer plans may be used to provide benefits to
employees of other participating employers and (ii) if other participating employers fail to make their contributions, each of our subsidiaries may be required to
bear their pro rata share of unfunded obligations. If a participating subsidiary withdraws from a plan in which it participates, it may be subject to a withdrawal
liability. As of December 31, 2023, our subsidiaries’ participation in these plans were not significant to our consolidated financial statements.
In the years ended December 31, 2023, 2022 and 2021 our subsidiaries contributed $215,000, $178,000 and $217,000, respectively, towards Multiemployer
Pension Plans. Our subsidiaries’ contributions did not represent more than 5% of total employer contributions in any of these plans for the years ended December
31, 2023, 2022 and 2021.
Multiemployer Health Plans
Multiemployer Health Plans in which our subsidiaries participate provide health benefits to eligible active and retired employees. In the years ended
December 31, 2023, 2022 and 2021 our subsidiaries contributed $1,005,000, $839,000 and $748,000, respectively, towards these plans.
53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
14. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted income per share, including a reconciliation of net income and the number of shares used in
computing basic and diluted income per share. Basic income per share is determined using the weighted average shares of common stock (including DSUs)
outstanding during the period. Diluted income per share is determined using the weighted average shares of common stock (including DSUs) outstanding during
the period, and assumes all potentially dilutive securities were converted into common shares at the earliest date possible. There were no potentially dilutive
securities outstanding during the years ended December 31, 2023, 2022 and 2021.
(Amounts in thousands, except share and per share amounts)
Income from continuing operations
Income from discontinued operations (see Note 8)
Net income
Weighted average shares outstanding – basic and diluted
Income from continuing operations
Income from discontinued operations (see Note 8)
Net income per common share – basic and diluted
2023
Year Ended December 31,
2022
2021
102,413 $
—
102,413 $
57,632 $
—
57,632 $
130,582
2,348
132,930
5,129,330
5,126,100
5,123,613
19.97 $
—
19.97 $
11.24 $
—
11.24 $
25.48
0.46
25.94
$
$
$
$
54
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures – Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.
Internal Control Over Financial Reporting – There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934, as amended) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
55
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The management of Alexander’s, Inc., together with its consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s
principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the
Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
As of December 31, 2023, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the
framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2023 is effective.
The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation
of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being
made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report appearing on page 57 of this Annual Report on Form 10-K, which expresses an unqualified
opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.
56
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Alexander’s, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Alexander’s, Inc. and subsidiaries (the “Company”) as of December 31, 2023, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial
statements as of and for the year ended December 31, 2023, of the Company and our report dated February 12, 2024, expressed an unqualified opinion on those
consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express
an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 12, 2024
57
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information relating to our directors, including our audit committee and audit committee financial expert, will be contained in a definitive Proxy Statement
involving the election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. We will file the Proxy Statement with the
Securities and Exchange Commission no later than 120 days after December 31, 2023. Such information is incorporated by reference herein. Also incorporated
herein by reference is the information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement.
Executive Officers of the Registrant
The following is a list of the names, ages, principal occupations and positions with us of our executive officers and the positions held by such officers during
the past five years.
Name
Steven Roth
Gary Hansen
Age
82
46
PRINCIPAL OCCUPATION, POSITION AND OFFICE
(Current and during past five years with the Company unless otherwise stated)
Chairman of the Board since May 2004 and Chief Executive Officer since March 1995; Chairman of the Board of Vornado
Realty Trust since May 1989; Chief Executive Officer of Vornado Realty Trust since April 2013 and from May 1989 to May
2009; a Trustee of Vornado Realty Trust since 1979; and Managing General Partner of Interstate Properties.
Chief Financial Officer since November 2021; Senior Vice President & Controller from January 2018 to October 2021; and
Vice President & Controller from May 2015 to December 2017.
We have a code of business conduct and ethics that applies to, among others, our Chief Executive Officer and Chief Financial Officer. The code is posted on
our website at www.alx-inc.com. We intend to satisfy our disclosure obligation regarding amendments and waivers of this code applicable to our Chief Executive
Officer and Chief Financial Officer by posting such information on our website.
58
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate
Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information relating to security ownership of certain beneficial owners and management and related stockholder matters, except as set forth below, will be
contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such
information is incorporated by reference herein.
Equity Compensation Plan Information
The following table provides information as of December 31, 2023, regarding our equity compensation.
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Plan Category
Total
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
23,388
N/A
23,388
$
—
N/A
—
482,399
N/A
482,399
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information relating to certain relationships and related transactions and director independence will be contained in the Proxy Statement referred to in “Item
10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information relating to principal accountant fees and services will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers
and Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
59
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10-K.
PART IV
1. The consolidated financial statements are set forth in Item 8 of this Annual Report on Form 10-K.
2. The following financial statement schedule should be read in conjunction with the financial statements included in Item 8 of this Annual Report on
Form 10-K.
Schedule III – Real Estate and Accumulated Depreciation as of
December 31, 2023, 2022 and 2021
Pages in this
Annual Report
on Form 10-K
61-62
All other financial statement schedules are omitted because they are not applicable, not required, or the information is included elsewhere in the
consolidated financial statements or the notes thereto.
60
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2023
(Amounts in thousands)
COLUMN A
COLUMN B
COLUMN C
COLUMN D
COLUMN E
COLUMN F
COLUMN G
COLUMN H
COLUMN I
Initial Cost to Company
(1)
Gross Amount at Which
Carried at Close of Period
Description
Encumbrances
(2)
Land
Buildings
and Leasehold
Improvements
Costs
Capitalized
Subsequent
to Acquisition
Buildings
and Leasehold
Improvements
Land
Development
and
Construction
In Progress
Accumulated
Depreciation
and
Amortization
Total
(3)
Date of
Construction
Date
Acquired
(1)
—
202,544
$
$
1,647
3,127
$
8,953
1,467
93,138
390,267
$
1,647
3,127
$
102,091
391,453
$
—
281
$
103,738
394,861
$
47,931
135,791
$
Rego Park I
Rego Park II
The Alexander apartment
tower
Flushing
Lexington Avenue
94,000
—
800,000
—
—
14,432
—
1,660
12,355
115,074
(107)
424,607
—
—
27,497
115,074
1,553
423,897
—
—
—
115,074
1,553
451,394
TOTAL
$
1,096,544
$ 19,206
$
24,435
$
1,022,979
$ 32,271
$
1,034,068
$
281
$ 1,066,620
$
(1) Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations).
(2) Excludes deferred debt issuance costs, net of $3,993.
(3) The net basis of the Company’s assets and liabilities for tax purposes is approximately $145,246 lower than the amount reported for financial statement purposes.
(4) Represents the date the lease was acquired.
61
Life on which
Depreciation in
Latest Income
Statement is
Computed
3-39 years
3-40 years
3-39 years
N/A
9-39 years
1959
2009
2016
(4)
1975
2003
1992
1992
1992
1992
1992
27,036
1,324
203,821
415,903
REAL ESTATE:
Balance at beginning of period
Additions during the period:
Land
Buildings and leasehold improvements
Development and construction in progress
Less:
Assets sold
Assets written-off
Balance at end of period
ACCUMULATED DEPRECIATION:
Balance at beginning of period
Depreciation expense
Less:
Accumulated depreciation on assets sold
Accumulated depreciation on assets written-off
Balance at end of period
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
2023
December 31,
2022
2021
$
1,084,598 $
1,069,426 $
1,071,043
—
2,959
1,346
1,088,903
—
15,002
193
1,084,621
(14,186)
(8,097)
1,066,620 $
—
(23)
1,084,598 $
396,268 $
28,137
424,405
(405)
(8,097)
415,903 $
370,557 $
25,734
396,291
—
(23)
396,268 $
—
5,842
10,090
1,086,975
(11,921)
(5,628)
1,069,426
350,122
26,063
376,185
—
(5,628)
370,557
$
$
$
62
(b) Exhibits
Exhibit No.
3.1
3.2
4
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
*
***
-
-
-
-
-
-
-
-
-
-
-
-
Amended and Restated Certificate of Incorporation. Incorporated herein by reference from Exhibit 3.1 to the registrant’s
Registration Statement on Form S-3 filed on September 20, 1995
Amended and Restated By-laws. Incorporated herein by reference from Exhibit 3.1 to the registrant’s Current Report on
Form 8-K filed on May 20, 2022.
*
*
Description of the Alexander’s, Inc. securities registered pursuant to Section 12 of the Securities Exchange Act
***
Real Estate Retention Agreement dated as of July 20, 1992, between Vornado Realty Trust and Keen Realty Consultants,
Inc., each as special real estate consultants, and the Company. Incorporated herein by reference from Exhibit 10(i)(O) to
the registrant’s Annual Report on Form 10-K for the fiscal year ended July 25, 1992
Extension Agreement to the Real Estate Retention Agreement, dated as of February 6, 1995, between the Company and
Vornado Realty Trust. Incorporated herein by reference from Exhibit 10(i)(G)(2) to the registrant’s Annual Report on Form
10-K for the year ended December 31, 1994
Agreement of Lease dated as of April 30, 2001 between Seven Thirty One Limited Partnership, landlord, and Bloomberg
L.P., tenant. Incorporated herein by reference from Exhibit 10(v) B to the registrant’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2001, filed on August 2, 2001
First Amendment to Real Estate Retention Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc. and
Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10(i)(E)(3) to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002
59th Street Real Estate Retention Agreement, dated as of July 3, 2002, by and between Vornado Realty, L.P., 731
Residential LLC and 731 Commercial LLC. Incorporated herein by reference from Exhibit 10(i)(E)(4) to the registrant’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002
Amended and Restated Management and Development Agreement, dated as of July 3, 2002, by and between Alexander’s,
Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10(i)(F)
(1) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002
Limited Liability Company Operating Agreement of 731 Residential LLC, dated as of July 3, 2002, among 731
Residential Holding LLC, as the sole member, Domenic A. Borriello, as an Independent Manager and Kim Lutthang, as an
Independent Manager. Incorporated herein by reference from Exhibit 10(i)(A)(1) to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002
Limited Liability Company Operating Agreement of 731 Commercial LLC, dated as of July 3, 2002, among 731
Commercial Holding LLC, as the sole member, Domenic A. Borriello, as an Independent Manager and Kim Lutthang, as
an Independent Manager. Incorporated herein by reference from Exhibit 10(i)(A)(2) to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002
First Amendment of Lease, dated as of April 19, 2002, between Seven Thirty One Limited Partnership, landlord and
Bloomberg L.P., tenant. Incorporated herein by reference from Exhibit 10(v)(B)(2) to the registrant’s Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 2002, filed on August 7, 2002
___________________
Incorporated by reference.
Filed herewith.
*
*
*
*
*
*
*
*
*
63
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
*
-
-
-
-
-
-
-
-
-
-
-
Second Amendment to Real Estate Retention Agreement, dated as of January 1, 2007, by and between Alexander’s, Inc.
and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.64 to the registrant’s Annual Report on Form
10-K for the year ended December 31, 2006, filed on February 26, 2007
Amendment to 59th Street Real Estate Retention agreement, dated as of January 1, 2007, by and among Vornado Realty
L.P., 731 Retail One LLC, 731 Restaurant LLC, 731 Office One LLC and 731 Office Two LLC. Incorporated herein by
reference from Exhibit 10.65 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, filed
on February 26, 2007
First Amendment to Amended and Restated Management and Development Agreement, dated as of July 6, 2005, by and
between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference
from Exhibit 10.52 to the registrant’s Annual Report on Form 10-K, for the year ended December 31, 2007, filed on
February 25, 2008
Second Amendment to Amended and Restated Management and Development Agreement, dated as of December 20,
2007, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated
herein by reference from Exhibit 10.53 to the registrant’s Annual Report on Form 10-K, for the year ended December 31,
2007, filed on February 25, 2008
Third Amendment to Real Estate Retention Agreement, dated as of December 20, 2007, by and between Alexander’s, Inc.,
and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.55 to the registrant’s Annual Report on Form
10-K, for the year ended December 31, 2007, filed on February 25, 2008
Lease dated as of February 7, 2005, by and between 731 Office One LLC, as Landlord, and Citibank, N.A., as Tenant.
Incorporated herein by reference from Exhibit 10.59 to the registrant’s Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009, filed on May 4, 2009
Assignment and Assumption and Consent Agreement, dated as of March 25, 2009, by and between 731 Office One LLC,
as Landlord, Citicorp North America, Inc., as Assignor, and Bloomberg L.P., as Assignee. Incorporated herein by
reference from Exhibit 10.60 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009,
filed on May 4, 2009
Third Amendment to Amended and Restated Management and Development Agreement, dated as of November 30, 2011,
by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by
reference from Exhibit 10.49 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed
on February 27, 2012
Fourth Amendment to Amended and Restated Management and Development Agreement, dated as of August 1, 2012, by
and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by
reference from Exhibit 10.2 to the registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2012,
filed on November 1, 2012
Fifth Amendment to Amended and Restated Management and Development Agreement, dated as of December 1, 2012, by
and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by
reference from Exhibit 10.54 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, filed
on February 26, 2013
Real Estate Sub-Retention Agreement dated as of February 28, 2014, by and between Alexander’s Management LLC, as
Agent, and Vornado Realty L.P., as Sub-Agent. Incorporated herein by reference from Exhibit 10.8 to the registrant’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014
__________________
Incorporated by reference.
*
*
*
*
*
*
*
*
*
*
*
64
10.21
10.22
10.23
10.24
10.25
10.26
10.27
10.28
+
10.29
**
10.30
10.31
*
**
+
-
-
-
-
-
-
-
-
-
-
-
Sixth Amendment to Amended and Restated Management and Development Agreement, dated as of March 21, 2014, by
and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by
reference from Exhibit 10.9 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed
on May 5, 2014
Rego Park II Residential Management and Development Agreement, dated as of March 21, 2014 by and between
Alexander’s of Rego Residential LLC and Vornado Management Corp. Incorporated herein by reference from Exhibit
10.10 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014
Fourth Amendment to Real Estate Retention Agreement, dated December 22, 2014 by and between Alexander’s, Inc. and
Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10.56 to the registrant’s Annual Report on Form 10-K
for the year ended December 31, 2014, filed on February 17, 2015
Second Amendment to 59th Street Real Estate Retention Agreement, dated December 22, 2014 by and between 731 Retail
One LLC, 731 Restaurant LLC, 731 Office Two LLC and Vornado Realty, L.P. Incorporated herein by reference from
Exhibit 10.57 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17,
2015
First Amendment to Rego II Real Estate Sub-Retention Agreement, dated December 22, 2014 by and between
Alexander’s, Inc. and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.58 to the registrant’s Annual
Report on Form 10-K for the year ended December 31, 2014, filed on February 17, 2015
First Amendment to Real-Estate Sub-Retention Agreement, dated December 22, 2014 by and between Alexander’s
Management LLC and Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10.59 to the registrant’s
Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17, 2015
Loan Agreement, dated as of August 5, 2015, by and between 731 Retail One LLC and 731 Commercial LLC, as
Borrower, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Landesbank Baden-Württemberg, New York
Branch, as Lenders. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q
for the quarter ended September 30, 2015, filed on November 2, 2015
Second Amendment of Lease, dated as of the 12th of January 2016 between 731 Office One LLC and Bloomberg L.P.
Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2016, filed on May 2, 2016
Form of Alexander’s Inc. 2016 Omnibus Stock Plan Deferred Stock Unit Grant Agreement between the Company and
certain employees. Incorporated herein by reference from Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2016, filed on August 1, 2016
Loan Agreement, dated as of June 1, 2017, between 731 Office One LLC, as Borrower, and Deutsche Bank AG, New York
Branch and Citigroup Global Markets Realty Corp. collectively, as Lender. Incorporated herein by reference from Exhibit
10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on July 31, 2017
Amended and Restated Loan and Security Agreement, dated and made effective as of December 12, 2018, by and between
Rego II Borrower LLC, as Borrower, and Bank of China, New York Branch, as Lender. Incorporated herein by reference
from Exhibit 10.55 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on
February 11, 2019
__________________
Incorporated by reference.
Management contract or compensatory agreement.
Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities
and Exchange Commission under Rule 24b-2. The omitted confidential material has been filed separately. The location of
the redacted confidential information is indicated in the exhibit as “redacted.”
*
*
*
*
*
*
*
*
*
*
*
65
10.32
10.33
10.34
10.35
10.36
10.37
10.38
10.39
10.40
10.41
*
-
-
-
-
-
-
-
-
-
-
Second Amended and Restated Promissory Note, dated December 12, 2018, by and between Rego II Borrower LLC, as
Maker, and Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.56 to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019
Second Amended and Restated Mortgage, Assignment of Leases and Rents and Security Agreement, dated December 12,
2018, by and between Rego II Borrower LLC, as Mortgagor, and Bank of China, New York Branch, as Mortgagee.
Incorporated herein by reference from Exhibit 10.57 to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2018, filed on February 11, 2019
Amended and Restated Guaranty of Recourse Carveouts, dated December 12, 2018, by Alexander’s, Inc., as Guarantor, to
and for the benefit of Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.58 to
the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019
Amended and Restated Environmental Indemnity Agreement, dated December 12, 2018, among Rego II Borrower LLC
and Alexander’s, Inc., individually or collectively as Indemnitor, in favor of Bank of China, New York Branch, as Lender.
Incorporated herein by reference from Exhibit 10.59 to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2018, filed on February 11, 2019
Amended and Restated Participation and Servicing Agreement for Amended and Restated Loan and Security Agreement,
dated December 12, 2018, between Bank of China, New York Branch, individually as Lender, Initial A-1 Holder and as the
Agent for the Holders, and Alexander’s of Rego Park II Participating Lender LLC, individually as Initial A-2 Holder.
Incorporated herein by reference from Exhibit 10.60 to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2018, filed on February 11, 2019
Waiver and Amendment No. 1 to Loan Agreement, dated October 10, 2019, by and among 731 Retail One LLC and 731
Commercial LLC, as Borrower, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Landesbank Baden-
Württemberg, New York Branch, as Lenders. Incorporated herein by reference from Exhibit 10.61 to the registrant’s
Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 18, 2020
First Amendment to Amended and Restated Loan and Security Agreement, dated February 14, 2020, by and between Rego
II Borrower LLC, as Borrower and Bank of China, New York Branch, as Lender. Incorporated herein by reference from
Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 4, 2020
Amendment and Reaffirmation of Guaranty and Environmental Indemnity Agreement, dated February 14, 2020, by and
between Alexander’s, Inc., as Guarantor, and Bank of China, New York Branch, as Lender. Incorporated herein by
reference from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed
on May 4, 2020
Second Amended and Restated Participation and Servicing Agreement for Amended and Restated Loan and Security
Agreement, dated February 14, 2020, between Bank of China, New York Branch, individually as Lender, Initial A-1
Holder and as the Agent for the Holders, and Alexander’s of Rego Park II Participating Lender LLC, individually as Initial
A-2 Holder. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020, filed on May 4, 2020
Omnibus Amendment to Loan Documents and Reaffirmation of Borrower and Guarantor, dated September 14, 2020, by
and between 731 Retail One LLC and 731 Commercial LLC as Borrower, Alexander’s, Inc. as Guarantor, JPMorgan
Chase Bank, N.A. as Administrative Agent on behalf of the Lenders, and the Lenders. Incorporated herein by reference
from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on
November 2, 2020
__________________
Incorporated by reference.
*
*
*
*
*
*
*
*
*
*
66
10.42
10.43
10.44
10.45
10.46
10.47
21
23
31.1
31.2
32.1
32.2
97
101
104
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*
***
Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated
September 14, 2020, by and between 731 Retail One LLC and 731 Commercial LLC as mortgagor and JPMorgan Chase
Bank, N.A. as mortgagee and as Administrative Agent for the benefit of the Lenders. Incorporated herein by reference
from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on
November 2, 2020
Interest Guaranty, dated September 14, 2020, made by Alexander’s, Inc. as Guarantor to JPMorgan Chase Bank, N.A. as
Administrative Agent for the benefit of the Lenders. Incorporated herein by reference from Exhibit 10.3 to the registrant’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on November 2, 2020
Leasing Costs Guaranty, dated September 14, 2020, made by Alexander’s, Inc. as Guarantor to JPMorgan Chase Bank,
N.A. as Administrative Agent for the benefit of the Lenders. Incorporated herein by reference from Exhibit 10.4 to the
registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on November 2, 2020
Second Amendment to Amended and Restated Loan and Security Agreement, dated October 23, 2020, by and between
Rego II Borrower LLC, as Borrower and Bank of China, New York Branch, as Lender. Incorporated herein by reference
from Exhibit 10.53 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on
February 16, 2021
Third Amendment to Loan and Omnibus Amendment, dated October 3, 2022, by and between 731 Retail One LLC and
731 Commercial LLC as Borrower, and JPMorgan Chase Bank, N.A. as Administrative Agent for the Lenders.
Incorporated herein by reference from Exhibit 10.46 to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2022, filed on February 13, 2023
Third Amendment to Amended and Restated Loan and Security Agreement, dated December 1, 2022, by and between
Rego II Borrower LLC, as Borrower and Bank of China, New York Branch, as Lender. Incorporated herein by reference
from Exhibit 10.47 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on
February 13, 2023
Subsidiaries of Registrant
Consent of Independent Registered Public Accounting Firm
Rule 13a-14 (a) Certification of the Chief Executive Officer
Rule 13a-14 (a) Certification of the Chief Financial Officer
Section 1350 Certification of the Chief Executive Officer
Section 1350 Certification of the Chief Financial Officer
Alexander’s Inc. Restatement Clawback Policy
The following financial information from the Alexander’s, Inc. Annual Report on Form 10-K for the year ended December
31, 2023 formatted in Inline Extensible Business Reporting Language (iXBRL) includes: (i) consolidated balance sheets,
(ii) consolidated statements of income, (iii) consolidated statements of comprehensive income, (iv) consolidated statements
of changes in equity, (v) consolidated statements of cash flows and (vi) the notes to the consolidated financial statements
The cover page from the Alexander’s, Inc. Annual Report on Form 10-K for the year ended December 31, 2023, formatted
as iXBRL and contained in Exhibit 101
__________________
Incorporated by reference.
Filed herewith.
67
*
*
*
*
*
*
***
***
***
***
***
***
***
***
***
ITEM 16. FORM 10-K SUMMARY
None.
68
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
SIGNATURES
ALEXANDER’S, INC.
(Registrant)
Date: February 12, 2024
By:
/s/ Gary Hansen
Gary Hansen, Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Signature
Title
Date
By:
/s/Steven Roth
Chairman of the Board of Directors and
February 12, 2024
(Steven Roth)
Chief Executive Officer
(Principal Executive Officer)
By:
/s/Gary Hansen
Chief Financial Officer
February 12, 2024
(Gary Hansen)
(Principal Financial and Accounting Officer)
By:
/s/Thomas R. DiBenedetto
Director
(Thomas R. DiBenedetto)
By:
/s/David Mandelbaum
Director
(David Mandelbaum)
By:
/s/Mandakini Puri
(Mandakini Puri)
By:
/s/Wendy Silverstein
(Wendy Silverstein)
By:
/s/Arthur Sonnenblick
(Arthur Sonnenblick)
By:
/s/Richard R. West
(Richard R. West)
Director
Director
Director
Director
By:
/s/Russell B. Wight Jr.
Director
(Russell B. Wight Jr.)
69
February 12, 2024
February 12, 2024
February 12, 2024
February 12, 2024
February 12, 2024
February 12, 2024
February 12, 2024
DESCRIPTION OF THE ALEXANDER'S, INC. SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE
ACT
The following descriptions are summaries of the material terms and provisions of Alexander’s preferred stock and common stock contained in Alexander’s
certificate of incorporation and Alexander’s by-laws. Copies of the certificate of incorporation and by-laws are filed as exhibits to this Annual Report on Form 10-
K. Please note that the terms “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries, unless the context
requires otherwise.
EXHIBIT 4
General
Our certificate of incorporation authorizes the issuance of up to 26,000,000 shares of capital stock, consisting of 10,000,000 shares of common stock, $1.00 par
value per share (the “common stock”), 3,000,000 shares of preferred stock, $1.00 par value per share (the “preferred stock”) and 13,000,000 shares of excess
stock, $1.00 par value per share (the “excess stock”). As of December 31, 2023, 5,173,450 and 5,107,290 shares of common stock were issued and outstanding,
respectively. No shares of preferred stock or shares of excess stock are issued and outstanding as of the date of this Annual Report on Form 10-K.
Dividend and Voting Rights of Holders of Common Stock
Holders of our common stock are entitled to receive dividends when, if and as authorized by our board of directors out of assets legally available to pay dividends.
Each common share entitles the holder to one vote on all matters voted on by stockholders, including elections of directors. There is no cumulative voting in the
election of directors, which means that the holders of a majority of the outstanding common stock can elect all of the directors then standing for election.
Our certificate of incorporation requires the affirmative vote of two-thirds of the outstanding shares of our stock entitled to vote before we may merge with another
corporation.
Holders of common stock do not have any conversion, redemption or preemptive rights to subscribe to any securities of our Company. In the event of our
dissolution, liquidation or winding-up, after the payment or provision of our debts and other liabilities and the preferential amounts to which holders of our
preferred stock are entitled, if any such preferred stock is outstanding, the holders of the common stock are entitled to share ratably in any assets remaining for
distribution to stockholders.
The common stock has equal dividend, distribution, liquidation and other rights, and there are no preference, appraisal or exchange rights applicable thereto. All
outstanding shares of common stock are, and any shares of common stock offered, upon issuance, will be, fully paid and nonassessable.
Equiniti Trust Company, LLC is the transfer agent for the common stock.
1
Restrictions on Ownership of Common Stock
The Common Stock Beneficial Ownership Limit. Our certificate of incorporation contains a number of provisions that restrict the ownership and transfer of shares
and are designed to safeguard us against an inadvertent loss of REIT status. These provisions also seek to deter non-negotiated acquisitions of, and proxy fights
for, us by third parties. In order to maintain our qualification as a REIT under the Internal Revenue Code, not more than 50% of the value of our outstanding
shares of capital stock may be owned, directly or constructively, by five or fewer individuals at any time during the last half of a taxable year and the shares of
capital stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months, or during a proportionate part of a
shorter taxable year. The Internal Revenue Code defines “individuals” to include some entities for purposes of the preceding sentence. All references to a holder’s
ownership of common stock in this section assumes application of the applicable attribution rules of the Internal Revenue Code under which, for example, a holder
is deemed to own shares owned by his or her spouse.
Our certificate of incorporation contains a limitation that restricts stockholders from owning more than 4.9% of the outstanding shares of common stock. In certain
circumstances, our board of directors may reduce the common stock beneficial ownership limit to as little as 2%, but only if any person who owns shares in excess
of such new limit could continue to do so. Our board of directors has, subject to certain conditions and limitations, exempted our manager, Vornado Realty Trust,
and certain of its affiliates from the common stock beneficial ownership limit. As a result, it is less likely as a practical matter that another holder of common stock
could obtain an exemption.
Attribution Rules. Investors should be aware that under the applicable attribution rules of the Internal Revenue Code, events other than a purchase or other transfer
of common stock can result in ownership of common stock in excess of the common stock beneficial ownership limit. For instance, if two stockholders, each of
whom owns 3% of the outstanding common stock, were to marry, then after their marriage both stockholders would be deemed to own 6% of the outstanding
shares of common stock, which is in excess of the common stock beneficial ownership limit. Similarly, if a stockholder who owns 4% of the outstanding common
stock were to purchase a 50% interest in a corporation which owns 3% of the outstanding common stock, then the stockholder would be deemed to own 5.5% of
the outstanding shares of common stock.
The Constructive Ownership Limit. Under the Internal Revenue Code, rental income received by a REIT from persons with respect to which the REIT is treated,
under the applicable attribution rules of the Internal Revenue Code, as owning a 10% or greater interest does not constitute qualifying income for purposes of the
income requirements that REITs must satisfy. For these purposes, a REIT is treated as owning any stock owned, under the applicable attribution rules of the
Internal Revenue Code, by a person that owns 10% or more of the value of the outstanding shares of the REIT. The attribution rules of the Internal Revenue Code
applicable for these purposes are different from those applicable with respect to the common stock beneficial ownership limit. All references to a stockholder’s
ownership of common stock in this section assume application of the applicable attribution rules of the Internal Revenue Code.
2
In order to ensure that our rental income will not be treated as non-qualifying income under the rule described in the preceding paragraph, and thus to ensure that
we will not inadvertently lose our REIT status as a result of the ownership of shares of a tenant, or a person that holds an interest in a tenant, our certificate of
incorporation contains an ownership limit that restricts, with certain exceptions, stockholders from owning more than 9.9% of the outstanding shares of any class
(the “common stock beneficial ownership limit”).
Stockholders should be aware that events other than a purchase or other transfer of shares can result in ownership, under the applicable attribution rules of the
Internal Revenue Code, of shares in excess of the constructive ownership limit. As the attribution rules that apply with respect to the constructive ownership limit
differ from those that apply with respect to the common stock beneficial ownership limit, the events other than a purchase or other transfer of shares which can
result in share ownership in excess of the constructive ownership limit can differ from those which can result in share ownership in excess of the common stock
beneficial ownership limit.
Issuance of Excess Stock if the Ownership Limits Are Violated. Our certificate of incorporation provides that a transfer of shares of common stock that would
otherwise result in ownership, under the applicable attribution rules of the Internal Revenue Code, of common stock in excess of the common stock beneficial
ownership limit or the constructive ownership limit, or which would cause the shares of capital stock of Alexander’s to be beneficially owned by fewer than 100
persons, would have no effect and the purported transferee would acquire no rights or economic interest in such common stock. In addition, common stock that
would otherwise be owned, under the applicable attribution rules of the Internal Revenue Code, in excess of the common stock beneficial ownership limit or the
constructive ownership limit will be automatically exchanged for shares of excess stock. These shares of excess stock would be transferred, by operation of law, to
us as trustee of a trust for the exclusive benefit of a beneficiary designated by the purported transferee or purported holder. While held in trust, the trustee shall
vote the shares of excess stock in the same proportion as the holders of the outstanding shares of common stock have voted. Any dividends or distributions
received by the purported transferee or other purported holder of the excess stock before our discovery of the automatic exchange for shares of excess stock must
be repaid to us upon demand.
If the purported transferee or purported holder elects to designate a beneficiary of an interest in the trust with respect to the excess stock, he or she may only
designate a person whose ownership of the shares will not violate the common stock beneficial ownership limit or the constructive ownership limit. When the
designation is made, the excess stock will be automatically exchanged for common stock. Our certificate of incorporation contains provisions designed to ensure
that the purported transferee or other purported holder of shares of excess stock may not receive in return for transferring an interest in the trust with respect to the
excess stock, an amount that reflects any appreciation in the shares of common stock for which the shares of excess stock were exchanged during the period that
the shares of excess stock were outstanding but will bear the burden of any decline in value during that period. Any amount received by a purported transferee or
other purported holder for designating a beneficiary in excess of the amount permitted to be received must be turned over to us. Our certificate of incorporation
provides that we may purchase any shares of excess stock that have been automatically exchanged for shares of common stock as a result of a purported transfer
or other event. The price at which we may purchase the excess stock will be equal to the lesser of:
3
•
in the case of shares of excess stock resulting from a purported transfer for value, the price per share in the purported transfer that resulted in the
automatic exchange for shares of excess stock or, in the case of excess stock resulting from some other event, the market price of the shares of common
stock exchanged on the date of the automatic exchange for excess stock, and
• the market price of the shares of common stock exchanged for the excess stock on the date that we accept the deemed offer to sell the excess stock.
Our purchase right with respect to excess stock will exist for 90 days, beginning on the date that the automatic exchange for shares of excess stock occurred or, if
we did not receive a notice concerning the purported transfer that resulted in the automatic exchange for shares of excess stock, the date that our board of directors
determines in good faith that an exchange for excess stock has occurred.
Other Provisions Concerning the Restrictions on Ownership. Our board of directors may exempt certain persons from the common stock beneficial ownership
limit or the constructive ownership limit if evidence satisfactory to our board of directors is presented showing that such exemption will not jeopardize our status
as a REIT under the Internal Revenue Code. Before granting an exemption of this kind, our board of directors may require a ruling from the Internal Revenue
Service, an opinion of counsel satisfactory to it and representations and undertakings from the applicant with respect to preserving our REIT status.
Our board of directors has, subject to certain conditions and limitations, exempted our manager, Vornado Realty Trust, and certain of its affiliates from the
common stock beneficial ownership limit. As a result, it is less likely as a practical matter that another holder of common stock could obtain an exemption.
The foregoing restrictions on ownership and transfer will not apply if our board of directors determines that it is no longer in our best interests to attempt to
qualify, or continue to qualify, as a REIT. Sections 382 and 383 of the Internal Revenue Code impose limitations upon the utilization of a corporation’s net
operating loss and credit carryforwards and certain other tax attributes, following significant changes in the corporation’s stock ownership. In order to preserve our
ability to use net operating loss carryforwards, if any, to reduce taxable income, our certificate of incorporation also contains additional provisions restricting the
ownership of our outstanding shares (the “Section 382 ownership restrictions”). The Section 382 ownership restrictions merely reduce the risk of certain
occurrences that could cause such a limitation to arise. It is still possible that, due to transfers (either directly or indirectly) of our outstanding shares, we could
become subject to a limitation under Section 382 or 383.
Our certificate of incorporation provides, in general, that, subject to the exceptions described in the next paragraph, no person may acquire shares of our Company,
or options or warrants to acquire such shares, if as a result such person (or another person to which such shares were attributed under certain complex attribution
rules, which differ in certain respects from those that apply for purposes of the common stock beneficial ownership limit or the constructive ownership limit)
would own, directly or under such attribution rules, 5% or more of the class of such outstanding shares (hereinafter, such person’s “ownership interest
percentage”). In addition, subject to the exceptions described in the next paragraph, no person whose ownership interest percentage of a class of shares equals or
exceeds 5% can acquire or transfer such shares, or options or warrants to acquire such shares. The foregoing restrictions apply independently to each class of our
outstanding stock.
4
The foregoing restrictions do not apply to (i) acquisitions and transfers of shares of common stock by certain persons and their affiliates whose ownership interest
percentage of common stock on September 21, 1993 was 5% or more, (ii) transfers of shares pursuant to an offering by us, to the extent determined by our board
of directors, and (iii) other transfers of shares specifically approved by our board of directors.
Transfers of shares, options or warrants in violation of the Section 382 ownership restrictions would be void, and the transferee would acquire no rights in such
shares, options or warrants. Thus, a purported acquiror would have no right to vote such shares or to receive dividends. Moreover, upon our demand, a purported
acquiror of shares, options or warrants would be required to transfer them to an agent designated by us. The agent, generally, would sell such shares, options or
warrants, remit the proceeds thereof to the purported acquiror to the extent of such person’s purchase price for the shares and, to the extent possible, remit the
balance of the proceeds to such person’s transferor. A similar procedure would be applied to any dividends paid to, and to the proceeds of any resale of shares,
options or warrants by, the purported acquiror.
Our board of directors has the authority to designate a date as of which the Section 382 ownership restrictions will no longer apply.
All certificates representing shares of common stock will bear a legend referring to the restrictions described above.
All persons who own, directly or by virtue of the applicable attribution rules of the Internal Revenue Code, more than 2% of the shares of outstanding common
stock must give a written notice to us containing the information specified in our certificate of incorporation by January 31 of each year. In addition, each
stockholder shall upon demand be required to disclose to us such information as we may request, in good faith, in order to determine our status as a REIT or to
comply with Treasury Regulations promulgated under the REIT provisions of the Internal Revenue Code.
Important Provisions of Delaware Law and Our Certificate of Incorporation and By-Laws
The following is a summary of important provisions of Delaware law and our certificate of incorporation and by-laws which affect us and our stockholders. The
description below is intended as only a summary. You can access complete information by referring to Delaware General Corporation Law and our certificate of
incorporation and by-laws.
Business Combinations with Interested Stockholders Under Delaware Law. Section 203 of the Delaware General Corporation Law prevents a publicly held
corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the
person became an interested stockholder, unless:
5
• before the date on which the person became an interested stockholder, the board of directors of the corporation approved either the business combination or the
transaction in which the person became an interested stockholder,
• the interested stockholder owned at least 85% of the outstanding voting stock of the corporation at the beginning of the transaction in which it became an
interested stockholder, excluding stock held by directors who are also officers of the corporation and by employee stock plans that do not provide
participants with the rights to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
• after the date on which the interested stockholder became an interested stockholder, the business combination is approved by the board of directors and the
holders of two-thirds of the outstanding voting stock of the corporation voting at a meeting, excluding the voting stock owned by the interested
stockholder.
As defined in Section 203, an “interested stockholder” is generally a person owning 15% or more of the outstanding voting stock of the corporation. As defined in
Section 203, a “business combination” includes mergers, consolidations, stock and assets sales and other transactions with the interested stockholder.
The provisions of Section 203 may have the effect of delaying, deferring or preventing a change of control of Alexander’s, Inc.
Amendment of Our Certificate of Incorporation and By-Laws. Amendments to our certificate of incorporation must be approved by our board of directors. Unless
otherwise required by law, our board of directors may amend our by-laws by a majority vote of the directors then in office.
Meetings of Stockholders. Under our by-laws, we will hold annual meetings of our stockholders at a date and time as determined by our board of directors,
chairman, vice chairman or president. Our by-laws require advance notice for our stockholders to make nominations of candidates for our board of directors or
bring other business before an annual meeting of our stockholders. The chairman or vice chairman shall call special meetings of our stockholders whenever
stockholders owning at least a majority of our issued and outstanding shares entitled to vote on matters to be submitted to stockholders shall request in writing
such a meeting.
Board of Directors. Our board of directors is divided into three classes. As the term of each class expires, directors in that class will be elected for a term of three
years and until their successors are duly elected and qualified. These staggered terms may reduce the possibility of an attempt to change control of Alexander’s.
6
ALEXANDER’S, INC.
SUBSIDIARIES OF REGISTRANT
EXHIBIT 21
Name of Subsidiary
State of Organization
731 Commercial Holding LLC
731 Commercial LLC
731 Office One Holding LLC
731 Office One LLC
731 Office Two Holding LLC
731 Office Two LLC
731 Restaurant, LLC
731 Retail One, LLC
Alexander’s Construction LLC
Alexander’s Kings Plaza, LLC
Alexander’s Management LLC
Alexander’s of Brooklyn, Inc.
Alexander’s of Flushing, Inc.
Alexander’s of Rego Park II, Inc.
Alexander’s of Rego Park III, Inc.
Alexander’s Rego Shopping Center Inc.
Alexander's of Rego Park II Participating Lender LLC
Alexander's of Rego Residential LLC
Alexander's of Rego Residential Holdings LLC
ALX C21 LLC
ALX Investments LLC
Fifty Ninth Street Insurance Company LLC
Kings Parking, LLC
Kings Plaza TEP LLC
Rego II Borrower LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Vermont
Delaware
Delaware
Delaware
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-212838 on Form S-8 of our reports dated February 12, 2024, relating to the
financial statements of Alexander’s, Inc. and the effectiveness of Alexander’s, Inc.'s internal control over financial reporting appearing in this Annual Report on
Form 10-K for the year ended December 31, 2023.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 12, 2024
EXHIBIT 31.1
CERTIFICATION
I, Steven Roth, certify that:
1. I have reviewed this Annual Report on Form 10‑K of Alexander’s, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure control and procedures (as defined in
Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
February 12, 2024
/s/ Steven Roth
Steven Roth
Chairman of the Board and
Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
I, Gary Hansen, certify that:
1. I have reviewed this Annual Report on Form 10‑K of Alexander’s, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure control and procedures (as defined in
Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
February 12, 2024
/s/ Gary Hansen
Gary Hansen
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code)
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code),
the undersigned officer of Alexander’s, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that:
The Annual Report on Form 10-K for year ended December 31, 2023 (the “Report”) of the Company fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
February 12, 2024
Name:
Title:
/s/ Steven Roth
Steven Roth
Chairman of the Board and
Chief Executive Officer
EXHIBIT 32.2
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code)
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code),
the undersigned officer of Alexander’s, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that:
The Annual Report on Form 10-K for year ended December 31, 2023 (the “Report”) of the Company fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
February 12, 2024
Name:
Title:
/s/ Gary Hansen
Gary Hansen
Chief Financial Officer
ALEXANDER’S, INC. RESTATEMENT CLAWBACK POLICY
EXHIBIT 97
I. BACKGROUND
Alexander’s, Inc. (the “Company”) has adopted this policy (this “Policy”) to provide for the recovery or “clawback” of certain incentive compensation
in the event of a Restatement. This Policy is intended to comply with, and will be interpreted to be consistent with, the requirements of Section 303A.14 of
the New York Stock Exchange (“NYSE”) Listed Company Manual. Certain terms used in this Policy are defined in Section VIII. below.
II. STATEMENT OF POLICY
The Company shall recover reasonably promptly the amount of erroneously awarded Incentive-Based Compensation in the event that the Company is
required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the
securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously
issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current
period (a “Restatement”).
The Company shall recover erroneously awarded Incentive-Based Compensation in compliance with this Policy except to the extent provided under
Section V. below.
III. SCOPE OF POLICY
A. Covered Persons and Recovery Period. This Policy applies to Incentive-Based Compensation received by a person:
•
after beginning service as an Executive Officer,
• who served as an Executive Officer at any time during the performance period for that Incentive-Based Compensation,
• while the Company has a class of securities listed on a national securities exchange, and
•
during the three completed fiscal years immediately preceding the date that the Company is required to prepare a Restatement (the “Recovery
Period”).
Notwithstanding this look-back requirement, the Company is only required to apply this Policy to Incentive-Based Compensation received on or after
October 2, 2023.
For purposes of this Policy, Incentive-Based Compensation shall be deemed “received” in the Company’s fiscal period during which the Financial
Reporting Measure (as defined herein) specified in the Incentive-Based Compensation award is attained, even if the payment or grant of the Incentive-
Based Compensation occurs after the end of that period.
4858-1246-3212 v.2
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B. Transition Period. In addition to the Recovery Period, this Policy applies to any transition period (that results from a change in the
Company’s fiscal year) within or immediately following the Recovery Period (a “Transition Period”), provided that a Transition Period between the last
day of the Company’s previous fiscal year end and the first day of the Company’s new fiscal year that comprises a period of nine to 12 months will be
deemed a completed fiscal year.
C. Determining Recovery Period. For purposes of determining the relevant Recovery Period, the date that the Company is required to prepare the
Restatement is the earlier to occur of:
•
•
the date the Board of Directors of the Company (the “Board”), a committee of the Board, or the officer or officers of the Company authorized to
take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare a
Restatement, and
the date a court, regulator, or other legally authorized body directs the Company to prepare a Restatement.
For clarity, the Company’s obligation to recover erroneously awarded Incentive-Based Compensation under this Policy is not dependent on if or when a
Restatement is filed.
D. Method of Recovery. The Compensation Committee of the Board (the “Committee”) will have discretion in determining how to accomplish
recovery of erroneously awarded Incentive-Based Compensation under this Policy, recognizing that different means of recovery may be appropriate in
different circumstances.
IV. AMOUNT SUBJECT TO RECOVERY
A. Recoverable Amount. The amount of Incentive-Based Compensation subject to recovery under this Policy is the amount of Incentive-Based
Compensation received that exceeds the amount of Incentive-Based Compensation that otherwise would have been received had it been determined based
on the restated amounts, computed without regard to any taxes paid or payable.
B. Covered Compensation Based on Stock Price or TSR. For Incentive-Based Compensation based on the price of the Company’s common
shares or total shareholder return (“TSR”), where the amount of erroneously awarded Incentive-Based Compensation is not subject to mathematical
recalculation directly from the information in a Restatement, the recoverable amount shall be determined by the Committee based on a reasonable estimate
of the effect of the Restatement on the share price or TSR upon which the Incentive-Based Compensation was received. In such event, the Company shall
maintain documentation of the determination of that reasonable estimate and provide such documentation to the NYSE.
V. EXCEPTIONS
The Company shall recover erroneously awarded Incentive-Based Compensation in compliance with this Policy except to the extent that the conditions set
out below are met and the Committee has made a determination that recovery would be impracticable:
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A. Direct Expense Exceeds Recoverable Amount. The direct expense paid to a third party to assist in enforcing this Policy would exceed
the amount to be recovered; provided, however, that before concluding it would be impracticable to recover any amount of erroneously awarded Incentive-
Based Compensation based on expense of enforcement, the Company shall make a reasonable attempt to recover such erroneously awarded Incentive-
Based Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the NYSE.
B. Recovery from Certain Tax-Qualified Retirement Plans. Recovery would likely cause an otherwise tax-qualified retirement plan, under which
benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations
thereunder.
VI. PROHIBITION AGAINST INDEMNIFICATION
Notwithstanding the terms of any indemnification arrangement or insurance policy with any individual covered by this Policy, the Company shall not
indemnify any Executive Officer or former Executive Officer against the loss of erroneously awarded Incentive-Based Compensation, including any
payment or reimbursement for the cost of insurance obtained by any such covered individual to fund amounts recoverable under this Policy.
VII. DISCLOSURE
The Company shall file all disclosures with respect to this Policy and recoveries under this Policy in accordance with the requirements of the U.S. Federal
securities laws, including the disclosure required by the applicable Securities and Exchange Commission (“SEC”) filings.
VIII. DEFINITIONS
Unless the context otherwise requires, the following definitions apply for purposes of this Policy:
“Executive Officer” means the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer,
the controller), any vice-president of the Company in charge of a principal business unit, division, or function (such as sales, administration, or finance),
any other officer who performs a policy-making function, or any other person who performs similar policymaking functions for the Company. Executive
officers of the Company’s subsidiaries, as applicable, are deemed Executive Officers of the Company if they perform such policy making functions for the
Company. Policy-making function is not intended to include policymaking functions that are not significant. Identification of an Executive Officer for
purposes of this Policy will include at a minimum executive officers identified pursuant to 17 CFR 229.401(b).
“Financial Reporting Measures” means any of the following: (i) measures that are determined and presented in accordance with the accounting
principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures, (ii) stock price
and (iii) TSR. A Financial Reporting Measure need not be presented within the Company’s financial statements or included in a filing with the SEC.
“Incentive-Based Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a
Financial Reporting Measure.
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IX. ADMINISTRATION; AMENDMENT; TERMINATION.
All determinations under this Policy will be made by the Committee, including determinations regarding how any recovery under this Policy is effected.
Any determinations of the Committee will be final, binding and conclusive and need not be uniform with respect to each individual covered by this Policy.
In the event of any conflict or overlap between this Policy and any other policy of the Company for clawback or recoupment of incentive compensation,
this Policy shall control.
The Committee may amend this Policy from time to time and may terminate this Policy at any time, in each case in its sole discretion.
X. EFFECTIVENESS; OTHER RECOUPMENT RIGHTS
This Policy shall be effective as of December 1, 2023. Any employment agreement, equity award agreement, compensatory plan or any other agreement or
arrangement with an Executive Officer shall be deemed to include, as a condition to the grant of any benefit thereunder, an arrangement with the Executive
Officer to abide by the terms of this Policy. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of
recoupment that may be available to the Company and its subsidiaries and affiliates under applicable law or pursuant to the terms of any similar policy or
similar provision in any employment agreement, equity award agreement or similar agreement.
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