THE PENN DISTRICT
T H I S P A G E I N T E N T I O N A L L Y L E F T B L A N K
V O R N A D O C O M P A N Y P R O F I L E
Vornado Realty Trust is a fully-integrated real estate operating company.
Our business is 87% New York-centric and 78% office-centric. We own all or portions of:
57 Manhattan properties consisting of:
20.4 million square feet of office space in 30 properties;
2.4 million square feet of street retail space in 50 properties;
1,662 residential units in 5 properties;
Multiple future development sites, including 350 Park Avenue, Sunset Pier 94 Studios
and PENN 15 (formerly the Hotel Pennsylvania);
THE PENN DISTRICT is our campus-like development currently consisting of 9 million
square feet in over a dozen buildings and land sites surrounding New York’s Pennsylvania
Station, the busiest transportation hub in North America;
A 32.4% interest in Alexander’s, Inc. (NYSE:ALX), which owns five properties in the
New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot
Bloomberg L.P. headquarters building;
Signage throughout Times Square and THE PENN DISTRICT;
BMS, our wholly owned subsidiary, which provides cleaning and security services for our
buildings and third parties, currently employing 2,437 associates;
The 3.7 million square foot THE MART in Chicago; and
A 70% controlling interest in 555 California Street, a three-building office complex in San
Francisco’s financial district aggregating 1.8 million square feet.
Vornado’s common shares are listed on the New York Stock Exchange and are traded
under the symbol: VNO.
1
T H I S P A G E I N T E N T I O N A L L Y L E F T B L A N K
2
Financial Highlights
As Reported
Revenues
Net income/(loss)
Net income/(loss) per share - basic
Net income/(loss) per share - diluted
Total assets
Total equity
Net operating income
Funds from operations
Funds from operations per share
% (decrease)/increase in funds from operations per share
As Adjusted
Net income
Net income per share - diluted
Funds from operations
Funds from operations per share
% (decrease)/increase in funds from operations per share
$
$
$
$
$
$
$
$
$
$
$
$
$
Year Ended December 31,
2023
1,811,163,000
43,378,000
0.23
0.23
16,187,665,000
5,705,286,000
1,143,213,000
503,792,000
2.59
(21.5) %
$
$
$
$
$
$
$
$
$
2022
1,799,995,000
(408,615,000)
(2.13)
(2.13)
16,493,375,000
6,076,380,000
1,162,048,000
638,928,000
3.30
11.1 %
Year Ended December 31,
2023
51,286,000
0.27
508,151,000
2.61
(17.1) %
$
$
$
$
2022
126,468,000
0.66
608,892,000
3.15
10.1 %
These financial highlights and the letter to shareholders present certain non-GAAP measures, including net income (loss), net operating income (“NOI”), funds from operations
(“FFO”), and earnings before interest, taxes, depreciation and amortization (“EBITDA”), all as adjusted, as well as NOI, FFO and EBITDA. We have provided reconciliations of
these non-GAAP measures to the applicable GAAP measures in the appendix section of this letter to shareholders and in the Company’s Annual Report on Form 10-K under “Item
7 Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which accompanies this letter or can be viewed at www.vno.com.
3
To Our Shareholders
Net Income/(Loss) attributable to common shares for the year ended December 31, 2023 was $43.4 million, $0.23 per diluted share,
compared to ($408.6) million, ($2.13) per diluted share, for the previous year.
Funds from Operations, as Adjusted (an apples-to-apples comparison of our continuing business, eliminating certain one-timers) for
the year ended December 31, 2023 was $508.2 million, $2.61 per diluted share, compared to $608.9 million, $3.15 per diluted share,
for the previous year. This is detailed on page 5.
Funds from Operations, as Reported (apples-to-oranges including one-timers) for the year ended December 31, 2023 was $503.8
million, $2.59 per diluted share, compared to $638.9 million, $3.30 per diluted share, for the previous year. See page 5 for a
reconciliation of Funds from Operations, as Reported, to Funds from Operations, as Adjusted.
Net Operating Income (before depreciation, G&A, and interest), as detailed below, for the year ended December 31, 2023 was $1.143
billion, up substantially from 2021 and basically flat from 2022.
Here are our financial results presented in Net Operating Income format by business unit:
Net Operating Income
($ IN MILLIONS)
New York:
Office
Retail
Residential
Alexander’s
Total New York
THE MART
555 California Street
Other
Total Net Operating Income
2023
Same Store
% Increase
(Decrease)
3.8 %
(6.4) %
11.8 %
9.9 %
2.2 %
(34.8) %
26.3 %
0.4 %
% of 2023
64.8 %
16.8 %
1.9 %
3.6 %
87.1 %
5.5 %
7.4 %
100.0 %
2023
727.0
188.6
21.9
40.1
977.6
61.5
82.9
1,122.0
21.2
1,143.2
2022
718.7
205.7
19.6
37.5
981.5
96.9
65.7
1,144.1
17.9
1,162.0
2021
677.2
173.4
17.8
37.3
905.7
58.9
64.8
1,029.4
4.0
1,033.4
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 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. 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 Part I of our Annual Report on Form 10-K for the year ended December 31, 2023, a copy of
which accompanies this letter or can be viewed at www.vno.com. 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. 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 letter.
4
The following chart reconciles Funds from Operations, as Reported, to Funds from Operations, as Adjusted:
($ IN MILLIONS, EXCEPT PER SHARE)
Funds from Operations, as Reported
Adjustments for certain items that impact FFO:
Real Estate Fund
After-tax gain on sale of 220 Central Park South units
Credit losses on investments
Deferred tax liability - Farley
Other, including noncontrolling interests’ share of above adjustments
Total adjustments
Funds from Operations, as Adjusted
Funds from Operations, as Adjusted per share
2023
503.8
(14.4)
(12.0)
8.3
11.7
10.8
4.4
508.2
2.61
2022
638.9
(1.6)
(35.9)
—
13.7
(6.2)
(30.0)
608.9
3.15
Funds from Operations, as Adjusted, decreased in 2023 by $100.7 million, or $0.54 per share. Here is the detail:
($ IN MILLIONS, EXCEPT PER SHARE)
Dispositions
Variable businesses
Tenant legal settlement
Net interest expense
Real estate tax expense - THE MART
Stock compensation
Other
Decrease in FFO, as Adjusted
Increase/(Decrease)
Amount
(14.7)
(4.3)
14.1
(56.4)
(16.9)
(19.6)
(2.9)
(100.7)
Per Share
(0.07)
(0.02)
0.06
(0.28)
(0.08)
(0.09)
(0.06)
(0.54)
5
Report Card
Since I have run Vornado from 1980, total shareholder return has been 11.4% per annum, but subpar lately. Dividends have represented
3.3 percentage points of Vornado’s annual return.
The table below shows Vornado’s total return to shareholders compared to our New York-centric peers and the Office REIT index for
various periods ending December 31, 2023, and for 2024 year-to-date:
2024 YTD
One-year
Five-year
Ten-year
Twenty-year
Vornado
(3.7) %
39.2 %
(40.3) %
(33.9) %
64.1 %
NY
REIT
Peers(1)
5.2 %
30.8 %
(29.3) %
—
—
Office
REIT
Index
(5.1) %
2.0 %
(16.8) %
7.0 %
98.6 %
Had we done this table as of December 31, 2019, pre-COVID, the numbers on the “twenty-year” line would have been, reading across,
569.9%, –, and 468.9%.
In 2015 and 2017, shareholders received $30.50 per share in dividends from our Urban Edge ($11.88) and JBG SMITH ($18.62) spin-
offs. The fact that these shares declined over time, as have all other office and retail shares, is another issue altogether.
Ten-Year Earnings Record
As is our custom, we present the table below that traces our ten-year record, both in absolute dollars and per share amounts:
($ AND SHARES
IN MILLIONS,
EXCEPT PER
SHARE DATA)
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
NOI(2)
FFO, As Adjusted
Amount
% Change
Amount
% Change
Per Share
1,147.5
1,150.1
1,028.4
1,002.9
1,156.6
1,147.1
1,146.9
1,109.6
1,073.3
981.7
(0.2) %
11.8 %
2.5 %
(13.3) %
0.8 %
— %
3.4 %
3.4 %
9.3 %
5.6 %
508.2
608.9
549.9
501.0
660.5
702.8
701.0
672.3
629.7
507.3
(16.5) %
10.7 %
9.8 %
(24.1) %
(6.0) %
0.3 %
4.3 %
6.8 %
24.1 %
8.4 %
2.61
3.15
2.86
2.62
3.46
3.68
3.66
3.53
3.32
2.69
Shares
Outstanding
210.3
207.4
205.7
203.7
203.1
202.3
201.6
200.5
199.9
198.5
1 Comprised of New York City-centric peers: SL Green, Empire State Realty Trust, and Paramount Group.
2 All years include only properties owned at the end of 2023.
6
Acquisitions/Dispositions
Here is a ten-year schedule of acquisitions and dispositions.
($ IN MILLIONS)
2024 to date
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Number of
Transactions
—
7
7
6
3
7
9
9
11
25
17
101
Net Acquisitions/
(Dispositions)
—
(127.4)
(409.3)
262.6
3.7
(2,818.6)
336.0
(5,901.9)
(875.1)
(3,717.1)
(412.3)
(13,659.4)
Acquisitions
—
20.0
—
397.0
3.7
67.1
573.5
145.7
147.4
955.8
648.1
2,958.3
Dispositions
—
147.4
409.3
134.4
—
2,885.7
237.5
6,047.6
1,022.5
4,672.9
1,060.4
16,617.7
Gain
—
36.5
69.0
7.9
—
1,384.1
170.4
5.1
664.4
316.7
523.4
3,177.5
Over the ten-year period, our dispositions totaled $16.6 billion and we were a net seller or spinner of $13.7 billion.
2019 Dispositions include $2.665 billion for the Retail Joint Venture at a 4.5% cap rate, resulting in a gain of $1.205 billion(3). 2017
Dispositions include $5.997 billion for the JBG SMITH spin-off and 2015 Dispositions include $3.700 billion for the Urban Edge
Properties spin-off. No gain was recognized on these spin-offs.
The action here takes place on the 45th floor where our acquisitions/dispositions team resides. Thanks to Michael Franco, EVPs Michael
Schnitt and Corporation Counsel Steven Borenstein, SVPs Cliff Broser, Brian Cantrell, Adam Green, and Tatiana Melamed.
3 The GAAP gain reported in our published financial statements was $2.571 billion, the difference being the step-up in basis to fair value of the retained portion of the assets.
Much of this gain was reversed by impairment charges of $409.1 million in 2020 and $483.0 million in 2022.
7
Lease…Lease…Lease
The mission of our business is to create value for shareholders by growing our asset base through the addition of carefully selected
properties and by adding value through intensive and efficient management. Our operating platform is where the rubber meets the road,
and leasing is the main event.
This year, total leasing was 2,779,000 square feet. Our New York office leasing team won the gold medal leasing 2.1 million square
feet. Average starting rents were a record-breaking $99 per square foot. In more gold medal stuff, for the year we leased 1.2 million
square feet at over $100 per square foot rents.
As is our practice, we present below leasing and occupancy statistics for our businesses.
(SQUARE FEET IN
THOUSANDS)
2023
Square feet leased
Initial Rent
GAAP Mark-to-Market
Cash Mark-to-Market
Number of transactions
2022
Square feet leased
Initial Rent
GAAP Mark-to-Market
Cash Mark-to-Market
Number of transactions
New York
Office
Retail
THE MART
555
California
Street
2,133
98.66
6.2 %
(2.0) %
75
894
84.51
9.0 %
5.4 %
86
299
118.47
20.7 %
18.8 %
35
111
266.25
(38.3) %
(34.2) %
22
337
52.97
(3.3) %
(7.8) %
71
299
52.40
(4.8) %
(5.4) %
63
10
134.70
12.8 %
2.4 %
2
210
96.40
24.3 %
13.6 %
6
The negative mark-to-market for Retail in 2022 was driven by a rent reduction in Hollister’s lease renewal at 666 Fifth Avenue.
Excluding this deal, Retail GAAP and cash mark-to-markets would have been outstanding at positive 33.5% and 23.4%, respectively.
Occupancy rate:
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
New York
Office
Retail(4)
THE MART
555
California
Street
90.7 %
91.9 %
92.2 %
93.4 %
96.9 %
97.2 %
97.1 %
96.3 %
96.3 %
96.9 %
88.1 %
83.9 %
91.4 %
90.4 %
93.8 %
97.6 %
96.8 %
97.0 %
97.3 %
96.9 %
79.2 %
81.6 %
88.9 %
89.5 %
94.6 %
94.7 %
98.6 %
98.9 %
98.6 %
94.7 %
94.5 %
94.7 %
93.8 %
98.4 %
99.8 %
99.4 %
94.2 %
92.4 %
93.3 %
97.6 %
Thanks to our leasing captains: Glen Weiss and Haim Chera. Also thanks to the New York Office leasing machine: EVP Josh Glick,
Edward Riguardi, Jared Silverman, Ryan Levy, Anthony Cugini, and Jordan Donohue; and for Retail: EVP Ed Hogan, Jason Morrison,
and Jenniel Davis; to EVP Paul Heinen, who runs THE MART and leasing at 555 California Street; and Toni McIntosh, Byron Morton
and Josh Kellerman at THE MART. Our thanks also to our in-house legal teams and their leaders, EVPs Pam Caruso and Elana Butler.
4 Excludes Manhattan Mall occupancy for all periods presented.
8
Clockwise from top left: 350 Park Avenue, THE MART, 1290 Avenue of the Americas, 770 Broadway
9
Capital Markets / Balance Sheet
At year-end, we had $3.2 billion of immediate liquidity consisting of $1.3 billion of cash and restricted cash and $1.9 billion available
on our $2.5 billion revolving credit facilities. Today, we have $3.1 billion of immediate liquidity. We also have approximately $10
billion of unencumbered assets.
This year, the inflation-fighting Federal Reserve raised interest rates rapidly, sending lenders and capital market counterparties to the
sidelines. In recent years, our capital markets volume has averaged over $4 billion; this year, only $613 million.
In January, we repaid our $105 million participation in the $205 million mortgage loan on 150 West 34th Street.
In June, a joint venture, in which we have a 55% interest, completed a $129.3 million refinancing of 512 West 22nd Street, a 173,000
square foot Manhattan office building. The interest-only loan bears a rate of SOFR plus 2.00% in year one and SOFR plus 2.35%
thereafter. The loan matures in June 2025 with a one-year extension option subject to debt service coverage ratio, loan-to-value, and
debt yield requirements. The loan replaces the previous $137.1 million loan that bore interest at LIBOR plus 1.85% and had an initial
maturity of June 2023.
In June, the Fifth Avenue and Times Square Joint Venture completed a restructuring of the 697-703 Fifth Avenue $421 million mortgage
loan. The restructured $355 million loan, which had its principal reduced through an application of property-level reserves and funds
from the partners, was split into a $325 million senior note, which bears interest at SOFR plus 2.00%, and a $30 million junior note,
which accrues interest at a fixed rate of 4.00%. The restructured loan matures in March 2028, as fully extended. Any amounts funded
for future re-leasing of the property will be senior to the $30 million junior note.
In July, a joint venture, in which we have a 50% interest, completed a $54 million refinancing of the office condominium of 825 Seventh
Avenue, a 173,000 square foot Manhattan office and retail building. The interest-only loan bears a rate of SOFR plus 2.75%, with a 30
basis point reduction upon satisfaction of certain leasing conditions, and matures in January 2026. The loan replaces the previous $60
million loan that bore interest at LIBOR plus 2.35% and was scheduled to mature in July 2023.
In October, we completed a $75 million refinancing of 150 West 34th Street, of which $25 million is recourse. The interest-only loan
bears a rate of SOFR plus 2.15% and matures in February 2025, with three one-year as-of-right extension options and an additional one-
year extension option available subject to satisfying a loan-to-value test. The interest rate on the loan is subject to an interest rate cap
arrangement with a SOFR strike rate of 5.00%, which matures in February 2026. The loan replaces the previous $100 million loan,
which bore interest at SOFR plus 1.86%.
Below is the right-hand side of our balance sheet as well as calculations of net debt/EBITDA at December 31, 2023, 2022 and 2021.
($ IN MILLIONS)
Secured debt - nonrecourse
Unsecured debt - recourse
Share of non-consolidated debt
Noncontrolling interests’ share of consolidated debt
Total debt
Cash
Projected cash proceeds from 220 Central Park South
Net debt
EBITDA as adjusted
2023
5,730
2,575
2,654
(682)
10,277
(1,413)
(70)
8,794
2022
5,878
2,575
2,697
(682)
10,468
(1,783)
(90)
8,595
2021
6,099
2,575
2,700
(682)
10,692
(2,177)
(148)
8,367
1,081
1,091
949
Net debt/EBITDA as adjusted
8.1 x
7.9 x
8.8 x
We expect net debt/EBITDA to improve by at least one turn as PENN 2 rents up and our businesses normalize.
In 2023, we entered into interest rate swaps on $1.490 billion of debt, a 1.00% SOFR interest rate cap on the $950 million 1290 Avenue
of the Americas mortgage loan ($665 million at share), and interest rate caps on $1.093 billion (at share) of other mortgage loans. As of
March 31, 2024, the aggregate fair value of our interest rate hedges at share was $160 million.
At year end, fixed-rate debt, including the effect of interest rate swaps, accounted for 77% of debt with a weighted average interest rate
of 3.6% and a weighted average term of 3.6 years. Floating-rate debt accounted for 23% of debt at a weighted average interest rate of
6.3% and a weighted average term of 1.6 years. Taking account of interest rate caps, 23% is reduced to 10%. While very helpful, our
swaps and caps do not in most instances match the maturity dates of the loans and therefore provide only partial protection.
I would observe that there really is no protection against loans that mature into a rising interest rate market. And I further observe that
the stock market marks to market, valuing at then-current interest rates, giving no value to lower-rate loans even if locked in for term.
10
Our balance sheet strategy is to rely primarily (70%) on project-level, nonrecourse debt – old-fashioned mortgages that are
collateralized by assets we estimate to have an aggregate fair value of $9.4 billion (loan-to-value of 82%). We have approximately $10
billion of unencumbered real estate assets. Only 25%(5) of our debt is recourse. Here is the detail of recourse debt:
($ IN THOUSANDS)
Debt recourse to Vornado:
3.50% senior unsecured notes
Unsecured revolving credit facility ($1.25 billion available)
2.15% senior unsecured notes
Unsecured term loan
Unsecured revolving credit facility ($675 million available)
3.40% senior unsecured notes
Amount Maturity
Years to
Maturity
450,000
—
400,000
800,000
575,000
350,000
2,575,000
1/25
4/26
6/26
12/27
12/27
6/31
0.8
2.0
2.2
3.7
3.7
7.2
3.4
Our credit statistics have been negatively affected by COVID-related reductions in our income and higher interest rates. This resulted
in downgrades by S&P to BBB- for senior unsecured debt and BB+ for corporate credit rating, by Moody’s to Ba1 and by Fitch to
BB+.(6)
Vornado remains committed to maintaining its investment grade rating. We aim to raise our rating as our income reverts and improves,
as our variable businesses continue to recover, as our occupancy climbs back to our historical 97%, and as PENN 2 leases up.
Special thanks to EVP Jason Kirschner and SVP Tatiana Melamed.
In addition, we guarantee five mortgage loans totaling $924 million ($541 million at share) for purposes of protecting tax positions.
5
6 All of our New York peers and most of the CBD office REITs are in the same boat.
11
Retail
Retail has bottomed. Tenant activity is picking up from literally no interest and no tours to now a fairly active market, but still at bottom-
fishing pricing. While rents have a way to go to reach peak pricing of five years ago, we feel very good about the activity level and
strength of this retail recovery. We expect activity and pricing to accelerate from here.
And there is more big retail news… In two blockbuster deals announced in December, global luxury retailers Prada and Kering bought
prime, upper Fifth Avenue properties for their own use as stores. One deal was $835 million and the other was $963 million, so in round
numbers, call it about $900 million for each half-block front on upper Fifth Avenue. So we now are seeing the most important retailers
in the world investing aggressively in real estate for their own store brands on the most important retail thoroughfare in our country.
This is only happening in the most important world cities (New York, London, Paris). Now, we take this mark very personally because
we own, in our Retail Joint Venture (so 51.5% at our share), a 26% market share of upper Fifth Avenue in four half blocks of similar
AAA quality. These transactions are indeed comps for our value. We also own in that same joint venture the two best full blocks (so
four half blocks) in Times Square. And we own the largest sign business in town, over half of which is in Times Square, in that same
joint venture.
We are making more than our fair share of deals – a sampling is Fendi, Berluti, Sephora, Whole Foods, Wegmans, Canada Goose,
Chase, Duane Reade, Blue Ribbon Sushi, Stefano Ricci, Five Below, DSW Shoes, Hollister, Lifetime Fitness, Avra Prime…
Individually, and collectively, we own great assets… a portfolio of 50 properties, 2.4 million square feet of flagship street retail
concentrated on the best high streets. Please see www.vno.com for portfolio details and images. Here is the math for our retail business:
NOI
($ IN MILLIONS,
EXCEPT
PROPERTIES)
2023
2022
2021
2020
2019
2018
Number of
Properties
50
56
60
63
62
63
GAAP Basis
188.6
205.7
173.4
147.3
273.2
353.4
Cash Basis
180.9
188.8
160.8
158.7
267.7
324.2
For comparability, 2018 and 2019 cash basis NOI of $324.2 million and $267.7 million should be adjusted for the Retail Joint Venture,
other sales and out-of-service assets taking our cash basis NOI, as adjusted, to $178 million and $194 million, respectively.
Below, we break down our retail business by submarket:
($ IN MILLIONS,
EXCEPT %)
Fifth Avenue
Times Square
THE PENN DISTRICT
Midtown South
Madison Avenue
Other
Total
NOI
GAAP Basis
Cash Basis
Amount
65.4
25.2
33.0
31.8
11.8
21.4
188.6
%
34.7
13.4
17.5
16.9
6.3
11.2
100.0
Amount
67.8
26.6
23.9
28.4
11.6
22.6
180.9
%
37.5
14.7
13.2
15.7
6.4
12.5
100.0
12
Clockwise from top left: 595 Madison Avenue, 689 Fifth Avenue, PENN 1, 1540 and 1535 Broadway
13
THE PENN DISTRICT
We are the largest owner in THE PENN DISTRICT with 9 million square feet. THE PENN DISTRICT’s time has come. THE PENN
DISTRICT is different from our other office assets…it is a large multi-building campus, it is long-term and it is development focused
(development and long-term are two of the dirtiest words in REITland). THE PENN DISTRICT is the highest growth opportunity in
our portfolio.
The name “Penn” – as used in Penn Plaza, or even THE PENN DISTRICT – is a legacy that short-sells reality. I look upon our neighbors
Hudson Yards and Manhattan West, and our PENN DISTRICT as a single submarket, call it the “New West Side of Manhattan.” This
submarket has been the fastest grower in town, now comprising 36 million square feet, and has sites that over time will produce 20
million square feet of growth. There will always be Park Avenue but for an increasing array of occupiers, Manhattan is tilting to the
south and to the west.
Our development plans for Farley, PENN 1 and PENN 2 were outlined in my letters to shareholders over the last years. Images, budgets,
returns and delivery dates are on our website. Two of these three large, exciting projects are now open and the third, PENN 2, is just
about complete. When fully completed, these three, aggregating 5.2 million square feet, will constitute the debut of our vision for THE
PENN DISTRICT. Here’s an update:
The acclaimed Moynihan Train Hall is open to the public, as is our Moynihan Food Hall.
The doubling in width and doubling in height of the Long Island Rail Road concourse, main corridor of Penn Station, to 60
feet wide and 18 feet high is complete. Anyone who thinks Penn Station cannot be turned into a world-class facility without
moving Madison Square Garden (highly unlikely and backbreakingly expensive) should take a look at this grand concourse.
We own the retail on both sides of the LIRR concourse.
Our retail leasing in both the Train Hall and the Long Island Rail Road concourse is above budget, with a prodigious 62
leases executed.
Vornado was a major principal in both the Moynihan Train Hall and LIRR concourse public/private partnerships.
At Farley, Meta (formerly Facebook) has taken occupancy of their 730,000 square feet under a 15-year lease.
At PENN 11, our major tenant has expanded to 400,000 square feet.
At PENN 1, our grand new lobby and multi-floor amenity offerings are completed and open. Our amenities here are extensive
(we believe the largest amenity package in the City, by far) and unique, tailored to the demographic of our tenants’ workforce,
are very busy and receiving rave reviews from tenants and brokers.
At PENN 2, the two-block wide Bustle is now complete, creating in front of PENN 2, combined with the 33rd Street
promenade and the 33rd Street set-back at PENN 1, an expansive open public space which, I might say, will be quite unique
and impressive (see cover picture).
Directly across Seventh Avenue, the Hotel Penn is now down to ground, creating our quite spectacular PENN 15 site. And
there are other sites in THE PENN DISTRICT for future development.
Our food and beverage strategy of curating outstanding restaurants, fast casual, grab and go, coffee, and sweets offered by a
mix of national and local operators at varying price points, to serve our tenants, neighbors, and the throngs of visitors to THE
PENN DISTRICT, is well underway. Avra Prime, Blue Ribbon Sushi, Bar Primi, The Landing, The Grand Astro Room (by
Sunday in Brooklyn), Roberta’s, The Moynihan Food Hall, Los Tacos, Dos Toros, Shake Shack, Pret, Chick-Fil-A, Blue
Bottle, Birch, Anita Gelato, Davey’s Ice Cream, Magnolia Bakery (the list goes on…) are now open or soon will be.
On the seventh floor of PENN 1, our PENN DISTRICT experience center is open and busy. This 14,000 square foot facility,
complete with multiple scale models and floor-to-ceiling, wall-to-wall videos, vividly illustrates and brings to life our vision
and plans for the buildings, restaurants, retail, amenities, and lifestyle and workstyle that THE PENN DISTRICT will
become.
14
We have earned our stripes with what we have already accomplished in THE PENN DISTRICT… just look at the Moynihan Train
Hall, the LIRR Concourse, Facebook at Farley (730,000 square feet), PENN 1 (2.6 million square feet), PENN 2 (1.8 million square
feet), PENN 11 (1.1 million square feet), the two-block-long Bustle along Seventh Avenue, and expansive surrounding public plazas.
Our PENN DISTRICT development team is led by Barry Langer with David Bellman, Judy Kessler, Alan Reagan, Sandy Reis, Nicole
Dosso, Chris Sullivan, Alejandro Knopoff, Andrew Hunt and Morgan Mann. Special shoutout and kudos to Glen Weiss, Barry Langer,
Josh Glick, Lisa Vogel, Jerald Kohrs, and Brad Zizmor who have been the guiding lights in the creation of PENN 1’s unique food,
gathering and social spaces. And, thank you to Dan Shannon for his excellent and creative work on PENN 2.
FARLEY - Moynihan Train and Food Halls
15
PENN 1
16
PENN 2
17
Long Island Rail Road (LIRR) Concourse
18
Some Thoughts, 2023 Version
Portions reprinted from prior years.
I join with all citizens of the free world by saying that we are shocked and saddened by the now, two wars in Ukraine and Gaza. I stand
with Israel and with Ukraine. The loss of life and destruction is heartbreaking… but the importance of the outcome of these hostilities
to our way of life cannot be overestimated.
A shoutout and thank you to our very talented, hard-working Vornado family in New York, Paramus, Chicago and San Francisco,
in leasing, development, the 45th floor, Paramus, operations, and BMS all of whom are A+, head of the class.
The State of Office
Nationwide, the share prices of office companies have been crushed. Geography, portfolio quality, and even balance sheet strength
don’t seem to matter. Is the stock market predicting that office buildings are obsolete, disrupted by the kitchen table and Zoom? Is the
stock market predicting that the future of work, the future of office, and even the future of our cities is challenged? We don't think so.
We don’t think WFH or WFA is an existential threat. While companies are still grappling with hybrid work policies and the right level
of flexibility, overall sentiment is shifting toward pre-pandemic norms. The City is busy, apartments are full with waiting lists. We are
seeing a real pick up in return to office throughout our portfolio, particularly Tuesday through Thursday. Utilization rates are
approximately 65%(7) and the momentum is improving month by month. Both employers and employees recognize the productivity,
collaboration, creativity, and cultural benefits of working in the office together.(8)
On an earnings call last year, in response to a question about hybrid work, I said, “I think you can assume Friday is dead forever … and
Monday is touch and go.” In 2021’s letter, I asked “does anybody think a nine hour, four day workweek with three days off has legs?”
It seems to me there’s a very close parallel between what happened to malls and what is now happening to office. Just five years ago,
there was universal certainty that malls and brick and mortar retail were dead, the victim of ubiquitous and explosively growing
e-commerce. Capital markets shut down, share prices cratered… but behold, today malls and physical stores are booming. It seems to
me that office in New York, and in all U.S. cities, has fallen victim to the same emotional and short-sighted view. Work from home is
to office what the internet was to retail. We believe in-office work is the better bet. Given a little time, frozen capital markets and no
new supply will restore the supply-demand balance and restore value to office. Lower interest rates, when they finally come, will be the
icing on the value-creation cake. Malls and office and the center cities of America are not going away. This cycle is not yet over and
there remain challenges… but for forward-looking investors, the time is now. Coincidently, only a few days ago, The Wall Street
Journal Heard on the Street column featured an article about real estate, the headline of which was “U.S. Property Crunch Favors the
Bold” with the subheadline “Investors willing to buy buildings when everyone is running scared typically get the biggest rewards.”
Here’s the opportunity(9), i.e. let’s skate to where the puck will be. Office, in the public markets, is on offer at a fraction of NAV
(admittedly, a very subjective number), a more than 50% discount from “normal” pricing of several years ago. Query: would you rather
buy what Mr. Market is selling at a once in a generation deep discount or invest in in-vogue property types at top-tick pricing? Here’s
my bull case, really a prediction: frozen capital markets and sky-high interest rates have and will continue to shut down new builds and
tenants’ normal growth will lead to a very tight New York City office market. A point in fact, even in this market, Park Avenue has
already tightened to under 7% vacancy, with rents going from say mid-$80s to $120s already.
In New York, of the total 422 million square feet, 245 million square feet are old, tired, obsolete, and well past their sell-by date. So we
really compete in a much smaller market of 177 million square feet. See Appendix A for square feet, vacancy, and building quality
by submarket. These statistics tell a very interesting and important story.
Notwithstanding all the noise, our team produced an outstanding 2023 leasing year (see page 8).
And notwithstanding all the noise, it’s important to note, with reference to the Net Operating Income table on page 4, that our business
units have by and large, and in the aggregate, held up very well. Interest rate increases and other below-the-line items have, of course,
taken their toll.
Big Trouble in Debt Markets
In this cycle, office towers, nationwide, are the common enemy. Most office loans will have to be restructured and extended as they
aren’t refinanceable at their current levels. Defaults and “give back the keys” have already started, led by some of the industry’s largest
landlords. By and large, lenders really don’t want the keys back and actually do need to get the defaulted loans off their books, initially
at small discounts and eventually at whatever discount clears the market.
There is no new debt available for office, so no buying, no selling, no new builds.(10) When a loan comes due, the only real refinance
option available (and that with a fight) is from the existing lender. There is a mere trickle of equity at deal-stealing prices. How long
and deep this all goes is unknowable. So, coming out of the cycle, many good but overleveraged buildings will change hands, will be
de-levered, and the second or third owner will enjoy a much lower basis. We have a best-in-class operating platform and intend to
participate in this death and rebirth cycle. My colleagues and I at Vornado are optimistic and excited.
We are clear-eyed and realistic about the near-term financing market challenges. It is not pretty when 3% debt rolls over to 7%, or even
up to 10%. We will certainly have a few workouts to deal with over the next couple of years, but that goes with the territory.
7 45% on Mondays, just 25% on Fridays. Pre-pandemic normal was 80%.
8 And it’s certainly much more fun to be gathered together rather than alone.
9 Trouble always creates opportunity.
10 More broadly, lenders have no appetite for construction financing across most property types which should also keep a lid on new supply.
19
Farley, PENN 1, PENN 2 are Debt-Free
Several years ago when we began the Farley/Facebook, PENN 1 and PENN 2 projects, we loaded in over $2 billion in cash to prefund
100% of our development and construction costs. We didn’t know then how prescient that would be. So Farley/Facebook and PENN
1 are now finished and paid for, as is PENN 2, which is just about complete. These three assets, aggregating 5.2 million square feet, are
free and clear and unencumbered… and that’s quite a feat.
Dividends
A few facts for context… In 2022, our dividend was $2.12, or $435 million, in cash. Over the past 10 years we have paid $5.1 billion in
regular dividends and another $400 million in special dividends and another $6 billion in spin-off dividends. An analyst characterized
REIT dividends as sacred, and I agree… well, I sort of agree. For 2023, we paid a $0.375 dividend, or $72 million in cash, in the first
quarter and a fourth quarter true-up dividend, making the total for the year $0.675, $129 million in cash. Going forward, on a year-by-
year basis until conditions normalize, we will defer paying dividends for the first, second, and third quarters, and in the fourth quarter,
based upon known facts, actual taxable income, including asset sales, etc. we will pay out taxable income, but will reassess whether it
is wise and appropriate to pay in cash, or in a combination of cash and scrip. Shareholders should be indifferent as to whether they
receive cash or scrip, but that cash, if retained, might be more wisely employed for debt management, stock buybacks, or whatever.
Buybacks
As most of you know, I have resisted buybacks for years and years, resisted copy-catting and resisted the pounding from analysts to
“close the NAV gap.” I believe my resistance was logical and fact based and proven correct by the market. Recently in April, when our
stock sold off into the teens, seeing a unique opportunity, our Board authorized a $200 million share buyback program (a toe in the
water). To date, we have repurchased 2,024,495 common shares for $29,143,000, an average price per share of $14.40(11). We will
proceed carefully and in a measured way.
To summarize, the economy has held up better than expected in the face of the Federal Reserve’s historic interest rate increases… but
make no mistake, in the end, the Fed will win its battle against inflation. Real estate capital markets remain challenged (read frozen),
making it extremely difficult to finance or sell assets. Capital is scarce and back-breakingly expensive. While these circumstances will
cause pain in the short term, they lay the foundation for a recovery in fundamentals and values in the future. The direct byproduct of the
lack of availability and out-of-sight high cost of financing is that it will shut down almost all new building. If history is our guide, as
demand recovers, the market will tighten and Class A rents and values will benefit enormously. We have seen this movie before.
We are in the multi-tenant office business. On average, we re-rent, say, 10% of our space yearly, call it two million square feet. The
tenant inducement capex the market now demands to re-rent that space might be as much as $300 per square foot ($150 per square
foot of TIs and a like amount of free rent), which amortized over a ten-year lease at 6% is $40.76 per annum. This is a killer.
One theme we do think will continue is a heightened focus on the quality of the landlord. Many landlords, particularly private ones,
are struggling with high leverage levels, which may limit their ability to invest capital in their buildings or, in some cases, even retain
their assets. Tenants and their brokers will shun these buildings. Strong, well capitalized landlords like Vornado will benefit.
What’s going on here? And nobody seems to care. The Federal debt is now $34 trillion, up from $20 trillion just seven years ago.
What’s more – annual deficits are running close to $2 trillion and the national debt is projected to be $45 trillion by 2030.(12)
The heavily populated northern, blue cities – what I call the northern crown of America – Washington, Philadelphia, New York, Chicago,
Seattle, Portland, San Francisco, and Los Angeles are all indulging runaway budgets and increasing taxes.
There is a natural competition between high-tax, densely populated urban centers and low-tax/no-tax, generally warm weather, business
welcoming states. Take a hard look at these statistics(13):
Population (in thousands)
Expenditures (in millions)
Expenditures per capita
New York
19,571
229,039
11,703
Florida
22,611
116,500
5,152
Texas
30,503
160,650
5,267
In the this will never happen… but it should department, the first governor of a northern, densely populated, urban state who recognizes
all this and reduces taxes will be lionized.
I again question the wisdom of the New York State estate tax. I repeat here what I have said before:
In New York State, the top 2% pay a full 50% of personal income taxes so it is critical that they remain tax-paying residents. The
vulnerability comes with the 2%-ers, who are at the end of their careers. Most of the folks I know are willing to pay higher income taxes
for the privilege of living in New York, but hate the prospect of a 16% toll for the privilege of dying in New York. New York State’s
estate tax brings in less than three quarters of one percent of the state’s annual budget. The estate tax should be repealed. Keeping our
highest taxpayers through the end of their lives is both good economic policy and good politics. By the way, high-tax California has no
estate tax, New Jersey repealed its estate tax in 2018.
11 I should have sold the farm and backed up the truck.
12 Source: Congressional Budget Office for all amounts
13 Source: U.S. Census Bureau for population amounts and state websites for budgeted expenditures
20
In January 2023, we completed an important deal with Citadel for 350 Park Avenue, which involved their master leasing the entire
585,000 square foot building (relieving us of 225,000 square feet of vacancy). This deal will almost certainly result in a teardown and a
new build of a grand 1.7 million square foot tower on a larger assembled site. Please see our press release of December 9, 2022. We
have a lot of friends on Wall Street and I might venture that by any measure (return on equity, return per employee, etc.), Citadel is at
the head of the class, intensely focused and aggressively growing. This deal validates the quality of our site, our development team, and
New York.
There is a learning here with regard to WFH and WFA. Interestingly, Ken tells me that a significant differentiator for his firm is the
simple fact that everybody comes to work every day, five days a week (I think they start at 7:30 am). I think companies that embrace
work-from-home will be left behind. And I think it’s absurd to think that years from now, tens of millions of Americans will be working
from home, alone at their kitchen table. And that office towers and our great cities will be empty. And by the way, Zoom (a.k.a.
Hollywood Squares) may be a disruptor, but its stock is down from the $500s to a still high $64.
In August, we contributed our Pier 94 leasehold to a joint venture with our partners Hudson Pacific and Blackstone and we will own
50% of the venture. This will be the best studio facility in New York City and the only purpose-built one in Manhattan. We appreciate
the support of the Mayor and the New York City EDC in completing this important public/private partnership. Demolition of the old
headhouse and exterior of the Pier is complete. Foundation work has commenced for the new headhouse and structural reinforcement
of the Pier is ongoing. We expect to deliver the project by the fourth quarter 2025. We believe in the project's potential and expect it to
generate a very attractive 10%+ incremental cash yield on our investment.
Replacement cost for New York office buildings is rising aggressively. Replacement cost has always been a leading indicator,
foretelling that the existing stock of office buildings will be increasing in value.
In the history of New York real estate, all great landlord bull markets followed a period of constrained supply, and here we are.
Capital markets are now making it almost impossible to build new.
The market is demanding highest quality, heavily amenitized, transportation-based space. Our portfolio fits the bill: THE PENN
DISTRICT (Farley, PENN 1, PENN 2), 770 Broadway, 1290 Avenue of the Americas, 280 Park Avenue, 555 California Street, THE
MART, future development sites 350 Park Avenue and PENN 15, to name a few.
After years of proudly commanding a full page and hero picture in this letter, 220 Central Park South, basically completed, now gets
this short paragraph. Sales to date have totaled $3.268 billion. We are over 98% sold with, I guesstimate, $55 million still to come from
the few remaining future sales. As an indicator of the singular success of this product, resale prices are up, and up substantially, and I
believe 220 to be the only recent development where resale prices have increased.
After three years of advocating that the powers that be should award a gaming license in Manhattan, in October, I made the surprise
announcement that we would not be pursuing a gaming license. Now, we have a great double-block long site in THE PENN DISTRICT,
which may well have had the winning hand. But here is my logic. The single most important financial imperative in our company is to
successfully complete the leasing of PENN 2; that will generate over $100 million of incremental income and create over two billion
dollars of incremental value. It became very clear that the tenants who would fill this space would not locate across the street from a
casino. What’s more, I made the odds no more than 50-50 that a gaming license would be granted for Manhattan and, if it were, the
odds of any individual site winning the sweepstakes would be around, say, 10%. So two billion dollars of value creation vs. a 10%
chance in a long-tailed governmental process – this was an easy call.
We are a show-me stock. Our team accepts that.
We believe in New York, our hometown, the most important city in America. New York is the economic and cultural capital of the
United States (there is a reason the Statue of Liberty is in New York Harbor); it is the finance center of the world; it attracts the best and
the brightest; it has a large and growing highly educated and diverse workforce, eight professional sports teams, Lincoln Center and
Carnegie Hall, Broadway, great museums, great restaurants and nightlife, the best hospitals and universities, and, of course, the largest
concentration of Fortune 500 headquarters, and New York is now the second most important tech center in the country… you get the
message.
21
22
Sustainability
Our Board and senior management are proud of Vornado’s continued national leadership in sustainability, improving our communities,
our buildings, and our tenant experiences. We continue to build upon our Vision 2030 and Science Based Target commitment through
our robust sustainability program. Our complete plan can be found on our website at www.vno.com/sustainability.
Key achievements include:
Procured 100% renewable energy credits (RECs) for electricity directly managed by Vornado in the key markets in which
we operate. These RECs include those sourced from hydroelectric, solar and wind facilities located in the states of New York
and California.
Achieved a 32% reduction in overall energy consumption across our in-service office portfolio, compared to our 2009
baseline
Reached a 65% waste diversion rate across our in-service office portfolio, making significant progress towards our long-
term target of 75%
Received multiple awards recognizing our continued industry leadership in sustainability including (i) the 13th NAREIT
Leader in the Light Award, (ii) Energy Star Partner of the Year with Sustained Excellence, and (iii) ranked #1 amongst peers
in the USA, Diversified – Office/Retail in the Global Real Estate Sustainability Benchmark (GRESB)
We continue using data to measure progress against our goals, align our goals with our tenants, plan for our longer-term projects and
engage with our stakeholders in meaningful ways. This past year we focused on operational optimization and how data can improve the
performance of our buildings, benefiting our tenants, our shareholders, and our building teams. We are proud of the savings that we saw
across our portfolio, even as occupancy recovered.
We constantly seek to enhance the health and well-being of our best-in-class employees with continuing education and career
development. Through our Vornado Volunteers program, our employees supported local organizations including Habitat for Humanity,
Breaking Ground, the Central Park Conservancy and Project Cicero. We expanded WorkLife, Vornado’s amenity ecosystem that allows
our tenants, employees, and communities to focus on work and self-care, into Chicago and San Francisco.
Our Board, and particularly our Corporate Governance and Nominating Committee, is assigned with oversight of sustainability, which
includes climate change risk. In 2023, our Executive Compensation program once again included sustainability performance metrics.
Our discussion of corporate governance is included in our proxy statement, which can be viewed at www.vno.com/proxy and the
governance section of our website at www.vno.com/governance. In 2024, we will continue to monitor regulatory requirements. Our
sustainability narrative is told with transparency and supported by data. All can be found at www.vno.com/sustainability.
Thanks to SVP Lauren Moss and her team, who lead our sustainability efforts.
23
731 Lexington Avenue
24
Signature Page
Sam Zell passed on May 18th. There was a memorial service in his honor in Chicago attended by over a thousand people in person and
hundreds more on video. I gave a eulogy. It could be said that Sam was the father of the publicly traded REIT market… he called it
liquid real estate. I wish us all to be as smart and accomplished and live life as large as Sam did.
We continually broaden our leadership team through promotions from within our Company. Please join me in congratulating this year’s
class; they deserve it.
Steven Borenstein was promoted to Executive Vice President, Corporation Counsel
Tatiana Melamed was promoted to Senior Vice President, Acquisitions and Capital Markets
Edward Riguardi was promoted to Senior Vice President, Office Leasing
Eileen Verrall was promoted to Senior Vice President, Marketing
Robin Elgouz was promoted to Vice President, Divisional Controller, BMS
Jennifer Escobar-Petrakos was promoted to Vice President, Payroll, BMS
Yllka Gashi was promoted to Vice President, Operations
Ryan Levy was promoted to Vice President, Office Leasing
Morgan Mann was promoted to Vice President, Development
Ashley Natale was promoted to Vice President, Retail Operations
Michael Polise was promoted to Vice President, Project Management
Lisa Simonian was promoted to Vice President, Head of Trade Shows, THE MART
Chris Sullivan was promoted to Vice President, Development
We are delighted to welcome the experienced and talented Jason Kirschner as our new EVP Head of Capital Markets.
And welcome to Kevin Ward, SVP, Chief Security Officer; Alex Bedell, VP, Office Leasing and Benjamin d’Hermillon, VP, Design &
Construction.
Special thanks to Samantha Benvenuto and Steven Borenstein, who lead our human capital and governance efforts.
Our operating platform heads are the best in the business. I pay my respects to my partners, Michael Franco, Glen Weiss, Barry Langer,
Haim Chera and Tom Sanelli; and to David Greenbaum and Joe Macnow, my long-time partners who are now part-timers. Our
exceptional 15 Division Executive Vice Presidents deserve special recognition and our thanks. Thank you as well to our very talented
and hardworking 26 Senior Vice Presidents and 56 Vice Presidents who make the trains run on time, every day.
Our Vornado Family has grown with 5 marriages and 5 births this year, 4 girls and 1 boy.
On behalf of Vornado’s Board, senior management and 2,935 associates, we thank our shareholders, analysts, and other stakeholders
for their continued support.
Again, this year, I offer to assist shareholders with tickets to my wife’s production of Left on Tenth, a new play by Delia Ephron starring
Julianna Margulies and Peter Gallagher, which will open on Broadway in the fall. Please call if I can be of help.
Steven Roth
Chairman and CEO
April 2, 2024
25
T H I S P A G E I N T E N T I O N A L L Y L E F T B L A N K
26
Appendix A
Building
Quality
Commodity
Better
Prime
Total
Building
Quality
Commodity
Better
Prime
Total
Building
Quality
Commodity
Better
Prime
Total
Source: CBRE
Total Square Feet
PENN
DISTRICT/
Hudson
Yards
6th Ave/
Rockefeller
Center
Midtown
South
Other
Midtown
Submarkets Downtown
Park Avenue
Total
5,982,551 10,651,710 16,615,518 53,005,676 99,378,277 59,572,501
245,206,233
9,684,512 27,703,100 30,005,528 34,381,718 27,132,421
150,178,272 21,270,993
26,893,389
—
422,277,894 30,913,834 36,051,893 44,318,618 83,011,204 141,277,423 86,704,922
3,660,290 15,715,671
7,517,428
—
—
Total
Park Avenue
10.7 %
6.6 %
6.8 %
7.4 %
15.8 %
12.0 %
11.7 %
14.0 %
PENN
DISTRICT/
Hudson
Yards
Vacancy
6th Ave/
Rockefeller
Center
Midtown
South
Other
Midtown
Submarkets
Downtown
13.8 %
20.4 %
13.5 %
15.4 %
13.9 %
6.3 %
N/A
9.2 %
16.9 %
20.1 %
N/A
18.1 %
16.8 %
17.7 %
14.6 %
17.1 %
20.4 %
16.2 %
N/A
19.1 %
Asking Rents Per Square Foot
Total
Park Avenue
PENN
DISTRICT/
Hudson
Yards
6th Ave/
Rockefeller
Center
Midtown
South
Other
Midtown
Submarkets
Downtown
$
$
$
$
63.27 $
100.46 $
155.15 $
77.05 $
72.21 $
92.90 $
224.68 $
98.49 $
59.86 $
104.80 $
149.21
108.29 $
75.65 $
92.76 $
N/A
82.88 $
68.98 $
104.22 $
$
N/A
83.70 $
67.38 $
95.28 $
205.58
80.87 $
51.10
70.20
N/A
56.77
27
Non-GAAP Reconciliations
Below is a reconciliation of net income (loss) to NOI, as adjusted (properties owned at the end of 2023):
($ IN MILLIONS)
Net income (loss)
Our share of (income) loss from partially owned entities
Our share of (income) loss from real estate fund
Interest and other investment (income) loss, net
Net gains on disposition of assets
Net gain on transfer to Fifth Ave. and Times Square JV
Purchase price fair value adjustment
(Income) loss from discontinued operations
NOI attributable to noncontrolling interests
Depreciation, amortization expense and income taxes
General and administrative expense
Acquisition and transaction related costs
Our share of NOI from partially owned entities
Interest and debt expense
NOI
Certain items that impact NOI
NOI, as adjusted (properties owned at the end of 2023)
2022
(382.6)
461.3
(3.6)
(19.9)
(100.6)
—
—
—
(70.0)
526.2
133.7
31.7
306.0
279.8
1,162.0
(11.9)
1,150.1
2023
32.9
(38.7)
(1.6)
(41.7)
(71.2)
—
—
—
(48.6)
463.5
162.9
50.7
285.8
349.2
1,143.2
4.3
1,147.5
Below is a reconciliation of net income (loss) to FFO and FFO, as adjusted:
($ IN MILLIONS)
Net income (loss) attributable to Vornado
Preferred share dividends and issuance costs
Net income (loss) applicable to common shares
Depreciation and amortization of real property
Net gains on sale of real estate
Real estate impairment losses
Decrease in fair value of marketable securities
Net gain on transfer to Fifth Avenue and Times Square JV, net
Net gain from sale of Urban Edge shares
After tax purchase price fair value adjustment
Partially-owned entities adjustments:
Depreciation of real property
Net gains on sale of real estate
Income tax effect of adjustments
Real estate impairment losses
(Increase) decrease in fair value of marketable securities
Noncontrolling interests’ share adjustments
Preferred share dividends
FFO
Certain items that impact FFO
FFO, as adjusted
Below is a reconciliation of net income (loss) to EBITDA, as adjusted
($ IN MILLIONS)
Net income (loss) (before noncontrolling interests)
Less: net loss (income) attributable to noncontrolling interests
in consolidated subsidiaries
Net income (loss) attributable to the Operating Partnership
Interest and debt expense
Depreciation and amortization
Net gain on sale of real estate
Impairment losses on real estate
Income tax expense/(benefit)
EBITDA
Gain on sale of 220 Central Park South units
Net gains on disposition of assets
Hotel Pennsylvania, Real Estate Fund and other
EBITDA, as adjusted
2023
105.5
(62.1)
43.4
385.6
(53.3)
22.8
—
—
—
—
108.1
(16.5)
—
50.5
—
(38.4)
1.6
503.8
4.4
508.2
2022
(346.5)
(62.1)
(408.6)
456.9
(58.7)
19.1
—
—
—
—
130.6
(0.2)
—
576.4
—
(77.9)
1.3
638.9
(30.0)
608.9
2023
32.9
2022
(382.6)
76.0
108.9
458.4
499.4
(73.0)
73.3
30.5
1,097.5
(14.1)
(1.0)
(1.1)
1,081.3
5.7
(376.9)
362.3
593.3
(58.9)
595.5
23.4
1,138.7
(41.9)
(17.4)
11.2
1,090.6
2021
207.5
(130.5)
(11.1)
(4.6)
(50.8)
—
—
—
(69.4)
401.9
134.6
13.8
310.9
231.1
1,033.4
(5.0)
1,028.4
2020
(461.8)
329.1
226.3
5.5
(381.3)
2019
3,334.3
(78.9)
104.1
(21.8)
(845.5)
— (2,571.1)
—
—
—
—
(69.3)
(72.8)
522.6
436.3
169.9
181.5
106.5
174.0
322.4
306.5
286.6
229.3
1,259.8
972.6
(103.2)
30.3
1,156.6
1,002.9
2021
176.0
(74.9)
101.1
373.8
—
7.9
—
—
—
—
139.2
(15.7)
—
—
(1.1)
(34.1)
—
571.1
(21.2)
549.9
2019
2020
3,147.9
(297.0)
(50.1)
(51.7)
3,097.8
(348.7)
389.0
368.6
(178.7)
—
32.0
236.3
4.9
5.5
— (2,559.1)
(62.4)
—
—
—
156.6
—
—
409.1
2.8
(79.1)
—
750.5
(249.5)
501.0
134.7
—
—
—
2.9
141.7
—
1,003.4
(342.9)
660.5
2018
422.6
(9.1)
89.2
(17.1)
(246.0)
—
(44.1)
(0.6)
(71.2)
484.2
141.9
31.3
253.6
347.9
1,382.6
(235.5)
1,147.1
2018
449.9
(65.1)
384.8
413.1
(158.1)
12.0
26.5
—
—
(27.3)
101.6
(4.0)
—
—
3.9
(22.8)
—
729.7
(26.9)
702.8
2017
264.1
(15.2)
(3.2)
(37.8)
(0.5)
—
—
13.2
(65.3)
470.4
159.0
1.8
269.2
345.6
1,401.3
(254.4)
1,146.9
2017
227.4
(65.4)
162.0
468.0
(3.5)
—
—
—
—
—
137.0
(17.8)
—
7.7
—
(36.7)
1.1
717.8
(16.8)
701.0
2016
982.0
(168.9)
23.6
(29.6)
(160.4)
—
—
(404.9)
(66.2)
428.2
149.6
9.4
271.1
330.2
1,364.1
(254.5)
1,109.6
2016
906.9
(83.3)
823.6
531.6
(177.0)
160.7
—
—
—
—
154.8
(2.9)
—
6.3
—
(41.1)
1.6
1,457.6
(785.3)
672.3
2015
859.4
9.9
(74.1)
(27.2)
(149.4)
—
—
(223.5)
(64.9)
294.8
149.3
12.5
245.8
309.3
1,341.9
(268.6)
1,073.3
2015
760.4
(80.6)
679.8
514.1
(289.1)
0.3
—
—
—
—
144.0
(4.5)
—
16.8
—
(22.4)
—
1,039.0
(409.3)
629.7
($ IN MILLIONS)
Non-cash impairment losses
2021
207.5 Net income (loss) applicable to common shares
Below is a reconciliation of net income (loss) to net income, as adjusted:
2023
43.4
73.3
(36.0)
(17.1)
(16.4)
(14.4)
(12.0)
11.7
8.3
10.5
51.3
(24.0) Net gain on contribution of Pier 94 leasehold interest
183.5 After-tax net gain on sale of The Armory Show
297.1 Our share of Alexander’s gain on sale of Rego Park III
526.5 Our share of income from real estate fund
(15.6)
220 Central Park South gains
7.9 Deferred tax liability on our investment in Farley
(9.8) Credit losses on investments
989.6 Certain other items that impact net income
(50.3) Net income, as adjusted
(0.6)
10.3
949.0
2014
1,009.0
58.5
(163.0)
(38.6)
(13.6)
—
—
(686.9)
(55.0)
360.7
141.9
18.4
207.7
337.4
1,176.5
(194.8)
981.7
2014
864.9
(81.5)
783.4
517.5
(507.2)
26.5
—
—
—
—
117.8
(11.6)
(7.3)
—
—
(8.0)
—
911.1
(403.8)
507.3
2022
(408.6)
595.5
—
—
—
(1.7)
(35.9)
13.7
—
(36.5)
126.5
28
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:
Commission File Number:
to
001-11954 (Vornado Realty Trust)
001-34482 (Vornado Realty L.P.)
Vornado Realty Trust
Vornado Realty L.P.
(Exact name of registrants as specified in its charter)
Vornado Realty Trust
Maryland
(State or other jurisdiction of incorporation or organization)
22-1657560
(I.R.S. Employer Identification Number)
Vornado Realty L.P.
Delaware
(State or other jurisdiction of incorporation or organization)
13-3925979
(I.R.S. Employer Identification Number)
888 Seventh Avenue, New York, New York
10019
(Address of principal executive offices) (Zip Code)
(212) 894-7000
(Registrants’ telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Registrant
Vornado Realty Trust
Vornado Realty Trust
Vornado Realty Trust
Vornado Realty Trust
Vornado Realty Trust
Common Shares of beneficial interest, $.04 par value per share
Title of Each Class
Trading Symbol(s)
VNO
Name of Exchange on Which
Registered
New York Stock Exchange
Cumulative Redeemable Preferred Shares of beneficial
interest, liquidation preference $25.00 per share:
5.40% Series L
5.25% Series M
5.25% Series N
4.45% Series O
VNO/PL
VNO/PM
VNO/PN
VNO/PO
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Registrant
Vornado Realty Trust
Vornado Realty L.P.
Title of Each Class
Series A Convertible Preferred Shares of beneficial interest,
liquidation preference $50.00 per share
Class A Units of Limited Partnership Interest
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: 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.
Vornado Realty Trust: Yes ☐ No ☑ Vornado Realty L.P.: 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.
Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: 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).
Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: 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,” “non-accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Vornado Realty Trust:
☑ Large Accelerated Filer
☐ Non-Accelerated Filer
Vornado Realty L.P.:
☐ Large Accelerated Filer
☑ Non-Accelerated Filer
☐ Accelerated Filer
☐ Smaller Reporting Company
☐ Emerging Growth Company
☐ 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.
Vornado Realty Trust: ☐ Vornado Realty L.P.: ☐
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.
Vornado Realty Trust: ☑ Vornado Realty L.P.: ☑
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.
Vornado Realty Trust: ☐ Vornado Realty L.P.: ☐
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).
Vornado Realty Trust: ☐ Vornado Realty L.P.: ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Vornado Realty Trust: Yes ☐ No ☑ Vornado Realty L.P.: Yes ☐ No ☑
The aggregate market value of the voting and non-voting common shares held by non-affiliates of Vornado Realty Trust, i.e. by persons
other than officers and trustees of Vornado Realty Trust, was $3,196,914,000 at June 30, 2023.
As of December 31, 2023, there were 190,390,703 common shares of beneficial interest outstanding of Vornado Realty Trust.
There is no public market for the Class A units of limited partnership interest of Vornado Realty L.P. Based on the June 30, 2023 closing
share price of Vornado Realty Trust’s common shares, which are issuable upon redemption of the Class A units, the aggregate market
value of the Class A units held by non-affiliates of Vornado Realty L.P., i.e. by persons other than Vornado Realty Trust and its officers
and trustees, was $217,739,000 as of June 30, 2023.
Documents Incorporated by Reference
Part III: Portions of Proxy Statement for Annual Meeting of Vornado Realty Trust’s Shareholders to be held on May 23, 2024.
EXPLANATORY NOTE
This report combines the Annual Reports on Form 10-K for the fiscal year ended December 31, 2023 of Vornado Realty Trust
and Vornado Realty L.P. Unless stated otherwise or the context otherwise requires, references to “Vornado” refer to Vornado Realty
Trust, a Maryland real estate investment trust (“REIT”), and references to the “Operating Partnership” and “VRLP” refer to Vornado
Realty L.P., a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively Vornado, the
Operating Partnership and those subsidiaries consolidated by Vornado.
The Operating Partnership is the entity through which we conduct substantially all of our business and own, either directly or
through subsidiaries, substantially all of our assets. Vornado is the sole general partner and also a 91.0% limited partner of the
Operating Partnership. As the sole general partner of the Operating Partnership, Vornado has exclusive control of the Operating
Partnership’s day-to-day management.
Under the limited partnership agreement of the Operating Partnership, unitholders may present their Class A units for redemption
at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time).
Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that
obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common
shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is
equivalent to the market value of one Vornado common share, and the distribution to a Class A unitholder is equal to the dividend paid
to a Vornado common shareholder. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. Vornado
generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than
having the Operating Partnership pay cash. With each such exchange or redemption, Vornado’s percentage ownership in the Operating
Partnership will increase. In addition, whenever Vornado issues common shares other than to acquire Class A units of the Operating
Partnership, Vornado must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must
issue to Vornado an equivalent number of Class A units of the Operating Partnership. This structure is commonly referred to as an
umbrella partnership REIT, or UPREIT.
The Company believes that combining the Annual Reports on Form 10-K of Vornado and the Operating Partnership into this
single report provides the following benefits:
•
•
•
enhances investors’ understanding of Vornado and the Operating Partnership by enabling investors to view the business as a
whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the
disclosure applies to both Vornado and the Operating Partnership; and
creates time and cost efficiencies in the preparation of one combined report instead of two separate reports.
The Company believes it is important to understand the few differences between Vornado and the Operating Partnership in the
context of how Vornado and the Operating Partnership operate as a consolidated company. The financial results of the Operating
Partnership are consolidated into the financial statements of Vornado. Vornado does not have any significant assets, liabilities or
operations, other than its investment in the Operating Partnership. The Operating Partnership, not Vornado, generally executes all
significant business relationships other than transactions involving the securities of Vornado. The Operating Partnership holds
substantially all of the assets of Vornado. The Operating Partnership conducts the operations of the business and is structured as a
partnership with no publicly traded equity. Except for the net proceeds from equity offerings by Vornado, which are contributed to the
capital of the Operating Partnership in exchange for Class A units of partnership in the Operating Partnership, and the net proceeds of
debt offerings by Vornado, which are contributed to the Operating Partnership in exchange for debt securities of the Operating
Partnership, as applicable, the Operating Partnership generates all remaining capital required by the Company’s business. These
sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit facilities, the
issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties.
To help investors better understand the key differences between Vornado and the Operating Partnership, certain information for
Vornado and the Operating Partnership in this report has been separated, as set forth below:
•
•
•
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities;
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information
specific to each entity, where applicable; and
Item 8. Financial Statements and Supplementary Data which includes the following specific disclosures for Vornado
Realty Trust and Vornado Realty L.P.:
•
•
•
•
Note 10. Redeemable Noncontrolling Interests
Note 11. Shareholders' Equity/Partners' Capital
Note 12. Stock-based Compensation
Note 13. Income (Loss) Per Share/Income (Loss) Per Class A Unit
This report also includes separate Part II, Item 9A. Controls and Procedures sections and separate Exhibits 31 and 32 certifications
for each of Vornado and the Operating Partnership in order to establish that the requisite certifications have been made and that
Vornado and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18
U.S.C. §1350.
Item
Financial Information:
Page Number
INDEX
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)
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters(1)
Certain Relationships and Related Transactions, and Director Independence(1)
Principal Accountant Fees and Services(1)
Exhibits and Financial Statement Schedules
Form 10-K Summary
7
12
24
25
26
32
32
32
33
34
57
59
118
118
122
122
122
122
123
123
123
123
132
133
PART I.
PART II.
PART III.
PART IV.
Signatures
________________________________________
(1) These items are omitted in whole or in part because Vornado, the Operating Partnership’s sole general partner, 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.
5
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 and redevelopment projects, the
estimated completion date, estimated project cost and cost to complete; estimates of future capital expenditures, and the timing and
form of dividends to common and preferred shareholders and operating partnership distributions, and the amount and form of potential
share repurchases and/or asset sales. 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.
6
ITEM 1.
BUSINESS
PART I
Vornado is a fully-integrated REIT and conducts its business through, and substantially all of its interests in properties are held
by, the Operating Partnership, a Delaware limited partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its
shareholders are dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first
satisfy their obligations to creditors. Vornado is the sole general partner of and owned approximately 91.0% of the common limited
partnership interest in the Operating Partnership as of December 31, 2023.
We currently own all or portions of:
New York:
•
57 Manhattan operating properties consisting of:
•
•
•
20.4 million square feet of office space in 30 of the properties;
2.4 million square feet of street retail space in 50 of the properties;
1,662 units in five residential properties;
• Multiple development sites, including 350 Park Avenue, Sunset Pier 94 Studios and the Hotel Pennsylvania site;
•
A 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns five properties in the greater New York
metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and
The Alexander, a 312-unit apartment tower in Queens;
Signage throughout the Penn District and Times Square; and
Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for
our buildings and third parties.
Other Real Estate and Investments:
•
•
•
•
•
The 3.7 million square foot THE MART in Chicago;
A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district
aggregating 1.8 million square feet; and
Other real estate and investments.
OBJECTIVES AND STRATEGY
Our business objective is to maximize Vornado shareholder value. We intend to achieve this objective by continuing to pursue our
investment philosophy and to execute our operating strategies through:
• maintaining a superior team of operating and investment professionals and an entrepreneurial spirit;
•
investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital
appreciation;
acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents;
developing and redeveloping properties to increase returns and maximize value; and
investing in operating companies that have a significant real estate component.
•
•
•
We expect to finance our growth, acquisitions and investments using internally generated funds and proceeds from asset sales and
by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership
units in exchange for property and may repurchase or otherwise reacquire these securities in the future.
DISPOSITIONS
We completed the following sale transactions during 2023:
•
$100 million sale of four Manhattan retail properties located at 510 Fifth Avenue, 148–150 Spring Street, 443 Broadway and
692 Broadway;
$71 million sale by Alexander’s (32.4% interest) of its Rego Park III land parcel;
$24 million sale of The Armory Show located in New York; and
$24 million net proceeds from the sale of two condominium units at 220 Central Park South (“220 CPS”).
•
•
•
FINANCINGS
We completed the following financing transactions during 2023:
•
•
•
•
•
•
•
$1.2 billion of interest rate swap arrangements;
$950 million 1.00% SOFR interest rate cap arrangement for the 1290 Avenue of the Americas mortgage loan (70.0%
ownership);
$355 million restructuring of 697-703 Fifth Avenue (44.8% ownership);
$183 million construction loan for Sunset Pier 94 Studios (49.9% ownership);
$129 million refinancing of 512 West 22nd Street (55% ownership);
$75 million refinancing of 150 West 34th Street; and
$54 million refinancing of 825 Seventh Avenue office condominium (50% ownership).
7
DEVELOPMENT / REDEVELOPMENT PROJECTS AND OPPORTUNITIES
PENN District
PENN 2
We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue
between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $638,959,000 has been
expended as of December 31, 2023.
Hotel Pennsylvania Site
Demolition of the existing building was completed in the third quarter of 2023.
We are also making districtwide improvements within the PENN District. The development cost of these improvements is
estimated to be $100,000,000, of which $47,424,000 has been expended as of December 31, 2023.
Sunset Pier 94 Studios
On August 28, 2023, we, together with Hudson Pacific Properties and Blackstone Inc. (“HPP/BX”), formed a joint venture to
develop Sunset Pier 94 Studios, a 266,000 square foot purpose-built studio campus in Manhattan. We own a 49.9% equity interest in
the joint venture. The development cost of the project is estimated to be $350,000,000, which will be funded with $183,200,000 of
construction financing and $166,800,000 of equity contributions. Our share of equity contributions will be funded by (i) our
$40,000,000 Pier 94 leasehold interest contribution and (ii) $34,000,000 of cash contributions, which are net of an estimated
$9,000,000 for our share of development fees and reimbursement for overhead costs incurred by us. HPP/BX will fund 100% of cash
contributions until such time that its capital account is equal to Vornado’s, after which equity will be funded in accordance with each
partner’s respective ownership interest. We have funded $7,994,000 of cash contributions as of December 31, 2023. For further
information about this transaction, see page 38, Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and
Results of Operations - Overview, in this Annual Report on Form 10-K.
350 Park Avenue
On January 24, 2023, we and the Rudin family (“Rudin”) completed agreements with Citadel Enterprise Americas LLC
(“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO (“KG”), for a series of transactions relating to 350
Park Avenue and 40 East 52nd Street. In connection therewith, we entered into a joint venture with Rudin (the “Vornado/Rudin JV”)
that purchased 39 East 51st Street for $40,000,000, funded on a 50/50 basis by Vornado and Rudin. 39 East 51st Street will be
combined with 350 Park Avenue and 40 East 52nd Street to create a premier development site (the “Site”). From October 2024 to June
2030, KG will have the option to either (i) acquire a 60% interest in a joint venture with the Vornado/Rudin JV (with Vornado having
an effective 36% interest in the entity) to build a new 1,700,000 square foot office tower, valuing the Site at $1.2 billion or (ii)
purchase the Site for $1.4 billion ($1.085 billion to Vornado). From October 2024 to September 2030, the Vornado/Rudin JV will
have the option to put the Site to KG for $1.2 billion ($900,000,000 to Vornado). For further information about this transaction and the
options available to each of the parties, see page 37, Part II, Item 7, Management’s Discussion and Analysis of Financial Condition
and Results of Operations - Overview, in this Annual Report on Form 10-K.
We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in
particular, the PENN District.
There can be no assurance that the above projects will be completed, completed on schedule or within budget.
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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. It has been central to Vornado's business strategy for over 15 years. The
Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental,
Social and Governance (“ESG”) matters, which includes climate change risk. Environmental sustainability initiatives are carried out
by a dedicated team of professionals that work directly with our business units.
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 our in-service office portfolio, with over 24 million square
feet at LEED Gold or Platinum. In 2023, we (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) were recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated eight years of
sustained excellence.
We prioritize addressing climate change and in 2019 adopted a 10-year plan to make our buildings carbon neutral by 2030
(“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy reduction, recovery, and renewable power. We rely on
technology, as well as meaningful stakeholder collaboration with our tenants, our employees, and our communities, to achieve this
plan. Our 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.
We consider sustainability in all aspects of our business, including the design, construction, retrofitting and ongoing maintenance
and operations of our portfolio of buildings. We operate our 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. Our
policies, from 100% green cleaning to procuring 100% renewable electricity certificates to energy efficiency, are implemented across
our entire portfolio. We undertake significant outreach with our tenants, employees and investors regarding Vornado’s sustainability
programs and strategies.
We gather data to measure progress against our goals, align our goals with our tenants, plan for our longer-term projects and
engage with our stakeholders in meaningful ways. We use carbon accounting software, energy audits and models and building
automation software to measure and track our 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 our measurement, verification
and reporting requirements.
Our 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 emissions, achieving a specified GRESB score and targeting a
specified percentage of LEED Gold or Platinum certified square footage in our office portfolio.
We are committed to transparent reporting of sustainability performance indicators and publish 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. We also submit
public reports to CDP, CSA (the S&P Global Corporate Sustainability Assessment) and EP100 (global initiative led by Climate
Group). Further details on our environmental sustainability initiatives and strategy, including our Vision 2030 Roadmap, can be found
in our 2022 ESG Report at (vno.com/sustainability). There can be no assurance that our 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.
HUMAN CAPITAL MANAGEMENT
As of December 31, 2023, we had 2,935 employees, consisting of (i) 2,437 employees of Building Maintenance Services LLC, a
wholly owned subsidiary, which provides cleaning, security, engineering and parking services primarily to our New York properties,
(ii) 394 employees in our corporate office, leasing, and property management, and (iii) 104 employees of THE MART. The foregoing
does not include employees of partially owned entities.
Human capital management is critical to our success and our employees are the foundation of our human capital.
Compensation, Benefits and Employee Wellbeing
To attract and retain the best-qualified talent and to help our employees stay healthy, balance their work and personal lives, and
meet their financial and retirement goals, we offer competitive benefits including, but not limited to, market-competitive
compensation, healthcare (medical, dental and vision coverage), a health savings account, 401(k) and employer match, dependent care
flexible spending account, parental leave, adoption/surrogacy benefits, short-term and long-term disability insurance, life insurance,
time off/paid holidays, tuition reimbursement, subsidized gym memberships, employee wellness programs and incentives, in-
workplace vaccinations, commuter benefits, an employee assistance program and workplace flexibility.
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HUMAN CAPITAL MANAGEMENT - CONTINUED
Talent Development
To foster talent and growth, we provide training and continuing education, promote career and personal development, and
encourage innovation and engagement. To achieve our talent development goals, we provide tuition reimbursement for our
employees’ continuing education and professional development, and the opportunity to participate in a variety of training and
networking engagements.
Culture and Engagement
Our employees are critical to our success, and we believe creating a positive and inclusive culture is essential to attracting and
retaining engaged employees. We seek to retain our employees by actively engaging with our workforce and we solicit their feedback
through our divisional leaders and employee surveys. We use their feedback to create and continually enhance programs that support
their needs.
Through our volunteer program, Vornado Volunteers, employees are granted one day of paid time off per calendar year to
volunteer for a cause of their choice.
Diversity and Inclusion
Vornado is a diverse and inclusive environment that empowers the individual and enriches the employment experience. We have
published Equal Employment Opportunity (EEO) data since 2017 and have a broadly diverse workforce across both our corporate
base as well as our BMS division. Our employee demographics data can be found in our 2022 ESG report (vno.com/sustainability),
which is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K.
Health and Wellness
As a building owner and landlord to thousands of business tenants, we focus on maintaining and improving the health of our
indoor environments, as well as communicating the value of our health and wellness programs with consistency and clarity to our
stakeholders. We believe that consistent health programming and communications protocols not only mitigate health risks within our
buildings, but they also create a responsible behavior framework for our employees, our tenants, and our visitors.
Labor Relations
BMS employs and manages janitorial and security staff who are members of 32BJ SEIU and engineering staff who are members
of Local 94 of the International Union of Operating Engineers AFL-CIO. Through our active participation in the Realty Advisory
Board on Labor Relations, we work collaboratively with both unions and consider our relations with our union employees to be very
positive.
For additional information on human capital matters, please see our most recent ESG report, available for download on our
website at www.vno.com and in digital format at vno.com/sustainability. This report and other information on our website are not
incorporated by reference into and do not form any part of this Annual Report on Form 10-K.
COMPETITION
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, regional and local economies, the financial condition and operating results of current and
prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations,
legislation, population and employment trends. See "Risk Factors" in Item 1A for additional information regarding these factors.
SEGMENT DATA
We operate in the following reportable segments: New York and Other. Financial information related to these reportable segments
for the years ended December 31, 2023, 2022 and 2021 is set forth in Note 23 – Segment Information to our consolidated financial
statements in this Annual Report on Form 10-K.
TENANTS ACCOUNTING FOR OVER 10% OF REVENUES
None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2023, 2022 and 2021.
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CERTAIN ACTIVITIES
We do not base our acquisitions and investments on specific allocations by type of property. We have historically held our
properties for long-term investment; however, it is possible that properties in our portfolio may be sold or otherwise disposed of when
circumstances warrant. Further, we have not adopted a policy that limits the amount or percentage of assets which could be invested in
a specific property or property type. Generally our activities are reviewed and may be modified from time to time by Vornado’s Board
of Trustees without the vote of our shareholders or Operating Partnership unitholders.
PRINCIPAL EXECUTIVE OFFICES
Our principal executive offices are located at 888 Seventh Avenue, New York, New York 10019; telephone (212) 894-7000.
MATERIALS AVAILABLE ON OUR WEBSITE
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, trustees 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 through our website
(www.vno.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange
Commission. Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate
Governance and Nominating Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the
event of any changes to these charters or the code or guidelines, revised copies will also be made available on our website. Copies of
these documents are also available directly from us free of charge. Our website also includes other financial and non-financial
information, including certain non-GAAP financial measures, none of which is a part of this Annual Report on Form 10-K. Copies of
our filings under the Securities Exchange Act of 1934 are also available free of charge from us, upon request.
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ITEM 1A.
RISK FACTORS
Material factors that may adversely affect our business, operations and financial condition are summarized below. We refer to the
equity and debt securities of both Vornado and the Operating Partnership as our “securities” and the investors who own shares of
Vornado or units of the Operating Partnership, or both, as our “equity holders.” 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 6.
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 78% of our net operating income (“NOI” a non-GAAP measure) is from our office properties. 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 continue to cause office tenants to reassess their long-term physical space needs, which
could have an adverse effect on our business.
Further, as office tenants reevaluate their physical space needs and focus on attracting and retaining talent, many tenants have
become more selective and are focused on leasing space in high-quality, modern and well-amenitized buildings near transit hubs.
These factors have resulted in increased competition among landlords to attract tenants, significant landlord capital expenditures for a
building to maintain Class A status and may negatively impact the value of older and less desirable office space. This could have an
adverse effect on our financial condition and results of operations.
A significant portion of our properties is located in the New York metropolitan area and is affected by the economic cycles and
risks inherent to this area.
In 2023, approximately 88% of our NOI is from properties located in the New York metropolitan area. We may continue to
concentrate a significant portion of our future acquisitions, development and redevelopment in this area. 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 New York metropolitan area real estate market have impacted and could continue to
impact 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;
increased 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 effect of trends in the economic and investment climates of the geographic areas in
which we concentrate, and more generally of the United States, or the real estate markets in these areas. Local, national or global
economic downturns could negatively affect the value of our properties, our businesses and profitability.
We are subject to risks that affect the general and New York City retail environments.
In 2023, approximately 17% of our NOI is from Manhattan retail properties. These properties are affected by the general and New
York City retail environments, including the level of consumer spending and consumer confidence, Manhattan 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.
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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 impact our revenues and cash flows.
The factors that affect the value of our real estate investments 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 sub-leases;
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;
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;
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;
changes in real estate taxes and other expenses;
fluctuations in interest rates;
the ability of state and local governments to operate within their budgets;
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• whether tenants and users such as customers and shoppers consider a property attractive;
changes in consumer preferences adversely affecting retailers and retail store values;
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changes in tenant space utilization;
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the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
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consequences of any armed conflict involving, or terrorist attacks against, the United States or individual acts of violence
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in public spaces;
availability of financing on acceptable terms or at all;
inflation or deflation;
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.
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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 equity holders. In addition, some of our major expenses,
including mortgage 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 impact 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 impact the rents we can charge at those properties and
our results of operations.
Our commercial office properties are located primarily in highly developed areas of the New York metropolitan area. Manhattan
is the largest office market in the United States. The number of competitive office properties in the New York metropolitan area,
which may be newer, more amenitized or better located than our properties, could have a material adverse effect on our ability to lease
office space at our properties and on the effective rents we are able to charge.
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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 leases or relet the
space on economically favorable terms, our cash flow and ability to service debt obligations and pay dividends and distributions to
equity holders could be adversely affected.
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 or make distributions to equity holders.
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 increase reliance on e-commerce, and future infectious or contagious
diseases could have a similar impact. Additionally, many office tenants have adopted work from home, hybrid and flexible work
arrangements which may lead our office tenants to reassess their 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 and may have
the effect of heightening other risks described under this heading “Risk Factors.”
Some of our potential losses may not be covered by insurance.
For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which
$275,000,000, increased from $250,000,000 effective June 20, 2023, includes communicable disease coverage, and we maintain all
risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and
earthquake, excluding communicable disease coverage. Our California properties have earthquake insurance with coverage of
$350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property.
We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2
billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear,
biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as
amended to date and which has been extended through December 2027.
Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a
portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for
coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third
party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a
deductible of $2,112,753 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining
portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.
Certain condominiums in which we own an interest (including the Farley Condominiums) maintain insurance policies with
different per occurrence and aggregate limits than our policies described above.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and 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 adversely affect our
business, results of operations and financial condition, the impact of which could be material.
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Actual or threatened terrorist attacks or other criminal acts may adversely affect the value of our properties and our ability to
generate cash flow.
We have significant investments in the New York City, Chicago and San Francisco metropolitan areas. In response to a terrorist
attack, the perceived threat of terrorism, or other criminal acts, tenants in these areas 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 these areas. This, in turn, would trigger a decrease in
the demand for space in these areas, which could increase vacancies in our properties and force us to lease space on less favorable
terms. Furthermore, we may experience increased costs in security, equipment and personnel. As a result, the value of our properties
and the level of our revenues and cash flows could decline materially.
The effects of climate change could have a concentrated impact on the areas where we operate and could adversely impact our
results.
Our investments are concentrated in the New York City, Chicago and San Francisco metropolitan areas. 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
areas 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 office and retail 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 urban areas, 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 impact 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 fuel
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 obligations or distribute to our equity owners.
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 shareholders’, 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 for the payment of
dividends.
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Significant inflation and future 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 impact on our business and 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 properties may not be able to be passed on to
residential tenants. Unreimbursed increased operating expenses may reduce cash flow available for payment of mortgage debt and
interest and for distributions to shareholders.
We face risks associated with property acquisitions.
We have acquired in the past and intend to continue to pursue the acquisition of properties and portfolios of properties, including,
but not limited to, large portfolios that would increase our size and could result in alterations to our capital structure. Furthermore,
from time to time we have made, and in the future we may seek to make one or more, material acquisitions that we believe will
maximize shareholder value. However, an announcement by us of one or more significant acquisitions could result in a quick and
significant decline in the price of our securities. Our acquisition activities and their success are subject to the following risks:
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we may be unable to complete an acquisition of a property or portfolio even after entering into an acquisition agreement,
making a non-refundable deposit and incurring certain other acquisition-related costs;
we may be unable to obtain or assume financing for acquisitions on favorable terms or at all;
increased interest rates will increase the cost of acquiring properties through financing, reducing the opportunities for
attractive acquisitions;
acquired properties may fail to perform as expected;
the actual costs of repositioning, redeveloping or maintaining acquired properties may be greater than our estimates and
may require significantly greater time and attention of management than anticipated;
the acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations
to our satisfaction or other conditions that are not within our control, which may not be satisfied;
acquired properties may be located in new markets where we may face risks associated with a lack of market knowledge
or understanding of the local economy, lack of business relationships in the area, costs associated with opening a new
regional office and unfamiliarity with local governmental and permitting procedures;
we may acquire real estate through the acquisition of the ownership entity subjecting us to the risks of that entity and we
may be exposed to the liabilities of properties or companies acquired, some of which we may not be aware of at the time
of acquisition;
we may face competition for acquisition opportunities from other well-capitalized investors, including publicly traded
and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies,
sovereign wealth funds, pension trusts, partnerships and individual investors, which may cause an increase in the
purchase price for a desired acquisition property or result in a competitor acquiring the desired property instead of us;
and
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of
properties, into our existing operations, and this could have an adverse effect on our results of operations and financial
condition.
Any delay or failure on our part to identify, negotiate, finance and consummate such acquisitions in a timely manner and on
favorable terms, or operate acquired properties to meet our financial expectations, could impede our growth and have an adverse effect
on us, including our financial condition, results of operations, cash flow and the market value of our securities. If we are unable to
successfully acquire additional properties, our ability to grow our business could be adversely affected.
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 are the owner of numerous development sites and continue to engage in redevelopment and repositioning activities with
respect to our properties, and, accordingly, we are subject to certain risks, 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 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 and (x) to the extent
16
the redevelopment activities are conducted in partnership with third parties, the possibility of disputes with our joint venture
development partners and the potential that we miss certain project milestone deadlines. These risks could result in substantial
unanticipated delays or expenses, 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 satisfy our principal and interest obligations and to make distributions to
our shareholders.
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 debt obligations.
We may not be permitted to dispose of certain properties or pay down the debt associated with those properties when we might
otherwise desire to do so without incurring additional costs. In addition, when we dispose of or sell assets, we may not be able to
reinvest the sales proceeds and earn similar returns.
As part of an acquisition of a property, or a portfolio of properties, we may agree, and in the past have agreed, not to dispose of
the acquired properties or reduce the mortgage indebtedness for a long-term period, unless we pay certain of the resulting tax costs of
the seller. These agreements could result in us holding on to properties that we would otherwise sell and not pay down or refinance. In
addition, when we dispose of or sell assets, we may not be able to reinvest the sales proceeds and earn returns similar to those
generated by the assets that were sold.
From time to time we have made, and in the future we may seek to make investments in companies over which we do not have
sole control. Some of these companies operate in industries with different risks than investing and operating real estate.
From time to time we have made, and in the future we may seek to make, investments in companies that we may not control,
including, but not limited to, Alexander’s, our Fifth Avenue and Times Square JV, and other equity and loan investments. Although
these businesses generally have a significant real estate component, some of them operate in businesses that are different from
investing and operating real estate. Consequently, we are subject to operating and financial risks of those industries and to the risks
associated with lack of control, such as having differing objectives than our partners or the entities in which we invest, or becoming
involved in disputes, or competing directly or indirectly with these partners or entities. In addition, we rely on the internal controls and
financial reporting controls of these entities and their failure to maintain effectiveness or comply with applicable standards may
adversely affect us.
We are subject to risks involved in real estate activity through joint ventures and private equity real estate funds.
We currently own properties through joint ventures and private equity real estate funds with other persons and entities and may in
the future acquire or own properties through joint ventures and funds when we believe circumstances warrant the use of such
structures. Joint venture and fund investments involve risk, including: the possibility that our partners might refuse to make capital
contributions when due and therefore we may be forced to make contributions to maintain the value of the property; that we may be
responsible to our partners for indemnifiable losses; that our partners might at any time have business or economic goals that are
inconsistent with ours; that third parties may be hesitant or refuse to transact with the joint venture or fund due to the identity of our
partners; and that our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or
requests. For certain of our joint venture arrangements, we and our respective joint venture partners have rights including the ability to
trigger a buy-sell, put right or forced sale arrangement, which could cause us to sell our interest, or acquire our partner’s interest, or to
sell the underlying asset, at a time when we otherwise would not have initiated such a transaction, without our consent or on
unfavorable terms. In some instances, joint venture and fund partners may have competing interests in our markets that could create
conflicts of interest. These conflicts may include compliance with the REIT requirements, and our REIT status could be jeopardized if
any of our joint ventures or funds do not operate in compliance with REIT requirements. To the extent our partners do not meet their
obligations to us or our joint ventures or funds, or they take action inconsistent with the interests of the joint venture or fund, we may
be adversely affected.
We are exposed to risks related to our properties that are subject to ground leases arrangements which could adversely affect
our results of operations.
We are the lessee under long-term ground lease arrangements at certain of our properties. Unless we purchase a fee interest in the
underlying land or extend the terms of these leases prior to expiration, we will no longer operate these properties upon expiration of
the leases, which could adversely affect our financial condition and results of operations. Furthermore, rent payments under such
leasehold interests are periodically adjusted pursuant to the respective contractual arrangements, including the currently ongoing
PENN 1 June 2023 rent reset process. These rent resets may result in materially higher rents that could adversely affect our financial
condition and results of operation. Additionally, due to the greater risk in a loan secured by a leasehold interest than a loan secured by
a fee interest, we face risks related to the availability and pricing of financing on favorable terms or at all for such ground leasehold
interests.
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RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL
Significantly tighter capital markets and economic conditions have affected and may continue to materially affect our
liquidity, financial condition and results of operations as well as the value of an investment in our debt and equity securities.
There are many factors that can affect the value of our debt and equity securities, 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 attract 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 securities.
We have outstanding debt, and its cost may continue to increase and refinancing may not be available on acceptable terms and
could affect our future operations.
As of December 31, 2023, our consolidated mortgages and unsecured indebtedness, excluding related premium, discount and
deferred financing costs, totaled $8.3 billion. We rely on both secured and unsecured, variable rate and fixed rate debt to finance
acquisitions and development activities and for working capital. 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 our loss of the property.
If we are unable to obtain debt financing or refinance existing indebtedness upon maturity, our financial condition and results of
operations would likely be adversely affected. In addition, the current interest rate environment has led to an increase in interest rates
on our variable rate debt, including on new hedging instruments, and an increase in the cost of refinancing our existing debt and
entering into new debt, all of which have reduced, and could continue to reduce, our operating cash flows. While certain of our debt is
fixed by interest rate swap arrangements, the arrangements typically expire 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 credit rating downgrades and
default on our obligations that could adversely affect our financial condition and results of operations.
We may not be able to obtain capital to make investments.
We depend primarily on external financing to fund the growth of our business. This is because one of the requirements of the
Internal Revenue Code of 1986, as amended, for a REIT is that it distributes 90% of its taxable income, excluding net capital gains, to
its shareholders. This, in turn, requires the Operating Partnership to make distributions to its unitholders. There is a separate
requirement to distribute net capital gains or pay a corporate level tax in lieu thereof. Our access to debt or equity financing depends
on the willingness of third parties to lend or make equity investments and on conditions in the capital markets generally. Although we
believe that we will be able to finance any investments we may wish to make in the foreseeable future, there can be no assurance that
new financing will be available or available on acceptable terms. For information about our available sources of funds, see
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and
the notes to the consolidated financial statements in this Annual Report on Form 10-K.
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 impact our earnings.
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Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development
activities.
The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the
applicable lender, to further mortgage the applicable property or to reduce or change insurance coverage. Our unsecured indebtedness
and debt that we may obtain in the future may contain customary restrictions, requirements and other limitations on our ability to incur
indebtedness, including covenants that limit our ability to incur debt based upon the levels of certain ratios including total debt to total
assets, secured debt to total assets, EBITDA to interest expense, and fixed charges, and that require us to maintain a certain ratio of
unencumbered assets to unsecured debt. Our ability to borrow is subject to compliance with these and other covenants. In addition,
failure to comply with our covenants could cause a default under the applicable debt instrument, and we may then be required to repay
such debt with capital from such other sources or give possession of a secured property to the lender. Under those circumstances, other
sources of capital may not be available to us or may be available only on unattractive terms. Further, depending on market conditions
at the time of any refinancing, the covenants included as part of the terms of such refinancing may be more restrictive than the existing
indebtedness.
In addition, our debt instruments 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. Further, if lenders insist on greater coverage than we are able to obtain it could result in acceleration of
repayment of such debt instruments and adversely affect our ability to finance or refinance our properties and expand our portfolio.
A further downgrade in our credit ratings could materially and adversely affect our business and financial condition.
Our credit rating and the credit ratings assigned to our debt securities and our preferred shares have been recently downgraded and
could change in the future based upon, among other things, our results of operations and financial condition. Our ratings are subject to
ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its
judgment, circumstances warrant such action. Moreover, these credit ratings are not recommendations to buy, sell or hold our common
shares or any other securities. If any of the credit rating agencies that have rated our securities downgrades or lowers its credit rating,
or if any credit rating agency indicates that it has placed any such rating on a “watch list” for a possible downgrading or lowering, or
otherwise indicates that its outlook for that rating is negative, such action could have a material adverse effect on our costs and
availability of funding. For instance, if we fail to maintain the credit ratings currently assigned to our senior debt, the interest rates
payable on outstanding debt under our unsecured term loan and revolving credit facilities would increase and we may be required to
post additional collateral under certain of our existing loan agreements. Furthermore, any future lowering of our credit ratings or
outlook would likely make it more difficult and/or more expensive for us to obtain additional debt financing. Our failure to maintain or
improve our credit ratings could in turn have a material adverse effect on our financial condition, results of operations, cash flows, the
trading/redemption price of our securities, and our ability to satisfy our debt service obligations and to pay dividends and distributions
to our equity holders.
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE
We depend on dividends and distributions from our direct and indirect subsidiaries. The creditors and preferred equity holders
of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or
distributions to us.
Substantially all of Vornado’s assets are held through the Operating Partnership which holds substantially all of its properties and
assets through subsidiaries. The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in
turn, substantially all of Vornado’s cash flow is dependent on cash distributions to it by the Operating Partnership. The creditors of
each of Vornado’s direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and
payable, before distributions may be made by that subsidiary to its equity holders. Thus, the Operating Partnership’s ability to make
distributions to its equity holders depends on its subsidiaries’ ability first to satisfy their obligations to their creditors and then to make
distributions to the Operating Partnership. Consequently, Vornado’s ability to pay dividends to its holders of common and preferred
shares depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and make distributions to holders of
its preferred units and then to make distributions to Vornado.
Furthermore, the holders of preferred units of the Operating Partnership are entitled to receive preferred distributions before
payment of distributions to the Operating Partnership’s equity holders, including Vornado. Thus, Vornado’s ability to pay cash
dividends to its equity holders and satisfy its debt obligations depends on the Operating Partnership’s ability first to satisfy its
obligations to its creditors and make distributions to holders of its preferred units and then to its equity holders, including Vornado. As
of December 31, 2023, there were six series of preferred units of the Operating Partnership not held by Vornado with a total
liquidation value of $52,921,000.
In addition, Vornado’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the
liquidation, reorganization or insolvency is only after the claims of the creditors, including trade creditors and preferred equity holders,
are satisfied.
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Vornado’s Amended and Restated Declaration of Trust (the “declaration of trust”) sets limits on the ownership of its shares.
Generally, for Vornado to maintain its qualification as a REIT under the Internal Revenue Code, not more than 50% in value of
the outstanding shares of beneficial interest of Vornado may be owned, directly or indirectly, by five or fewer individuals at any time
during the last half of Vornado’s taxable year. The Internal Revenue Code defines “individuals” for purposes of the requirement
described in the preceding sentence to include some types of entities. Under Vornado’s declaration of trust, as amended, no person
may own more than 6.7% of the outstanding common shares of any class, or 9.9% of the outstanding preferred shares of any class,
with some exceptions for persons who held common shares in excess of the 6.7% limit before Vornado adopted the limit and other
persons approved by Vornado’s Board of Trustees. In addition, our declaration of trust includes restrictions on ownership of our
common shares and preferred shares to preserve our status as a "domestically controlled qualified investment entity" within the
meaning of Section 897 (h)(4)(B) of the Internal Revenue Code of 1986, as amended. These restrictions on transferability and
ownership may delay, deter or prevent a change in control of Vornado or other transaction that might involve a premium price or
otherwise be in the best interest of equity holders.
The Maryland General Corporation Law (the “MGCL”) contains provisions that may reduce the likelihood of certain takeover
transactions.
The MGCL imposes conditions and restrictions on certain “business combinations” (including, among other transactions, a
merger, consolidation, share exchange, or, in certain circumstances, an asset transfer or issuance of equity securities) between a
Maryland REIT and certain persons who beneficially own at least 10% of the corporation’s stock (an “interested shareholder”). Unless
approved in advance by the board of trustees of the trust, or otherwise exempted by the statute, such a business combination is
prohibited for a period of five years after the most recent date on which the interested shareholder became an interested shareholder.
After such five-year period, a business combination with an interested shareholder must be: (a) recommended by the board of trustees
of the trust, and (b) approved by the affirmative vote of at least (i) 80% of the trust’s outstanding shares entitled to vote and (ii) two-
thirds of the trust’s outstanding shares entitled to vote which are not held by the interested shareholder with whom the business
combination is to be effected, unless, among other things, the trust’s common shareholders receive a “fair price” (as defined by the
statute) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder
for his or her shares.
In approving a transaction, Vornado’s Board of Trustees may provide that its approval is subject to compliance, at or after the
time of approval, with any terms and conditions determined by the Board of Trustees. Vornado’s Board of Trustees has adopted a
resolution exempting any business combination between Vornado and any trustee or officer of Vornado or its affiliates. As a result,
any trustee or officer of Vornado or its affiliates may be able to enter into business combinations with Vornado that may not be in the
best interest of our equity holders. With respect to business combinations with other persons, the business combination provisions of
the MGCL may have the effect of delaying, deferring or preventing a change in control of Vornado or other transaction that might
involve a premium price or otherwise be in the best interest of our equity holders. The business combination statute may discourage
others from trying to acquire control of Vornado and increase the difficulty of consummating any offer.
Title 3, Subtitle 8 of the MGCL permits our Board of Trustees, without shareholder approval and regardless of what is currently
provided in our declaration of trust or bylaws, to implement certain takeover defenses, including adopting a classified board or
increasing the vote required to remove a trustee. Such takeover defenses may have the effect of inhibiting a third party from making an
acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise
could provide our common shareholders with the opportunity to realize a premium over the then current market price.
Vornado may issue additional shares in a manner that could adversely affect the likelihood of certain takeover transactions.
Vornado’s declaration of trust authorizes the Board of Trustees to:
•
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cause Vornado to issue additional authorized but unissued common shares or preferred shares;
classify or reclassify, in one or more series, any unissued preferred shares;
set the preferences, rights and other terms of any classified or reclassified shares that Vornado issues; and
increase, without shareholder approval, the number of shares of beneficial interest that Vornado may issue.
Vornado’s Board of Trustees could establish a series of preferred shares whose terms could delay, deter or prevent a change in
control of Vornado, and therefore of the Operating Partnership, or other transaction that might involve a premium price or otherwise
be in the best interest of our equity holders, although Vornado’s Board of Trustees does not now intend to establish a series of
preferred shares of this kind. Vornado’s declaration of trust and bylaws contain other provisions that may delay, deter or prevent a
change in control of Vornado or other transaction that might involve a premium price or otherwise be in the best interest of our equity
holders.
We may change our policies without obtaining the approval of our equity holders.
Our operating and financial policies, including our policies with respect to acquisitions of real estate or other companies, growth,
operations, indebtedness, capitalization, dividends and distributions, are exclusively determined by Vornado’s Board of Trustees.
Accordingly, our equity holders do not control these policies.
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Steven Roth and Interstate Properties may exercise substantial influence over us. They and some of Vornado’s other trustees
and officers have interests or positions in other entities that may compete with us.
As of December 31, 2023, Interstate Properties, a New Jersey general partnership, and its partners beneficially owned an
aggregate of approximately 7.0% of the common shares of beneficial interest of Vornado and 26.0% of the common stock of
Alexander’s, which is described below. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the three partners of Interstate
Properties. Mr. Roth is the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, the managing general partner
of Interstate Properties, and the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. Messrs. Mandelbaum
and Wight are Trustees of Vornado and Directors of Alexander’s.
Because of these overlapping interests, Mr. Roth and Interstate Properties and its partners may have substantial influence over
Vornado, and therefore over the Operating Partnership. In addition, certain decisions concerning our operations or financial structure
may present conflicts of interest among Messrs. Roth, Mandelbaum and Wight and Interstate Properties and our other equity holders.
In addition, Mr. Roth, Interstate Properties and its partners, and Alexander’s currently and 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, competition for properties and tenants, possible corporate transactions such as acquisitions and
other strategic decisions affecting the future of these entities.
We manage and lease the real estate assets of Interstate Properties pursuant to a management agreement for which we receive an
annual fee equal to 4% of annual base rent and percentage rent. See Note 22 – Related Party Transactions to our consolidated
financial statements in this Annual Report on Form 10-K for additional information.
There may be conflicts of interest between Alexander’s and us.
As of December 31, 2023, we owned 32.4% of the outstanding common stock of Alexander’s. Alexander’s is a REIT that has five
properties, which are located in the greater New York metropolitan area. In addition to the 2.3% that they indirectly own through
Vornado, Interstate Properties, which is described above, and its partners owned 26.0% of the outstanding common stock of
Alexander’s as of December 31, 2023. Mr. Roth is the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, the
managing general partner of Interstate Properties, and the Chairman of the Board of Directors and Chief Executive Officer of
Alexander’s. Messrs. Mandelbaum and Wight are Trustees of Vornado and Directors of Alexander’s and general partners of Interstate
Properties. Ms. Mandakini Puri is a Trustee of Vornado and Director of Alexander’s.
We manage, develop and lease Alexander’s properties under management, development and leasing agreements under which we
receive annual fees from Alexander’s. These agreements are described in Note 5 – Investments in Partially Owned Entities to our
consolidated financial statements in this Annual Report on Form 10-K.
RISKS RELATED TO OUR COMMON SHARES AND OPERATING PARTNERSHIP CLASS A UNITS
The trading price of Vornado’s common shares has been volatile and may continue to fluctuate.
The trading price of Vornado’s common shares has been volatile and may continue to fluctuate widely as a result of several
factors, many of which are outside our control. 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 Vornado’s common shares and the redemption price of the Operating Partnership’s
Class A units. 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;
interest rates increases;
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 Vornado common shares and the shares of our competitors;
fluctuations in the stock price and operating results of our competitors;
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share repurchase plans;
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;
inflation;
local, domestic and international economic factors unrelated to our performance (including the macro-economic impact
of geopolitical conflicts);
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.
A significant decline in Vornado’s stock price could result in substantial losses for our equity holders.
Vornado has many shares available for future sale, which could hurt the market price of its shares and the redemption price of
the Operating Partnership’s units.
The interests of equity holders could be diluted if we issue additional equity securities. As of December 31, 2023, Vornado had
authorized but unissued 59,609,297 common shares of beneficial interest, $0.04 par value, and 58,387,098 preferred shares of
beneficial interest, no par value; of which 22,186,690 common shares are reserved for issuance upon redemption of Class A Operating
Partnership units, convertible securities and employee stock options and 11,200,000 preferred shares are reserved for issuance upon
redemption of preferred Operating Partnership units. Any shares not reserved may be issued from time to time in public or private
offerings or in connection with acquisitions. In addition, common and preferred shares reserved may be sold upon issuance in the
public market after registration under the Securities Act or under Rule 144 under the Securities Act or other available exemptions from
registration. We cannot predict the effect that future sales of Vornado’s common and preferred shares or Operating Partnership Class
A and preferred units will have on the market prices of our securities.
In addition, under Maryland law, Vornado’s Board of Trustees has the authority to increase the number of authorized shares
without shareholder approval.
Loss of our key personnel could harm our operations and adversely affect the value of our common shares and Operating
Partnership Class A units.
We are dependent on the efforts of Steven Roth, the Chairman of the Board of Trustees and Chief Executive Officer of Vornado.
While we believe that we could find a replacement for him and other key personnel, the loss of their services could harm our
operations and adversely affect the value of our securities.
RISKS RELATED TO REGULATORY COMPLIANCE
Vornado may fail to qualify or remain qualified as a REIT and may be required to pay federal income taxes at corporate rates,
which could adversely impact the value of our common shares.
Although we believe that Vornado will remain organized and will continue to operate so as to qualify as a REIT for federal
income tax purposes, Vornado may fail to remain so qualified. Qualifications are governed by highly technical and complex
provisions of the Internal Revenue Code for which there are only limited judicial or administrative interpretations and depend 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, Vornado fails to maintain its qualification as a REIT and does not qualify
under statutory relief provisions, Vornado could not deduct distributions to shareholders in computing our taxable income and would
have to pay federal income tax on its taxable income at regular corporate rates. The federal income tax payable would include any
applicable alternative minimum tax. If Vornado had to pay federal income tax, the amount of money available to distribute to equity
holders and pay its indebtedness would be reduced for the year or years involved, and Vornado would not be required to make
distributions to shareholders in that taxable year and in future years until it was able to qualify as a REIT and did so. In addition,
Vornado would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification
was lost, unless Vornado were entitled to relief under the relevant statutory provisions. Our failure to qualify as a REIT could impact
our ability to expand our business and raise capital and adversely affect the value of our common shares.
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.
22
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. Vornado, 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 Vornado is organized and qualifies as a REIT, it is 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 either have undergone,
or are currently undergoing, tax audits. Although we believe that we have substantial arguments in favor of our positions in the
ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. 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.
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 including 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 for the payment of dividends and distributions to our security
holders.
Compliance or failure to comply with the Americans with Disabilities Act (the "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. From time to time persons have asserted claims against us with respect
to some of our properties under the ADA, but to date such claims have not resulted in any material expense or liability. 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 equity holders.
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.
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. Our predecessor companies may
be subject to similar liabilities for activities of those companies in the past. 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 subject 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.
23
RISKS RELATED TO TECHNOLOGY, CYBERSECURITY AND DATA PROTECTION
The occurrence of cyber incidents, or a deficiency in our cyber security, as well as other disruptions to our IT networks and
related systems, could negatively impact 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 negatively impact 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, 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. Our suppliers, subcontractors, and joint venture partners face similar threats and an incident at
one of these entities could adversely impact our business. These entities are typically outside our control and may have access to
certain of our information with varying levels of security and cybersecurity resources. The risk of a security breach or disruption,
particularly through cyber attack, including by computer hackers, foreign governments and cyber terrorists, has generally increased as
the number, intensity and sophistication of attempted attacks 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, the
incidents we have experienced thus far have 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.
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.
24
ITEM 1C.
CYBERSECURITY
Risk Management and Strategy
We employ a comprehensive risk management strategy for the assessment, identification and management of material risks
stemming from cybersecurity threats. Our methodologies involve a systematic evaluation of potential threats, vulnerabilities, and their
potential impacts on our organization’s operations, data, and systems.
Our cybersecurity risk management program 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.
Our cybersecurity risk management program includes:
•
•
•
•
•
•
Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, and our
broader enterprise IT environment;
A team principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls
and (iii) our response to cybersecurity incidents;
The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security
controls;
Cybersecurity awareness training of our employees, incident response personnel 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. We employ rigorous vetting
processes 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 risks from cybersecurity threats, including as a result
of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our
operations, business strategy, results of operations, or financial condition.
Governance
Our Board of Trustee’s 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
management’s implementation of our cybersecurity risk management program.
The Committee receives periodic reports from management on our potential cybersecurity risks and threats and receives
presentations on cybersecurity topics from our Chief Information Officer. The Committee reports to the full Board of Trustees
regarding its activities, including those related to cybersecurity. The full Board of Trustees also receives briefings from management
on cybersecurity matters as needed.
Our management team, including our Chief Information Officer, is responsible for assessing and managing our material risks
from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises
both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our 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.
Our 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 engaged by us; 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 Trustees.
25
ITEM 2.
PROPERTIES
PROPERTY LISTING
We operate in two reportable segments: New York and Other. The following pages provide details of our real estate properties as
of December 31, 2023.
NEW YORK SEGMENT
Property
PENN 1 (ground leased through 2098)(1)
1290 Avenue of the Americas
PENN 2
909 Third Avenue (ground leased through 2063)(1)
280 Park Avenue(2)
Independence Plaza, Tribeca (1,327 units)(2)
770 Broadway
PENN 11
100 West 33rd Street
90 Park Avenue
One Park Avenue
888 Seventh Avenue (ground leased through 2067)(1)
The Farley Building
(ground and building leased through 2116)(1)
330 West 34th Street (65.2% ground leased through 2149)(1)
85 Tenth Avenue(2)
650 Madison Avenue(2)
350 Park Avenue
150 East 58th Street(4)
7 West 34th Street(2)
595 Madison Avenue
640 Fifth Avenue(2)
50-70 West 93rd Street (324 units)(2)
Sunset Pier 94 Studios
(ground and building leased through 2110)(1)(2)
260 Eleventh Avenue (ground leased through 2114)(1)
4 Union Square South
61 Ninth Avenue (2 buildings) (ground leased through 2115)(1)(2)
512 West 22nd Street(2)
825 Seventh Avenue
1540 Broadway(2)
Paramus
666 Fifth Avenue (2)(6)
1535 Broadway(2)
57th Street (2 buildings)(2)
689 Fifth Avenue(2)
150 West 34th Street
655 Fifth Avenue(2)
435 Seventh Avenue
606 Broadway
697-703 Fifth Avenue(2)
1131 Third Avenue
131-135 West 33rd Street
________________________________________
See notes on page 28.
%
Ownership
100.0 %
70.0 %
100.0 %
100.0 %
50.0 %
Type
Office / Retail
Office / Retail
Office / Retail
Office
Office / Retail
50.1 % Retail / Residential
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
95.0 %
100.0 %
49.9 %
20.1 %
100.0 %
100.0 %
53.0 %
100.0 %
52.0 %
49.9 %
49.9 %
100.0 %
100.0 %
45.1 %
55.0 %
51.2 %
52.0 %
100.0 %
52.0 %
52.0 %
50.0 %
52.0 %
100.0 %
50.0 %
100.0 %
50.0 %
44.8 %
100.0 %
100.0 %
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Office
Office / Retail
Office / Retail
Office / Retail
Office / Retail
Residential
Studio
Office
Retail
Office / Retail
Office / Retail
Office(2) / Retail
Retail
Office
Retail
Retail / Theatre
Office / Retail
Office / Retail
Retail
Retail
Retail
Office / Retail
Retail
Retail
Retail
Square Feet
Under
Development
or Not
Available
for Lease
Total
Property
228,000
2,557,000
—
2,120,000
In Service
2,329,000
2,120,000
338,000
1,457,000
1,795,000
%
Occupancy
82.4%
99.8%
100.0%
95.0%
95.3%
57.6%
79.7%
99.3%
70.6%
95.2%
95.0%
86.5%
91.4%
75.7%
84.5%
86.1%
100.0%
83.2%
100.0%
89.5%
92.3%
99.7%
(5)
100.0%
100.0%
100.0%
85.2%
80.1%
78.5%
81.2%
100.0%
100.0%
78.3%
100.0%
100.0%
100.0%
100.0%
81.8%
100.0%
100.0%
100.0%
(3)
1,351,000
1,265,000
1,258,000
1,183,000
1,149,000
1,114,000
956,000
945,000
887,000
847,000
724,000
638,000
601,000
585,000
544,000
477,000
330,000
315,000
283,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
266,000
209,000
204,000
194,000
173,000
173,000
161,000
129,000
114,000
107,000
103,000
98,000
78,000
57,000
43,000
36,000
26,000
23,000
23,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,351,000
1,265,000
1,258,000
1,183,000
1,149,000
1,114,000
956,000
945,000
887,000
847,000
724,000
638,000
601,000
585,000
544,000
477,000
330,000
315,000
283,000
266,000
209,000
204,000
194,000
173,000
173,000
161,000
129,000
114,000
107,000
103,000
98,000
78,000
57,000
43,000
36,000
26,000
23,000
23,000
26
PROPERTY LISTING – CONTINUED
NEW YORK SEGMENT – CONTINUED
Property
715 Lexington Avenue
537 West 26th Street
334 Canal Street (4 units)
304-306 Canal Street (4 units)
40 East 66th Street (3 units)
431 Seventh Avenue
138-142 West 32nd Street
339 Greenwich Street
966 Third Avenue
968 Third Avenue(2)
137 West 33rd Street
57th Street(2)
Eighth Avenue and 34th Street
Hotel Pennsylvania Site(7)
Other (3 buildings)
Alexander's, Inc.:
731 Lexington Avenue(2)
Rego Park II, Queens (6.6 acres)(2)
Rego Park I, Queens (4.8 acres)(2)
The Alexander Apartment Tower, Queens (312 units)(2)
Flushing, Queens (1.0 acre ground leased through 2037)(1)(2)
Total New York Segment
Our Ownership Interest
________________________________________
See notes on page 28.
(3)
(3)
Type
%
Ownership
100.0 %
Retail
Retail
100.0 %
100.0 % Retail / Residential
100.0 % Retail / Residential
Residential
100.0 %
Retail
100.0 %
Retail
100.0 %
Retail
100.0 %
Retail
100.0 %
Retail
50.0 %
Retail
100.0 %
Land
50.0 %
Land
100.0 %
Land
100.0 %
Retail
100.0 %
%
Occupancy
100.0%
100.0%
—%
100.0%
100.0%
100.0%
80.3%
100.0%
100.0%
100.0%
100.0%
(5)
(5)
(5)
65.4%
In Service
22,000
17,000
—
4,000
10,000
9,000
8,000
8,000
7,000
7,000
3,000
—
—
—
16,000
Square Feet
Under
Development
or Not
Available
for Lease
Total
Property
—
—
14,000
9,000
—
—
—
—
—
—
—
—
—
—
—
22,000
17,000
14,000
13,000
10,000
9,000
8,000
8,000
7,000
7,000
3,000
—
—
—
16,000
32.4 %
32.4 %
32.4 %
32.4 %
32.4 %
Office / Retail
Retail
Retail
Residential
Retail
98.9%
76.9%
100.0%
95.2%
100.0%
90.0%
1,079,000
616,000
214,000
255,000
167,000
24,632,000
—
—
124,000
—
—
2,098,000
1,079,000
616,000
338,000
255,000
167,000
26,730,000
89.4%
19,185,000
1,881,000
21,066,000
27
PROPERTY LISTING – CONTINUED
OTHER SEGMENT
Property
THE MART:
THE MART, Chicago
527 West Kinzie, Chicago
Other (2 properties)(2), Chicago
Total THE MART
Our Ownership Interest
555 California Street:
555 California Street
315 Montgomery Street
345 Montgomery Street
Total 555 California Street
Our Ownership Interest
Other:
%
Ownership
Type
%
Occupancy
In Service
Square Feet
Under
Development
or Not
Available
for Lease
Total
Property
Office / Retail /
Trade show /
Showroom
Land
Retail
100.0 %
100.0 %
50.0 %
70.0 %
70.0 %
70.0 %
Office / Retail
Office / Retail
Office / Retail
79.1%
(5)
100.0%
79.2%
3,669,000
—
19,000
3,688,000
—
—
—
—
3,669,000
—
19,000
3,688,000
79.2%
3,679,000
—
3,679,000
98.7%
99.7%
—%
94.5%
1,506,000
235,000
78,000
1,819,000
—
—
—
—
1,506,000
235,000
78,000
1,819,000
94.5%
1,274,000
—
1,274,000
Rosslyn Plaza, VA (197 units)(2)
Fashion Centre Mall / Washington Tower, VA(2)
Wayne Towne Center, Wayne, NJ (ground leased through
2064)(1)
Annapolis, MD (ground leased through 2042)(1)
Atlantic City, NJ (11.3 acres ground leased through 2070 to
VICI Properties for a portion of the Borgata Hotel
and Casino complex)
Total Other
45.6 %
7.5 %
100.0 %
100.0 %
Office /
Residential
Office / Retail
(3)
58.4%
93.5%
685,000
1,038,000
304,000
—
989,000
1,038,000
Retail
Retail
100.0%
100.0%
686,000
128,000
4,000
—
690,000
128,000
100.0 %
Land
100.0%
89.2%
—
2,537,000
—
308,000
—
2,845,000
Our Ownership Interest
91.9%
1,202,000
144,000
1,346,000
________________________________________
(1) Term assumes all renewal options exercised, if applicable.
(2) Denotes property not consolidated in the accompanying consolidated financial statements and related financial data included in the Annual Report on Form 10-K.
(3) Excludes residential occupancy statistics.
(4)
(5) Properties under development or to be developed.
(6)
75,000 square feet is leased from 666 Fifth Avenue office condominium.
(7) Demolition of the existing building was completed in the third quarter of 2023.
Includes 962 Third Avenue (the Annex building to 150 East 58th Street) 50.0% ground leased through 2118 (assuming all renewal options are exercised).
28
Square
Footage
At Share
Annualized
Escalated Rents
At Share
% of Total
Annualized
Escalated Rents
At Share
1,451,153
$
1,044,715
585,460
685,290
759,446
306,768
312,694
306,612
11,957
408,031
167,180
69,186
62,498
48,886
41,765
41,279
30,699
28,184
27,333
27,326
TOP 10 TENANTS BASED ON ANNUALIZED ESCALATED RENTS(1) (AT SHARE):
Tenant
Meta Platforms, Inc.
IPG and affiliates
Citadel
New York University
Google/Motorola Mobility (guaranteed by Google)
Bloomberg L.P.
Amazon (including its Whole Foods subsidiary)
Neuberger Berman Group LLC
Swatch Group USA
Madison Square Garden & Affiliates
________________________________________
See note below.
ANNUALIZED ESCALATED RENTS(1) (AT SHARE) BY TENANT INDUSTRY:
Industry
Office:
Financial Services
Technology
Professional Services
Advertising/Marketing
Entertainment and Electronics
Real Estate
Insurance
Education
Apparel
Engineering, Architect & Surveying
Health Services
Communications
Government
Other
Retail:
Apparel
Luxury Retail
Banking
Restaurants
Grocery
Other
Showroom
Total
Percentage
9.3%
3.9%
3.5%
2.7%
2.3%
2.3%
1.7%
1.6%
1.5%
1.5%
22%
16%
7%
5%
4%
3%
3%
3%
2%
2%
2%
1%
1%
6%
77%
5%
4%
2%
2%
1%
4%
18%
5%
100%
________________________________________
(1) Represents monthly contractual base rent before free rent plus tenant reimbursements multiplied by 12. Annualized escalated rents at share include leases signed
but not yet commenced in place of current tenants or vacancy in the same space.
29
NEW YORK
As of December 31, 2023, our New York segment consisted of 26.7 million square feet in 60 properties. The 26.7 million square
feet is comprised of 20.4 million square feet of Manhattan office in 30 of the properties, 2.4 million square feet of Manhattan street
retail in 50 of the properties, 1,662 units in five residential properties, and our 32.4% interest in Alexander’s, which owns five
properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P.
headquarters building, and The Alexander, a 312-unit apartment tower in Queens. The New York segment also includes nine garages
totaling 1.6 million square feet (4,685 spaces).
As of December 31, 2023, the occupancy rate for our New York segment was 89.4%.
Occupancy and weighted average annual rent per square foot:
Office:
As of December 31,
Total Square Feet
In Service
Square Feet
In Service
Square Feet
At Share
Occupancy
Rate
Weighted
Average Annual
Escalated Rent
Per Square Foot
Vornado's Ownership Interest
2023
2022
2021
2020
2019
Retail:
20,383,000
19,902,000
20,630,000
20,586,000
20,666,000
18,699,000
18,724,000
19,442,000
18,361,000
19,070,000
16,001,000
16,028,000
16,757,000
15,413,000
16,195,000
$
90.7%
91.9%
92.2%
93.4%
96.9%
86.30
83.98
80.01
79.05
76.26
As of December 31,
Total Square Feet
In Service
Square Feet
In Service
Square Feet
At Share
Occupancy
Rate
Weighted
Average Annual
Escalated Rent
Per Square Foot
Vornado's Ownership Interest
2023
2022
2021
2020
2019
2,394,000
2,556,000
2,693,000
2,690,000
2,712,000
2,123,000
2,289,000
2,267,000
2,275,000
2,300,000
1,684,000
1,851,000
1,825,000
1,805,000
1,842,000
$
74.9%
74.4%
80.7%
78.8%
94.5%
224.88
215.72
214.22
226.38
209.86
Occupancy and average monthly rent per unit:
Residential:
As of December 31,
Total
Number of Units
Total
Number of Units
Occupancy
Rate
Average Monthly
Rent Per Unit
Vornado's Ownership Interest
2023
2022
2021
2020
2019
1,974
1,976
1,986
1,995
1,996
939
941
951
960
960
96.8% $
96.7%
97.0%
84.9%
97.5%
4,115
3,882
3,776
3,714
3,902
30
NEW YORK – CONTINUED
Lease expirations as of December 31, 2023 (at share):
Year
Office:
Fourth Quarter 2023(2)
2024
2025
2026
2027
2028(4)
2029
2030
2031
2032
2033
Retail:
Fourth Quarter 2023(2)
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Number of
Expiring Leases
Square Feet of
Expiring Leases(1)
Percentage of
New York Square
Feet
Annualized Escalated Rents
of Expiring Leases
Total
Per Square Foot
12
76
67
79
95
65
59
50
31
22
21
3
11
12
10
10
9
14
21
24
21
7
223,000
713,000
586,000
1,163,000
1,301,000
1,044,000
1,241,000
643,000
891,000
958,000
502,000
11,000
197,000
50,000
82,000
32,000
32,000
53,000
153,000
68,000
57,000
17,000
1.6%
5.0%
4.1%
8.1%
9.1%
7.3%
8.7%
4.5%
6.2%
6.7%
4.0%
1.0%
17.7%
4.5%
7.3%
2.9%
2.9%
4.7%
13.7%
6.1%
5.1%
1.5%
$
$
23,965,000 $
63,535,000
45,758,000
94,536,000
102,958,000
84,045,000
100,418,000
54,540,000
80,847,000
94,504,000
42,938,000
1,122,000 $
20,532,000
13,076,000
26,414,000
20,509,000
14,731,000
27,460,000
23,416,000
30,383,000
29,537,000
6,022,000
(3)
(5)
107.47
89.11
78.09
81.29
79.14
80.50
80.92
84.82
90.74
98.65
85.53
102.00
104.22
261.52
322.12
640.91
460.34
518.11
153.05
446.81
518.19
354.24
________________________________________
(1) Excludes storage, vacancy and other.
(2)
Includes month-to-month leases, holdover tenants, and leases expiring on the last day of the current quarter.
(3) Based on current market conditions, we expect to re-lease this space at rents between $85 to $95 per square foot.
(4) Excludes the expiration of 492,000 square feet at 909 Third Avenue for U.S. Post Office as we assume the exercise of all renewal options through 2038 given the
below-market rent on their options.
(5) Based on current market conditions, we expect to re-lease this space at rents between $125 to $150 per square foot.
Alexander’s
As of December 31, 2023, we own 32.4% of the outstanding common stock of Alexander’s, which owns five properties in the
greater New York City aggregating 2.5 million square feet, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg
L.P. headquarters building. As of December 31, 2023, Alexander's had an occupancy rate of 92.6% and a weighted average annual
rent per square foot of $107.78.
OTHER REAL ESTATE AND INVESTMENTS
THE MART
We own the 3.7 million square foot THE MART in Chicago, whose largest tenant is Motorola Mobility at 609,000 square feet, the
lease of which is guaranteed by Google. As of December 31, 2023, THE MART had an occupancy rate of 79.2% and a weighted
average annual rent per square foot of $52.06.
555 California Street
We own a 70% controlling interest in a three-building office complex aggregating 1.8 million square feet, located at California
and Montgomery Streets in San Francisco’s financial district (“555 California Street”). As of December 31, 2023, 555 California
Street had an occupancy rate of 94.5% and a weighted average annual rent per square foot of $94.93.
31
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 legal counsel, the outcome of such matters is not expected to have a material adverse effect on our financial position, 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
Vornado Realty Trust
Vornado’s common shares are traded on the New York Stock Exchange under the symbol “VNO.”
As of February 1, 2024, there were 758 holders of record of Vornado common shares.
Vornado Realty L.P.
There is no established trading market for the Operating Partnership's Class A units. Class A units that are not held by Vornado
may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the
holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at
all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market
value of one Vornado common share, and the distribution to a Class A unit holder is equal to the dividend paid to a Vornado common
shareholder.
As of February 1, 2024, there were 806 Class A unitholders of record.
Recent Sales of Unregistered Securities
Vornado Realty Trust
During the fourth quarter of 2023, Vornado issued 64,056 of its common shares for the redemption of Class A units by certain
limited partners of Vornado Realty L.P. Such shares were issued in reliance on an exemption from registration under Section 4(a)(2)
of the Securities Act of 1933, as amended. There were no cash proceeds associated with these issuances.
Vornado Realty L.P.
During the fourth quarter of 2023, Vornado Realty L.P. issued 375,369 Class A units to satisfy conversions of restricted
Operating Partnership units (“LTIP Units”) and 20,731 pursuant to Vornado’s 2023 Omnibus Share Plan. There were no cash
proceeds associated with the issuances.
On November 1, 2023, the Operating Partnership granted 116,612 LTIP Units at a market price of $19.30 per unit to Vornado
consultants that are not executives of the Company as part of their annual consulting fees. The units were issued outside of Vornado’s
2023 Omnibus Share Plan.
All of the securities referred to above were issued in reliance on an exemption from registration under Section 4(a)(2) of the
Securities Act of 1933, as amended. There were no cash proceeds associated with these issuances.
From time to time, in connection with equity awards granted under our Omnibus Share Plan, we may withhold common shares for
tax purposes or acquire common shares as part of the payment of the exercise price. Although we treat these as repurchases for certain
financial statement purposes, these withheld or acquired shares are not considered by us as repurchases for this purpose.
Information relating to compensation plans under which Vornado’s 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.
32
Recent Purchases of Unregistered Securities
Vornado Realty Trust
On April 26, 2023, the Company’s Board of Trustees authorized the repurchase of up to $200,000,000 of its outstanding common
shares under a newly established share repurchase program. There were no common share repurchases during the three months ended
December 31, 2023. As of December 31, 2023, $170,857,000 remained available and authorized for common share repurchases.
Share repurchases may be made from time to time in the open market, through privately negotiated transactions or through other
means as permitted by federal securities laws, including through block trades, accelerated share repurchase transactions and/or trading
plans intended to qualify under Rule 10b5-1. The timing, manner, price and amount of any repurchases will be determined in
Vornado’s discretion depending on business, economic and market conditions, corporate and regulatory requirements, prevailing
prices for Vornado’s common shares, alternative uses for capital and other considerations. The program does not have an expiration
date and may be suspended or discontinued at any time and does not obligate Vornado to make any repurchases of its common shares.
Vornado Realty L.P.
None.
Performance Graph
The following graph is a comparison of the five-year cumulative return of Vornado’s common shares, 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 shares, 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
shares will continue in line with the same or similar trends depicted in the graph below.
Vornado Realty Trust
S&P 400 MidCap Index(1)
S&P 500 Index(2)
The NAREIT All Equity Index
2018
2019
2020
2021
2022
2023
$
100 $
115 $
68 $
81 $
43 $
100
100
100
126
131
129
143
156
122
179
200
172
156
164
129
60
181
207
144
________________________________________
(1)
(2) To facilitate comparison to the performance graph presented in our Annual Report for the prior year, the S&P 500 Index is presented above.
In 2023, Vornado was added as a constituent of the S&P 400 MidCap Index.
ITEM 6.
RESERVED
33
Comparison of Five-Year Cumulative ReturnVornado Realty TrustS&P 500 IndexS&P 400 MidCap IndexThe NAREIT All Equity Index201820192020202120222023$25$50$75$100$125$150$175$200$225$250
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
Critical Accounting Estimates
Net Operating Income At Share by Segment for the Years Ended December 31, 2023 and 2022
Results of Operations for the Year Ended December 31, 2023 Compared to December 31, 2022
Related Party Transactions
Liquidity and Capital Resources
Funds From Operations for the Years Ended December 31, 2023 and 2022
Page Number
35
42
43
46
49
50
56
34
Introduction
The following discussion should be read in conjunction with the 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
Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through,
and substantially all of its interests in properties are held by, Vornado Realty L.P., (the “Operating Partnership”) a Delaware limited
partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders are dependent upon the cash flow of the
Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the
sole general partner of and owned approximately 91.0% of the common limited partnership interest in the Operating Partnership as of
December 31, 2023. All references to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership
and those subsidiaries consolidated by Vornado.
We own and operate office and retail properties with a concentration in the New York metropolitan area. In addition, we have a
32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns five properties in the greater New York metropolitan
area, as well as interests in other real estate and investments.
Our business objective is to maximize Vornado shareholder value, which we measure by the total return provided to our
shareholders. Below is a table comparing Vornado’s performance to the FTSE NAREIT Office Index (“Office REIT”) and the MSCI
US REIT Index (“MSCI”) for the following periods ended December 31, 2023:
Three-month
One-year
Three-year
Five-year
Ten-year
Vornado
Total Return(1)
Office REIT
MSCI
25.8%
39.2%
(12.7%)
(40.3%)
(33.9%)
23.5%
2.0%
(22.3%)
(16.8%)
7.0%
16.0%
13.7%
22.8%
42.9%
108.0%
________________________________________
(1) Past performance is not necessarily indicative of future performance.
We intend to achieve this objective by continuing to pursue our investment philosophy and to execute our operating strategies
through:
• maintaining a superior team of operating and investment professionals and an entrepreneurial spirit;
•
investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital
appreciation;
acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents;
developing and redeveloping properties to increase returns and maximize value; and
investing in operating companies that have a significant real estate component.
•
•
•
We expect to finance our growth, acquisitions and investments using internally generated funds and proceeds from asset sales and
by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership
units in exchange for property and may repurchase or otherwise reacquire these securities in the future.
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, regional and local economies, the financial condition and operating results of current and
prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations,
legislation, population and employment trends. See “Risk Factors” in Item 1A for additional information regarding these factors.
Our business has been, and may continue to be, affected by increased interest rates, the effects of inflation 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.
35
Overview - continued
Vornado Realty Trust
Year Ended December 31, 2023 Financial Results Summary
Net income attributable to common shareholders for the year ended December 31, 2023 was $43,378,000, or $0.23 per diluted
share, compared to net loss attributable to common shareholders of $408,615,000, or $2.13 per diluted share, for the year ended
December 31, 2022. The years ended December 31, 2023 and 2022 include certain items that impact net income (loss) attributable to
common shareholders, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling
interests, decreased net income attributable to common shareholders by $7,908,000, or $0.04 per diluted share, for the year ended
December 31, 2023 and increased net loss attributable to common shareholders by $535,083,000, or $2.79 per diluted share, for the
year ended December 31, 2022.
Funds from operations ("FFO") attributable to common shareholders plus assumed conversions for the year ended December 31,
2023 was $503,792,000, or $2.59 per diluted share, compared to $638,928,000, or $3.30 per diluted share, for the year ended
December 31, 2022. The years ended December 31, 2023 and 2022 include certain items that impact FFO, which are listed in the table
below. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO by $4,359,000, or $0.02
per diluted share, for the year ended December 31, 2023 and increased FFO by $30,036,000, or $0.15 per diluted share, for the year
ended December 31, 2022.
The following table reconciles the difference between our net income (loss) attributable to common shareholders and our net
income attributable to common shareholders, as adjusted:
(Amounts in thousands)
For the Year Ended December 31,
2023
2022
Certain expense (income) items that impact net income (loss) attributable to common shareholders:
Real estate impairment losses on wholly owned and partially owned assets
$
73,289 $
595,488
Net gain on contribution of Pier 94 leasehold interest to joint venture
After-tax net gain on sale of The Armory Show
Our share of Alexander's gain on sale of Rego Park III land parcel
Our share of income from real estate fund investments
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units and ancillary amenities
Deferred tax liability on our investment in the Farley Building (held through a taxable REIT subsidiary)
Credit losses on investments
Other
Noncontrolling interests' share of above adjustments and assumed conversion of dilutive potential common shares
(35,968)
(17,076)
(16,396)
(14,379)
(11,959)
11,722
8,269
10,342
7,844
64
Total of certain expense (income) items that impact net income (loss) attributable to common shareholders
$
7,908 $
—
—
—
(1,671)
(35,858)
13,665
—
3,749
575,373
(40,290)
535,083
The following table reconciles the difference between our FFO attributable to common shareholders plus assumed conversions
and our FFO attributable to common shareholders plus assumed conversions, as adjusted:
(Amounts in thousands)
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions:
Our share of income from real estate fund investments
$
After-tax net gain on sale of 220 CPS condominium units and ancillary amenities
Deferred tax liability on our investment in the Farley Building (held through a taxable REIT subsidiary)
Credit losses on investments
Other
Noncontrolling interests' share of above adjustments
For the Year Ended December 31,
2023
2022
(14,379) $
(11,959)
11,722
8,269
11,043
4,696
(337)
(1,671)
(35,858)
13,665
—
(8,412)
(32,276)
2,240
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed
conversions, net
$
4,359 $
(30,036)
36
Overview - continued
Same Store Net Operating Income ("NOI") At Share
The percentage increase (decrease) in same store NOI at share and same store NOI at share - cash basis of our New York
segment, THE MART and 555 California Street are below.
Year Ended December 31, 2023 compared to December 31, 2022:
Total
New York
THE MART(1)
555
California
Street(2)
Same store NOI at share % increase (decrease)
Same store NOI at share - cash basis % increase (decrease)
0.4 %
0.6 %
2.2 %
2.8 %
(34.8) %
(37.2) %
26.3%
26.6%
________________________________________
(1) 2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2) 2023 includes our $14,103,000 share of the receipt of a tenant settlement, net of legal expenses.
Calculations of same store NOI at share, reconciliations of our net income (loss) to NOI at share, NOI at share - cash basis and
FFO and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
Dividends/Share Repurchase Program
On December 5, 2023, Vornado’s Board of Trustees declared a dividend of $0.30 per common share. Together with the $0.375
per share common dividend already paid in the first quarter of 2023, this resulted in an aggregate 2023 common dividend of $0.675
per common share. We anticipate that our common share dividend policy for 2024 will be to pay one common share dividend in the
fourth quarter.
On April 26, 2023, our Board of Trustees authorized the repurchase of up to $200,000,000 of our outstanding common shares
under a newly established share repurchase program.
During the year ended December 31, 2023, we repurchased 2,024,495 common shares for $29,143,000 at an average price per
share of $14.40. As of December 31, 2023, $170,857,000 remained available and authorized for repurchases.
350 Park Avenue
On January 24, 2023, we and the Rudin family (“Rudin”) completed agreements with Citadel Enterprise Americas LLC
(“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO (“KG”), for a series of transactions relating to 350
Park Avenue and 40 East 52nd Street.
Pursuant to the agreements, Citadel master leases 350 Park Avenue, a 585,000 square foot Manhattan office building, on an “as
is” basis for ten years, with an initial annual net rent of $36,000,000. Per the terms of the lease, no tenant allowance or free rent was
provided. Citadel has also master leased Rudin’s adjacent property at 40 East 52nd Street (390,000 square feet).
In addition, we entered into a joint venture with Rudin (the “Vornado/Rudin JV”) which was formed to purchase 39 East 51st
Street. Upon formation of the KG joint venture described below, 39 East 51st Street will be combined with 350 Park Avenue and 40
East 52nd Street to create a premier development site (collectively, the “Site”). On June 20, 2023, the Vornado/Rudin JV completed
the purchase of 39 East 51st Street for $40,000,000, which was funded on a 50/50 basis by Vornado and Rudin.
From October 2024 to June 2030, KG will have the option to either:
•
acquire a 60% interest in a joint venture with the Vornado/Rudin JV that would value the Site at $1.2 billion ($900,000,000 to
Vornado and $300,000,000 to Rudin) and build a new 1,700,000 square foot office tower (the “Project”) pursuant to East
Midtown Subdistrict zoning with the Vornado/Rudin JV as developer. KG would own 60% of the joint venture and the
Vornado/Rudin JV would own 40% (with Vornado owning 36% and Rudin owning 4% of the joint venture along with a
$250,000,000 preferred equity interest in the Vornado/Rudin JV).
◦
◦
◦
at the joint venture formation, Citadel or its affiliates will execute a pre-negotiated 15-year anchor lease with
renewal options for approximately 850,000 square feet (with expansion and contraction rights) at the Project for its
primary office in New York City;
the rent for Citadel’s space will be determined by a formula based on a percentage return (that adjusts based on the
actual cost of capital) on the total Project cost;
the master leases will terminate at the scheduled commencement of demolition;
•
or, exercise an option to purchase the Site for $1.4 billion ($1.085 billion to Vornado and $315,000,000 to Rudin), in which
case the Vornado/Rudin JV would not participate in the new development.
Further, the Vornado/Rudin JV will have the option from October 2024 to September 2030 to put the Site to KG for $1.2 billion
($900,000,000 to Vornado and $300,000,000 to Rudin). For ten years following any put option closing, unless the put option is
exercised in response to KG’s request to form the joint venture or KG makes a $200,000,000 termination payment, the Vornado/Rudin
JV will have the right to invest in a joint venture with KG on the terms described above if KG proceeds with development of the Site.
37
Overview - continued
Sunset Pier 94 Studios Joint Venture
On August 28, 2023, we, together with Hudson Pacific Properties and Blackstone Inc., formed a joint venture (“Pier 94 JV”) to
develop a 266,000 square foot purpose-built studio campus at Pier 94 in Manhattan (“Sunset Pier 94 Studios”). In connection
therewith:
• We contributed our Pier 94 leasehold interest to the joint venture in exchange for a 49.9% common equity interest and an
initial capital account of $47,944,000, comprised of (i) the $40,000,000 value of our Pier 94 leasehold interest contribution
and (ii) a $7,994,000 credit for pre-development costs incurred. Hudson Pacific Properties (“HPP”) and Blackstone Inc.
(together, “HPP/BX”) received an aggregate 50.1% common equity interest in Pier 94 JV and an initial capital account of
$22,976,000 in exchange for (i) a $15,000,000 cash contribution upon the joint venture’s formation and (ii) a $7,976,000
credit for pre-development costs incurred. HPP/BX will fund 100% of cash contributions until such time that its capital
account is equal to Vornado’s, after which equity will be funded in accordance with each partner’s respective ownership
interest.
•
•
The lease of Pier 94 with the City of New York was amended and restated to allow for the contribution to Pier 94 JV and to
remove Pier 92 from the lease’s demised premises. The amended and restated lease expires in 2060 with five 10-year renewal
options.
Pier 94 JV closed on a $183,200,000 construction loan facility ($100,000 outstanding as of December 31, 2023) which bears
interest at SOFR plus 4.75% and matures in September 2025, with one one-year as-of-right extension option and two one-
year extension options subject to certain conditions. VRLP and the other partners provided a joint and several completion
guarantee.
The development cost of the project is estimated to be $350,000,000, which will be funded with $183,200,000 of construction
financing (described above) and $166,800,000 of equity contributions. Our share of equity contributions will be funded by (i) our
$40,000,000 Pier 94 leasehold interest contribution and (ii) $34,000,000 of cash contributions, which are net of an estimated
$9,000,000 for our share of development fees and reimbursement for overhead costs incurred by us.
Upon contribution of the Pier 94 leasehold, we recognized a $35,968,000 net gain primarily due to the step-up of our retained
investment in the leasehold interest to fair value. The net gain was included in “net gains on disposition of wholly owned and partially
owned assets” on our consolidated statements of income for the year ended December 31, 2023.
Dispositions
Alexander's
On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel, located 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. As a result of the sale, we recognized our $16,396,000 share of the net gain and received a $711,000 sales
commission from Alexander’s, of which $250,000 was paid to a third-party broker.
The Armory Show
On July 3, 2023, we completed the sale of The Armory Show, located in New York, for $24,410,000, subject to certain post-
closing adjustments, and realized net proceeds of $22,489,000. In connection with the sale, we recognized a net gain of $20,181,000
which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income.
Manhattan Retail Properties Sale
On August 10, 2023, we completed the sale of four Manhattan retail properties located at 510 Fifth Avenue, 148–150 Spring
Street, 443 Broadway and 692 Broadway for $100,000,000 and realized net proceeds of $95,450,000. In connection with the sale, we
recognized an impairment loss of $625,000 which is included in “impairment losses, transaction related costs and other” on our
consolidated statements of income.
220 Central Park South
During the year ended December 31, 2023, we closed on the sale of two condominium units at 220 CPS for net proceeds of
$24,484,000 resulting in a financial statement net gain of $14,127,000 which is included in "net gains on disposition of wholly owned
and partially owned assets" on our consolidated statements of income. In connection with these sales, $2,168,000 of income tax
expense was recognized on our consolidated statements of income.
38
Overview - continued
Financings
150 West 34th Street Loan Participation
On January 9, 2023, our $105,000,000 participation in the $205,000,000 mortgage loan on 150 West 34th Street was repaid,
which reduced “other assets” and “mortgages payable, net” on our consolidated balance sheets by $105,000,000.
On October 4, 2023, we completed a $75,000,000 refinancing of 150 West 34th Street, of which $25,000,000 is recourse to the
Operating Partnership. The interest-only loan bears a rate of SOFR plus 2.15% and matures in February 2025, with three one-year as-
of-right extension options and an additional one-year extension option available subject to satisfying a loan-to-value test. The interest
rate on the loan is subject to an interest rate cap arrangement with a SOFR strike rate of 5.00%, which matures in February 2026. The
loan replaces the previous $100,000,000 loan, which bore interest at SOFR plus 1.86%.
697-703 Fifth Avenue (Fifth Avenue and Times Square JV)
On June 14, 2023, the Fifth Avenue and Times Square JV completed a restructuring of the 697-703 Fifth Avenue $421,000,000
non-recourse mortgage loan, which matured in December 2022. The restructured $355,000,000 loan, which had its principal reduced
through an application of property-level reserves and funds from the partners, was split into (i) a $325,000,000 senior note, which
bears interest at SOFR plus 2.00%, and (ii) a $30,000,000 junior note, which accrues interest at a fixed rate of 4.00%. The restructured
loan matures in June 2025, with two one-year and one nine-month as-of-right extension options (March 2028, as fully extended). Any
amounts funded for future re-leasing of the property will be senior to the $30,000,000 junior note.
512 West 22nd Street
On June 28, 2023, a joint venture, in which we have a 55% interest, completed a $129,250,000 refinancing of 512 West 22nd
Street, a 173,000 square foot Manhattan office building. The interest-only loan bears a rate of SOFR plus 2.00% in year one and
SOFR plus 2.35% thereafter. The loan matures in June 2025 with a one-year extension option subject to debt service coverage ratio,
loan-to-value and debt yield requirements. The loan replaces the previous $137,124,000 loan that bore interest at LIBOR plus 1.85%
and had an initial maturity of June 2023. In addition, the joint venture entered into the interest rate cap arrangement detailed in the
table on the following page.
825 Seventh Avenue
On July 24, 2023, a joint venture, in which we have a 50% interest, completed a $54,000,000 refinancing of the office
condominium of 825 Seventh Avenue, a 173,000 square foot Manhattan office and retail building. The interest-only loan bears a rate
of SOFR plus 2.75%, with a 30 basis point reduction available upon satisfaction of certain leasing conditions, and matures in January
2026. The loan replaces the previous $60,000,000 loan that bore interest at LIBOR plus 2.35% and was scheduled to mature in July
2023.
39
Overview - continued
Financings - continued
Interest Rate Swap and Cap Arrangements
We entered into the following interest rate swap and cap arrangements during the year ended December 31, 2023. See page 58,
Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk - Derivatives and Hedging, in this Annual Report on
Form 10-K for further information on our hedging instruments.
(Amounts in thousands)
Interest rate swaps:
555 California Street (effective 05/24)
PENN 11 (effective 03/24)(1)
Unsecured term loan(2)
Interest rate caps:
1290 Avenue of the Americas (70.0% interest)(3)
One Park Avenue (effective 3/24)
640 Fifth Avenue (52.0% interest)
731 Lexington Avenue office condominium (32.4% interest)
150 West 34th Street
512 West 22nd Street (55.0% interest)
________________________
Notional
Amount
(at share)
All-In
Swapped Rate
Expiration
Date
Variable Rate
Spread
$
$
840,000
250,000
150,000
6.03%
6.34%
5.12%
Index Strike
Rate
665,000
525,000
259,925
162,000
75,000
71,088
1.00%
3.89%
4.00%
6.00%
5.00%
4.50%
05/26
10/25
07/25
11/25
03/25
05/24
06/24
02/26
06/25
S+205
S+206
S+129
S+162
S+122
S+111
Prime + 0
S+215
S+200
(1) The $500,000 mortgage loan is currently subject to a $500,000 interest rate swap with an all-in swapped rate of 2.22% and expires in March 2024. In January
2024, we entered into a forward swap arrangement for the remaining $250,000 balance of the $500,000 PENN 11 mortgage loan which is effective upon the
March 2024 expiration of the current in-place swap. Together with the forward swap above, the loan will bear interest at an all-in swapped rate of 6.28% effective
March 2024 through October 2025.
In addition to the swap disclosed above, the unsecured term loan, which matures in December 2027, is subject to various interest rate swap arrangements that were
entered into in prior periods.
In connection with the arrangement, we made a $63,100 up-front payment, of which $18,930 is attributable to noncontrolling interests. See Note 9 - Debt in Part
II, Item 8 of this Annual Report on Form 10-K for details.
(3)
(2)
Leasing Activity For the Year Ended December 31, 2023
The leasing activity and related statistics below are based on leases signed during the period and are not intended to coincide with
the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America
(“GAAP”). Second generation relet space represents square footage that has not been vacant for more than nine months and tenant
improvements and leasing commissions are based on our share of square feet leased during the period.
•
•
•
•
2,133,000 square feet of New York Office space (1,661,000 square feet at share) at an initial rent of $98.66 per square foot and a
weighted average lease term of 10.0 years. The changes in the GAAP and cash mark-to-market rent on the 1,476,000 square feet
of second generation space were positive 6.2% and negative 2.0%, respectively. Tenant improvements and leasing commissions
were $7.44 per square foot per annum, or 7.5% of initial rent.
299,000 square feet of New York Retail space (239,000 square feet at share) at an initial rent of $118.47 per square foot and a
weighted average lease term of 6.5 years. The changes in the GAAP and cash mark-to-market rent on the 131,000 square feet of
second generation space were positive 20.7% and positive 18.8%, respectively. Tenant improvements and leasing commissions
were $21.90 per square foot per annum, or 18.5% of initial rent.
337,000 square feet at THE MART (332,000 square feet at share) at an initial rent of $52.97 per square foot and a weighted
average lease term of 7.2 years. The changes in the GAAP and cash mark-to-market rent on the 244,000 square feet of second
generation space were negative 3.3% and negative 7.8%, respectively. Tenant improvements and leasing commissions were
$11.44 per square foot per annum, or 21.6% of initial rent.
10,000 square feet at 555 California Street (7,000 square feet at share) at an initial rent of $134.70 per square foot and a weighted
average lease term of 5.9 years. The changes in the GAAP and cash mark-to-market rent on the 4,000 square feet of second
generation space were positive 12.8% and positive 2.4%, respectively. Tenant improvements and leasing commissions were
$22.92 per square foot per annum, or 17.0% of initial rent.
40
Overview - continued
Square footage (in service) and Occupancy as of December 31, 2023
(Square feet in thousands)
New York:
Office
Retail (includes retail properties that are in the base of our office properties)
Residential - 1,974 units(2)
Alexander's
Other:
THE MART
555 California Street
Other
Total square feet as of December 31, 2023
________________________________________
See notes below.
Number of
properties
Square Feet (in service)
Total
Portfolio
Our
Share
Occupancy %
30 (1)
50 (1)
5 (1)
5
3
3
11
18,699
2,123
1,479
2,331
24,632
3,688
1,819
2,537
8,044
16,001
1,684
745
755
19,185
3,679
1,274
1,202
6,155
32,676
25,340
90.7%
74.9%
96.8%
92.6%
89.4%
(2)
(2)
79.2%
94.5%
91.9%
Square footage (in service) and Occupancy as of December 31, 2022
(Square feet in thousands)
New York:
Office
Retail (includes retail properties that are in the base of our office properties)
Residential - 1,976 units(2)
Alexander's
Other:
THE MART
555 California Street
Other
Number of
properties
Square Feet (in service)
Total
Portfolio
Our
Share
Occupancy %
(1)
(1)
(1)
30
56
6
6
4
3
11
18,724
2,289
1,499
2,241
24,753
3,635
1,819
2,532
7,986
16,028
1,851
766
726
19,371
3,626
1,273
1,197
6,096
91.9 %
74.4 %
96.7 % (2)
96.4 % (2)
90.4%
81.6 %
94.7 %
92.6 %
Total square feet as of December 31, 2022
32,739
25,467
________________________________________
(1) Reflects the Office, Retail and Residential space within our 65 and 71 total New York properties as of December 31, 2023 and 2022, respectively.
(2) The Alexander Apartment Tower (312 units) is reflected in Residential unit count and occupancy.
41
Critical Accounting Estimates
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 a summary of the critical
accounting estimates used in the preparation of our consolidated financial statements. A discussion of our accounting policies is
included in Note 2 - Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual
Report on Form 10-K.
Acquisitions of Real Estate
Upon the acquisition of real estate, we assess whether the transaction should be accounted for as an asset acquisition or as a
business combination. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted
for as asset acquisitions. Our acquisitions of real estate generally will not meet the definition of a business because substantially all of
the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related
identified intangible assets).
We assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired
above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase
price on a relative fair value basis. We assess fair value based on estimated cash flow projections based on a number of factors such as
historical operating results, known trends, and market/economic conditions and make key assumptions regarding the discount and
capitalization rates used in our analyses. The use of different assumptions to value the acquired properties and allocate value between
land and building could affect the revenues recognized over the terms of the leases at our properties and the expenses recognized over
the property's estimated remaining useful life on our consolidated statements of income.
Impairment Analyses for Investments in Real Estate and Unconsolidated Partially Owned Entities
Our investments in consolidated properties, including any related right-of-use assets and intangible assets, and unconsolidated
partially owned entities are individually reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. For our unconsolidated partially owned entities, we consider various qualitative factors to
determine if a decrease in the value of our investment is other-than-temporary during our intended holding period. 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, capital expenditures, discount rates 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 investments on our consolidated balance sheets as well as any potential
impairment losses recognized on our consolidated statements of income.
During the year ended December 31, 2023, we recognized an aggregate $95,465,000 of impairment losses directly attributable to
decreases in the value of depreciable real estate held by certain wholly owned and partially owned entities, of which $22,176,000 was
attributable to noncontrolling interests. See Note 5 - Investments in Partially Owned Entities and Note 15 - Fair Value Measurements
to our consolidated financial statements in this Annual Report on Form 10-K for further details.
Impairment analyses are based on information available at the time the analyses are prepared. Estimates of future cash flows are
subjective and are based, in part, on assumptions regarding future rental revenues, operating expenses, capital expenditures, discount
rates and capitalization rates which could differ materially from actual results.
Collectability Assessments for Revenue Recognition
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, publicly available
information about the financial condition of the tenant, and other factors. Our assessment of the collectability of tenant receivables can
have a significant impact on the rental revenue recognized in our consolidated statements of income.
Recent Accounting Pronouncements
See Note 2 – Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual
Report on Form 10-K for a discussion concerning recent accounting pronouncements.
42
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022
NOI at share represents total revenues less operating expenses including our share of partially owned entities. NOI at share - cash
basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above
market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We consider NOI at share - cash
basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments
as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI at
share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of
our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations
and may not be comparable to similarly titled measures employed by other companies.
Below is a summary of NOI at share and NOI at share - cash basis by segment for the years ended December 31, 2023 and 2022.
(Amounts in thousands)
Total revenues
Operating expenses
NOI - consolidated
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries
Add: NOI from partially owned entities
NOI at share
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net
and other
NOI at share - cash basis
(Amounts in thousands)
Total revenues
Operating expenses
NOI - consolidated
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries
Add: NOI from partially owned entities
NOI at share
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net
and other
NOI at share - cash basis
For the Year Ended December 31, 2023
Total
New York
Other
$
1,811,163
$
1,452,158
$
(905,158)
906,005
(48,553)
285,761
1,143,213
(733,478)
718,680
(15,547)
274,436
977,569
(3,377)
(7,700)
$
1,139,836
$
969,869
$
359,005
(171,680)
187,325
(33,006)
11,325
165,644
4,323
169,967
For the Year Ended December 31, 2022
Total
New York
Other
$
1,799,995
$
1,449,442
$
(873,911)
926,084
(70,029)
305,993
1,162,048
(716,148)
733,294
(45,566)
293,780
981,508
(10,980)
(18,509)
$
1,151,068
$
962,999
$
350,553
(157,763)
192,790
(24,463)
12,213
180,540
7,529
188,069
43
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
(Amounts in thousands)
New York:
Office
Retail
Residential
Alexander's
Total New York
Other:
THE MART(1)
555 California Street(2)
Other investments
Total Other
NOI at share
________________________________________
See notes below.
For the Year Ended December 31,
2023
2022
$
727,000
$
188,561
21,910
40,098
977,569
61,519
82,965
21,160
165,644
718,686
205,753
19,600
37,469
981,508
96,906
65,692
17,942
180,540
$
1,143,213
$
1,162,048
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are
summarized below.
(Amounts in thousands)
New York:
Office
Retail
Residential
Alexander's
Total New York
Other:
THE MART(1)
555 California Street(2)
Other investments
Total Other
NOI at share - cash basis
________________________________________
(1)
(2)
2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
For the Year Ended December 31,
2023
2022
$
726,914
$
180,932
20,588
41,435
969,869
62,579
85,819
21,569
169,967
715,407
188,846
18,214
40,532
962,999
101,912
67,813
18,344
188,069
$
1,139,836
$
1,151,068
44
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2023
and 2022
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31,
2023 and 2022.
(Amounts in thousands)
Net income (loss)
Depreciation and amortization expense
General and administrative expense
Impairment losses, transaction related costs and other
(Income) loss from partially owned entities
Income from real estate fund investments
Interest and other investment income, net
Interest and debt expense
Net gains on disposition of wholly owned and partially owned assets
Income tax expense
NOI from partially owned entities
NOI attributable to noncontrolling interests in consolidated subsidiaries
NOI at share
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other
NOI at share - cash basis
NOI At Share by Region(1)
Region:
New York metropolitan area
Chicago, IL
San Francisco, CA(1)
________________________________________
(1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses.
For the Year Ended December 31,
2023
2022
$
32,888
$
(382,612)
434,273
162,883
50,691
(38,689)
(1,590)
(41,697)
349,223
(71,199)
29,222
285,761
(48,553)
1,143,213
(3,377)
504,502
133,731
31,722
461,351
(3,541)
(19,869)
279,765
(100,625)
21,660
305,993
(70,029)
1,162,048
(10,980)
$
1,139,836
$
1,151,068
For the Year Ended December 31,
2023
2022
88%
6%
6%
100%
86%
8%
6%
100%
45
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022
Revenues
Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an
increase of $11,168,000. Below are the details of the increase by segment:
(Amounts in thousands)
(Decrease) increase due to:
Rental revenues:
Acquisitions, dispositions and other
Development and redevelopment
Trade shows
Same store operations
Fee and other income:
BMS cleaning fees
Management and leasing fees
Other income
Total increase in revenues
________________________________________
See notes below.
Expenses
Total
New York
Other
$
(42,082) $
(30,417) $
3,855
(223)
38,251
(199)
4,264
2,001
5,102
11,367
3,855
—
16,198
(10,364)
5,078
1,974
6,028
13,080
$
11,168
$
2,716
$
(11,665)
—
(223)
22,053
(1)
10,165
(814)
27
(926)
(1,713)
8,452
Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an
increase of $30,918,000. Below are the details of the increase (decrease) by segment:
(Amounts in thousands)
(Decrease) increase due to:
Operating:
Acquisitions, dispositions and other
Development and redevelopment
Non-reimbursable expenses
Trade shows
BMS expenses
Same store operations
Depreciation and amortization:
Acquisitions, dispositions and other
Development and redevelopment
Same store operations
General and administrative
Expense from deferred compensation plan liability
Impairment losses, transaction related costs and other
Total
New York
Other
$
(22,050)
$
(12,709)
$
5,048
2,957
612
4,831
39,849
31,247
(77,474)
287
6,958
(70,229)
29,152
(3)
21,779
18,969
5,048
2,957
—
5,645
16,389
17,330
(77,474)
287
4,971
(72,216)
4,014
—
27,475
(4)
Total increase (decrease) in expenses
$
30,918
$
(23,397)
$
(9,341)
—
—
612
(814)
23,460
(2)
13,917
—
—
1,987
1,987
25,138
21,779
(8,506)
54,315
________________________________________
(1)
(2)
(3) Primarily due to non-cash expense related to the June 2023 equity compensation grant. See Note 12 - Stock-based Compensation in Part II, Item 8 of this Annual
2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
2022 includes prior period accrual adjustments related to changes in the tax-assessed value of THE MART.
Report on Form 10-K for details.
(4) Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022).
46
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Income (Loss) from Partially Owned Entities
Below are the components of income (loss) from partially owned entities.
(Amounts in thousands)
Our share of net income (loss):
Fifth Avenue and Times Square JV:
Equity in net income(1)
Return on preferred equity, net of our share of the expense
Non-cash impairment loss
Partially owned office buildings(2)(3)
Alexander's Inc.(4)
Other equity method investments(3)(5)
Percentage
Ownership as of
December 31, 2023
For the Year Ended December 31,
2023
2022
51.5%
$
35,209 $
37,416
—
72,625
(73,589)
37,075
2,578
Various
32.4%
Various
55,248
37,416
(489,859)
(397,195)
(110,261)
22,973
23,132
$
38,689 $
(461,351)
________________________________________
(1)
2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is
amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue
and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from
non-cash impairment losses recognized in prior periods.
Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses.
(2)
(3)
(4) On May 19, 2023, Alexander’s completed the sale of the Rego Park III land parcel for $71,060. As a result of the sale, we recognized our $16,396 share of the net
gain and received a $711 sales commission from Alexander’s, of which $250 was paid to a third-party broker.
Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.
(5)
Income from Real Estate Fund Investments
Below is a summary of income from the Vornado Capital Partners Real Estate Fund (“the Fund”) and the Crowne Plaza Times
Square Hotel Joint Venture.
(Amounts in thousands)
Previously recorded unrealized loss on exited investments
Net realized loss on exited investments
Net investment (loss) income
Net unrealized loss on held investments
Income from real estate fund investments
Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries
For the Year Ended December 31,
2023
2022
$
247,575 $
(245,714)
(271)
—
1,590
12,789
59,396
(54,255)
6,130
(7,730)
3,541
(1,870)
1,671
Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries
$
14,379 $
Interest and Other Investment Income, net
The following table sets forth the details of interest and other investment income, net.
(Amounts in thousands)
Interest on cash and cash equivalents and restricted cash
Credit losses on investments
Amortization of discount on investments in U.S. Treasury bills
Interest on loans receivable
Other, net
For the Year Ended December 31,
2023
2022
$
$
44,786 $
(8,269)
3,829
1,351
—
41,697 $
7,553
—
7,075
5,006
235
19,869
47
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Interest and Debt Expense
Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year,
an increase of $69,458,000. This was primarily due to (i) $98,348,000 of higher interest expense resulting from higher average interest
rates on our debt, partially offset by (ii) $23,977,000 of higher capitalized interest and debt expense.
Net Gains on Disposition of Wholly Owned and Partially Owned Assets
Net gains on disposition of wholly owned and partially owned assets of $71,199,000 for the year ended December 31, 2023,
primarily consists of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Pier 94 JV primarily due to the step-up of our
retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $14,127,000
from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of
$100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units
and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center
Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City
real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000
from the sale of 484-486 Broadway.
Income Tax Expense
Income tax expense was $29,222,000 for the year ended December 31, 2023, compared to $21,660,000 in the prior year, an
increase of $7,562,000. This was primarily due to higher income tax expense incurred by our taxable REIT subsidiaries.
Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31,
2023, compared to $5,737,000 in the prior year, an increase of $70,230,000. This resulted primarily from the allocation of the
impairment loss recognized on 606 Broadway and an increase in losses allocated to the redeemable noncontrolling interest in the
Farley joint venture and the noncontrolling interests of Vornado Capital Partners Real Estate Fund.
Same Store Net Operating Income At Share
Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting
periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense,
amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash
adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our
properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our
properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be
considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed
by other companies.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California
Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
(Amounts in thousands)
Total
New York
THE MART
555 California
Street
Other
NOI at share for the year ended December 31, 2023
$ 1,143,213
$
977,569
$
61,519
$
82,965
$
21,160
Less NOI at share from:
Dispositions
Development properties
Other non-same store (income) expense, net
(1,270)
(26,748)
(20,399)
(1,556)
(26,748)
761
Same store NOI at share for the year ended December 31, 2023
$ 1,094,796
$
950,026
NOI at share for the year ended December 31, 2022
$ 1,162,048
$
981,508
Less NOI at share from:
Dispositions
Development properties
Other non-same store income, net
Same store NOI at share for the year ended December 31, 2022
(15,205)
(24,088)
(32,838)
$ 1,089,917
Increase (decrease) in same store NOI at share
$
4,879
$
$
(13,158)
(24,088)
(14,896)
929,366
286
—
—
61,805
96,906
(2,047)
—
—
94,859
$
$
$
—
—
—
82,965
65,692
—
—
—
65,692
$
$
$
—
—
(21,160)
—
17,942
—
—
(17,942)
—
—
$
$
$
$
20,660
$
(33,054)
$
17,273
% increase (decrease) in same store NOI at share
0.4 %
2.2 %
(34.8) %
26.3 %
— %
48
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Same Store Net Operating Income At Share - continued
Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, THE
MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
(Amounts in thousands)
Total
New York
THE MART
555
California
Street
Other
NOI at share - cash basis for the year ended December 31, 2023
$ 1,139,836
$
969,869
$
62,579
$
85,819
$
21,569
Less NOI at share - cash basis from:
Dispositions
Development properties
Other non-same store income, net
(1,793)
(23,661)
(29,547)
(2,016)
(23,661)
(7,978)
223
—
—
—
—
—
—
—
(21,569)
Same store NOI at share - cash basis for the year ended December 31, 2023
$ 1,084,835
$
936,214
$
62,802
$
85,819
$
—
NOI at share - cash basis for the year ended December 31, 2022
$ 1,151,068
$
962,999
$
101,912
$
67,813
$
18,344
Less NOI at share - cash basis from:
Dispositions
Development properties
Other non-same store income, net
Same store NOI at share - cash basis for the year ended December 31, 2022
(15,122)
(23,567)
(33,665)
$ 1,078,714
$
(13,256)
(23,567)
(15,321)
910,855
(1,866)
—
—
—
—
100,046
$
—
67,813
$
Increase (decrease) in same store NOI at share - cash basis
$
6,121
$
25,359
$
(37,244)
$
18,006
—
—
(18,344)
—
—
$
$
% increase (decrease) in same store NOI at share - cash basis
0.6 %
2.8 %
(37.2) %
26.6 %
— %
Related Party Transactions
See Note 22 - Related Party Transactions to our consolidated financial statements in this Annual Report on Form 10-K for a
discussion concerning related party transactions.
49
Liquidity and Capital Resources
Our cash requirements include property operating expenses, capital improvements, tenant improvements, debt service, leasing
commissions, dividends to our shareholders, distributions to unitholders of the Operating Partnership, as well as acquisition and
development and redevelopment 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; proceeds from debt financings,
including mortgage loans, senior unsecured borrowings, unsecured term loans and unsecured revolving credit facilities; proceeds from
the issuance of common and preferred equity; and asset sales.
As of December 31, 2023, we have $3.2 billion of liquidity comprised of $1.3 billion of cash and cash equivalents and restricted
cash and $1.9 billion available on our $2.5 billion revolving credit facilities. The ongoing challenges posed by increased interest rates
and the effects of inflation could adversely impact our cash flow from continuing operations but we anticipate that cash flow from
continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business
operations, cash distributions to unitholders of the Operating Partnership, cash dividends to our shareholders, debt amortization and
recurring capital expenditures. Capital requirements for development and redevelopment expenditures and acquisitions may require
funding from borrowings, equity offerings and/or asset sales.
We may from time to time repurchase or retire our outstanding debt securities or repurchase or redeem our equity securities. Such
purchases, if any, will depend on prevailing market conditions, liquidity requirements and other factors. The amounts involved in
connection with these transactions could be material to our consolidated financial statements.
On April 26, 2023, our Board of Trustees authorized the repurchase of up to $200,000,000 of our outstanding common shares
under a newly established share repurchase program. As of December 31, 2023, $170,857,000 remained available and authorized for
repurchases.
Summary of Cash Flows
Cash and cash equivalents and restricted cash was $1,261,584,000 as of December 31, 2023, a $240,427,000 increase from the
balance as of December 31, 2022.
Our cash flow activities are summarized as follows:
(Amounts in thousands)
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Operating Activities
For the Year Ended December 31,
2023
2022
(Decrease) Increase
in Cash Flow
$
$
648,152 $
798,944 $
(150,792)
(128,788)
(278,937)
(906,864)
(801,274)
778,076
522,337
240,427 $
(909,194) $
1,149,621
Net cash provided by operating activities primarily consists of cash inflows from rental revenues and operating distributions from
our unconsolidated partially owned entities less cash outflows for property expenses, general and administrative expenses and interest
expense. For the year ended December 31, 2023, net cash provided by operating activities of $648,152,000 was comprised of
$673,731,000 of cash from operations, including distributions of income from partially owned entities of $172,873,000 and return of
capital from real estate fund investments of $1,861,000, and a net decrease of $25,579,000 in cash due to the timing of cash receipts
and payments related to changes in operating assets and liabilities.
50
Liquidity and Capital Resources - continued
Summary of Cash Flows - continued
Investing Activities
Net cash flow used in investing activities is impacted by the timing and extent of our development, capital improvement,
acquisition and disposition activities during the year.
The following table details the net cash used in investing activities:
(Amounts in thousands)
Development costs and construction in progress
Proceeds from maturities of U.S. Treasury bills
Additions to real estate
Proceeds from sales of real estate
Proceeds from repayment of participation in 150 West 34th Street mortgage loan
Investments in partially owned entities
Acquisitions of real estate and other
Proceeds from sale of condominium units at 220 Central Park South
Distributions of capital from partially owned entities
Deconsolidation of cash and restricted cash held by a previously consolidated entity
Purchase of U.S. Treasury bills
Net cash used in investing activities
Financing Activities
For the Year Ended December 31,
2023
2022
Increase (Decrease)
in Cash Flow
$
(552,701) $
(737,999) $
468,598
(211,899)
123,519
105,000
(57,297)
(33,145)
24,484
18,869
(14,216)
—
597,499
(159,796)
373,264
—
(33,172)
(3,000)
88,019
34,417
—
(1,066,096)
$
(128,788) $
(906,864) $
185,298
(128,901)
(52,103)
(249,745)
105,000
(24,125)
(30,145)
(63,535)
(15,548)
(14,216)
1,066,096
778,076
Net cash flow used in financing activities is impacted by the timing and extent of issuances of debt and equity securities,
distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other repayments
associated with our outstanding debt.
The following table details the net cash used in financing activities:
(Amounts in thousands)
Repayments of borrowings
For the Year Ended December 31,
2023
2022
Increase (Decrease)
in Cash Flow
$
(148,000) $
(1,251,373) $
1,103,373
Contributions from noncontrolling interests in consolidated subsidiaries
Dividends paid on common shares/Distributions to Vornado
Dividends paid on preferred shares/Distributions to preferred unitholders
Distributions to redeemable security holders and noncontrolling interests in consolidated
subsidiaries
Repurchase of common shares/Class A units owned by Vornado
Deferred financing costs
Proceeds received from exercise of Vornado stock options and other
Repurchase of shares/Class A units related to stock compensation agreements and related tax
withholdings and other
Proceeds from borrowings
Net cash used in financing activities
132,701
(129,066)
(62,116)
(38,970)
(29,183)
(4,424)
146
(25)
5,609
(406,562)
(62,116)
(84,699)
—
(32,706)
885
(85)
$
—
(278,937) $
1,029,773
(801,274) $
127,092
277,496
—
45,729
(29,183)
28,282
(739)
60
(1,029,773)
522,337
51
Liquidity and Capital Resources - continued
Dividends
We anticipate that our common share dividend policy for 2024 will be to pay one common share dividend in the fourth quarter. If
Vornado’s Board of Trustees were to declare a dividend consistent with our aggregate 2023 common dividend of $0.675, the
Operating Partnership would be required to distribute (i) approximately $129,000,000 of cash to Vornado for distribution to its
common shareholders and (ii) $11,475,000 of cash to third party Class A unitholders. Additionally, during 2024, Vornado expects to
pay approximately $62,000,000 of cash dividends on outstanding preferred shares.
Debt
We have an effective shelf registration for the offering of our equity and debt securities that is not limited in amount due to our
status as a “well-known seasoned issuer.” We have issued senior unsecured notes from a shelf registration statement that contain
financial covenants that restrict our ability to incur debt, and that require us to maintain a level of unencumbered assets based on the
level of our secured debt. Our unsecured revolving credit facilities and unsecured term loan contain financial covenants that require us
to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for increased interest rates in
the event of a decline in the credit rating assigned to our senior unsecured notes. Our unsecured revolving credit facilities and
unsecured term loan also contain customary conditions precedent to borrowing, including representations and warranties, and contain
customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or
principal. As of December 31, 2023, we are in compliance with all of the financial covenants required by our senior unsecured notes,
our unsecured revolving credit facilities and our unsecured term loan.
A summary of our consolidated debt as of December 31, 2023 is presented below.
(Amounts in thousands)
Consolidated debt:
Fixed rate(2)
Variable rate(3)
Total
Deferred financing costs, net and other
Total, net
As of December 31, 2023
Weighted
Average
Interest Rate(1)
3.50%
6.26%
3.94%
Balance
6,993,200
1,311,415
8,304,615
(53,163)
8,251,452
$
$
_______________________________________
(1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for
(2)
(3)
hedging instruments, as applicable.
Includes variable rate debt with interest rates fixed by interest rate swap arrangements and the $950,000 1290 Avenue of the Americas mortgage loan which is
subject to a 1.00% SOFR interest rate cap arrangement.
Includes variable rate mortgages subject to interest rate cap arrangements, except for the 1290 Avenue of the Americas mortgage loan discussed above. As of
December 31, 2023, $1,034,119 of our variable rate debt is subject to interest rate cap arrangements. The interest rate cap arrangements have a weighted average
strike rate of 4.50% and a weighted average remaining term of 10 months.
During 2024 and 2025, $169,815,000 and $1,329,800,000, respectively, of our outstanding consolidated debt matures, assuming
the exercise of as-of-right extension options. We may refinance this maturing debt as it comes due or choose to repay it using cash and
cash equivalents or our unsecured revolving credit facilities. We may also refinance or prepay other outstanding debt depending on
prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions
could be material to our consolidated financial statements.
Details of 2023 financing activities are provided in the “Overview” of Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
The contractual principal and interest repayments schedule of our consolidated debt as of December 31, 2023 is as follows:
(Amounts in thousands)
Total
Less than 1 Year
1 – 3 Years
3 – 5 Years
Thereafter
Notes and mortgages payable
Senior unsecured notes due 2025
Senior unsecured notes due 2026
Senior unsecured notes due 2031
Unsecured term loan
Revolving credit facilities
Total contractual principal(1) and interest(2)
repayments
$
6,694,477 $
466,406
420,831
438,324
942,964
663,887
432,580 $
15,750
8,600
11,900
39,400
22,601
1,864,750 $
450,656
412,231
23,800
71,244
45,141
4,021,303 $
—
—
23,800
832,320
596,145
375,844
—
—
378,824
—
—
$
9,626,889 $
530,831 $
2,867,822 $
5,473,568 $
754,668
________________________________________
(1) Based on the contractual maturity of our loans, including as-of-right extension options, as of December 31, 2023.
(2) Estimated interest for variable rate debt based on the Term SOFR curve available as of December 31, 2023.
52
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 $250,000,000 of capital expenditures for our consolidated properties. We plan to fund
these capital expenditures from operating cash flow, existing liquidity, and/or borrowings. Our partially owned non-consolidated
subsidiaries typically fund their capital expenditures without any additional equity contribution from us.
Development and Redevelopment Projects and Opportunities
Development and redevelopment expenditures consist of all hard and soft costs associated with the development and
redevelopment of a property. We plan to fund these development and redevelopment expenditures from operating cash flow, existing
liquidity, and/or borrowings. See detailed discussion below for our current development and redevelopment projects.
PENN District
PENN 2
We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue
between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $638,959,000 has been
expended as of December 31, 2023.
Hotel Pennsylvania Site
Demolition of the existing building was completed in the third quarter of 2023.
We are also making districtwide improvements within the PENN District. The development cost of these improvements is
estimated to be $100,000,000, of which $47,424,000 has been expended as of December 31, 2023.
Sunset Pier 94 Studios
On August 28, 2023, we, together with HPP/BX, formed a joint venture to develop Sunset Pier 94 Studios, a 266,000 square foot
purpose-built studio campus in Manhattan. We own a 49.9% equity interest in the joint venture. The development cost of the project is
estimated to be $350,000,000, which will be funded with $183,200,000 of construction financing and $166,800,000 of equity
contributions. Our share of equity contributions will be funded by (i) our $40,000,000 Pier 94 leasehold interest contribution and (ii)
$34,000,000 of cash contributions, which are net of an estimated $9,000,000 for our share of development fees and reimbursement for
overhead costs incurred by us. HPP/BX will fund 100% of cash contributions until such time that its capital account is equal to
Vornado’s, after which equity will be funded in accordance with each partner’s respective ownership interest. We have funded
$7,994,000 of cash contributions as of December 31, 2023. For further information about this transaction, see page 38, Part II, Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview, in this Annual Report on Form
10-K.
350 Park Avenue
On January 24, 2023, we and the Rudin family (“Rudin”) completed agreements with Citadel Enterprise Americas LLC
(“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO (“KG”), for a series of transactions relating to 350
Park Avenue and 40 East 52nd Street. In connection therewith, we entered into a joint venture with Rudin (the “Vornado/Rudin JV”)
that purchased 39 East 51st Street for $40,000,000, funded on a 50/50 basis by Vornado and Rudin. 39 East 51st Street will be
combined with 350 Park Avenue and 40 East 52nd Street to create a premier development site (the “Site”). From October 2024 to June
2030, KG will have the option to either (i) acquire a 60% interest in a joint venture with the Vornado/Rudin JV (with Vornado having
an effective 36% interest in the entity) to build a new 1,700,000 square foot office tower, valuing the Site at $1.2 billion or (ii)
purchase the Site for $1.4 billion ($1.085 billion to Vornado). From October 2024 to September 2030, the Vornado/Rudin JV will
have the option to put the Site to KG for $1.2 billion ($900,000,000 to Vornado). For further information about this transaction and the
options available to each of the parties, see page 37, Part II, Item 7, Management’s Discussion and Analysis of Financial Condition
and Results of Operations - Overview, in this Annual Report on Form 10-K.
We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in
particular, the PENN District.
There can be no assurance that the above projects will be completed, completed on schedule or within budget.
53
Liquidity and Capital Resources - continued
Other Obligations
We have contractual cash obligations for certain properties that are subject to long-term ground and building leases. During 2024,
$71,015,000 of lease payments are due, including fair market rent resets accounted for as variable rent and accruals for ground rent
resets yet to be determined (see below). For 2025 and thereafter, we have $2,419,492,000 of future lease payments. We believe that
our operating cash flow will be adequate to fund these lease payments.
Our future lease payments disclosed above include payments for our PENN 1 ground lease based on an amount estimated in
January 2022, when we exercised the second of three 25-year renewal options. The first renewal period commenced June 2023 and,
together with the second option exercise, extends the lease term through June 2073. The ground lease is subject to fair market value
resets at each 25-year renewal period. The rent reset process for the June 2023 renewal period is currently ongoing and the timing is
uncertain. The final fair market value determination may be materially higher or lower than our January 2022 estimate.
Insurance
For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which
$275,000,000, increased from $250,000,000 effective June 20, 2023, includes communicable disease coverage, and we maintain all
risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and
earthquake, excluding communicable disease coverage. Our California properties have earthquake insurance with coverage of
$350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property.
We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2
billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear,
biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as
amended to date and which has been extended through December 2027.
Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a
portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for
coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third
party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a
deductible of $2,112,753 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining
portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.
Certain condominiums in which we own an interest (including the Farley Condominiums) maintain insurance policies with
different per occurrence and aggregate limits than our policies described above.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and 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 debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit
agreements 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. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance or
refinance our properties and expand our portfolio.
Other Commitments and Contingencies
We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation
with legal counsel, the outcome of such matters is not currently expected to have a material adverse effect on our financial position,
results of operations or cash flows.
Each of our properties has been subjected to varying degrees of environmental assessment at various times. The environmental
assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of
new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in
cleanup requirements would not result in significant costs to us.
In July 2018, we leased 78,000 square feet at 345 Montgomery Street in San Francisco, CA, to a subsidiary of Regus PLC, for an
initial term of 15 years. The obligations under the lease were guaranteed by Regus PLC in an amount of up to $90,000,000. The tenant
purported to terminate the lease prior to space delivery. We commenced a suit on October 23, 2019 seeking to enforce the lease and
the guaranty. On May 11, 2021, the court issued a final statement of decision in our favor and on January 31, 2023, the Court of
Appeal affirmed the lower court's decision. On October 9, 2020, the successor to Regus PLC filed for bankruptcy in Luxembourg. In
April 2023, we entered into a settlement with affiliates of the successor to Regus PLC, pursuant to which we agreed to discontinue all
legal proceedings against the Regus PLC successor and its affiliates in exchange for a payment to us of $21,350,000, which is included
in “rental revenues” on our consolidated statements of income for the year ended December 31, 2023, of which $6,405,000 is
attributable to noncontrolling interest.
54
Liquidity and Capital Resources - continued
Other Commitments and Contingencies - continued
We may, from time to time, enter into guarantees including, but not limited to, payment guarantees to lenders of unconsolidated
joint ventures for tax purposes, completion guarantees for development and redevelopment projects, and guarantees to fund leasing
costs. These agreements terminate either upon the satisfaction of specified obligations or repayment of the underlying loans. As of
December 31, 2023, the aggregate dollar amount of these guarantees is approximately $1,230,000,000, primarily comprised of
payment guarantees for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street, and 435 Seventh Avenue and the
completion guarantee provided to the lender of Pier 94 JV. Other than these loans, our mortgage loans are non-recourse to us.
As of December 31, 2023, $30,233,000 of letters of credit were outstanding under one of our unsecured revolving credit
facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage
and maximum debt to market capitalization ratios, and provide for increased interest rates in the event of a decline in the credit rating
assigned to our senior unsecured notes. Our unsecured revolving credit facilities also contain customary conditions precedent to
borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated
repayment, including such items as failure to pay interest or principal.
Our 95% consolidated joint venture (5% is owned by Related Companies ("Related")) developed and owns the Farley Building. In
connection with the development of the property, the joint venture admitted a historic Tax Credit Investor partner. Under the terms of
the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions.
Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a
refund or reduction of the Tax Credit Investor’s capital contributions. As of December 31, 2023, the Tax Credit Investor has made
$205,068,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax
Credit Investor.
As of December 31, 2023, we have construction commitments aggregating approximately $91,372,000.
55
Funds From Operations
Vornado Realty Trust
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, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate held by the entity, 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 non-GAAP financial measures 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. The Company also uses FFO attributable to
common shareholders plus assumed conversions, as adjusted for certain items that impact the comparability of period-to-period FFO,
as one of several criteria to determine performance-based compensation for senior management. 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. The calculations of both the numerator and denominator used in the
computation of income per share are disclosed in Note 13 – Income (Loss) Per Share/Income (Loss) Per Class A Unit, in our
consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. Details of certain items that impact FFO are
discussed in the financial results summary of our “Overview.”
Below is a reconciliation of net income (loss) attributable to common shareholders to FFO attributable to common shareholders
plus assumed conversions for the years ended December 31, 2023 and 2022.
(Amounts in thousands, except per share amounts)
Reconciliation of net income (loss) attributable to common shareholders to FFO attributable to common
shareholders plus assumed conversions:
Net income (loss) attributable to common shareholders
Per diluted share
FFO adjustments:
Depreciation and amortization of real property
Real estate impairment losses
Net gains on sale of real estate
Proportionate share of adjustments to equity in net income (loss) of partially owned entities to arrive at FFO:
Depreciation and amortization of real property
Net gain on sale of real estate
Real estate impairment losses
Noncontrolling interests' share of above adjustments
FFO adjustments, net
FFO attributable to common shareholders
Convertible preferred share dividends
FFO attributable to common shareholders plus assumed conversions
Per diluted share
Reconciliation of weighted average shares outstanding:
Weighted average common shares outstanding
Effect of dilutive securities:
Convertible securities
Share-based payment awards
Denominator for FFO per diluted share
$
$
$
$
$
$
$
For the Year Ended December 31,
2023
2022
43,378
0.23
$
$
(408,615)
(2.13)
385,608
$
22,831
(1)
(53,305)
$
$
$
$
108,088
(16,545)
50,458
(2)
497,135
(38,363)
458,772
502,150
1,642
503,792
2.59
191,005
2,468
851
194,324
456,920
19,098
(58,751)
130,647
(169)
576,390
1,124,135
(77,912)
1,046,223
637,608
1,320
638,928
3.30
191,775
1,545
250
193,570
_______________________________________
(1) Net of $22,176 attributable to noncontrolling interests.
(2)
Includes a $21,114 impairment loss on advances made for our interest in a joint venture, resulting from a decline in the value of the underlying building.
56
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to fluctuations in market interest rates. Market interest rates are sensitive to many factors that are beyond our
control. Our exposure to a change in interest rates on our consolidated and non-consolidated debt (all of which arises out of non-
trading activity) is as follows:
(Amounts in thousands, except per share and unit amounts)
Consolidated debt:
Fixed rate(2)
Variable rate(3)
Pro rata share of debt of non-consolidated entities:
Fixed rate(2)
Variable rate(4)
Noncontrolling interests’ share of consolidated subsidiaries
Total change in annual net income attributable to the Operating Partnership
Noncontrolling interests’ share of the Operating Partnership
Total change in annual net income attributable to Vornado
Total change in annual net income attributable to the
Operating Partnership per diluted Class A unit
Total change in annual net income attributable to Vornado
per diluted common share
2023
December 31,
Balance
Weighted
Average
Interest Rate(1)
Effect of 1%
Change In
Base Rates
$
$
$
$
6,993,200
1,311,415
8,304,615
1,201,092
1,453,609
2,654,701
3.50%
6.26%
3.94%
3.87%
6.62%
5.38%
$
$
$
$
—
13,114
13,114
—
14,536
14,536
(3,971)
23,679
(1,939)
21,740
0.11
0.11
_______________________________________
(1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for
(2)
(3)
(4)
hedging instruments, as applicable.
Includes variable rate debt with interest rates fixed by interest rate swap arrangements and the $950,000 1290 Avenue of the Americas mortgage loan which is
subject to a 1.00% SOFR interest rate cap arrangement.
Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $1,034,119, of which $397,059 is attributable to noncontrolling
interests. The interest rate cap arrangements have a weighted average strike rate of 4.50% and a weighted average remaining term of 10 months.
Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $667,946 at our pro rata share. The interest rate cap
arrangements have a weighted average strike rate of 4.59% and a weighted average remaining term of 5 months.
Fair Value of Debt
The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the
current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt. As of
December 31, 2023, the estimated fair value of our consolidated debt was $8,013,000,000.
57
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - continued
Derivatives and Hedging
We utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings,
including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. The
following table summarizes our consolidated hedging instruments, all of which hedge variable rate debt, as of December 31, 2023.
(Amounts in thousands)
Debt Balance
Variable Rate
Spread
Notional
Amount
All-In
Swapped Rate
Expiration
Date
Interest rate swaps:
555 California Street mortgage loan
Effective beginning 5/24
770 Broadway mortgage loan
PENN 11 mortgage loan
Effective beginning 3/24(2)
Unsecured revolving credit facility
Unsecured term loan
Through 07/25
07/25 through 10/26
10/26 through 08/27
100 West 33rd Street mortgage loan
888 Seventh Avenue mortgage loan
4 Union Square South mortgage loan
Interest rate caps:
1290 Avenue of the Americas mortgage loan(3)
One Park Avenue mortgage loan
Various mortgage loans
____________________
$
1,200,000
S+205
$
700,000
500,000
575,000
800,000
S+225
S+206
S+114
S+129
480,000
259,800
120,000
S+165
S+180
S+150
(1)
(1)
840,000
840,000
700,000
500,000
250,000
575,000
700,000
550,000
50,000
480,000
200,000
98,200
2.29%
6.03%
4.98%
2.22%
6.34%
3.87%
4.52%
4.35%
4.03%
5.06%
4.76%
3.74%
Index Strike
Rate
05/24
05/26
07/27
03/24
10/25
08/27
07/25
10/26
08/27
06/27
09/27
01/25
950,000
525,000
510,000
S+162
S+122
Various
950,000
525,000
510,000
1.00%
3.89%
Various
11/25
03/25
Various
(1) Represents our 70.0% share of the $1.2 billion mortgage loan.
(2)
In January 2024, we entered into a forward swap arrangement for the remaining $250,000 balance of the $500,000 PENN 11 mortgage loan which is effective
upon the March 2024 expiration of the current in-place swap. Together with the forward swap above, the loan will bear interest at an all-in swapped rate of 6.28%
effective March 2024 through October 2025.
In connection with the arrangement, we made a $63,100 up-front payment, of which $18,930 was attributable to noncontrolling interests. See Note 9 - Debt in
Part II, Item 8 of this Annual Report on Form 10-K for details.
(3)
The following table summarizes our hedging instruments of our unconsolidated subsidiaries (shown at our pro rata ownership
interest) as of December 31, 2023.
(Amounts in thousands and at share)
Interest rate swaps:
Debt Balance
Variable Rate
Spread
Notional
Amount
All-In
Swapped Rate
Expiration
Date
731 Lexington Avenue retail condominium (32.4% interest)
$
50-70 West 93rd Street (49.9% interest)
97,200
41,667
S+151
S+164
$
97,200
41,168
1.76%
3.14%
Interest rate caps:
640 Fifth Avenue (52.0% interest)
731 Lexington Avenue office condominium (32.4% interest)
61 Ninth Avenue (45.1% interest)(1)
512 West 22nd Street (55.0% interest)
Rego Park II (32.4% interest)
Fashion Centre/Washington Tower (7.5% interest)
____________________
Index Strike
Rate
259,925
162,000
75,543
70,729
65,624
34,125
S+111
Prime+0
S+146
S+200
S+145
S+305
259,925
162,000
75,543
70,729
65,624
34,125
4.00%
6.00%
4.39%
4.50%
4.15%
3.89%
05/25
06/24
05/24
06/24
02/24
06/25
11/24
05/24
(1)
In February 2024, we entered into a 4.39% interest rate cap arrangement expiring January 2026 and effective upon expiration of the currently in-place cap.
58
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Vornado Realty Trust
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
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
Vornado Realty L.P.
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
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
Vornado Realty Trust and Vornado Realty L.P.
Notes to Consolidated Financial Statements
Page
Number
60
62
63
64
65
68
71
73
74
75
76
79
82
59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of Vornado Realty Trust
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vornado Realty Trust 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 schedule 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 the 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 Notes 2, 5, 15, and 16 to the financial statements
Critical Audit Matter Description
The Company’s consolidated and unconsolidated real estate properties are individually reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. For consolidated properties, an impairment exists
when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an
undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair
value. For unconsolidated partially owned entities, an impairment loss is recorded when there is a decline in the estimated fair value of
an investment below its carrying value, and the Company concludes that the decline is other-than-temporary during its intended
holding period. Fair value is determined based on estimated cash flow projections that utilize discount and capitalization rates and
available market information.
Preparing the Company’s estimated cash flow projections requires management to make significant estimates and assumptions related
to future market rental rates, capitalization rates, and discount rates.
We identified the impairment of certain real estate properties as a critical audit matter because of the significant estimates and
assumptions related to future market rental rates, capitalization rates and discount rates. Performing audit procedures to evaluate the
reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort,
including the need to involve our fair value specialists.
60
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to impairment included the following, among others:
• We tested the effectiveness of controls over management’s evaluation of recoverability of its real estate properties, including
those over future market rental rates and capitalization rates used in the assessment.
• We tested the effectiveness of controls over management’s evaluation of impairment of its real estate properties and
investments in partially owned entities and measurement of that impairment based on discounted cash flows, including those
over the future market rental rates, capitalization rates, and discount rates used in the assessment
• We evaluated the reasonableness of future market rental rates, capitalization rates, and discount rates used by management
with independent market data, focusing on geographical location and property type. In addition, we developed ranges of
independent estimates of future market rental rates, capitalization rates, and discount rates and compared those to the amounts
used by management.
• We involved our fair value specialists in providing comparable market transaction details to further evaluate management’s
selected future market rental rates, capitalization rates, and discount rates, as applicable.
• We evaluated the reasonableness of management’s projected future cash flow analyses by comparing management’s
projections to the Company’s historical results.
• We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 12, 2024
We have served as the Company’s auditor since 1976.
61
VORNADO REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except unit, share and per share amounts)
ASSETS
Real estate, at cost:
Land
Buildings and improvements
Development costs and construction in progress
Leasehold improvements and equipment
Total
Less accumulated depreciation and amortization
Real estate, net
Right-of-use assets
Cash and cash equivalents
Restricted cash
Investments in U.S. Treasury bills
Tenant and other receivables
Investments in partially owned entities
220 Central Park South condominium units ready for sale
Receivable arising from the straight-lining of rents
Deferred leasing costs, net of accumulated amortization of $249,347 and $237,395
Identified intangible assets, net of accumulated amortization of $98,589 and $98,139
Other assets
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgages payable, net
Senior unsecured notes, net
Unsecured term loan, net
Unsecured revolving credit facilities
Lease liabilities
Accounts payable and accrued expenses
Deferred revenue
Deferred compensation plan
Other liabilities
Total liabilities
Commitments and contingencies
Redeemable noncontrolling interests:
Class A units - 17,000,030 and 14,416,891 units outstanding
Series D cumulative redeemable preferred units - 141,400 units outstanding
Total redeemable noncontrolling partnership units
Redeemable noncontrolling interest in a consolidated subsidiary
Total redeemable noncontrolling interests
Shareholders' equity:
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and
outstanding 48,792,902 shares
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and
outstanding 190,390,703 and 191,866,880 shares
Additional capital
Earnings less than distributions
Accumulated other comprehensive income
Total shareholders' equity
Noncontrolling interests in consolidated subsidiaries
Total equity
See notes to the consolidated financial statements.
62
As of December 31,
2023
2022
2,436,221 $
9,952,954
1,281,076
130,953
13,801,204
(3,752,827)
10,048,377
680,044
997,002
264,582
—
69,543
2,610,558
35,941
701,666
355,010
127,082
297,860
16,187,665 $
5,688,020 $
1,193,873
794,559
575,000
732,859
411,044
32,199
105,245
311,132
9,843,931
480,251
3,535
483,786
154,662
638,448
2,451,828
9,804,204
933,334
125,389
13,314,755
(3,470,991)
9,843,764
684,380
889,689
131,468
471,962
81,170
2,665,073
43,599
694,972
373,555
139,638
474,105
16,493,375
5,829,018
1,191,832
793,193
575,000
735,969
450,881
39,882
96,322
268,166
9,980,263
345,157
3,535
348,692
88,040
436,732
1,182,459
1,182,459
7,594
8,263,291
(4,009,395)
65,115
5,509,064
196,222
5,705,286
16,187,665 $
7,654
8,369,228
(3,894,580)
174,967
5,839,728
236,652
6,076,380
16,493,375
$
$
$
$
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
REVENUES:
Rental revenues
Fee and other income
Total revenues
EXPENSES:
Operating
Depreciation and amortization
General and administrative
(Expense) benefit from deferred compensation plan liability
Impairment losses, transaction related costs and other
For the Year Ended December 31,
2023
2022
2021
$
1,607,486 $
1,607,685 $
203,677
1,811,163
(905,158)
(434,273)
(162,883)
(12,162)
(50,691)
192,310
1,799,995
(873,911)
(504,502)
(133,731)
9,617
(31,722)
1,424,531
164,679
1,589,210
(797,315)
(412,347)
(134,545)
(9,847)
(13,815)
Total expenses
(1,565,167)
(1,534,249)
(1,367,869)
Income (loss) from partially owned entities
Income from real estate fund investments
Interest and other investment income, net
Income (loss) from deferred compensation plan assets
Interest and debt expense
Net gains on disposition of wholly owned and partially owned assets
Income (loss) before income taxes
Income tax (expense) benefit
Net income (loss)
Less net loss (income) attributable to noncontrolling interests in:
Consolidated subsidiaries
Operating Partnership
Net income (loss) attributable to Vornado
Preferred share dividends
Series K preferred share issuance costs
NET INCOME (LOSS) attributable to common shareholders
INCOME (LOSS) PER COMMON SHARE - BASIC:
Net income (loss) per common share
Weighted average shares outstanding
INCOME (LOSS) PER COMMON SHARE - DILUTED:
Net income (loss) per common share
Weighted average shares outstanding
38,689
1,590
41,697
12,162
(349,223)
71,199
62,110
(29,222)
32,888
75,967
(3,361)
105,494
(62,116)
—
(461,351)
3,541
19,869
(9,617)
(279,765)
100,625
(360,952)
(21,660)
(382,612)
5,737
30,376
(346,499)
(62,116)
—
43,378 $
(408,615) $
130,517
11,066
4,612
9,847
(231,096)
50,770
197,057
10,496
207,553
(24,014)
(7,540)
175,999
(65,880)
(9,033)
101,086
0.23 $
(2.13) $
191,005
191,775
0.53
191,551
0.23 $
(2.13) $
191,856
191,775
0.53
192,122
$
$
$
See notes to consolidated financial statements.
63
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Net income (loss)
Other comprehensive (loss) income:
For the Year Ended December 31,
2023
2022
2021
$
32,888 $
(382,612) $
207,553
Change in fair value of interest rate swaps and other
Other comprehensive (loss) income of nonconsolidated subsidiaries
Comprehensive (loss) income
Less comprehensive loss (income) attributable to noncontrolling interests
(112,051)
(8,286)
(87,449)
85,665
190,493
18,874
(173,245)
19,247
Comprehensive (loss) income attributable to Vornado
$
(1,784) $
(153,998) $
51,338
10,275
269,166
(35,602)
233,564
See notes to consolidated financial statements.
64
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands, except per share amount)
Preferred Shares
Common Shares
Shares
Amount
Shares
Amount
Additional
Capital
Earnings
Less Than
Distributions
Accumulated
Other
Comprehensive
Income
Non-
controlling
Interests in
Consolidated
Subsidiaries
Total
Equity
48,793
$ 1,182,459
191,867
$
7,654
$ 8,369,228
$ (3,894,580) $
174,967
$
236,652
$ 6,076,380
Balance as of December 31, 2022
Net income attributable to
Vornado
Net loss attributable to
nonredeemable noncontrolling
interests in consolidated
subsidiaries
Dividends on common shares
($0.675 per share)
Dividends on preferred shares (see
Note 11 for dividends per share
amounts)
Common shares issued:
Upon redemption of Class A
units, at redemption value
Under dividend reinvestment
plan
Contributions
Distributions
Deferred compensation shares and
options
Repurchase of common shares
Other comprehensive loss of
nonconsolidated subsidiaries
Change in fair value of interest
rate swaps and other
Unearned 2020 Out-Performance
Plan and 2019 Performance AO
LTIP awards
Redeemable Class A unit
measurement adjustment
Noncontrolling interests' share of
other comprehensive loss
Deconsolidation of partially
owned entity
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
539
11
—
—
(2)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,024)
(81)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
21
—
—
—
—
—
105,494
—
—
—
8,468
146
—
—
321
—
—
—
20,668
(135,540)
—
—
—
(129,066)
(62,116)
—
—
—
—
(25)
(29,102)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(8,286)
(112,051)
—
(2,574)
—
105,494
(36,582)
(36,582)
—
(129,066)
—
(62,116)
—
—
24,033
8,489
146
24,033
(21,526)
(21,526)
—
—
—
—
—
—
296
(29,183)
(8,286)
(112,051)
20,668
(138,114)
13,059
(3,719)
9,340
—
(2,636)
(2,636)
Balance as of December 31, 2023
48,793
$ 1,182,459
190,391
$
7,594
$ 8,263,291
$ (4,009,395) $
65,115
$
196,222
$ 5,705,286
See notes to consolidated financial statements.
65
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED
(Amounts in thousands, except per share amounts)
Preferred Shares
Common Shares
Shares
Amount
Shares
Amount
Additional
Capital
Earnings
Less Than
Distributions
Accumulated
Other
Comprehensive
(Loss) Income
Non-
controlling
Interests in
Consolidated
Subsidiaries
Total
Equity
Balance as of December 31, 2021
48,793
$ 1,182,459
191,724
$
7,648
$ 8,143,093
$ (3,079,320) $
(17,534) $
278,892
$ 6,515,238
Net loss attributable to Vornado
Net income attributable to
nonredeemable noncontrolling
interests in consolidated
subsidiaries
Dividends on common shares
($2.12 per share)
Dividends on preferred shares (see
Note 11 for dividends per share
amounts)
Common shares issued:
Upon redemption of Class A
units, at redemption value
Under employees' share option
plan
Under dividend reinvestment
plan
Contributions
Distributions
Deferred compensation shares and
options
Other comprehensive income of
nonconsolidated subsidiaries
Change in fair value of interest
rate swaps and other
Redeemable Class A unit
measurement adjustment
Noncontrolling interests' share of
other comprehensive income
Other
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
117
—
28
—
—
(2)
—
—
—
—
—
—
—
—
—
5
—
1
—
—
—
—
—
—
—
—
—
(346,499)
—
—
—
3,519
7
877
—
—
588
—
—
221,145
—
(1)
—
(406,562)
(62,116)
—
—
—
—
—
(85)
—
—
—
—
2
—
—
—
—
—
—
—
—
—
—
18,874
190,494
—
—
(346,499)
3,931
3,931
—
(406,562)
—
(62,116)
—
—
—
5,609
3,524
7
878
5,609
(54,388)
(54,388)
—
—
—
—
503
18,874
190,494
221,145
(16,866)
2,616
(14,250)
(1)
(8)
(8)
Balance as of December 31, 2022
48,793
$ 1,182,459
191,867
$
7,654
$ 8,369,228
$ (3,894,580) $
174,967
$
236,652
$ 6,076,380
See notes to consolidated financial statements.
66
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED
(Amounts in thousands, except per share amount)
Preferred Shares
Common Shares
Shares
Amount
Shares
Amount
Additional
Capital
Earnings
Less Than
Distributions
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests in
Consolidated
Subsidiaries
Total
Equity
Balance as of December 31, 2020
48,793
$ 1,182,339
191,355
$
7,633
$ 8,192,507
$ (2,774,182) $
(75,099) $
414,957
$ 6,948,155
Net income attributable to
Vornado
Net income attributable to
nonredeemable noncontrolling
interests in consolidated
subsidiaries
Dividends on common shares
($2.12 per share)
Dividends on preferred shares (see
Note 11 for dividends per share
amounts)
Series O cumulative redeemable
preferred shares issuance
Common shares issued:
Upon redemption of Class
A units, at redemption value
Under employees' share option
plan
Under dividend reinvestment
plan
Contributions
Distributions
Conversion of Series A preferred
shares to common shares
Deferred compensation shares and
options
Other comprehensive income of
nonconsolidated subsidiaries
Change in fair value of interest rate
swaps
Unearned 2018 Out-Performance
Plan awards acceleration
Redeemable Class A unit
measurement adjustment
Series K cumulative redeemable
preferred shares called for
redemption
Noncontrolling interests' share of
other comprehensive income
Other
—
—
—
—
—
—
—
—
—
12,000
291,153
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(13)
—
—
—
—
—
(12,000)
(290,967)
—
—
—
(53)
—
—
—
—
350
1
21
—
—
1
(4)
—
—
—
—
—
—
—
—
—
—
—
—
14
—
1
—
—
—
—
—
—
—
—
—
—
—
—
175,999
—
—
—
—
14,562
22
876
—
—
13
906
—
—
10,283
(76,073)
—
—
(3)
—
(406,109)
(65,880)
—
—
—
—
—
—
—
(114)
—
—
—
—
(9,033)
—
(1)
—
—
—
—
—
—
—
—
—
—
—
—
10,275
51,337
—
—
—
(4,048)
1
—
175,999
20,826
20,826
—
(406,109)
—
—
—
—
—
4,052
(65,880)
291,153
14,576
22
877
4,052
(160,975)
(160,975)
—
—
—
—
—
—
—
—
32
—
792
10,275
51,337
10,283
(76,073)
(300,000)
(4,048)
(24)
Balance as of December 31, 2021
48,793
$ 1,182,459
191,724
$
7,648
$ 8,143,093
$ (3,079,320) $
(17,534) $
278,892
$ 6,515,238
See notes to consolidated financial statements.
67
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
2023
2022
2021
$
32,888 $
(382,612) $
207,553
(Amounts in thousands)
Cash Flows from Operating Activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (including amortization of deferred financing costs)
Distributions of income from partially owned entities
Net gains on disposition of wholly owned and partially owned assets
Real estate impairment losses
Stock-based compensation expense
Equity in net (income) loss of partially owned entities
Change in deferred tax liability
Amortization of interest rate cap premiums
Straight-lining of rents
Credit losses on investments
Amortization of below-market leases, net
Net realized and unrealized (gain) loss on real estate fund investments
Return of capital from real estate fund investments
Write-off of lease receivables deemed uncollectible
Defeasance cost in connection with refinancing of mortgage payable
Other non-cash adjustments
Changes in operating assets and liabilities:
Real estate fund investments
Tenant and other receivables
Prepaid assets
Other assets
Lease liabilities
Accounts payable and accrued expenses
Other liabilities
Net cash provided by operating activities
Cash Flows from Investing Activities:
Development costs and construction in progress
Proceeds from maturities of U.S. Treasury bills
Additions to real estate
Proceeds from sales of real estate
Proceeds from repayment of participation in 150 West 34th Street mortgage loan
Investments in partially owned entities
Acquisitions of real estate and other
Proceeds from sale of condominium units at 220 Central Park South
Distributions of capital from partially owned entities
Deconsolidation of cash and restricted cash held by a previously consolidated entity
Purchase of U.S. Treasury bills
Acquisition of additional 45.0% ownership interest in One Park Avenue (inclusive of $5,806 of
prorations and net working capital and net of $39,370 of cash and restricted cash balances
consolidated upon acquisition)
Proceeds from repayments of loans receivable
Net cash used in investing activities
See notes to consolidated financial statements.
68
457,574
172,873
(71,199)
45,007
43,201
(38,689)
17,020
10,989
(8,808)
8,269
(5,268)
(1,861)
1,861
1,008
—
8,866
—
9,379
(12,854)
(79,110)
17,582
10,723
28,701
648,152
(552,701)
468,598
(211,899)
123,519
105,000
(57,297)
(33,145)
24,484
18,869
(14,216)
—
—
—
526,306
184,501
(100,625)
19,098
29,249
461,351
14,005
430
(46,177)
—
(5,178)
2,589
5,141
872
—
2,660
—
(4,437)
104,186
(34,615)
15,658
5,718
824
798,944
(737,999)
597,499
(159,796)
373,264
—
(33,172)
(3,000)
88,019
34,417
—
(1,066,096)
—
—
(128,788)
(906,864)
432,594
214,521
(50,770)
7,880
38,329
(130,517)
11,243
11
8,644
—
(9,249)
(4,621)
5,104
7,695
23,729
(3,886)
(4,474)
(187)
30,466
(54,716)
(4,091)
35,856
692
761,806
(585,940)
—
(149,461)
100,024
—
(14,997)
(3,000)
137,404
106,005
—
—
(123,936)
1,554
(532,347)
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED
(Amounts in thousands)
Cash Flows from Financing Activities:
Repayments of borrowings
Contributions from noncontrolling interests
Dividends paid on common shares
Dividends paid on preferred shares
Distributions to noncontrolling interests
Repurchase of common shares
Deferred financing costs
Proceeds received from exercise of employee share options and other
Repurchase of shares related to stock compensation agreements and related tax withholdings and
other
Proceeds from borrowings
Purchase of marketable securities in connection with defeasance of mortgage payable
Redemption of preferred shares
Proceeds from the issuance of preferred shares
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 period
Cash and cash equivalents and restricted cash at end of period
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period
Restricted cash at beginning of period
Cash and cash equivalents and restricted cash at beginning of period
Cash and cash equivalents at end of period
Restricted cash at end of period
Cash and cash equivalents and restricted cash at end of period
For the Year Ended December 31,
2023
2022
2021
$
(148,000) $
(1,251,373) $
(1,584,243)
132,701
(129,066)
(62,116)
(38,970)
(29,183)
(4,424)
146
(25)
—
—
—
—
(278,937)
240,427
1,021,157
5,609
(406,562)
(62,116)
(84,699)
—
(32,706)
885
(85)
1,029,773
—
—
—
(801,274)
(909,194)
1,930,351
1,261,584 $
1,021,157 $
4,052
(406,109)
(65,880)
(190,876)
—
(51,184)
899
(1,567)
3,248,007
(973,729)
(300,000)
291,153
(29,477)
199,982
1,730,369
1,930,351
889,689 $
1,760,225 $
1,624,482
131,468
170,126
105,887
1,021,157 $
1,930,351 $
1,730,369
997,002 $
889,689 $
1,760,225
264,582
131,468
170,126
1,261,584 $
1,021,157 $
1,930,351
$
$
$
$
$
See notes to consolidated financial statements.
69
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED
(Amounts in thousands)
Supplemental Disclosure of Cash Flow Information:
Cash payments for interest (excluding capitalized interest) and interest rate cap premiums
Cash payments for income taxes
Non-Cash Information:
Redeemable Class A unit measurement adjustment
Change in fair value of consolidated interest rate hedges and other
Write-off of fully depreciated assets
Accrued capital expenditures included in accounts payable and accrued expenses
Initial investment in Pier 94 joint venture upon contribution of leasehold interest
Decrease in assets and liabilities resulting from the deconsolidation of Pier 94:
Real estate
Right-of-use assets
Lease liabilities
Additional estimated lease liability arising from the recognition of right-of-use asset
Reclassification of condominium units from "development costs and construction in progress" to
"220 Central Park South condominium units ready for sale"
Reclassification of assets held for sale (included in "other assets")
Increase in assets and liabilities resulting from the consolidation of One Park Avenue:
Real estate
Identified intangible assets
Mortgages payable
Deferred revenue
Marketable securities transferred in connection with the defeasance of mortgage payable
Defeasance of mortgage payable
$
$
$
For the Year Ended December 31,
2023
2022
2021
381,410 $
10,365 $
252,371 $
7,947 $
188,587
9,155
(138,114) $
221,145 $
(112,051)
(82,343)
52,091
50,090
21,693
7,081
(20,692)
—
—
—
—
—
—
—
—
—
190,494
(278,561)
104,750
—
—
—
—
350,000
32,604
—
—
—
—
—
—
—
(76,073)
51,337
(123,537)
291,690
—
—
—
—
—
16,014
80,005
566,013
139,545
525,000
18,884
(973,729)
950,000
See notes to consolidated financial statements.
70
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of Vornado Realty L.P.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vornado Realty L.P. and subsidiaries (the "Partnership") 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 schedule 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 Partnership 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 the 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 Partnership'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 Partnership's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the
Partnership'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 Partnership 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 Notes 2, 5, 15, and 16 to the financial statements
Critical Audit Matter Description
The Partnership’s consolidated and unconsolidated real estate properties are individually reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. For consolidated properties, an impairment exists
when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an
undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair
value. For unconsolidated partially owned entities, an impairment loss is recorded when there is a decline in the estimated fair value of
an investment below its carrying value, and the Partnership concludes that the decline is other-than-temporary during its intended
holding period. Fair value is determined based on estimated cash flow projections that utilize discount and capitalization rates and
available market information.
Preparing the Partnership’s estimated cash flow projections requires management to make significant estimates and assumptions
related to future market rental rates, capitalization rates, and discount rates.
We identified the impairment of certain real estate properties as a critical audit matter because of the significant estimates and
assumptions related to future market rental rates, capitalization rates and discount rates. Performing audit procedures to evaluate the
reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort,
including the need to involve our fair value specialists.
71
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to impairment included the following, among others:
• We tested the effectiveness of controls over management’s evaluation of recoverability of its real estate properties, including
those over future market rental rates and capitalization rates used in the assessment.
• We tested the effectiveness of controls over management’s evaluation of impairment of its real estate properties and
investments in partially owned entities and measurement of that impairment based on discounted cash flows, including those
over the future market rental rates, capitalization rates, and discount rates used in the assessment.
• We evaluated the reasonableness of future market rental rates, capitalization rates, and discount rates used by management
with independent market data, focusing on geographical location and property type. In addition, we developed ranges of
independent estimates of future market rental rates, capitalization rates, and discount rates and compared those to the amounts
used by management.
• We involved our fair value specialists in providing comparable market transaction details to further evaluate management’s
selected future market rental rates, capitalization rates, and discount rates, as applicable.
• We evaluated the reasonableness of management’s projected future cash flow analyses by comparing management’s
projections to the Partnership’s historical results.
• We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 12, 2024
We have served as the Partnership’s auditor since 1997.
72
VORNADO REALTY L.P.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except unit amounts)
ASSETS
Real estate, at cost:
Land
Buildings and improvements
Development costs and construction in progress
Leasehold improvements and equipment
Total
Less accumulated depreciation and amortization
Real estate, net
Right-of-use assets
Cash and cash equivalents
Restricted cash
Investments in U.S. Treasury bills
Tenant and other receivables
Investments in partially owned entities
220 Central Park South condominium units ready for sale
Receivable arising from the straight-lining of rents
Deferred leasing costs, net of accumulated amortization of $249,347 and $237,395
Identified intangible assets, net of accumulated amortization of $98,589 and $98,139
Other assets
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgages payable, net
Senior unsecured notes, net
Unsecured term loan, net
Unsecured revolving credit facilities
Lease liabilities
Accounts payable and accrued expenses
Deferred revenue
Deferred compensation plan
Other liabilities
Total liabilities
Commitments and contingencies
Redeemable noncontrolling interests:
Class A units - 17,000,030 and 14,416,891 units outstanding
Series D cumulative redeemable preferred units - 141,400 units outstanding
Total redeemable noncontrolling partnership units
Redeemable noncontrolling interest in a consolidated subsidiary
Total redeemable noncontrolling interests
Partners' equity:
Partners' capital
Earnings less than distributions
Accumulated other comprehensive income
Total partners' equity
Noncontrolling interests in consolidated subsidiaries
Total equity
As of December 31,
2023
2022
2,436,221 $
9,952,954
1,281,076
130,953
13,801,204
(3,752,827)
10,048,377
680,044
997,002
264,582
—
69,543
2,610,558
35,941
701,666
355,010
127,082
297,860
16,187,665 $
5,688,020 $
1,193,873
794,559
575,000
732,859
411,044
32,199
105,245
311,132
9,843,931
480,251
3,535
483,786
154,662
638,448
9,453,344
(4,009,395)
65,115
5,509,064
196,222
5,705,286
16,187,665 $
2,451,828
9,804,204
933,334
125,389
13,314,755
(3,470,991)
9,843,764
684,380
889,689
131,468
471,962
81,170
2,665,073
43,599
694,972
373,555
139,638
474,105
16,493,375
5,829,018
1,191,832
793,193
575,000
735,969
450,881
39,882
96,322
268,166
9,980,263
345,157
3,535
348,692
88,040
436,732
9,559,341
(3,894,580)
174,967
5,839,728
236,652
6,076,380
16,493,375
$
$
$
$
See notes to the consolidated financial statements.
73
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per unit amounts)
REVENUES:
Rental revenues
Fee and other income
Total revenues
EXPENSES:
Operating
Depreciation and amortization
General and administrative
(Expense) benefit from deferred compensation plan liability
Impairment losses, transaction related costs and other
For the Year Ended December 31,
2023
2022
2021
$
1,607,486 $
1,607,685 $
203,677
1,811,163
(905,158)
(434,273)
(162,883)
(12,162)
(50,691)
192,310
1,799,995
(873,911)
(504,502)
(133,731)
9,617
(31,722)
1,424,531
164,679
1,589,210
(797,315)
(412,347)
(134,545)
(9,847)
(13,815)
Total expenses
(1,565,167)
(1,534,249)
(1,367,869)
Income (loss) from partially owned entities
Income from real estate fund investments
Interest and other investment income, net
Income (loss) from deferred compensation plan assets
Interest and debt expense
Net gains on disposition of wholly owned and partially owned assets
Income (loss) before income taxes
Income tax (expense) benefit
Net income (loss)
Less net loss (income) attributable to noncontrolling interests in consolidated subsidiaries
Net income (loss) attributable to Vornado Realty L.P.
Preferred unit distributions
Series K preferred unit issuance costs
NET INCOME (LOSS) attributable to Class A unitholders
INCOME (LOSS) PER CLASS A UNIT - BASIC:
Net income (loss) per Class A unit
Weighted average units outstanding
INCOME (LOSS) PER CLASS A UNIT - DILUTED:
Net income (loss) per Class A unit
Weighted average units outstanding
38,689
1,590
41,697
12,162
(349,223)
71,199
62,110
(29,222)
32,888
75,967
108,855
(62,231)
—
(461,351)
3,541
19,869
(9,617)
(279,765)
100,625
(360,952)
(21,660)
(382,612)
5,737
(376,875)
(62,231)
—
46,624 $
(439,106) $
130,517
11,066
4,612
9,847
(231,096)
50,770
197,057
10,496
207,553
(24,014)
183,539
(66,035)
(9,033)
108,471
0.22 $
(2.15) $
205,105
205,315
0.52
204,728
0.22 $
(2.15) $
205,956
205,315
0.51
205,644
$
$
$
See notes to consolidated financial statements.
74
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Net income (loss)
Other comprehensive (loss) income:
For the Year Ended December 31,
2023
2022
2021
$
32,888 $
(382,612) $
207,553
Change in fair value of interest rate swaps and other
Other comprehensive (loss) income of nonconsolidated subsidiaries
Comprehensive (loss) income
Less comprehensive loss (income) attributable to noncontrolling interests in consolidated
subsidiaries
(112,051)
(8,286)
(87,449)
190,493
18,874
(173,245)
79,686
3,121
Comprehensive (loss) income attributable to Vornado Realty L.P.
$
(7,763) $
(170,124) $
51,338
10,275
269,166
(24,014)
245,152
See notes to consolidated financial statements.
75
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands, except per unit amount)
Preferred Units
Class A Units
Owned by Vornado
Units
Amount
Units
Amount
Earnings
Less Than
Distributions
Accumulated
Other
Comprehensive
Income
Non-
controlling
Interests in
Consolidated
Subsidiaries
Total
Equity
Balance as of December 31, 2022
48,793
$ 1,182,459
191,867
$ 8,376,882
$
(3,894,580) $
174,967
$
236,652
$ 6,076,380
Net income attributable to Vornado Realty L.P.
Net income attributable to redeemable
partnership units
Net loss attributable to nonredeemable
noncontrolling interests in consolidated
subsidiaries
Distributions to Vornado ($0.675 per unit)
Distributions to preferred unitholders (see Note
11 for distributions per unit amounts)
Class A units issued to Vornado:
Upon redemption of redeemable Class A units,
at redemption value
Under Vornado's dividend reinvestment plan
Contributions
Distributions
Deferred compensation units and options
Repurchase of Class A units owned by Vornado
Other comprehensive loss of nonconsolidated
subsidiaries
Change in fair value of interest rate swaps and
other
Unearned 2020 Out-Performance Plan and 2019
Performance AO LTIP awards
Redeemable Class A unit measurement
adjustment
Noncontrolling interests' share of other
comprehensive loss
Deconsolidation of partially owned entity
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
539
8,489
11
—
—
(2)
(2,024)
—
—
—
—
—
—
146
—
—
321
(81)
—
—
20,668
(135,540)
—
—
108,855
(3,361)
—
(129,066)
(62,116)
—
—
—
—
(25)
(29,102)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(8,286)
(112,051)
—
(2,574)
13,059
—
—
—
108,855
(3,361)
(36,582)
(36,582)
—
—
—
—
24,033
(129,066)
(62,116)
8,489
146
24,033
(21,526)
(21,526)
—
—
—
—
—
—
296
(29,183)
(8,286)
(112,051)
20,668
(138,114)
(3,719)
(2,636)
9,340
(2,636)
Balance as of December 31, 2023
48,793
$ 1,182,459
190,391
$ 8,270,885
$
(4,009,395) $
65,115
$
196,222
$ 5,705,286
See notes to consolidated financial statements.
76
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY – CONTINUED
(Amounts in thousands, except per unit amounts)
Preferred Units
Class A Units
Owned by Vornado
Units
Amount
Units
Amount
Earnings
Less Than
Distributions
Accumulated
Other
Comprehensive
(Loss) Income
Non-
controlling
Interests in
Consolidated
Subsidiaries
Total
Equity
Balance as of December 31, 2021
48,793
$ 1,182,459
191,724
$ 8,150,741
$
(3,079,320) $
(17,534) $
278,892
$ 6,515,238
Net loss attributable to Vornado Realty L.P.
Net loss attributable to redeemable partnership
units
Net income attributable to nonredeemable
noncontrolling interests in consolidated
subsidiaries
Distributions to Vornado ($2.12 per unit)
Distributions to preferred unitholders (see Note
11 for distributions per unit amounts)
Class A units issued to Vornado:
Upon redemption of redeemable Class A units,
at redemption value
Under Vornado's employees' share option plan
Under Vornado's dividend reinvestment plan
Contributions
Distributions
Deferred compensation units and options
Other comprehensive income of nonconsolidated
subsidiaries
Change in fair value of interest rate swaps and
other
Redeemable Class A unit measurement
adjustment
Noncontrolling interests' share of other
comprehensive income
Other
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(376,875)
30,376
—
(406,562)
(62,116)
117
3,524
—
28
—
—
(2)
—
—
—
—
—
7
878
—
—
588
—
—
221,145
—
(1)
—
—
—
—
—
(85)
—
—
—
—
2
—
—
—
—
—
—
—
—
—
—
—
18,874
190,494
—
(16,866)
(1)
—
—
3,931
—
—
—
—
—
5,609
(376,875)
30,376
3,931
(406,562)
(62,116)
3,524
7
878
5,609
(54,388)
(54,388)
—
—
—
—
503
18,874
190,494
221,145
2,616
(8)
(14,250)
(8)
Balance as of December 31, 2022
48,793
$ 1,182,459
191,867
$ 8,376,882
$
(3,894,580) $
174,967
$
236,652
$ 6,076,380
See notes to consolidated financial statements.
77
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY – CONTINUED
(Amounts in thousands, except per unit amount)
Preferred Units
Class A Units
Owned by Vornado
Units
Amount
Units
Amount
Earnings
Less Than
Distributions
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests in
Consolidated
Subsidiaries
Total
Equity
Balance as of December 31, 2020
48,793
$ 1,182,339
191,355
$ 8,200,140
$
(2,774,182) $
(75,099) $
414,957
$ 6,948,155
12,000
291,153
Net income attributable to Vornado Realty L.P.
—
Net income attributable to redeemable partnership
units
Net income attributable to nonredeemable
noncontrolling interests in consolidated
subsidiaries
Distributions to Vornado ($2.12 per unit)
Distributions to preferred unitholders (see Note 11
for distributions per unit amounts)
Series O cumulative redeemable preferred units
issuance
Class A units issued to Vornado:
Upon redemption of redeemable Class A units,
at redemption value
Under Vornado's employees' share option plan
Under Vornado's dividend reinvestment plan
Contributions
Distributions
Conversion of Series A preferred units to Class A
units
Deferred compensation units and options
Other comprehensive income of nonconsolidated
subsidiaries
Change in fair value of interest rate swaps
Unearned 2018 Out-Performance Plan awards
acceleration
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Redeemable Class A unit measurement adjustment
—
Series K cumulative redeemable preferred units
called for redemption
(12,000)
(290,967)
Noncontrolling interests' share of other
comprehensive income
Other
—
—
—
(53)
—
—
—
—
—
—
—
—
—
—
(13)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
350
14,576
1
21
—
—
1
(4)
—
—
—
—
—
—
—
22
877
—
—
13
906
—
—
10,283
(76,073)
—
—
(3)
183,539
(7,540)
—
(406,109)
(65,880)
—
—
—
—
—
—
—
(114)
—
—
—
—
(9,033)
—
(1)
—
—
—
—
—
—
—
—
—
—
—
—
—
10,275
51,337
—
—
—
(4,048)
1
—
—
183,539
(7,540)
20,826
—
—
—
—
—
—
4,052
20,826
(406,109)
(65,880)
291,153
14,576
22
877
4,052
(160,975)
(160,975)
—
—
—
—
—
—
—
—
32
—
792
10,275
51,337
10,283
(76,073)
(300,000)
(4,048)
(24)
Balance as of December 31, 2021
48,793
$ 1,182,459
191,724
$ 8,150,741
$
(3,079,320) $
(17,534) $
278,892
$ 6,515,238
See notes to consolidated financial statements.
78
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
2023
2022
2021
$
32,888 $
(382,612) $
207,553
(Amounts in thousands)
Cash Flows from Operating Activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (including amortization of deferred financing costs)
Distributions of income from partially owned entities
Net gains on disposition of wholly owned and partially owned assets
Real estate impairment losses
Stock-based compensation expense
Equity in net (income) loss of partially owned entities
Change in deferred tax liability
Amortization of interest rate cap premiums
Straight-lining of rents
Credit losses on investments
Amortization of below-market leases, net
Net realized and unrealized (gain) loss on real estate fund investments
Return of capital from real estate fund investments
Write-off of lease receivables deemed uncollectible
Defeasance cost in connection with refinancing of mortgage payable
Other non-cash adjustments
Changes in operating assets and liabilities:
Real estate fund investments
Tenant and other receivables
Prepaid assets
Other assets
Lease liabilities
Accounts payable and accrued expenses
Other liabilities
Net cash provided by operating activities
Cash Flows from Investing Activities:
Development costs and construction in progress
Proceeds from maturities of U.S. Treasury bills
Additions to real estate
Proceeds from sales of real estate
Proceeds from repayment of participation in 150 West 34th Street mortgage loan
Investments in partially owned entities
Acquisitions of real estate and other
Proceeds from sale of condominium units at 220 Central Park South
Distributions of capital from partially owned entities
Deconsolidation of cash and restricted cash held by a previously consolidated entity
Purchase of U.S. Treasury bills
Acquisition of additional 45.0% ownership interest in One Park Avenue (inclusive of $5,806 of
prorations and net working capital and net of $39,370 of cash and restricted cash balances
consolidated upon acquisition)
Proceeds from repayments of loans receivable
Net cash used in investing activities
See notes to consolidated financial statements.
79
457,574
172,873
(71,199)
45,007
43,201
(38,689)
17,020
10,989
(8,808)
8,269
(5,268)
(1,861)
1,861
1,008
—
8,866
—
9,379
(12,854)
(79,110)
17,582
10,723
28,701
648,152
(552,701)
468,598
(211,899)
123,519
105,000
(57,297)
(33,145)
24,484
18,869
(14,216)
—
—
—
526,306
184,501
(100,625)
19,098
29,249
461,351
14,005
430
(46,177)
—
(5,178)
2,589
5,141
872
—
2,660
—
(4,437)
104,186
(34,615)
15,658
5,718
824
798,944
(737,999)
597,499
(159,796)
373,264
—
(33,172)
(3,000)
88,019
34,417
—
(1,066,096)
—
—
(128,788)
(906,864)
432,594
214,521
(50,770)
7,880
38,329
(130,517)
11,243
11
8,644
—
(9,249)
(4,621)
5,104
7,695
23,729
(3,886)
(4,474)
(187)
30,466
(54,716)
(4,091)
35,856
692
761,806
(585,940)
—
(149,461)
100,024
—
(14,997)
(3,000)
137,404
106,005
—
—
(123,936)
1,554
(532,347)
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED
(Amounts in thousands)
Cash Flows from Financing Activities:
Repayments of borrowings
Contributions from noncontrolling interests in consolidated subsidiaries
Distributions to Vornado
Distributions to preferred unitholders
Distributions to redeemable security holders and noncontrolling interests in consolidated
subsidiaries
Repurchase of Class A units owned by Vornado
Deferred financing costs
Proceeds received from exercise of Vornado stock options and other
Repurchase of Class A units related to stock compensation agreements and related tax withholdings
and other
Proceeds from borrowings
Purchase of marketable securities in connection with defeasance of mortgage payable
Redemption of preferred units
Proceeds from the issuance of preferred units
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 period
Cash and cash equivalents and restricted cash at end of period
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period
Restricted cash at beginning of period
Cash and cash equivalents and restricted cash at beginning of period
Cash and cash equivalents at end of period
Restricted cash at end of period
Cash and cash equivalents and restricted cash at end of period
For the Year Ended December 31,
2023
2022
2021
$
(148,000) $
(1,251,373) $
(1,584,243)
132,701
(129,066)
(62,116)
(38,970)
(29,183)
(4,424)
146
(25)
—
—
—
—
(278,937)
240,427
1,021,157
5,609
(406,562)
(62,116)
(84,699)
—
(32,706)
885
(85)
1,029,773
—
—
—
(801,274)
(909,194)
1,930,351
1,261,584 $
1,021,157 $
4,052
(406,109)
(65,880)
(190,876)
—
(51,184)
899
(1,567)
3,248,007
(973,729)
(300,000)
291,153
(29,477)
199,982
1,730,369
1,930,351
889,689 $
1,760,225 $
1,624,482
131,468
170,126
105,887
1,021,157 $
1,930,351 $
1,730,369
997,002 $
889,689 $
1,760,225
264,582
131,468
170,126
1,261,584 $
1,021,157 $
1,930,351
$
$
$
$
$
See notes to consolidated financial statements.
80
VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED
(Amounts in thousands)
Supplemental Disclosure of Cash Flow Information:
Cash payments for interest (excluding capitalized interest) and interest rate cap premiums
Cash payments for income taxes
Non-Cash Information:
Redeemable Class A unit measurement adjustment
Change in fair value of consolidated interest rate hedges and other
Write-off of fully depreciated assets
Accrued capital expenditures included in accounts payable and accrued expenses
Initial investment in Pier 94 joint venture upon contribution of leasehold interest
Decrease in assets and liabilities resulting from the deconsolidation of Pier 94:
$
$
$
Real estate
Right-of-use assets
Lease liabilities
Additional estimated lease liability arising from the recognition of right-of-use asset
Reclassification of condominium units from "development costs and construction in progress" to
"220 Central Park South condominium units ready for sale"
Reclassification of assets held for sale (included in "other assets")
Increase in assets and liabilities resulting from the consolidation of One Park Avenue:
Real estate
Identified intangible assets
Mortgages payable
Deferred revenue
Marketable securities transferred in connection with the defeasance of mortgage payable
Defeasance of mortgage payable
For the Year Ended December 31,
2023
2022
2021
381,410 $
10,365 $
252,371 $
7,947 $
188,587
9,155
(138,114) $
221,145 $
(112,051)
(82,343)
52,091
50,090
21,693
7,081
(20,692)
—
—
—
—
—
—
—
—
—
190,494
(278,561)
104,750
—
—
—
—
350,000
32,604
—
—
—
—
—
—
—
(76,073)
51,337
(123,537)
291,690
—
—
—
—
—
16,014
80,005
566,013
139,545
525,000
18,884
(973,729)
950,000
See notes to consolidated financial statements.
81
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Business
Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through,
and substantially all of its interests in properties are held by, Vornado Realty L.P. (the “Operating Partnership”), a Delaware limited
partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders are dependent upon the cash flow of the
Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the
sole general partner of and owned approximately 91.0% of the common limited partnership interest in the Operating Partnership as of
December 31, 2023. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership
and those subsidiaries consolidated by Vornado.
We currently own all or portions of:
New York:
•
57 Manhattan operating properties consisting of:
•
•
•
20.4 million square feet of office space in 30 of the properties;
2.4 million square feet of street retail space in 50 of the properties;
1,662 units in five Manhattan residential properties;
• Multiple development sites, including 350 Park Avenue, Sunset Pier 94 Studios and the Hotel Pennsylvania site;
•
A 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns five properties in the greater New York
metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and
The Alexander, a 312-unit apartment tower in Queens;
Signage throughout the Penn District and Times Square; and
Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for
our buildings and third parties.
•
•
Other Real Estate and Investments:
•
•
•
The 3.7 million square foot THE MART in Chicago;
A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district
aggregating 1.8 million square feet; and
Other real estate and investments.
2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include the accounts of Vornado and the Operating Partnership and their
consolidated subsidiaries. All inter-company amounts have been eliminated. Our consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. In addition, certain prior year balances have been reclassified in order to conform to the current period
presentation.
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. For our derivatives in hedge accounting relationships, we have utilized the
elective relief in ASC 848, allowing for the continuation of hedge accounting through the transition process. As of December 31,
2023, we have transitioned all of our LIBOR-indexed debt and derivatives to SOFR, except for the $500,000,000 mortgage loan on the
office condominium of 731 Lexington Avenue, owned by Alexander’s Inc. (in which we have a 32.4% interest), which transitioned to
the Prime Rate.
82
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. Basis of Presentation and Significant Accounting Policies - continued
Recently Issued Accounting Literature - continued
In August 2023, the FASB issued ASU 2023-05, Business Combinations — Joint Venture Formations (Subtopic 805-60):
Recognition and Initial Measurement (“ASU 2023-05”). ASU 2023-05 addresses the accounting for contributions made to a joint
venture, upon formation, in a joint venture’s separate financial statements. Prior to the amendment, the FASB did not provide specific
authoritative guidance on the initial measurement of assets and liabilities assumed by a joint venture upon its formation. ASU 2023-05
requires a joint venture to recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value
measurement that are consistent with the business combinations guidance). ASU 2023-05 is effective for all joint venture formations
with a formation date on or after January 1, 2025, with early adoption permitted. During the current reporting period, we adopted ASU
2023-05 for newly formed entities meeting the definition of a joint venture. Historically, our joint ventures have recognized net assets
contributed at formation at fair value. Adoption of ASU 2023-05 did not have an impact on our consolidated financial statements.
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.
Significant Accounting Policies
Real Estate: Real estate is carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and
certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are expensed as
incurred. For redevelopment of existing operating properties, the net book value of the existing property under redevelopment plus the
cost for the construction and improvements incurred in connection with the redevelopment, including interest and debt expense, are
capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the redeveloped property when
complete. If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair
value of the redeveloped property, the excess is charged to expense. Depreciation is recognized on a straight-line basis over the
estimated useful lives of these assets which range from 7 to 40 years. Tenant allowances are amortized on a straight-line basis over the
lives of the related leases, which approximate the useful lives of the assets.
Upon the acquisition of real estate, we assess whether the transaction should be accounted for as an asset acquisition or as a
business combination. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted
for as asset acquisitions. Our acquisitions of real estate generally will not meet the definition of a business because substantially all of
the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related
identified intangible assets).
We assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired
above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase
price based on these assessments which are on a relative fair value basis. We assess fair value based on estimated cash flow
projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows
are based on a number of factors including historical operating results, known trends, and market/economic conditions. We amortize
identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows
of the property or business acquired.
Our properties, including any related right-of-use ("ROU") assets and intangible assets, are individually reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when
the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an
undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair
value. Impairment analyses are based on information available at the time the analyses are prepared. Estimates of future cash flows are
subjective and are based, in part, on assumptions regarding future rental revenues, operating expenses, capital expenditures, discount
rates and capitalization rates which could differ materially from actual results.
83
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. Basis of Presentation and Significant Accounting Policies - continued
Significant Accounting Policies - continued
Partially Owned Entities: We consolidate entities in which we have a controlling financial interest. In determining whether we
have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we
consider (i) whether the entity is a variable interest entity (“VIE”) in which we are the primary beneficiary or (ii) whether the entity is
a voting interest entity in which we have a majority of the voting interests of the entity. We are deemed to be the primary beneficiary
of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance
and (ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. We generally do not control
a partially owned entity if the approval of all of the partners/members is contractually required with respect to decisions that most
significantly impact the performance of the partially owned entity. This includes decisions regarding operating/capital budgets, and the
placement of new or additional financing secured by the assets of the venture, among others. We account for investments under the
equity method when the requirements for consolidation are not met, and we have significant influence over the operations of the
investee. Equity method investments are initially recorded at cost and subsequently adjusted for our share of net income or loss and
cash contributions and distributions each period. Equity investments that do not qualify for consolidation or equity method accounting
are recorded at fair value in accordance with ASC Topic 321, Investments-Equity Securities ("ASC 321") or, if fair value is not readily
determinable, are initially recognized at cost and subsequently remeasured if there is an orderly transaction in an identical or similar
investment of the same issuer or if the investment is impaired.
Investments in unconsolidated partially owned entities are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recorded when there is a decline in the fair value of
an investment below its carrying value and we conclude that the decline is other-than-temporary during our intended holding period.
An impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value. Impairment
analyses are based on information available at the time the analyses are prepared. Estimates of future cash flows are subjective and are
based, in part, on assumptions regarding future rental revenues, operating expenses, capital expenditures, discount rates and
capitalization rates which could differ materially from actual results.
220 Central Park South Condominium Units Ready For Sale: Our remaining unsold 220 Central Park South (“220 CPS”)
residential condominium units are recognized in “220 Central Park South condominium units ready for sale”. These units have
received temporary certificates of occupancy and are carried at the lower of their carrying amount or fair value less costs to sell. We
have used the relative sales value method to allocate costs to individual condominium units. GAAP income is recognized when legal
title transfers upon closing of the condominium unit sales and is included in "net gains on disposition of wholly owned and partially
owned assets" on our consolidated statements of income. As of December 31, 2023 and 2022, none of the 220 CPS condominium
units ready for sale had a carrying value that exceeded fair value.
Cash and Cash Equivalents: Cash and cash equivalents consist of highly liquid investments with original maturities of three
months or less and are carried at cost, which approximates fair value due to their short-term maturities. The majority of our cash and
cash equivalents consists of (i) deposits at major commercial banks, which may at times exceed the Federal Deposit Insurance
Corporation limit and (ii) Certificate of Deposits placed through an Account Registry Service.
Restricted Cash: Restricted cash consists of security deposits, cash restricted for the purposes of facilitating a Section 1031 Like-
Kind exchange, cash restricted in connection with our deferred compensation plan and cash escrowed under loan agreements,
including for debt service, real estate taxes, property insurance, leasing costs and capital improvements.
Deferred Charges: Direct financing costs are deferred and amortized over the terms of the related agreements as a component of
interest 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.
84
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. Basis of Presentation and Significant Accounting Policies - continued
Significant Accounting Policies - continued
Revenue Recognition:
•
Rental revenues include revenues from the leasing of space at our properties to tenants, trade shows, tenant services and
parking garage revenues.
•
•
•
•
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 variable, and are generally recognized in the same period as the related expenses
are incurred.
• We recognize amortization of acquired below-market leases as an increase to rental revenues and
amortization of acquired above-market leases as a decrease to rental revenues over the term of the lease
(see Note 8 - Identified Intangible Assets and Liabilities).
Revenues from the operation of trade shows at our properties, primarily derived from booth rentals, are recognized
when the trade show booths are made available for use by the exhibitors, in accordance with ASC 842.
Revenues derived from sub-metered electric, service 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 classify revenues derived from management, leasing and other contractual agreements (including BMS cleaning,
engineering and security services) with third parties or with partially owned entities as “fee and other income” and recognize
revenue 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.
85
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. Basis of Presentation and Significant Accounting Policies - continued
Significant Accounting Policies - continued
Income Taxes: Vornado operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856-860 of
the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90% of its REIT taxable
income as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its
taxable income which is distributed to its shareholders. Vornado distributes to its shareholders 100% of its REIT taxable income and
therefore, no provision for Federal income taxes is required. Dividends distributed for the years ended December 31, 2023 and 2022
were characterized, for federal income tax purposes, as ordinary income under Section 199A of the Internal Revenue Code. Dividends
distributed for the year ended December 31, 2021 were characterized for federal income tax purposes as 84.2% ordinary income under
Section 199A of the Internal Revenue Code and 15.8% qualified dividend income (taxed as long-term capital gain).
We have elected to treat certain consolidated subsidiaries, and may in the future elect to treat newly formed subsidiaries, as
taxable REIT subsidiaries pursuant to an amendment to the Internal Revenue Code that became effective January 1, 2001. Taxable
REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are
subject to Federal and State income tax at regular corporate tax rates. The Farley Building and our 220 CPS condominium project are
held through taxable REIT subsidiaries.
As of December 31, 2023 and 2022, our taxable REIT subsidiaries had deferred tax assets, net of valuation allowances, of
$7,557,000 and $7,944,000, respectively, which are included in “other assets” on our consolidated balance sheets. As of December 31,
2023 and 2022, our taxable REIT subsidiaries had deferred tax liabilities of $74,721,000 and $54,597,000, respectively, which are
included in "other liabilities" on our consolidated balance sheets. The deferred tax assets relate to net operating loss carry forwards and
temporary differences between the book and tax basis of our assets. The deferred tax liabilities relate to temporary differences between
the book and tax basis of our assets.
As of December 31, 2023, our taxable REIT subsidiaries have an estimated $162,000,000 of federal net operating loss ("NOL")
carryforwards and $259,000,000 of state and local NOL carryforwards, which are reduced by valuation allowances of $144,000,000
for federal NOL carryforwards and $242,000,000 for state and local NOL carryforwards. The NOL carryforwards are subject to
certain limitations.
For the year ended December 31, 2023, we recognized $29,222,000 of income tax expense based on an effective tax rate of
approximately 47.0%. For the years ended December 31, 2022 and 2021, we recognized $21,660,000 of income tax expense and
$10,496,000 of income tax benefit, based on negative effective tax rates of approximately 6.0% and 5.3%, respectively. Income tax
(expense) benefit recorded in each of the years primarily relates to our consolidated taxable REIT subsidiaries, and certain state, local,
and franchise taxes. The year ended December 31, 2023 included $11,722,000 of income tax expense resulting from book to tax
differences (primarily straight-line rent adjustments and depreciation) on our investment in The Farley Building and $2,168,000 of
income tax expense recognized on the sale of 220 CPS condominium units. The year ended December 31, 2022 included $13,665,000
of income tax expense resulting from book to tax differences on our investment in The Farley Building and $6,016,000 of income tax
expense recognized on the sale of 220 CPS condominium units. The year ended December 31, 2021 included $27,910,000 of income
tax benefit recognized by our taxable REIT subsidiaries, $10,868,000 of income tax expense resulting from book to tax differences on
our investment in The Farley Building and $5,711,000 of income tax expense recognized on the sale of 220 CPS condominium units.
The Company has no uncertain tax positions recognized as of December 31, 2023 and 2022.
The Operating Partnership’s partners are required to report their respective share of taxable income on their individual tax returns.
The estimated taxable income attributable to Vornado common shareholders (unaudited) for the years ended December 31, 2023,
2022 and 2021 was approximately $102,903,000, $398,644,000, and $413,026,000, respectively. The book to tax differences between
net income (loss) and estimated taxable income primarily result from differences in the income recognition or deductibility of
depreciation and amortization, gain or loss from the sale of real estate and other capital transactions, impairment losses, straight-line
rent adjustments, stock option expense and repairs expense related to the tangible property regulations.
The net basis of Vornado’s assets and liabilities for tax reporting purposes is approximately $1.5 billion lower than the amounts
reported in Vornado’s consolidated balance sheet as of December 31, 2023.
86
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. Revenue Recognition
Below is a summary of our revenues by segment. Additional financial information related to these reportable segments for the
years ended December 31, 2023, 2022 and 2021 is set forth in Note 23 - Segment Information.
(Amounts in thousands)
For the Year Ended December 31, 2023
Property rentals
Trade shows(2)
Lease revenues(3)
Tenant services
Parking revenues
Rental revenues
BMS cleaning fees
Management and leasing fees
Other income
Fee and other income
Total revenues
____________________
See notes on following page.
(Amounts in thousands)
Property rentals
Trade shows(2)
Lease revenues(3)
Tenant services
Parking revenues
Rental revenues
BMS cleaning fees
Management and leasing fees
Other income
Fee and other income
Total revenues
____________________
See notes on following page.
Total
New York
Other
$
1,523,890 $
1,222,229 $
301,661
(1)
20,781
1,544,671
42,460
20,355
1,607,486
141,937
13,040
48,700
203,677
—
1,222,229
31,086
16,502
1,269,817
151,608
13,619
17,114
182,341
1,811,163 $
1,452,158 $
For the Year Ended December 31, 2022
Total
New York
Other
1,510,648 $
1,230,851 $
$
$
32,669
1,543,317
45,211
19,157
1,607,685
137,673
11,039
43,598
192,310
—
1,230,851
33,351
15,979
1,280,181
146,530
11,645
11,086
169,261
$
1,799,995 $
1,449,442 $
20,781
322,442
11,374
3,853
337,669
(9,671) (4)
(579)
31,586
21,336
359,005
279,797
32,669
312,466
11,860
3,178
327,504
(8,857) (4)
(606)
32,512
23,049
350,553
87
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. Revenue Recognition - continued
(Amounts in thousands)
Property rentals
Trade shows(2)
Lease revenues(3)
Tenant services
Parking revenues
Rental revenues
BMS cleaning fees
Management and leasing fees
Other income
Fee and other income
Total revenues
For the Year Ended December 31, 2021
Total
New York
Other
$
1,354,209 $
1,071,816 $
19,482
1,373,691
37,449
13,391
1,424,531
119,780
11,725
33,174
164,679
—
1,071,816
26,048
11,370
1,109,234
126,891
12,177
9,297
148,365
$
1,589,210 $
1,257,599 $
282,393
19,482
301,875
11,401
2,021
315,297
(7,111) (4)
(452)
23,877
16,314
331,611
________________________________________
(1)
(2)
2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
2022 and 2021 include revenues from The Armory Show. On July 3, 2023, we completed the sale of The Armory Show. See Note 7 - Dispositions for further
information.
(3) The components of lease revenues were as follows:
Fixed billings
Variable billings
Total contractual operating lease billings
Adjustment for straight-line rents and amortization of acquired below-market leases and
other, net
Less: write-off of straight-line rent and tenant receivables deemed uncollectible
For the Year Ended December 31,
2023
2022
2021
$
1,387,731 $
1,376,527 $
150,045
1,537,776
12,756
(5,861)
122,947
1,499,474
44,715
(872)
1,277,645
108,850
1,386,495
(5,109)
(7,695)
Lease revenues
$
1,544,671 $
1,543,317 $
1,373,691
(4) Represents the elimination of BMS cleaning fees related to THE MART and 555 California Street which are included as income in the New York segment.
88
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. Real Estate Fund Investments
We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”) and own a 25.0%
interest in the Fund. The Fund had an initial eight-year term ending February 2019, which has been extended to December 2024, by
which time the Fund intends to dispose of its remaining investment and wind down its business. The Fund's three-year investment
period ended in July 2013. The Fund is accounted for under ASC Topic 946, Financial Services – Investment Companies (“ASC 946”)
and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We
consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting.
Prior to its dissolution on September 29, 2023, we were the general partner and investment manager of the Crowne Plaza Times
Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) and owned a 57.1% interest in the joint venture which, prior to the
transaction described below, owned the 24.3% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. Through our
interests in the Fund and the Crowne Plaza Joint Venture, in total we owned an indirect, minority 32.8% interest in the Crowne Plaza
Times Square Hotel.
In June 2020, the Fund and the Crowne Plaza Joint Venture (collectively, the "Crowne Plaza Co-Investors") defaulted on the
$274,355,000 non-recourse loan on the Crowne Plaza Times Square Hotel. In 2021, the mezzanine lender to the Crowne Plaza Co-
Investors exercised its right under the loan documents and appointed an independent director to certain subsidiaries of the Crowne
Plaza Co-Investors. Since then, neither we nor the Fund controlled Crowne Plaza Times Square Hotel nor have we or the Fund been
involved in making any operating decisions relating to Crowne Plaza Times Square Hotel. In December 2022, the Fund entered into a
Restructuring Support Agreement with certain of its subsidiaries and the lender of the loan on the Crowne Plaza Times Square Hotel,
pursuant to which the independent director caused the subsidiaries to enter into a Chapter 11 bankruptcy restructuring process and the
Fund agreed to work consensually with such subsidiaries and the lender to effectuate a transfer of ownership of the hotel property
through a court supervised auction process, or an equitization of the secured loans held by the lender. On March 21, 2023, the
bankruptcy court confirmed the subsidiaries' Chapter 11 plan of reorganization, which became effective on March 31, 2023. Following
the Chapter 11 reorganization, neither we nor the Fund have any continuing ownership or other interest in the hotel property. As we
have no carrying value or contingent liabilities related to Crowne Plaza, there is no impact to our consolidated financial statements for
the year ended December 31, 2023.
As investment manager of the Fund, we are entitled to an incentive allocation after the limited partners have received a preferred
return on their invested capital, subject to catch-up and clawback provisions. On December 27, 2023, we made a $14,667,000 payment
to the limited partners, net of amounts owed to us, representing a clawback of previously paid incentive allocations.
As of December 31, 2023, we had one real estate fund investment carried at zero on our consolidated balance sheet, $28,815,000
below cost, and had remaining unfunded commitments of $23,074,000, of which our share was $5,769,000.
Below is a summary of income from the Fund and the Crowne Plaza Joint Venture.
(Amounts in thousands)
For the Year Ended December 31,
2023
2022
2021
Previously recorded unrealized loss on exited investments
$
247,575 $
59,396 $
Net realized (loss) income on exited investments
Net unrealized (loss) income on held investments
Net investment (loss) income
Income from real estate fund investments
Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries
(245,714)
—
(271)
1,590
12,789
(54,255)
(7,730)
6,130
3,541
(1,870)
Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries
$
14,379 $
1,671 $
The table below summarizes the changes in the fair value of the Fund and the Crowne Plaza Joint Venture.
(Amounts in thousands)
Beginning balance
Previously recorded unrealized loss on exited investments
Net realized loss on exited investments
Net unrealized loss on held investments
Dispositions
Ending balance
For the Year Ended December 31,
2023
2022
$
$
— $
247,575
(245,714)
—
(1,861)
— $
—
1,364
3,257
6,445
11,066
(7,309)
3,757
7,730
59,396
(54,255)
(7,730)
(5,141)
—
89
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5.
Investments in Partially Owned Entities
Fifth Avenue and Times Square JV
As of December 31, 2023, we own a 51.5% common interest in a joint venture ("Fifth Avenue and Times Square JV") which
owns interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth
Avenue, 1535 Broadway and 1540 Broadway (collectively, the "Properties"). The remaining 48.5% common interest in the joint
venture is owned by a group of institutional investors (the "Investors"). Our 51.5% common interest in the joint venture represents an
effective 51.0% interest in the Properties. The 48.5% common interest in the joint venture owned by the Investors represents an
effective 47.2% interest in the Properties.
We also own $1.828 billion aggregate liquidation preference of preferred equity interests in certain of the Properties. The
preferred equity has an annual coupon of 4.25% through April 2024, increasing to 4.75% for the subsequent five years and thereafter
at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.
Fifth Avenue and Times Square JV operates pursuant to a limited partnership agreement (the “Partnership Agreement”) among
VRLP, a wholly owned subsidiary of VRLP (“Vornado GP”) and the Investors. Vornado GP is the general partner of Fifth Avenue
and Times Square JV. VRLP is jointly and severally liable with Vornado GP for Vornado GP’s obligations under the Partnership
Agreement. Pursuant to the Partnership Agreement and the organizational documents of the entities owning the Properties, the
Investors or directors of the entities owning the Properties appointed by the Investors, as the case may be, have the right to approve
annual business plans and budgets for the Properties and certain other specified major decisions with respect to the Properties and
Fifth Avenue and Times Square JV. The Partnership Agreement affords the Investors the right to remove and replace Vornado GP in
the event Vornado GP or certain of its affiliates commit fraud or other bad acts in connection with Fifth Avenue and Times Square JV,
become bankrupt or insolvent, or default on certain of their respective obligations under the Partnership Agreement (subject to notice
and cure periods in certain circumstances). The Partnership Agreement includes (i) remedies for the failure of any partner to make a
required capital contribution for necessary expenses and (ii) liquidity provisions, including transfer rights subject to mutual rights of
first offer and a mutual buy-sell, customary for similar partnerships. Subject to certain limitations, commencing April 19, 2024, either
party may transfer more than 50% or control of their respective interests in Fifth Avenue and Times Square JV or exercise the buy-sell
on a Property-by-Property basis. In the event the buy-sell is exercised with respect to any Property in which VRLP holds preferred
equity and VRLP is the selling partner in the buy-sell, VRLP may elect whether or not to include its preferred equity in the buy-sell
for the Property to be sold.
As of December 31, 2023, the carrying amount of our investment in the joint venture was less than our share of the equity in the
net assets of the joint venture by approximately $840,300,000, the basis difference primarily resulting from the non-cash impairment
losses recognized in prior periods. Substantially all of this basis difference was allocated, based on our estimates of the fair values of
Fifth Avenue and Times Square JV’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference
related to the buildings into earnings as a reduction to depreciation expense over their estimated useful lives.
We receive an annual fee for managing the Properties equal to 2% of the gross revenues from the Properties. In addition, we are
entitled to a development fee of 5% of development costs, plus reimbursement of certain costs, for development projects performed by
us. We are entitled to 1.5% of development costs, plus reimbursement of certain costs, as a supervisory fee for development projects
not performed by us. We provide leasing services for fees calculated based on a percentage of rents, less any commissions paid to
third-party real estate brokers, if applicable. We jointly provide leasing services for the retail space with Crown Retail Services LLC,
and exclusively provide leasing services for the office space. We recognized property management fee income, included in "fee and
other income" on our consolidated statements of income, of $4,587,000, $4,397,000 and $4,297,000 for the years ended December 31,
2023, 2022 and 2021, respectively.
Wholly owned subsidiaries of Vornado provide cleaning, security and engineering services at certain Properties. We recognized
income for these services, included in "fee and other income" on our consolidated statements of income, of $4,499,000, $4,571,000
and $3,993,000 for the years ended December 31, 2023, 2022 and 2021, respectively.
We believe, based on comparable fees charged by other real estate companies, that the fees described above are consistent with
the market.
On June 14, 2023, the Fifth Avenue and Times Square JV completed a restructuring of the 697-703 Fifth Avenue $421,000,000
non-recourse mortgage loan, which matured in December 2022. The restructured $355,000,000 loan, which had its principal reduced
through an application of property-level reserves and funds from the partners, was split into (i) a $325,000,000 senior note, which
bears interest at SOFR plus 2.00%, and (ii) a $30,000,000 junior note, which accrues interest at a fixed rate of 4.00%. The restructured
loan matures in June 2025, with two one-year and one nine-month as-of-right extension options (March 2028, as fully extended). Any
amounts funded for future re-leasing of the property will be senior to the $30,000,000 junior note.
90
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Investments in Partially Owned Entities - continued
Alexander’s, Inc
As of December 31, 2023, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common
equity. We manage, develop and lease Alexander’s properties pursuant to agreements which expire in March of each year and are
automatically renewable. As of December 31, 2023 and 2022, Alexander’s owed us an aggregate of $715,000 and $801,000,
respectively, pursuant to such agreements.
As of December 31, 2023, the market value (“fair value” pursuant to ASC Topic 820, Fair Value Measurements ("ASC 820")) of
our investment in Alexander’s, based on Alexander’s December 31, 2023 closing share price of $213.57, was $353,259,000, or
$265,749,000 in excess of the carrying amount on our consolidated balance sheet. As of December 31, 2023, the carrying amount of
our investment in Alexander’s, excluding amounts owed to us, exceeds our share of the equity in the net assets of Alexander’s by
approximately $29,524,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s
common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on
our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis
difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation
is not material to our share of equity in Alexander’s net income.
We receive an annual fee for managing Alexander’s and all of its properties equal to the sum of (i) $2,800,000, (ii) 2% of the
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. In
addition, we are entitled to a development fee of 6% of development costs, as defined.
We provide Alexander’s 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 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 Alexander’s tenants. In the event third-party real estate brokers are used, our fee increases by 1% and we are
responsible for the fees to the third-parties. We are also entitled to a commission upon the sale of any of Alexander’s 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.
Wholly owned subsidiaries of Vornado provide cleaning, engineering, security, and garage management services to certain
Alexander’s properties. During the years ended December 31, 2023, 2022 and 2021, we recognized $4,629,000, $4,601,000 and
$4,234,000 of income, respectively, for these services.
On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel, located 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. As a result of the sale, we recognized our $16,396,000 share of the net gain and received a $711,000 sales
commission from Alexander’s, of which $250,000 was paid to a third-party broker.
512 West 22nd Street
On June 28, 2023, a joint venture, in which we have a 55% interest, completed a $129,250,000 refinancing of 512 West 22nd
Street, a 173,000 square foot Manhattan office building. The interest-only loan bears a rate of SOFR plus 2.00% in year one and
SOFR plus 2.35% thereafter. The loan matures in June 2025 with a one-year extension option subject to debt service coverage ratio,
loan-to-value and debt yield requirements. The loan replaces the previous $137,124,000 loan that bore interest at LIBOR plus 1.85%
and had an initial maturity of June 2023. In addition, the joint venture entered into a two-year 4.50% interest rate cap arrangement.
825 Seventh Avenue
On July 24, 2023, a joint venture, in which we have a 50% interest, completed a $54,000,000 refinancing of the office
condominium of 825 Seventh Avenue, a 173,000 square foot Manhattan office and retail building. The interest-only loan bears a rate
of SOFR plus 2.75%, with a 30 basis point reduction available upon satisfaction of certain leasing conditions, and matures in January
2026. The loan replaces the previous $60,000,000 loan that bore interest at LIBOR plus 2.35% and was scheduled to mature in July
2023.
91
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Investments in Partially Owned Entities - continued
Sunset Pier 94 Joint Venture
On August 28, 2023, we, together with Hudson Pacific Properties and Blackstone Inc., formed a joint venture (“Pier 94 JV”) to
develop a 266,000 square foot purpose-built studio campus at Pier 94 in Manhattan (“Sunset Pier 94 Studios”). In connection
therewith:
• We contributed our Pier 94 leasehold interest to the joint venture in exchange for a 49.9% common equity interest and an
initial capital account of $47,944,000, comprised of (i) the $40,000,000 value of our Pier 94 leasehold interest contribution
and (ii) a $7,994,000 credit for pre-development costs incurred. Hudson Pacific Properties (“HPP”) and Blackstone Inc.
(together, “HPP/BX”) received an aggregate 50.1% common equity interest in Pier 94 JV and an initial capital account of
$22,976,000 in exchange for (i) a $15,000,000 cash contribution upon the joint venture’s formation and (ii) a $7,976,000
credit for pre-development costs incurred. HPP/BX will fund 100% of cash contributions until such time that its capital
account is equal to Vornado’s, after which equity will be funded in accordance with each partner’s respective ownership
interest.
•
•
The lease of Pier 94 with the City of New York was amended and restated to allow for the contribution to Pier 94 JV and to
remove Pier 92 from the lease’s demised premises. The amended and restated lease expires in 2060 with five 10-year renewal
options.
Pier 94 JV closed on a $183,200,000 construction loan facility ($100,000 outstanding as of December 31, 2023) which bears
interest at SOFR plus 4.75% and matures in September 2025, with one one-year as-of-right extension option and two one-
year extension options subject to certain conditions. VRLP and the other partners provided a joint and several completion
guarantee.
The development cost of the project is estimated to be $350,000,000, which will be funded with $183,200,000 of construction
financing (described above) and $166,800,000 of equity contributions. Our share of equity contributions will be funded by (i) our
$40,000,000 Pier 94 leasehold interest contribution and (ii) $34,000,000 of cash contributions, which are net of an estimated
$9,000,000 for our share of development fees and reimbursement for overhead costs incurred by us.
We share control with HPP/BX for major decisions of the joint venture, including decisions regarding development, leasing,
operating and capital budgets, and refinancings, and accordingly account for our investment in Pier 94 JV under the equity method.
Upon contribution of the Pier 94 leasehold, we recognized a $35,968,000 net gain primarily due to the step-up of our retained
investment in the leasehold interest to fair value. The net gain was included in “net gains on disposition of wholly owned and partially
owned assets” on our consolidated statements of income for the year ended December 31, 2023.
Vornado and HPP will jointly serve as co-managing members of Pier 94 JV and will provide development and management
services to Pier 94 JV through the construction period and subsequent to substantial completion. Fees earned for these services will be
split by Vornado and HPP on a 50/50 basis. BMS, our wholly-owned subsidiary, will provide cleaning, security and other services
with respect to Sunset Pier 94 Studios.
92
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Investments in Partially Owned Entities – continued
Below is a schedule of our investments in partially owned entities.
(Amounts in thousands)
Investments:
Fifth Avenue and Times Square JV (see page 90 for details)
Partially owned office buildings/land(1)
Alexander’s (see page 91 for details)
Other equity method investments(2)
Investments in partially owned entities included in other liabilities(3):
7 West 34th Street
85 Tenth Avenue
Percentage
Ownership as of
December 31, 2023
Balance as of December 31,
2023
2022
51.5%
Various
32.4%
Various
53.0%
49.9%
$
2,242,972 $
2,272,320
118,558
87,510
161,518
182,180
87,796
122,777
2,610,558 $
2,665,073
(69,899) $
(11,330)
(81,229) $
(65,522)
(16,006)
(81,528)
$
$
$
________________________________________
(1)
(2)
(3) Our negative basis results from distributions in excess of our investment.
Includes interests in 280 Park Avenue, 650 Madison Avenue, 512 West 22nd Street, 61 Ninth Avenue and others.
Includes interests in Independence Plaza, Pier 94 JV (see page 92 for details), Rosslyn Plaza and others.
Below is a schedule of income (loss) from partially owned entities.
(Amounts in thousands)
Our share of net income (loss):
Fifth Avenue and Times Square JV (see page 90 for details):
Equity in net income(1)
Return on preferred equity, net of our share of the expense
Non-cash impairment loss
Alexander's (see page 91 for details):
Equity in net income
Management, leasing and development fees
Net gain on sale of land
Partially owned office buildings(2)(3)
Other equity method investments(3)(4)
Percentage
Ownership as of
December 31, 2023
For the Year Ended December 31,
2023
2022
2021
51.5%
$
35,209 $
55,248 $
37,416
—
72,625
15,441
5,238
16,396
37,075
37,416
(489,859)
(397,195)
18,439
4,534
—
22,973
(73,589)
(110,261)
2,578
23,132
32.4%
Various
Various
47,144
37,416
—
84,560
20,116
5,429
14,576
40,121
6,384
(548)
$
38,689 $
(461,351) $
130,517
________________________________________
(1)
2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is
amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue
and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from
non-cash impairment losses recognized in prior periods.
Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses.
Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.
(2)
(3)
(4)
93
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Investments in Partially Owned Entities – continued
Below is a summary of the debt of our partially owned entities.
(Amounts in thousands)
Mortgages Payable:
Percentage
Ownership as of
December 31, 2023
Partially owned office buildings(4)
Alexander's
Fifth Avenue and Times Square JV
Other(5)
Various
32.4%
51.5%
Various
Maturity(1)
2024-2029
2024-2027
2024-2028
2024-2032
Weighted Average
Interest Rate as of
December 31, 2023(2)
100% Partially Owned Entities’
Debt(3) as of December 31,
2023
2022
5.45%
4.48%
5.92%
5.16%
$
3,275,098 $
1,096,544
855,476
1,365,954
3,288,977
1,096,544
921,000
1,377,492
________________________________________
(1) Assumes the exercise of as-of-right extension options.
(2) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for
hedging instruments, as applicable.
(3) All amounts are non-recourse to us except (i) the $500,000 mortgage loan on 640 Fifth Avenue, included in the Fifth Avenue and Times Square JV, and (ii) the
$300,000 mortgage loan on 7 West 34th Street.
Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
Includes interests in Independence Plaza, Pier 94 JV (see page 92 for details), Rosslyn Plaza and others.
(4)
(5)
Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned
entities was $2,654,701,000 and $2,697,226,000 as of December 31, 2023 and 2022, respectively.
Summary of Condensed Combined Financial Information
The following is a summary of condensed combined financial information for all of our partially owned entities.
(Amounts in thousands)
Balance Sheet:
Assets
Liabilities
Noncontrolling interests
Equity
(Amounts in thousands)
Income Statement:
Total revenue
Net income (loss)
Net (loss) income attributable to the entities
As of December 31,
2023
2022
$
11,533,000 $
7,326,000
1,907,000
2,300,000
12,012,000
7,519,000
2,095,000
2,398,000
For the Year Ended December 31,
2022
2021
2023
$
1,132,000 $
34,000
(40,000)
1,189,000 $
(404,000)
(483,000)
1,184,000
190,000
114,000
94
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. 350 Park Avenue
On January 24, 2023, we and the Rudin family (“Rudin”) completed agreements with Citadel Enterprise Americas LLC
(“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO (“KG”), for a series of transactions relating to 350
Park Avenue and 40 East 52nd Street.
Pursuant to the agreements, Citadel master leases 350 Park Avenue, a 585,000 square foot Manhattan office building, on an “as
is” basis for ten years, with an initial annual net rent of $36,000,000. Per the terms of the lease, no tenant allowance or free rent was
provided. In the first quarter of 2023, we commenced revenue recognition of the master lease. Citadel has also master leased Rudin’s
adjacent property at 40 East 52nd Street (390,000 square feet).
In addition, we entered into a joint venture with Rudin (the “Vornado/Rudin JV”) which was formed to purchase 39 East 51st
Street. Upon formation of the KG joint venture described below, 39 East 51st Street will be combined with 350 Park Avenue and 40
East 52nd Street to create a premier development site (collectively, the “Site”). On June 20, 2023, the Vornado/Rudin JV completed
the purchase of 39 East 51st Street for $40,000,000, which was funded on a 50/50 basis by Vornado and Rudin.
From October 2024 to June 2030, KG will have the option to either:
•
acquire a 60% interest in a joint venture with the Vornado/Rudin JV that would value the Site at $1.2 billion ($900,000,000 to
Vornado and $300,000,000 to Rudin) and build a new 1,700,000 square foot office tower (the “Project”) pursuant to East
Midtown Subdistrict zoning with the Vornado/Rudin JV as developer. KG would own 60% of the joint venture and the
Vornado/Rudin JV would own 40% (with Vornado owning 36% and Rudin owning 4% of the joint venture along with a
$250,000,000 preferred equity interest in the Vornado/Rudin JV).
◦
◦
◦
at the joint venture formation, Citadel or its affiliates will execute a pre-negotiated 15-year anchor lease with
renewal options for approximately 850,000 square feet (with expansion and contraction rights) at the Project for its
primary office in New York City;
the rent for Citadel’s space will be determined by a formula based on a percentage return (that adjusts based on the
actual cost of capital) on the total Project cost;
the master leases will terminate at the scheduled commencement of demolition;
•
or, exercise an option to purchase the Site for $1.4 billion ($1.085 billion to Vornado and $315,000,000 to Rudin), in which
case the Vornado/Rudin JV would not participate in the new development.
Further, the Vornado/Rudin JV will have the option from October 2024 to September 2030 to put the Site to KG for $1.2 billion
($900,000,000 to Vornado and $300,000,000 to Rudin). For ten years following any put option closing, unless the put option is
exercised in response to KG’s request to form the joint venture or KG makes a $200,000,000 termination payment, the Vornado/Rudin
JV will have the right to invest in a joint venture with KG on the terms described above if KG proceeds with development of the Site.
7. Dispositions
The Armory Show
On July 3, 2023, we completed the sale of The Armory Show, located in New York, for $24,410,000, subject to certain post-
closing adjustments, and realized net proceeds of $22,489,000. In connection with the sale, we recognized a net gain of $20,181,000
which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income.
Manhattan Retail Properties Sale
On August 10, 2023, we completed the sale of four Manhattan retail properties located at 510 Fifth Avenue, 148–150 Spring
Street, 443 Broadway and 692 Broadway for $100,000,000 and realized net proceeds of $95,450,000. In connection with the sale, we
recognized an impairment loss of $625,000 which is included in “impairment losses, transaction related costs and other” on our
consolidated statements of income.
220 Central Park South
During the year ended December 31, 2023, we closed on the sale of two condominium units at 220 CPS for net proceeds of
$24,484,000 resulting in a financial statement net gain of $14,127,000 which is included in "net gains on disposition of wholly owned
and partially owned assets" on our consolidated statements of income. In connection with these sales, $2,168,000 of income tax
expense was recognized on our consolidated statements of income.
95
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. Identified Intangible Assets and Liabilities
The following summarizes our identified intangible assets (primarily in-place and above-market leases) and liabilities (primarily
below-market leases).
(Amounts in thousands)
Identified intangible assets:
Gross amount
Accumulated amortization
Total, net
Identified intangible liabilities (included in deferred revenue):
Gross amount
Accumulated amortization
Total, net
Balance as of December 31,
2023
2022
$
$
$
$
225,671 $
(98,589)
127,082 $
206,771 $
(178,282)
28,489 $
237,777
(98,139)
139,638
244,396
(208,592)
35,804
Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental revenues of
$5,268,000, $5,178,000 and $9,249,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated annual
amortization for each of the five succeeding years commencing January 1, 2024 is below:
(Amounts in thousands)
2024
2025
2026
2027
2028
$
2,451
964
321
(148)
(47)
Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $8,342,000,
$10,516,000 and $7,330,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated annual amortization for
each of the five succeeding years commencing January 1, 2024 is below:
(Amounts in thousands)
2024
2025
2026
2027
2028
$
6,843
5,810
5,615
5,308
4,173
9. Debt
Secured Debt
150 West 34th Street
On January 9, 2023, our $105,000,000 participation in the $205,000,000 mortgage loan on 150 West 34th Street was repaid,
which reduced “other assets” and “mortgages payable, net” on our consolidated balance sheets by $105,000,000.
On October 4, 2023, we completed a $75,000,000 refinancing of 150 West 34th Street, of which $25,000,000 is recourse to the
Operating Partnership. The interest-only loan bears a rate of SOFR plus 2.15% and matures in February 2025, with three one-year as-
of-right extension options and an additional one-year extension option available subject to satisfying a loan-to-value test. The interest
rate on the loan is subject to an interest rate cap arrangement with a SOFR strike rate of 5.00%, which matures in February 2026. The
loan replaces the previous $100,000,000 loan, which bore interest at SOFR plus 1.86%.
1290 Avenue of the Americas
On June 29, 2023, we entered into a forward two-year 1.00% SOFR interest rate cap arrangement for the $950,000,000 SOFR
plus 1.62% mortgage loan. We made a $63,100,000 up-front payment (of which $18,930,000 is attributable to noncontrolling
interests), which was recorded to “other assets” on our consolidated balance sheets. The forward cap was effective upon the November
2023 expiration of the previous 3.89% SOFR interest rate cap.
96
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. Debt - continued
The following is a summary of our debt:
(Amounts in thousands)
Mortgages Payable:
Fixed rate(2)
Variable rate(3)
Total
Deferred financing costs, net and other
Total, net
Unsecured Debt:
Senior unsecured notes
Deferred financing costs, net and other
Senior unsecured notes, net
Unsecured term loan
Deferred financing costs, net and other
Unsecured term loan, net
Weighted Average
Interest Rate as of
December 31, 2023(1)
Balance as of December 31,
2023
2022
3.42%
6.23%
4.01%
3.02%
4.79%
$
4,518,200 $
1,211,415
5,729,615
(41,595)
3,570,000
2,307,615
5,877,615
(48,597)
$
$
5,688,020 $
5,829,018
1,200,000 $
1,200,000
(6,127)
(8,168)
1,193,873
1,191,832
800,000
(5,441)
794,559
800,000
(6,807)
793,193
Unsecured revolving credit facilities
3.87%
575,000
575,000
Total, net
$
2,563,432 $
2,560,025
________________________________________
(1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for
(2)
(3)
hedging instruments, as applicable. See Note 15 - Fair Value Measurements for further information on our consolidated hedging instruments.
Includes variable rate mortgages with interest rates fixed by interest rate swap arrangements and the $950,000 1290 Avenue of the Americas mortgage loan which
is subject to a 1.00% SOFR interest rate cap arrangement.
Includes variable rate mortgages subject to interest rate cap arrangements, except for the 1290 Avenue of the Americas mortgage loan discussed above. As of
December 31, 2023, $1,034,119 of our variable rate debt is subject to interest rate cap arrangements. The interest rate cap arrangements have a weighted average
strike rate of 4.50% and a weighted average remaining term of 10 months.
The net carrying amount of properties collateralizing the above indebtedness amounted to $5.9 billion as of December 31, 2023.
As of December 31, 2023, the principal maturities of mortgages payable and unsecured debt, including as-of-right extension
options, for the next five years and thereafter are as follows:
(Amounts in thousands)
Year Ended December 31,
2024
2025
2026
2027
2028
Thereafter
Mortgages Payable
Unsecured Debt
$
169,815 $
879,800
525,000
1,580,000
2,225,000
350,000
—
450,000
400,000
1,375,000
—
350,000
97
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. Redeemable Noncontrolling Interests
Redeemable Noncontrolling Partnership Units
Redeemable noncontrolling partnership units are primarily comprised of Class A Operating Partnership units held by third parties
and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value
from period-to-period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’
capital” on the consolidated balance sheets of the Operating Partnership. Class A units may be tendered for redemption to the
Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common
shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A
units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share,
and a distribution made to a Class A unitholder is equal to the dividend paid to a Vornado common shareholder.
Below are the details of redeemable noncontrolling partnership units.
(Amounts in thousands, except units and per unit amounts)
Balance as of December 31,
Units Outstanding as of
December 31,
Unit Series
2023
2022
2023
2022
Per Unit
Liquidation
Preference
Preferred or
Annual
Distribution
Rate
Common:
Class A units held by third parties
$
480,251
(1) $
345,157
(1)
17,000,030
14,416,891
n/a
$
0.675
Perpetual Preferred/Redeemable Preferred:
3.25% D-17 Cumulative Redeemable(2)
$
3,535
$
3,535
141,400
141,400 $
25.00 $
0.8125
________________________________________
(1) As of December 31, 2023 and 2022, the aggregate redemption value of redeemable Class A units of the Operating Partnership, was $480,251,000 and
$300,015,000, respectively, based on Vornado’s quarter-end closing common share price.
(2) Holders may tender units for redemption to the Operating Partnership for cash at their stated redemption amount; Vornado, at its option, may assume that
obligation and pay the holders either cash or Vornado preferred shares on a one-for-one basis. These units are redeemable at Vornado's option at any time.
Below is a table summarizing the activity of redeemable noncontrolling partnership units.
(Amounts in thousands)
Beginning balance
Net income (loss)
Other comprehensive (loss) income
Distributions
Redemption of Class A units for Vornado common shares, at redemption value
Redeemable Class A unit measurement adjustment
Other, net
Ending balance
For the Year Ended December 31,
2023
2022
$
348,692
$
3,361
(9,340)
(10,783)
(8,489)
138,114
22,231
$
483,786
$
590,975
(30,376)
14,250
(30,311)
(3,524)
(221,145)
28,823
348,692
Redeemable noncontrolling partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13
cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC Topic 480, Distinguishing
Liabilities and Equity. Accordingly, the fair value of these units is included as a component of "other liabilities" on our consolidated
balance sheets and aggregated $49,386,000 and $49,383,000 as of December 31, 2023 and 2022, respectively. Changes in the value
from period-to-period, if any, are charged to “interest and debt expense” on our consolidated statements of income.
Redeemable Noncontrolling Interest in a Consolidated Subsidiary
A consolidated joint venture in which we own a 95% interest, developed and owns the Farley Building (the "Farley Project").
During 2020, a historic tax credit investor (the "Tax Credit Investor") funded $92,400,000 of capital contributions to the Farley Project
and on December 22, 2023, the Tax Credit Investor funded an additional $112,668,000 of capital contributions.
The arrangement includes a put option whereby the joint venture may be obligated to purchase the Tax Credit Investor’s
ownership interest in the Farley Project at a future date. The put price is calculated based on a pre-determined formula. As exercise of
the put option is outside of the joint venture’s control, the Tax Credit Investor’s interest, together with the put option, have been
recorded to “redeemable noncontrolling interest in a consolidated subsidiary” on our consolidated balance sheets. The redeemable
noncontrolling interest is recorded at the greater of the carrying amount or redemption value at the end of each reporting period.
Changes in the value from period-to-period are charged to “additional capital” in Vornado’s consolidated statements of changes in
equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. There was no adjustment required for
the years ended December 31, 2023 and 2022.
98
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. Redeemable Noncontrolling Interests - continued
Redeemable Noncontrolling Interest in a Consolidated Subsidiary - continued
Below is a table summarizing the activity of the redeemable noncontrolling interest in a consolidated subsidiary.
(Amounts in thousands)
Beginning balance
Net loss
Contributions
Distributions
Ending balance
11. Shareholders' Equity/Partners' Capital
Common Shares (Vornado Realty Trust)
For the Year Ended December 31,
2023
2022
$
$
88,040
(39,385)
112,668
(6,661)
154,662
$
$
97,708
(9,668)
—
—
88,040
As of December 31, 2023, there were 190,390,703 common shares outstanding. During 2023, we paid an aggregate of
$129,066,000 of common dividends at an annual rate of $0.675 per share.
Class A Units (Vornado Realty L.P.)
As of December 31, 2023, there were 190,390,703 Class A units outstanding that were held by Vornado. These units are
classified as “partners’ capital” on the consolidated balance sheets of the Operating Partnership. As of December 31, 2023, there were
17,000,030 Class A units outstanding, that were held by third parties. These units are classified outside of “partners’ capital” as
“redeemable partnership units” on the consolidated balance sheets of the Operating Partnership (see Note 10 – Redeemable
Noncontrolling Interests). During 2023, the Operating Partnership paid an aggregate of $129,066,000 of distributions to Vornado at an
annual rate of $0.675 per unit.
Share Repurchase Program
On April 26, 2023, our Board of Trustees authorized a share repurchase plan under which Vornado is authorized to repurchase up
to $200,000,000 of its outstanding common shares. To the extent Vornado repurchases any of its common shares, in order to fund the
common share repurchase and maintain the one-to-one ratio of the number of Vornado common shares outstanding and the number of
Class A units owned by Vornado, the Operating Partnership will repurchase from Vornado an equal number of its Class A units at the
same price.
Share repurchases may be made from time to time in the open market, through privately negotiated transactions or through other
means as permitted by federal securities laws, including through block trades, accelerated share repurchase transactions and/or trading
plans intended to qualify under Rule 10b5-1. The timing, manner, price and amount of any repurchases will be determined in
Vornado’s discretion depending on business, economic and market conditions, corporate and regulatory requirements, prevailing
prices for Vornado’s common shares, alternative uses for capital and other considerations. The program does not have an expiration
date and may be suspended or discontinued at any time and does not obligate Vornado to make any repurchases of its common shares.
During the year ended December 31, 2023, we repurchased 2,024,495 common shares for $29,143,000 at an average price per
share of $14.40. As of December 31, 2023, $170,857,000 remained available and authorized for repurchases.
The Operating Partnership repurchased Class A units from Vornado equivalent to the number and price of common shares
repurchased by Vornado during the same periods.
99
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. Shareholders' Equity/Partners' Capital - continued
Preferred Shares/Units
The following table sets forth the details of our preferred shares of beneficial interest and the preferred units of the Operating
Partnership outstanding as of December 31, 2023 and 2022. During 2023, we paid $62,116,000 in preferred dividends.
(Amounts in thousands, except share/unit and per share/per unit amounts)
Preferred Shares/Units
Convertible Preferred:
6.5% Series A: authorized 12,902 shares/units(2)
Cumulative Redeemable Preferred(3):
5.40% Series L: authorized 13,800,000 shares/units
5.25% Series M: authorized 13,800,000 shares/units
5.25% Series N: authorized 12,000,000 shares/units
4.45% Series O: authorized 12,000,000 shares/units
Balance
Shares/Units
Outstanding
Liquidation
Preference
Annual
Dividend/
Distribution(1)
Per Share/Unit
$
920
12,902 $
50.00 $
3.25
290,306
12,000,000
308,946
12,780,000
291,134
12,000,000
291,153
12,000,000
$ 1,182,459
48,792,902
25.00
25.00
25.00
25.00
1.35
1.3125
1.3125
1.1125
________________________________________
(1) Dividends on preferred shares and distributions on preferred units are cumulative and are payable quarterly in arrears.
(2) Redeemable at the option of Vornado under certain circumstances, at a redemption price of 1.9531 common shares/Class A units per Series A preferred share/unit
plus accrued and unpaid dividends/distributions through the date of redemption, or convertible at any time at the option of the holder for 1.9531 common shares/
Class A units per Series A preferred share/unit.
(3) Series L and Series M preferred shares/units are redeemable at Vornado's option at a redemption price of $25.00 per share/unit, plus accrued and unpaid dividends/
distributions through the date of redemption. Series N preferred shares/units are redeemable commencing November 2025 and Series O preferred shares/units are
redeemable commencing September 2026, each at a redemption price of $25.00 per share/unit.
12. Stock-based Compensation
Vornado’s 2023 Omnibus Share Plan provides the Compensation Committee of Vornado’s Board of Trustees (the “Compensation
Committee”) the ability to grant incentive and non-qualified Vornado stock options, restricted Vornado common shares, restricted
Operating Partnership units (“LTIP Units”), out-performance plan awards (“OPP Units”), appreciation-only long-term incentive plan
units (“AO LTIP Units”), performance conditioned appreciation-only long-term incentive plan units (“Performance AO LTIP Units”),
and long-term performance plan units (“LTPP Units”) to certain of our employees and officers. Vornado’s 2023 Omnibus Share Plan
was approved on May 18, 2023, as discussed on the following page.
We account for forfeitures as they occur and any previously recognized compensation cost is reversed in the period that an award
is forfeited. Below is a summary of our stock-based compensation expense, a component of "general and administrative" expense on
our consolidated statements of income.
(Amounts in thousands)
LTIP Units
Performance AO LTIP Units
LTPP Units
OPP Units
Vornado stock options
Vornado restricted stock
AO LTIP Units
For the Year Ended December 31,
2022
2021
2023
$
22,179 $
21,086 $
27,698
11,426
7,189
1,992
162
159
94
94
5,145
1,906
296
292
430
219
—
8,629
456
450
877
$
43,201 $
29,249 $
38,329
Below is a summary of unrecognized stock-based compensation expense as of December 31, 2023.
(Amounts in thousands)
Performance AO LTIP Units
LTIP Units
LTPP Units
OPP Units
As of
Weighted-Average
Remaining
Amortization Period
2.1
1.9
1.6
1.3
2.0
December 31, 2023
$
$
37,284
29,550
5,004
1,206
73,044
100
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. Stock-based Compensation - continued
On May 18, 2023, our shareholders approved the 2023 Omnibus Share Plan (the “Plan”), which replaced the 2019 Omnibus Share
Plan. Under the Plan, awards may be granted up to a maximum 10,800,000 shares, if all awards granted are Full Value awards, as
defined in the Plan, and up to 21,600,000 shares, if all of the awards granted are Not Full Value Awards, as defined in the Plan. Full
Value Awards are securities that have a value equivalent to the underlying Vornado common share or Class A unit of the Operating
Partnership, such as restricted Vornado common shares or LTIP Units. Vornado stock options, AO LTIP Units and Performance AO
LTIP Units are Not Full Value Awards; these securities require the payment of an exercise price. As of December 31, 2023, Vornado
has approximately 1,217,000 shares available for future grants under the Plan, if all awards granted are Full Value Awards, as defined.
LTPP Units
LTPP Units are multi-year, LTIP units-based performance equity compensation plans. On January 11, 2023, the Compensation
Committee approved the 2023 Long-Term Performance Plan (“2023 LTPP”). Awards under the 2023 LTPP are bifurcated between
operational performance (50%) and relative performance (50%) measurements and may be earned at specified threshold, target and
maximum levels.
The operational component awards may be earned based on Vornado’s 2023 operational performance in the following categories:
•
•
FFO, as adjusted per share (75% weighting); and
ESG performance metrics consisting of greenhouse emissions reductions, GRESB score and Green Building Certification
(LEED) achievements (aggregate 25% weighting).
Any LTPP award units tentatively earned based on Vornado’s 2023 operational performance are subject to an absolute return
modifier pursuant to which such award units are subject to a potential reduction (but not increase) of up to 30% if Vornado’s three-
year total shareholder return (“TSR”) is below specified levels.
Awards under relative components may be earned based on Vornado’s three-year TSR, measured against the Dow Jones U.S.
Real Estate Office Index (50% weighting) and a Northeast peer group custom index (50% weighting). Awards earned under the
relative component of the 2023 LTPP are subject to reductions of up to 30% if Vornado’s three-year TSR is below specified levels.
If the designated performance objectives are achieved, awards earned under 2023 LTPP will vest 50% in January 2026 and 50%
in January 2027. In addition, the Chief Executive Officer is required to hold any earned and vested awards for three years following
each such vesting date and all other award recipients are required to hold such awards for one year following each such vesting date.
Dividends on awards granted under the 2023 LTPP accrue during the applicable performance period and are paid to participants if
awards are ultimately earned based on the achievement of the designated performance objectives.
LTPP Units granted during the years ended December 31, 2023 and 2022 had grant date fair values of $9,491,000 and
$7,847,000, respectively. During the years ended December 31, 2023 and 2022, $4,670,000 and $4,033,000, respectively, was
immediately expensed on the respective grant date due to acceleration of vesting for employees who are retirement eligible (have
reached age 65 or age 60 with at least 20 years of service).
OPP Units
OPP Units are multi-year, performance-based equity compensation plans under which participants have the opportunity to earn a
class of units of the Operating Partnership if, and only if, Vornado outperforms a predetermined TSR and/or outperforms the market
with respect to a relative TSR during the four-year performance period. OPP units, if earned, become convertible into Class A units of
the Operating Partnership (and ultimately into Vornado common shares) following vesting.
OPP units granted during the year ended December 31, 2021 had a total notional value of $30,000,000 and a fair value of
$9,950,000, of which $6,140,000 was immediately expensed on the grant date due to acceleration of vesting for employees who are
retirement eligible (have reached age 65 or age 60 with at least 20 years of service).
On March 30, 2023, the outstanding OPP Units issued in 2020 were forfeited as the requirements were not satisfied.
101
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. Stock-based Compensation – continued
Vornado Stock Options
Vornado stock options are granted at an exercise price equal to the average of the high and low market price of Vornado’s
common shares on the NYSE on the date of grant, generally vest over four years and expire ten years from the date of grant.
Compensation expense related to Vornado stock option awards is recognized on a straight-line basis over the vesting period.
Below is a summary of Vornado’s stock option activity for the year ended December 31, 2023.
Outstanding as of December 31, 2022
Forfeited
Expired
Outstanding as of December 31, 2023
Options exercisable as of December 31, 2023
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
65.35
52.30
64.56
65.52
66.78
4.17
3.99
Shares
176,705 $
(1,058)
(17,546)
158,101 $
144,361 $
There were no Vornado stock options granted during the years ended December 31, 2023, 2022 and 2021.
There were no Vornado stock options exercised during the year ended December 31, 2023. Cash received from Vornado stock
option exercises for the years ended December 31, 2022 and 2021 was $7,000 and $22,000, respectively. The total intrinsic value of
Vornado stock options exercised during the years ended December 31, 2022 and 2021 was $842 and $5,500, respectively. As of
December 31, 2023, the aggregate intrinsic value of outstanding and exercisable Vornado stock options was $0.
Performance AO LTIP Units
Performance AO LTIP Units are AO LTIP Units that require the achievement of certain performance conditions by a specified
date or they are forfeited. If the performance conditions are met, once vested, the awards may be converted into Class A Operating
Partnership units in the same manner as AO LTIP Units until ten years from the date of grant.
On January 14, 2023, the outstanding Performance AO LTIP Units issued in 2019 expired as the performance conditions were not
satisfied.
On June 29, 2023, the Committee granted 14,368,750 Performance AO LTIP Units to a broad group of employees of the
Company including its named executive officers (as identified in the Company’s proxy statement for its 2023 Annual Meeting of
Shareholders). Each Performance AO LTIP Unit is potentially convertible into a number of Class A Units, determined by reference to
the excess of the closing market price of Vornado common shares on the NYSE on the date of conversion over $16.87. The
Performance AO LTIP Units can be converted until the 10th anniversary of the grant date, subject to satisfaction of the vesting and
performance conditions described below.
The Performance AO LTIP Units will vest with respect to 20% on the 3rd anniversary of the Grant Date, and the remaining 80%
will vest on the 4th anniversary of the Grant Date, subject to the recipient’s continued employment with the Company, and subject to
the following performance conditions:
•
•
•
•
No Performance AO LTIP Units are earned if the Applicable Price (defined below) is less than $21.0875 per share.
At an Applicable Price of $21.0875 per share (a 25% increase above the Grant Date share price), 33% of the Performance AO
LTIP Units are earned.
At an Applicable Price of $25.3050 per share (a 50% increase above the Grant Date share price), 67% of the Performance AO
LTIP Units are earned.
At an Applicable Price of $29.5225 per share (a 75% increase above the Grant Date share price), 100% of the Performance
AO LTIP Units are earned.
Linear interpolation applies for Applicable Prices between $21.0875 and $29.5225. “Applicable Price” means the highest average
consecutive 20-trading day closing share price for Vornado’s common shares during the 10 years following the Grant Date.
102
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. Stock-based Compensation – continued
Performance AO LTIP Units - continued
Performance AO LTIP Units granted during the year ended December 31, 2023 had a fair value of $48,710,000. The fair value of
each Performance AO LTIP Unit granted is estimated on the date of grant using an option-pricing model with the following weighted-
average assumptions for grants in the year ended December 31, 2023:
Expected volatility
Risk free interest rate
Expected dividend yield
Below is a summary of Performance AO LTIP Units activity for the year ended December 31, 2023.
As of December 31, 2023
33%
4%
6%
Outstanding as of December 31, 2022
Expired
Granted
Outstanding as of December 31, 2023
Options exercisable as of December 31, 2023
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
62.62
62.62
16.87
16.87
—
9.5
—
Shares
496,762 $
(496,762)
14,368,750
14,368,750 $
— $
As of December 31, 2023, the aggregate intrinsic value of outstanding Performance AO LTIP Units was $153,748,000.
AO LTIP Units
AO LTIP Units are a class of partnership interests in the Operating Partnership that are intended to qualify as “profits interests”
for federal income tax purposes and generally only allow the recipient to realize value to the extent the fair market value of a Vornado
common share exceeds the threshold level set at the time the AO LTIP Units are granted, subject to any vesting conditions applicable
to the award. The threshold level is intended to be equal to 100% of the then fair market value of a Vornado common share on the date
of grant. The value of vested AO LTIP Units is realized through conversion of the AO LTIP Units into Class A Operating Partnership
units. AO LTIP Units have a term of ten years from the grant date. Each holder will generally receive special income allocations in
respect of an AO LTIP Unit equal to 10% (or such other percentage specified in the applicable award agreement) of the income
allocated in respect of a Class A Unit. Upon conversion of AO LTIP Units to Class A Units, holders will be entitled to receive in
respect of each such AO LTIP Unit, on a per unit basis, a special distribution equal to 10% (or such other percentage specified in the
applicable award agreement) of the distributions received by a holder of an equivalent number of Class A Units during the period from
the grant date of the AO LTIP Units through the date of conversion.
Below is a summary of AO LTIP Units activity for the year ended December 31, 2023.
Outstanding as of December 31, 2022
Forfeited
Expired
Outstanding as of December 31, 2023
Options exercisable as of December 31, 2023
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
59.93
52.40
59.62
59.99
60.63
5.24
5.16
Shares
565,664 $
(3,797)
(20,053)
541,814 $
499,882 $
There were no AO LTIP Units granted during the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023, the
aggregate intrinsic value of outstanding and exercisable AO LTIP Units was $0.
103
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. Stock-based Compensation – continued
LTIP Units
LTIP Units are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of
grant, generally vest over a period of three to four years, and are subject to a taxable book-up event, as defined. Compensation expense
related to LTIP Units is recognized ratably over the vesting period using a graded vesting attribution model. Distributions paid on
unvested LTIP Units amounted to $1,302,000, $2,197,000 and $2,634,000 in the years ended December 31, 2023, 2022 and 2021,
respectively.
On June 29, 2023, the Committee granted 2,394,801 LTIP Units to a broad group of employees of the Company including its
named executive officers (as identified in the Company’s proxy statement for its 2023 Annual Meeting of Shareholders). The LTIP
Units vest in two equal installments on the 3rd and 4th anniversaries of the grant date, respectively, subject to the recipient’s continued
employment with the Company as of such dates, with each vesting tranche subject to an additional one-year post-vesting transfer
restriction. The fair value of each LTIP Unit was based on the market value of Vornado’s common shares on the grant date less a
discount for post-vesting transfer restrictions.
Below is a summary of restricted LTIP unit activity for the year ended December 31, 2023.
Unvested as of December 31, 2022
Unvested Units
Granted
Vested
Forfeited
Unvested as of December 31, 2023
Units
Weighted-Average
Grant-Date
Fair Value
985,916 $
3,110,000
(825,882)
(59,875)
3,210,159
49.41
14.62
45.04
27.15
17.24
LTIP Units granted in 2023, 2022 and 2021 had a fair value of $45,468,000, $15,446,000 and $26,194,000, respectively. The fair
value of LTIP Units that vested during the years ended December 31, 2023, 2022 and 2021 was $37,198,000, $25,158,000 and
$36,541,000, respectively.
Vornado Restricted Stock
Vornado restricted stock awards are granted at the average of the high and low market price of Vornado’s common shares on the
NYSE on the date of grant and generally vest over four years. Compensation expense related to Vornado’s restricted stock awards is
recognized on a straight-line basis over the vesting period. Dividends paid on unvested Vornado restricted stock are charged directly to
retained earnings and amounted to $2,000, $18,000 and $35,000 for the years ended December 31, 2023, 2022 and 2021, respectively.
Below is a summary of Vornado’s restricted stock activity for the year ended December 31, 2023.
Unvested Shares
Unvested as of December 31, 2022
Vested
Forfeited
Unvested as of December 31, 2023
Shares
Weighted-Average
Grant-Date
Fair Value
8,379 $
(5,093)
(239)
3,047
55.64
57.17
53.31
53.26
There were no Vornado restricted stock awards granted during the years ended December 31, 2023, 2022 and 2021. The fair value
of restricted stock that vested during the years ended December 31, 2023, 2022 and 2021 was $291,000, $428,000 and $567,000,
respectively.
104
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. Income (Loss) Per Share/Income (Loss) Per Class A Unit
Vornado Realty Trust
Basic net income (loss) per common share is computed by dividing (i) net income (loss) attributable to common stockholders after
allocation of dividends and undistributed earnings to participating securities by (ii) the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the dilutive impact of potential common shares and is computed after
allocation of earnings to participating securities. Vornado’s participating securities include unvested restricted common shares.
Employee stock options, OPP Units, AO LTIP Units, Performance AO LTIP Units and LTPP Units are included in the calculation of
diluted income per share using the treasury stock method, if the effect is dilutive. Series A convertible preferred shares, Series G-1
through G-4 convertible preferred units, and Series D-13 redeemable preferred units, are included in the calculation of diluted income
per share using the if-converted method, if the effect is dilutive. Net income (loss) is allocated to redeemable Class A units of the
Operating Partnership on a one-for-one basis with Vornado common shares. As such, redemption of these units for Vornado common
shares would not have a dilutive effect on income (loss) per common share.
(Amounts in thousands, except per share amounts)
Numerator:
Net income (loss) attributable to Vornado
Preferred share dividends
Series K preferred share issuance costs
Net income (loss) attributable to common shareholders
Distributions and earnings allocated to unvested participating securities
For the Year Ended December 31,
2023
2022
2021
$
105,494 $
(62,116)
(346,499) $
(62,116)
—
43,378
(2)
—
(408,615)
(18)
175,999
(65,880)
(9,033)
101,086
(34)
Numerator for basic and diluted income (loss) per common share
$
43,376 $
(408,633) $
101,052
Denominator:
Denominator for basic income (loss) per common share - weighted average shares
Effect of dilutive securities(1):
Share-based awards
Denominator for diluted income (loss) per common share - weighted average shares and assumed
conversions
191,005
191,775
191,551
851
—
571
191,856
191,775
192,122
Income (loss) per common share:
Basic
Diluted
$
$
0.23 $
0.23 $
(2.13) $
(2.13) $
0.53
0.53
____________________
(1) The calculation of diluted income (loss) per common share for the years ended December 31, 2023, 2022, and 2021 excluded weighted average potential common
shares of 3,458, 1,706, and 164, respectively, as their effect was antidilutive.
105
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. Income (Loss) Per Share/Income (Loss) Per Class A Unit – continued
Vornado Realty L.P.
Basic net income (loss) per Class A unit is computed by dividing (i) net income (loss) attributable to Class A unitholders after
allocation of distributions and undistributed earnings to participating securities by (ii) the weighted average number of Class A units
outstanding for the period. Diluted earnings per share reflects the dilutive impact of potential Class A units and is computed after
allocation of earnings to participating securities. VRLP’s participating securities include unvested LTIP Units and LTPP Units for
which the applicable performance vesting conditions were satisfied. Equity awards subject to market and/or performance vesting
conditions, including Vornado stock options, OPP Units, AO LTIP Units, Performance AO LTIP Units and LTPP Units, are included
in the calculation of diluted income per Class A unit using the treasury stock method. Convertible securities, including Series A
convertible preferred shares, Series G-1 through G-4 convertible preferred units, and Series D-13 redeemable preferred units, are
included in the calculation of diluted income per Class A unit using the if-converted method, if dilutive.
(Amounts in thousands, except per unit amounts)
Numerator:
For the Year Ended December 31,
2023
2022
2021
Net income (loss) attributable to Vornado Realty L.P.
$
108,855 $
(376,875) $
Preferred unit distributions
Series K preferred unit issuance costs
Net income (loss) attributable to Class A unitholders
Distributions and earnings allocated to participating securities
Numerator for basic and diluted income (loss) per Class A unit
(62,231)
—
46,624
(1,323)
(62,231)
—
(439,106)
(2,215)
$
45,301 $
(441,321) $
183,539
(66,035)
(9,033)
108,471
(2,668)
105,803
Denominator:
Denominator for basic income (loss) per Class A unit – weighted average units
Effect of dilutive securities(1):
Unit-based awards
Denominator for diluted income (loss) per Class A unit – weighted average units and assumed
conversions
205,105
205,315
204,728
851
—
916
205,956
205,315
205,644
Income (loss) per Class A unit:
Basic
Diluted
$
$
0.22 $
0.22 $
(2.15) $
(2.15) $
0.52
0.51
____________________
(1) The calculation of diluted income (loss) per Class A unit for the years ended December 31, 2023, 2022, and 2021 excluded weighted average potential Class A
units of 3,458, 1,706, and 164, respectively, as their effect was antidilutive.
14. Variable Interest Entities
Unconsolidated VIEs
As of December 31, 2023 and 2022, we had several unconsolidated VIEs. We do not consolidate these entities because we are not
the primary beneficiary and the nature of our involvement in the activities of these entities does not give us power over decisions that
significantly affect these entities’ economic performance. We account for our investment in these entities under the equity method (see
Note 5 – Investments in Partially Owned Entities). As of December 31, 2023 and 2022, the carrying amount of assets related to our
unconsolidated VIEs was $109,220,000 and $68,223,000, respectively, included in “investments in partially owned entities” on our
consolidated balance sheets. Our maximum exposure to loss from our unconsolidated VIEs as of December 31, 2023 and 2022 was
$196,394,000 and $68,223,000, respectively, which includes our completion guarantee provided to the lender of the Pier 94 JV in
2023.
Consolidated VIEs
Our most significant consolidated VIEs are the Operating Partnership (for Vornado), the Farley joint venture and certain
properties that have noncontrolling interests. These entities are VIEs because the noncontrolling interests do not have substantive kick-
out or participating rights. We consolidate these entities because we control all significant business activities.
As of December 31, 2023, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, were
$4,901,150,000 and $2,735,826,000 respectively. As of December 31, 2022, the total assets and liabilities of our consolidated VIEs,
excluding the Operating Partnership, were $4,423,995,000 and $2,345,726,000, respectively.
106
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. Fair Value Measurements
ASC 820 defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the
price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date (the exit price). 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. Considerable judgment is necessary to interpret Level 2 and 3
inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, our fair value estimates,
which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or
disposition of these assets.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities that are measured at fair value on our consolidated balance sheets consist of (i) investments in U.S.
Treasury bills (classified as available-for-sale), (ii) the assets in our deferred compensation plan (for which there is a corresponding
liability on our consolidated balance sheets), (iii) loans receivable for which we have elected the fair value option under ASC Subtopic
825-10, Financial Instruments ("ASC 825-10"), (iv) interest rate swaps and caps and (v) mandatorily redeemable instruments (Series
G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units). The tables below aggregate the
fair values of these financial assets and liabilities by their levels in the fair value hierarchy.
(Amounts in thousands)
As of December 31, 2023
Deferred compensation plan assets ($26,363 included in restricted cash and $78,883 in
other assets)
$
105,246 $
58,956 $
Loans receivable (included in investments in partially owned entities)
Interest rate swaps and caps designated as a hedge (included in other assets)
Interest rate caps not designated as a hedge (included in other assets)
32,984
138,772
4,154
—
—
—
— $
—
138,772
4,154
46,290
32,984
—
—
Total
Level 1
Level 2
Level 3
Total assets
Mandatorily redeemable instruments (included in other liabilities)
Interest rate swaps designated as a hedge (included in other liabilities)
Interest rate caps not designated as a hedge (included in other liabilities)
Total liabilities
(Amounts in thousands)
Investments in U.S. Treasury bills(1)
Deferred compensation plan assets ($7,763 included in restricted cash and $88,559 in
other assets)
Loans receivable ($50,091 included in investments in partially owned entities and
$4,306 in other assets)
Interest rate swaps and caps designated as a hedge (included in other assets)
Interest rate caps not designated as a hedge (included in other assets)
Total assets
Mandatorily redeemable instruments (included in other liabilities)
Interest rate caps not designated as a hedge (included in other liabilities)
Total liabilities
$
$
$
281,156 $
58,956 $
142,926 $
79,274
49,386 $
49,386 $
— $
7,239
4,092
—
—
7,239
4,092
60,717 $
49,386 $
11,331 $
—
—
—
—
As of December 31, 2022
Total
Level 1
Level 2
Level 3
$
471,962 $
471,962 $
— $
—
96,322
57,406
54,397
183,804
5,994
—
—
—
—
—
183,804
5,994
38,916
54,397
—
—
812,479 $
529,368 $
189,798 $
93,313
49,383 $
49,383 $
— $
2,741
—
2,741
52,124 $
49,383 $
2,741 $
—
—
—
$
$
$
____________________
(1) During the year ended December 31, 2023, we realized proceeds of $477,000 from maturing U.S. Treasury bills.
107
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. Fair Value Measurements - continued
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued
Deferred Compensation Plan Assets
Deferred compensation plan assets that are classified as Level 3 consist of investments in limited partnerships and investment
funds, which are managed by third parties. We receive quarterly financial reports that provide net asset values on a fair value basis
from a third-party administrator, which are compiled from the quarterly reports provided to them from each limited partnership and
investment fund. The period of time over which these underlying assets are expected to be liquidated is unknown. The third-party
administrator does not adjust these values in determining our share of the net assets and we do not adjust these values when reported in
our consolidated financial statements.
The table below summarizes the changes in the fair value of deferred compensation plan assets that are classified as Level 3.
(Amounts in thousands)
Beginning balance
Purchases
Sales
Realized and unrealized gains (losses)
Other, net
Ending balance
Loans Receivable
For the Year Ended December 31,
2023
2022
38,916 $
7,855
(5,080)
982
3,617
46,290 $
45,016
4,507
(9,941)
(3,781)
3,115
38,916
$
$
Loans receivable consist of loan investments in real estate related assets for which we have elected the fair value option under
ASC 825-10. These investments are classified as Level 3.
Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and
discount rates. These rates are based on the location, type and nature of each property, current and anticipated market conditions,
industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable
quantitative inputs in the table below were utilized in determining the fair value of these loans receivable.
Unobservable quantitative inputs (range and weighted average):
Discount rates
Terminal capitalization rates
As of
December 31, 2023
December 31, 2022
8.0%
5.5%
7.5%
5.5%
The table below summarizes the changes in fair value of loans receivable that are classified as Level 3.
(Amounts in thousands)
Beginning balance
Credit losses
Interest accrual
Paydowns
Ending balance
____________________
For the Year Ended December 31,
2023
2022
$
$
$
54,397
(26,155) (1)
5,153
(411)
32,984
$
50,182
—
4,748
(533)
54,397
(1)
Includes a $21,114 impairment loss on advances made for our interest in a joint venture, resulting from a decline in the value of the underlying building. The loss
was included in “income (loss) from partially owned entities” on our consolidated statements of income for the year ended December 31, 2023.
108
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. Fair Value Measurements - continued
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued
Derivatives and Hedging
We use derivative instruments principally to reduce our exposure to interest rate increases. We do not enter into or hold derivative
instruments for speculative trading purposes. We recognize the fair values of all derivatives in "other assets" or "other liabilities" on
our consolidated balance sheets. Changes in the fair value of our cash flow hedges are recognized in other comprehensive income until
the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on
future levels of interest rates and other variables affecting the fair values of hedging instruments and hedged items, but will have no
effect on cash flows. Cash payments and receipts related to our interest rate hedges are classified as operating activities and included
within our disclosure of cash paid for interest on our consolidated statements of cash flows, consistent with the classification of the
hedged interest payments.
The following table summarizes our consolidated hedging instruments, all of which hedge variable rate debt, as of December 31,
2023 and 2022, respectively.
(Amounts in thousands)
Interest rate swaps:
555 California Street mortgage loan:
In-place swap
$
Forward swap (effective 05/24)
770 Broadway mortgage loan
PENN 11 mortgage loan:
In-place swap
Forward swap (effective 03/24)
Unsecured revolving credit facility
Unsecured term loan(3)
100 West 33rd Street mortgage loan
888 Seventh Avenue mortgage loan
4 Union Square South mortgage loan
Interest rate caps:
1290 Avenue of the Americas mortgage loan
One Park Avenue mortgage loan
Various mortgage loans
________________________________________
As of December 31, 2023
As of
December 31,
2022
Notional
Amount
All-In
Swapped Rate
Swap/Cap
Expiration
Date
Fair Value
Asset
Fair Value
Liability
Fair Value
Asset
(1)
(1)
840,000
840,000
700,000
500,000
250,000
(2)
575,000
700,000
480,000
200,000
98,200
950,000
525,000
(4)
(5)
2.29%
6.03%
4.98%
2.22%
6.34%
3.87%
4.52%
5.06%
4.76%
3.74%
(6)
(7)
05/24
05/26
07/27
03/24
10/25
08/27
(3)
06/27
09/27
01/25
11/25
03/25
$
15,494
$
— $
—
20,306
4,702
—
17,064
11,089
3,550
4,340
2,327
53,784
5,297
819
6,091
—
—
1,148
—
—
—
—
—
—
—
—
49,888
—
29,226
26,587
—
24,457
21,024
6,886
6,544
4,050
7,590
5,472
2,080
$
138,772
$
7,239 $
183,804
(1) Represents our 70.0% share of the $1.2 billion mortgage loan. In March 2023, we entered into the forward swap arrangement detailed above.
(2)
In January 2024, we entered into a forward swap arrangement for the remaining $250,000 balance of the $500,000 PENN 11 mortgage loan which is effective
upon the March 2024 expiration of the current in-place swap. Together with the forward swap above, the loan will bear interest at an all-in swapped rate of 6.28%
effective March 2024 through October 2025.
(3) Represents the aggregate fair value of various interest rate swap arrangements to hedge interest payments on our unsecured term loan, which matures in December
2027. The impact of these interest rate swap arrangements is detailed below:
Swapped Balance
Through 07/25
07/25 through 10/26
10/26 through 08/27
$
700,000
550,000
50,000
All-In Swapped Rate
4.52%
4.35%
4.03%
Unswapped Balance
(bears interest at S+129)
100,000
$
250,000
750,000
2022 includes the fair value of a $100,000 notional swap which expired in October 2023.
(4) The remaining $59,800 mortgage loan balance bears interest at a floating rate of SOFR plus 1.80% (7.14% as of December 31, 2023).
(5) The remaining $21,800 mortgage loan balance bears interest at a floating rate of SOFR plus 1.50% (6.84% as of December 31, 2023).
(6) Current SOFR strike rate of 1.00%. In connection with the arrangement, we made a $63,100 up-front payment, of which $18,930 was attributable to
noncontrolling interests. See Note 9 - Debt for further information.
(7) Current SOFR cap strike rate of 3.89%. In March 2023, we entered into a forward cap arrangement which is effective upon the March 2024 expiration of the
current in-place cap and expires in March 2025. The forward cap has a SOFR strike rate of 3.89%.
109
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. Fair Value Measurements - continued
Fair Value Measurements on a Nonrecurring Basis
During the years ended December 31, 2023 and 2022, we recognized impairment losses on certain real estate investments. The
following table sets forth the details of our impairment losses.
(Amounts in thousands)
Consolidated real estate assets
Investments in partially owned entities
As of and For The Years Ended
December 31, 2023
December 31, 2022
Aggregate Fair Value
Impairment Losses
Aggregate Fair Value
Impairment Losses
$
$
55,097 $
21,473
76,570 $
45,007
29,344
74,351
(1) $
(2)
$
80,008 $
2,272,320
2,352,328 $
19,098
583,212
(3)
602,310
Includes $22,176 attributable to noncontrolling interests.
________________________________________
(1)
(2) Excludes a $21,114 impairment loss on advances made for our interest in a joint venture.
(3)
Includes $6,822 attributable to noncontrolling interests.
The fair value of these assets was measured using discounted cash flow analyses and level 3 inputs. Significant unobservable
quantitative inputs in the table below were utilized in determining the fair value of these real estate assets.
Unobservable Quantitative Input
Discount rates
Terminal capitalization rates
As of
December 31, 2023
December 31, 2022
Range
Weighted Average
Range
Weighted Average
7.50% - 8.00%
5.50%
7.99%
5.50%
7.50% - 8.00%
4.75% - 5.50%
7.52%
4.78%
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
(primarily money market funds, which invest in obligations of the United States government) and our secured and unsecured debt.
Estimates of the fair value of these instruments are determined by the standard practice of modeling the contractual cash flows
required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate,
which is provided by a third-party specialist. For floating rate debt, we use forward rates derived from observable market yield curves
to project the expected cash flows we would be required to make under the instrument. The fair value of cash equivalents and
borrowings under our unsecured revolving credit facilities and unsecured term loan are classified as Level 1. The fair value of our
secured debt and unsecured debt are classified as Level 2. The table below summarizes the carrying amounts and fair value of these
financial instruments.
(Amounts in thousands)
Cash equivalents
Debt:
Mortgages payable
Senior unsecured notes
Unsecured term loan
Unsecured revolving credit facilities
Total
As of December 31, 2023
As of December 31, 2022
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
$
$
$
$
$
825,720
5,729,615
1,200,000
800,000
575,000
$
$
826,000
5,569,000
1,069,000
800,000
575,000
$
$
402,903
5,877,615
1,200,000
800,000
575,000
8,304,615
(1) $
8,013,000
$
8,452,615
(1) $
403,000
5,697,000
1,021,000
800,000
575,000
8,093,000
________________________________________
(1) Excludes $53,163 and $63,572 of deferred financing costs, net and other as of December 31, 2023 and 2022, respectively.
110
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16. Impairment losses, Transaction Related Costs and Other
The following table sets forth the details of impairment losses, transaction related costs and other:
(Amounts in thousands)
Real estate impairment losses(1)
Transaction related costs and other
For the Year Ended December 31,
2023
2022
2021
$
$
45,007 $
19,098 $
5,684
12,624
50,691 $
31,722 $
7,880
5,935
13,815
________________________________________
(1) See Note 15 - Fair Value Measurements for additional information. 2023 includes $22,176 of impairment loss attributable to noncontrolling interests.
17. Interest and Other Investment Income, Net
The following table sets forth the details of interest and other investment income, net:
(Amounts in thousands)
Interest on cash and cash equivalents and restricted cash
Credit losses on investments
Amortization of discount on investments in U.S. Treasury bills
Interest on loans receivable
Other, net
18. Interest and Debt Expense
The following table sets forth the details of interest and debt expense:
(Amounts in thousands)
Interest expense (1)
Capitalized interest and debt expense
Amortization of deferred financing fees
For the Year Ended December 31,
2023
2022
2021
$
44,786 $
7,553 $
(8,269)
3,829
1,351
—
—
7,075
5,006
235
$
41,697 $
19,869 $
284
—
—
2,517
1,811
4,612
For the Year Ended December 31,
2022
2021
2023
$
$
368,984 $
277,046 $
(43,062)
23,301
(19,085)
21,804
349,223 $
279,765 $
249,169
(38,320)
20,247
231,096
________________________________________
(1)
2021 includes $23,729 of defeasance costs, of which $7,119 is attributable to noncontrolling interests, in connection with the refinancing of 1290 Avenue of the
Americas, a property in which we own a 70% controlling interest.
111
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19. Leases
As lessor
We lease space to tenants under operating leases. Most of the leases provide for the payment of fixed base rent payable monthly in
advance. Leases typically provide for periodic step-ups in rent over the term of the lease and pass through to tenants their share of
increases in real estate taxes and operating expenses over a base year. Certain leases also require additional variable rent payments
based on a percentage of the tenants’ sales. Electricity is provided to tenants on a sub-metered basis or included in rent based on
surveys and adjusted for subsequent utility rate increases. Leases also typically provide for free rent and tenant improvement
allowances for all or a portion of the tenant’s initial construction costs of its premises.
As of December 31, 2023, future undiscounted cash flows under non-cancelable operating leases were as follows:
(Amounts in thousands)
For the year ended December 31,
2024
2025
2026
2027
2028
Thereafter
As of December 31, 2023
$
1,271,885
1,207,370
1,168,555
1,061,307
962,067
6,254,989
As lessee
We have a number of ground leases which are classified as operating leases. As of December 31, 2023, our ROU assets and lease
liabilities were $680,044,000 and $732,859,000, respectively. As of December 31, 2022, our ROU assets and lease liabilities were
$684,380,000 and $735,969,000, respectively.
On August 28, 2023, upon contribution of the Pier 94 leasehold to Pier 94 JV, we derecognized a ROU asset of $7,081,000 and a
lease liability of $20,692,000. See Note 5 - Investments in Partially Owned Entities for further details.
When the rate implicit in a lease is not readily determinable, the discount rate applied to measure each ROU asset and lease
liability is based on our incremental borrowing rate ("IBR"). We consider the general economic environment and our ratings and
factor in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease.
Certain of our ground leases offer renewal options which we assess against relevant economic factors to determine whether we are
reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that we are reasonably
certain will be exercised are included in the measurement of the lease liability and corresponding ROU asset.
Certain of our ground leases are subject to fair market rent resets based on a percentage of the appraised value of the underlying
assets at specified future dates. Fair market rent resets occurring during the lease term do not give rise to remeasurement of the related
ROU assets and lease liabilities. Fair market rent resets occurring during the lease term, which may be material, will be recognized in
the periods in which they are incurred as variable rent expense.
The following table sets forth information related to the measurement of our lease liabilities.
(Amounts in thousands)
Weighted average remaining lease term (in years)
Weighted average discount rate
Cash paid for operating leases
For the Year Ended December 31,
2022
2021
2023
47.9
5.59%
48.4
5.54%
44.4
4.85%
$
22,499
$
21,861
$
22,382
We recognize rent expense as a component of "operating" expenses on our consolidated statements of income. Rent expense is
comprised of fixed and variable lease payments. The following table sets forth the details of our rent expense.
(Amounts in thousands)
Fixed rent expense
Variable rent expense
Rent expense
For the Year Ended December 31,
2022
2021
2023
$
$
46,538 $
14,679
61,217 $
45,211 $
14,180
59,391 $
24,901
13,078
37,979
112
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19. Leases - continued
As lessee - continued
As of December 31, 2023, future lease payments under operating ground leases were as follows:
(Amounts in thousands)
For the year ended December 31,
As of December 31, 2023
2024
2025
2026
2027
2028
Thereafter
Total undiscounted cash flows
Present value discount
Lease liabilities
$
$
57,811
46,227
46,616
47,027
47,462
1,869,172
2,114,315
(1,381,456)
732,859
PENN 1
Our future lease payments disclosed above include payments for our PENN 1 ground lease based on an amount estimated in
January 2022, when we exercised the second of three 25-year renewal options. The first renewal period commenced June 2023 and,
together with the second option exercise, extends the lease term through June 2073. The ground lease is subject to fair market value
resets at each 25-year renewal period. The rent reset process for the June 2023 renewal period is currently ongoing and the timing is
uncertain. The final fair market value determination may be materially higher or lower than our January 2022 estimate.
The Farley Building
The future lease payments detailed above exclude the ground and building lease at the Farley Building. The consolidated joint
venture, in which we own a 95% controlling interest, has a 99-year triple-net lease with Empire State Development ("ESD") for
847,000 rentable square feet of commercial space at the property, comprised of approximately 730,000 square feet of office space and
approximately 117,000 square feet of restaurant and retail space. Our lease of the commercial space at the property is accounted for as
a “failed sale-leaseback” as a result of us being deemed the "accounting owner" during development of the property in accordance
with ASC 842-40-55 and the lease subsequently meeting "finance lease" classification pursuant to ASC 842-40-25 upon substantial
completion. The lease calls for annual rent payments and fixed payments in lieu of real estate taxes ("PILOT") through June 2030.
Following the fixed PILOT payment period, the PILOT is calculated in a manner consistent with buildings subject to New York City
real estate taxes and assessments. As of December 31, 2023, future rent and fixed PILOT payments are $527,379,000.
20. 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 participating subsidiaries may be required to bear its then 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 was not significant to our consolidated financial statements.
During the years ended December 31, 2023, 2022 and 2021, we contributed $7,913,000, $7,761,000 and $19,851,000,
respectively, towards Multiemployer Pension Plans, which is included as a component of “operating” expenses on our consolidated
statements of income. During the year ended December 31, 2021, the Company funded its pension withdrawal liability in relation to
the permanent closure of Hotel Pennsylvania which resulted in the Company funding more than 5% of total employer contributions to
the related plan for the year. For our other Multiemployer Pension Plans, our subsidiaries’ contributions did not represent more than
5% of total employer contributions 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. During the years ended December 31, 2023, 2022 and 2021, our subsidiaries contributed $28,764,000, $26,514,000 and
$23,431,000, respectively, towards these plans, which is included as a component of “operating” expenses on our consolidated
statements of income.
113
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
21. Commitments and Contingencies
Insurance
For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which
$275,000,000, increased from $250,000,000 effective June 20, 2023, includes communicable disease coverage, and we maintain all
risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and
earthquake, excluding communicable disease coverage. Our California properties have earthquake insurance with coverage of
$350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property.
We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2
billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear,
biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as
amended to date and which has been extended through December 2027.
Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a
portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for
coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third
party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a
deductible of $2,112,753 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining
portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.
Certain condominiums in which we own an interest (including the Farley Condominiums) maintain insurance policies with
different per occurrence and aggregate limits than our policies described above.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and 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 debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit
agreements 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. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance or
refinance our properties and expand our portfolio.
Other Commitments and Contingencies
We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation
with legal counsel, the outcome of such matters is not currently expected to have a material adverse effect on our financial position,
results of operations or cash flows.
Each of our properties has been subjected to varying degrees of environmental assessment at various times. The environmental
assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of
new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in
cleanup requirements would not result in significant costs to us.
In July 2018, we leased 78,000 square feet at 345 Montgomery Street in San Francisco, CA, to a subsidiary of Regus PLC, for an
initial term of 15 years. The obligations under the lease were guaranteed by Regus PLC in an amount of up to $90,000,000. The tenant
purported to terminate the lease prior to space delivery. We commenced a suit on October 23, 2019 seeking to enforce the lease and
the guaranty. On May 11, 2021, the court issued a final statement of decision in our favor and on January 31, 2023, the Court of
Appeal affirmed the lower court's decision. On October 9, 2020, the successor to Regus PLC filed for bankruptcy in Luxembourg. In
April 2023, we entered into a settlement with affiliates of the successor to Regus PLC, pursuant to which we agreed to discontinue all
legal proceedings against the Regus PLC successor and its affiliates in exchange for a payment to us of $21,350,000, which is included
in “rental revenues” on our consolidated statements of income for the year ended December 31, 2023, of which $6,405,000 is
attributable to noncontrolling interest.
114
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
21. Commitments and Contingencies – continued
Other Commitments and Contingencies - continued
We may, from time to time, enter into guarantees including, but not limited to, payment guarantees to lenders of unconsolidated
joint ventures for tax purposes, completion guarantees for development and redevelopment projects, and guarantees to fund leasing
costs. These agreements terminate either upon the satisfaction of specified obligations or repayment of the underlying loans. As of
December 31, 2023, the aggregate dollar amount of these guarantees is approximately $1,230,000,000, primarily comprised of
payment guarantees for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street, and 435 Seventh Avenue and the
completion guarantee provided to the lender of Pier 94 JV. Other than these loans, our mortgage loans are non-recourse to us.
As of December 31, 2023, $30,233,000 of letters of credit were outstanding under one of our unsecured revolving credit
facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage
and maximum debt to market capitalization ratios, and provide for increased interest rates in the event of a decline in the credit rating
assigned to our senior unsecured notes. Our unsecured revolving credit facilities also contain customary conditions precedent to
borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated
repayment, including such items as failure to pay interest or principal.
Our 95% consolidated joint venture (5% is owned by Related Companies ("Related")) developed and owns the Farley Building. In
connection with the development of the property, the joint venture admitted a historic Tax Credit Investor partner. Under the terms of
the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions.
Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a
refund or reduction of the Tax Credit Investor’s capital contributions. As of December 31, 2023, the Tax Credit Investor has made
$205,068,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax
Credit Investor.
As of December 31, 2023, we have construction commitments aggregating approximately $91,372,000.
22. Related Party Transactions
Alexander’s, Inc.
We own 32.4% of Alexander’s. Steven Roth, the Chairman of Vornado’s Board of Trustee’s and its Chief Executive Officer, is
also the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. We provide various services to Alexander’s
in accordance with management, development and leasing agreements. These agreements are described in Note 5 - Investments in
Partially Owned Entities.
Interstate Properties (“Interstate”)
Interstate is a general partnership in which Mr. Roth is the managing general partner. David Mandelbaum and
Russell B. Wight, Jr., Trustees of Vornado and Directors of Alexander’s, respectively, are Interstate’s two other general partners. As
of December 31, 2023, Interstate and its partners beneficially owned an aggregate of approximately 7.0% of the common shares of
beneficial interest of Vornado and 26.0% of Alexander’s common stock.
We manage and lease the real estate assets of Interstate pursuant to a management agreement for which we receive an annual fee
equal to 4% of annual base rent and percentage rent. The management agreement has a term of one year and is automatically
renewable unless terminated by either of the parties on 60 days’ notice at the end of the term. We believe, based upon comparable fees
charged by other real estate companies, that the management agreement terms are consistent with the market. We earned $206,000,
$204,000, and $203,000 of management fees under the agreement for the years ended December 31, 2023, 2022 and 2021,
respectively.
Fifth Avenue and Times Square JV
We provide various services to Fifth Avenue and Times Square JV in accordance with management, development, leasing and
other agreements. These agreements are described in Note 5 - Investments in Partially Owned Entities. Haim Chera, Executive Vice
President - Head of Retail, has an investment in Crown Acquisitions Inc. and Crown Retail Services LLC (collectively, "Crown"),
companies controlled by Mr. Chera's family. Crown has a nominal minority interest in Fifth Avenue and Times Square JV.
Additionally, we have other investments with Crown.
115
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23. Segment Information
We operate in two reportable segments, New York and Other, which is based on how we manage our business.
Net operating income ("NOI") at share represents total revenues less operating expenses including our share of partially owned
entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of
acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We
consider NOI at share - cash basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered
performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are
bought and sold based on NOI at share - cash basis, we utilize this measure to make investment decisions as well as to compare the
performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net
income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies. Asset
information by segment is not reported as we do not use this measure to assess segment performance or to make resource allocation
decisions.
Below is a summary of NOI at share and NOI at share - cash basis by segment for the years ended December 31, 2023, 2022 and
2021.
(Amounts in thousands)
Total revenues
Operating expenses
NOI - consolidated
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries
Add: NOI from partially owned entities
NOI at share
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net,
and other
NOI at share - cash basis
(Amounts in thousands)
Total revenues
Operating expenses
NOI - consolidated
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries
Add: NOI from partially owned entities
NOI at share
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net,
and other
NOI at share - cash basis
(Amounts in thousands)
Total revenues
Operating expenses
NOI - consolidated
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries
Add: NOI from partially owned entities
NOI at share
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net,
and other
NOI at share - cash basis
116
For the Year Ended December 31, 2023
Total
New York
Other
$
1,811,163
$
1,452,158
$
(905,158)
906,005
(48,553)
285,761
1,143,213
(733,478)
718,680
(15,547)
274,436
977,569
(3,377)
(7,700)
$
1,139,836
$
969,869
$
359,005
(171,680)
187,325
(33,006)
11,325
165,644
4,323
169,967
For the Year Ended December 31, 2022
Total
New York
Other
$
1,799,995
$
1,449,442
$
(873,911)
926,084
(70,029)
305,993
1,162,048
(716,148)
733,294
(45,566)
293,780
981,508
(10,980)
(18,509)
$
1,151,068
$
962,999
$
350,553
(157,763)
192,790
(24,463)
12,213
180,540
7,529
188,069
For the Year Ended December 31, 2021
New York
Total
Other
$
1,589,210
$
1,257,599
$
(797,315)
791,895
(69,385)
310,858
1,033,368
(626,386)
631,213
(38,980)
300,721
892,954
1,318
(1,188)
$
1,034,686
$
891,766
$
331,611
(170,929)
160,682
(30,405)
10,137
140,414
2,506
142,920
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23. Segment Information - continued
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31,
2023, 2022 and 2021.
(Amounts in thousands)
Net income (loss)
Depreciation and amortization expense
General and administrative expense
Impairment losses, transaction related costs and other
(Income) loss from partially owned entities
Income from real estate fund investments
Interest and other investment income, net
Interest and debt expense
Net gains on disposition of wholly owned and partially owned assets
Income tax expense (benefit)
NOI from partially owned entities
NOI attributable to noncontrolling interests in consolidated subsidiaries
For the Year Ended December 31,
2023
2022
2021
$
32,888
$
(382,612)
$
434,273
162,883
50,691
(38,689)
(1,590)
(41,697)
349,223
(71,199)
29,222
285,761
(48,553)
504,502
133,731
31,722
461,351
(3,541)
(19,869)
279,765
(100,625)
21,660
305,993
(70,029)
207,553
412,347
134,545
13,815
(130,517)
(11,066)
(4,612)
231,096
(50,770)
(10,496)
310,858
(69,385)
NOI at share
1,143,213
1,162,048
1,033,368
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net,
and other
NOI at share - cash basis
(3,377)
(10,980)
1,318
$
1,139,836
$
1,151,068
$
1,034,686
117
ITEM 9.
None.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
ITEM 9A.
CONTROLS AND PROCEDURES
Vornado Realty Trust
Disclosure Controls and Procedures: Our management, with the participation of Vornado’s Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-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, Vornado’s 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.
Management’s Report on Internal Control over Financial Reporting
Management of Vornado Realty Trust, together with its consolidated subsidiaries (the “Company”), is responsible for establishing
and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed
under the supervision of Vornado’s principal executive and principal financial officers to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of our 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 our 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 our internal
control over financial reporting as of December 31, 2023 was effective.
Our 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, and that receipts and expenditures are being made only in accordance with authorizations of management and our
trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
our assets that could have a material effect on our financial statements.
The effectiveness of our 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 the following page, which expresses an
unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2023.
118
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of Vornado Realty Trust
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Vornado Realty Trust 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 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
119
ITEM 9A.
CONTROLS AND PROCEDURES - CONTINUED
Vornado Realty L.P.
Disclosure Controls and Procedures: Vornado Realty L.P.’s management, with the participation of Vornado’s Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined
in Rule 13a-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, Vornado’s 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.
Management’s Report on Internal Control over Financial Reporting
Management of Vornado Realty Trust, sole general partner of Vornado Realty L.P., together with Vornado Realty L.P.’s
consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate internal control over financial
reporting. Our internal control over financial reporting is a process designed under the supervision of Vornado’s principal executive
and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
our 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 our 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 our internal
control over financial reporting as of December 31, 2023 was effective.
Our 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, and that receipts and expenditures are being made only in accordance with authorizations of management and
Vornado’s trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of our assets that could have a material effect on our financial statements.
The effectiveness of our 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 the following page, which expresses an
unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2023.
120
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of Vornado Realty L.P.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Vornado Realty L.P. and subsidiaries (the “Partnership”) 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 Partnership 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 Partnership and our report
dated February 12, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Partnership’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 Partnership’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 Partnership 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
121
ITEM 9B.
OTHER INFORMATION
During the three months ended December 31, 2023, none of our trustees or executive officers adopted, modified or terminated a
“Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of
Regulation S-K.
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information relating to trustees of Vornado, the Operating Partnership’s sole general partner, including its audit committee and
audit committee financial expert, will be contained in Vornado’s definitive Proxy Statement involving the election of Vornado’s
trustees which Vornado will file with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities
Exchange Act of 1934 not later than 120 days after December 31, 2023, and such information is incorporated herein by reference.
Also incorporated herein by reference is the information under the caption “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 Vornado of the executive officers of Vornado
and the positions held by such officers during the past five years. All executive officers of Vornado have terms of office that run until
the next succeeding meeting of the Board of Trustees of Vornado following the Annual Meeting of Vornado’s Shareholders unless
they are removed sooner by Vornado’s Board.
Name
Steven Roth
Age
82
PRINCIPAL OCCUPATION, POSITION AND OFFICE
(Current and during past five years with Vornado unless otherwise stated)
Chairman of the Board; Chief Executive Officer since April 2013 and from May 1989 to May 2009;
Managing General Partner of Interstate Properties, an owner of shopping centers and an investor in
securities and partnerships; Chief Executive Officer of Alexander’s, Inc. since March 1995, a
Director since 1989, and Chairman of the Board since May 2004.
Michael J. Franco
55
President and Chief Financial Officer since December 2020; President since April 2019; Executive
Vice President - Chief Investment Officer from April 2015 to April 2019; Executive Vice President -
Head of Acquisitions and Capital Markets from November 2010 to April 2015.
Haim Chera
Barry S. Langer
Glen J. Weiss
54
45
54
Executive Vice President - Head of Retail since April 2019; Principal at Crown Acquisitions from
January 2000 - April 2019.
Executive Vice President - Development - Co-Head of Real Estate since April 2019; Executive Vice
President - Head of Development from May 2015 to April 2019.
Executive Vice President - Office Leasing - Co-Head of Real Estate since April 2019; Executive Vice
President - Office Leasing from May 2013 to April 2019.
Vornado, the Operating Partnership’s sole general partner, has adopted a Code of Business Conduct and Ethics that applies to all
officers and employees. This Code is available on Vornado’s website at www.vno.com.
ITEM 11.
EXECUTIVE COMPENSATION
Information relating to Vornado’s executive officer and trustee compensation will be contained in Vornado’s Proxy Statement
referred to above in Item 10, “Directors, Executive Officers and Corporate Governance,” and such information is incorporated herein
by reference.
122
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 will be
contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” and such
information is incorporated herein by reference.
Equity compensation plan information
The following table provides information as of December 31, 2023 regarding Vornado’s equity compensation plans.
Plan Category
Equity compensation plans approved by security
holders
Equity compensation plans not approved by
security holders
Total
________________________________________
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
the second column)
(1)
(3)
21,767,856
419,603
22,187,459
$
$
65.52
N/A
65.52
1,217,273
(2)
—
1,217,273
(1)
Includes shares/units of (i) 158,101 Vornado Stock Options (144,361 of which are vested and exercisable), (ii) 541,814 Appreciation-Only Long-Term Incentive
Plan ("AO LTIP") units (499,882 of which are vested and exercisable), (iii) 14,368,750 Performance AO LTIP units, (iv) 4,558,915 restricted Operating
Partnership units (1,348,756 of which are vested and exercisable), (v) 1,208,264 unearned Out-Performance Plan units, (vi) 71,656 earned but unvested Long-
Term Performance Plan LTIP Units and (vii) 860,356 unearned Long-Term Performance Plan LTIP Units. See Note 12 - Stock-based Compensation in Part II,
Item 8 of this Annual Report on Form 10-K for additional information.
Does not include 3,047 shares of Vornado Restricted Stock, as they have been reflected in Vornado's total shares outstanding.
(2) Based on awards being granted as "Full Value Awards," as defined. If we were to grant "Not Full Value Awards," as defined, the number of securities available
(3)
for future grants is approximately 2,435,000 shares.
Includes (i) 120,924 restricted Operating Partnership units granted at a market price of $13.03 per unit to Vornado Trustees that are not executives of the Company
as part of their annual Trustee fees and (ii) 116,612 restricted Operating Partnership units granted at a market price of $19.30 per unit to Vornado consultants that
are not executives of the Company for annual consulting fees, and (iii) 182,067 restricted Operating Partnership units granted in 2022.
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 Vornado’s
Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” and such information is
incorporated herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information relating to principal accountant fees and services will be contained in Vornado’s Proxy Statement referred to in Item
10, “Directors, Executive Officers and Corporate Governance,” under the caption “Ratification of The Appointment of Independent
Accounting Firm” and such information is incorporated herein by reference.
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
PART IV
1. The consolidated financial statements are set forth in Item 8 of this Annual Report on Form 10-K.
The following financial statement schedules 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
Page in this
Annual Report
on Form 10-K
124
Schedules other than those listed above are omitted because they are not applicable or the information required is included in the
consolidated financial statements or the notes thereto.
123
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(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
Encumbrances(1)
Land
Buildings
and
improvements
Costs
capitalized
subsequent
to acquisition
Gross amount at which
carried at close of period
Buildings
and
improvements
Land
Total(2)
Accumulated
depreciation
and
amortization
Date of
construction(3)
Date
acquired
Life on which
depreciation
in latest
income
statement
is computed
$ 518,244 $
926,992 $
257,295 $ 518,244 $
1,184,287 $ 1,702,531 $
495,262
15,684
197,057
108,646
306,034
384,700
431,882
581,757
737,916
914,769
—
1,326,938
1,326,938
25,714
181,322
435,128
78,189
331,371
—
119,657
New York
Manhattan
1290 Avenue of the Americas
$
One Park Avenue
350 Park Avenue
PENN 1
100 West 33rd Street
150 West 34th Street
PENN 2
90 Park Avenue
770 Broadway
888 Seventh Avenue
PENN 11
909 Third Avenue
150 East 58th Street
595 Madison Avenue
330 West 34th Street
715 Lexington Avenue
4 Union Square South
The Farley Building
260 Eleventh Avenue
606 Broadway
435 Seventh Avenue
131-135 West 33rd Street
304 - 306 Canal Street
1131 Third Avenue
431 Seventh Avenue
138-142 West 32nd Street
334 Canal Street
966 Third Avenue
137 West 33rd Street
825 Seventh Avenue
537 West 26th Street
950,000
525,000
400,000
—
480,000
75,000
575,000
(5)
—
700,000
259,800
500,000
350,000
—
—
—
—
—
—
74,119
95,696
—
—
—
—
—
—
—
—
—
—
197,057
265,889
—
331,371
119,657
53,615
8,000
52,898
—
40,333
—
39,303
62,731
—
—
—
—
45,406
19,893
8,315
3,511
7,844
16,700
9,252
1,693
8,869
6,398
1,483
120,000
24,079
369,016
363,381
412,169
361,443
268,509
164,903
175,890
95,686
117,269
85,259
120,723
80,216
62,888
8,599
26,903
55,220
476,235
80,482
8,993
19,091
21,312
12,905
7,844
2,751
9,936
6,507
3,631
1,550
697
1963
1926
1960
1972
1912
1911
2002
1910
1920
1932
439,632
268,509
771,003
388,166
1,010,927
1,063,616
376,611
293,782
297,399
227,347
249,476
145,926
145,488
196,672
17,645
69,549
384,611
346,680
297,399
267,680
249,476
185,229
208,219
196,672
47,731
93,628
186,718
1911/2009
57,618
109,183
208,034
146,826
168,398
112,615
143,228
78,336
64,983
68,953
2,918
1900
1968
1964
1907
1980
1923
1969
1969
1968
1925
1923
30,512
1965/2004
1,433,047
1,433,047
106,076
88,683
30,955
21,123
21,789
7,016
13,527
3,051
12,068
8,751
3,631
1,550
4,666
88,683
54,885
41,016
30,104
8,787
21,371
19,751
21,320
9,504
12,500
7,948
6,149
48,002
18,343
1,696
12,659
4,478
539
3,886
1,157
2,611
614
938
339
1,299
4,396
2007
2021
2006
1998
2007
2015
1997
1997
1998
1998
1997
1999
1998
1999
1998
2001
1993
2018
2015
2016
1997
2016
2014
1997
2007
2015
2011
2013
2015
1997
2018
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
845,098
200,721
198,096
180,130
142,088
128,753
65,710
82,600
188,073
20,828
14,329
956,812
8,201
486
2,032
477
(7,629)
5,683
300
2,132
1,304
—
—
3,969
20,000
52,689
8,000
52,898
—
40,333
—
39,303
62,731
—
30,086
24,079
—
—
23,930
19,893
8,315
1,771
7,844
16,700
9,252
753
8,869
6,398
1,483
10,370
17,632
26,631
21,371
124
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
(Amounts in thousands)
COLUMN A
COLUMN B
COLUMN C
COLUMN D
COLUMN E
Initial cost to company
Encumbrances(1)
Land
Buildings
and
improvements
Costs
capitalized
subsequent
to acquisition
Gross amount at which
carried at close of period
Buildings
and
improvements
Total(2)
Land
COLUMN F COLUMN G COLUMN H COLUMN I
Life on which
depreciation
in latest
income
statement
is computed
Accumulated
depreciation
and
amortization
Date of
construction(3)
Date
acquired
New York - continued
Manhattan - continued
339 Greenwich Street
Hotel Pennsylvania
Other (Including Signage)
Total Manhattan
Other Properties
Paramus, New Jersey
Total Other Properties
Total New York
Other
THE MART
THE MART, Illinois
527 West Kinzie, Illinois
Total THE MART
$
— $
2,622 $
12,333 $
(10,018) $
866 $
4,071 $
4,937 $
—
—
29,903
140,477
121,712
31,892
163,985
56,012
29,903
108,589
285,697
119,792
315,600
228,381
368
—
32,781
1919
2017
1997
5,104,615
2,025,913
4,530,569
4,644,755
2,053,679
9,147,558
11,201,237
2,707,928
—
—
—
—
—
—
20,408
20,408
1,033
1,033
19,375
19,375
20,408
20,408
14,819
14,819
1967
1987
5,104,615
2,025,913
4,530,569
4,665,163
2,054,712
9,166,933
11,221,645
2,722,747
$
— $ 64,528 $
319,146 $
475,435 $
64,535 $
794,574 $ 859,109 $
406,292
1930
—
—
5,166
69,694
—
319,146
317
475,752
5,166
69,701
317
5,483
—
794,891
864,592
406,292
555 California Street, California
1,200,000
223,446
895,379
Borgata Land, Atlantic City, NJ
759-771 Madison Avenue (40 East
66th Street) Residential, New York
Annapolis, Maryland
Wayne Towne Center, New Jersey
Other
Total Other
Leasehold improvements, equipment
and other
—
—
—
—
—
83,089
—
8,454
—
—
—
13,321
9,652
26,137
—
278,150
1,405
223,446
83,089
1,173,529
1,396,975
1,405
84,494
(8,193)
—
49,313
3,861
5,273
—
—
—
8,309
9,652
75,450
3,861
13,582
9,652
75,450
3,861
468,993
671
3,541
5,215
42,400
2,291
1922,1969
-1970
—
—
1,200,000
384,683
1,263,635
800,288
381,509
2,067,097
2,448,606
929,403
—
—
—
130,953
—
130,953
130,953
100,677
Total December 31, 2023
$
6,304,615 $ 2,410,596 $ 5,794,204 $
5,596,404 $ 2,436,221 $ 11,364,983 $ 13,801,204 $
3,752,827
________________________________________
(1) Represents contractual debt obligations.
(2) The net basis of Vornado's assets and liabilities for tax reporting purposes is approximately $1.5 billion lower than the amounts reported for financial statement purposes.
(3) Date of original construction - many properties have had substantial renovation or additional construction, see "costs capitalized subsequent to acquisition" column.
(4) Depreciation of the buildings and improvements is calculated over lives ranging from the life of the lease to forty years.
(5) Secured amount outstanding on revolving credit facilities.
125
1998
1998
2007
2010
2005
2005
2010
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
(4)
VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
The following is a reconciliation of real estate assets and accumulated depreciation:
Real Estate
Balance at beginning of period
Additions during the period:
Land
Buildings & improvements and other
Less: Assets sold, written-off, reclassified to ready for sale and deconsolidated
Balance at end of period
Accumulated Depreciation
Balance at beginning of period
Depreciation expense
Less: Accumulated depreciation on assets sold, written-off and deconsolidated
Balance at end of period
Year Ended December 31,
2023
2022
2021
$
13,314,755 $
13,217,845 $
12,087,943
40,145
713,740
14,068,640
267,436
—
711,722
13,929,567
614,812
197,057
1,286,474
13,571,474
353,629
$
13,801,204 $
13,314,755 $
13,217,845
$
3,470,991 $
382,638
3,376,347 $
449,864
3,853,629
100,802
3,826,211
355,220
3,169,446
362,311
3,531,757
155,410
$
3,752,827 $
3,470,991 $
3,376,347
126
(b)
Exhibits:
Exhibit No.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
— Articles of Restatement of Vornado Realty Trust, as filed with the State Department of Assessments and Taxation of Maryland on July
30, 2007 - Incorporated by reference to Exhibit 3.75 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2007 (File No. 001-11954), filed on July 31, 2007
— Amended and Restated Bylaws of Vornado Realty Trust, as amended on July 28, 2022 - Incorporated by reference to Exhibit 3.2 to
Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (File No. 001-11954), filed on August 1,
2022
— Articles of Amendment to Declaration of Trust, dated September 30, 2016 – Incorporated by reference to Exhibit 3.3 to Vornado
Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-11954), filed on February 16, 2021
— Articles of Amendment of Vornado Realty Trust, as filed with the State Department of Assessments and Taxation of Maryland on
October 4, 2016—Incorporated by reference to Annex B to Vornado Realty Trust's Definitive Proxy Statement on Schedule 14A
(File No. 001-11954), filed on April 8, 2016.
— Articles of Amendment to Declaration of Trust, dated June 13, 2018 - Incorporated by reference to Exhibit 3.54 to Vornado Realty
Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 001-11954), filed on July 30, 2018
— Articles of Amendment to Declaration of Trust, dated August 7, 2019 - Incorporated by reference to Exhibit 3.1 to Vornado Realty
Trust's Current Report on Form 8-K (File No. 001-11954), filed on August 8, 2019
— Articles Supplementary, 5.40% Series L Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00
per share, no par value – Incorporated by reference to Exhibit 3.6 to Vornado Realty Trust’s Registration Statement on Form 8-A
(File No. 001-11954), filed on January 25, 2013
— Articles Supplementary Classifying Vornado Realty Trust's 5.25% Series M Cumulative Redeemable Preferred Shares of Beneficial
Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.7 to Vornado Realty Trust's
Registration Statement on Form 8-A (File No. 001-11954), filed on December 13, 2017
— Articles Supplementary Classifying Vornado Realty Trust's 5.25% Series N Cumulative Redeemable Preferred Shares of Beneficial
Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust's
Current Report on Form 8-K (File No. 001-11954), filed on November 24, 2020
— Articles Supplementary Classifying Vornado Realty Trust's 4.45% Series O Cumulative Redeemable Preferred Shares of Beneficial
Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust's
Current Report on Form 8-K (File No. 001-11954), filed on September 22, 2021
— Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of October 20, 1997 (the
“Partnership Agreement”) – Incorporated by reference to Exhibit 3.26 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003
— Amendment to the Partnership Agreement, dated as of December 16, 1997 – Incorporated by reference to Exhibit 3.27 to Vornado
Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003
*
*
*
*
*
*
*
*
*
*
*
*
— Second Amendment to the Partnership Agreement, dated as of April 1, 1998 – Incorporated by reference to Exhibit 3.5 to Vornado
*
Realty Trust’s Registration Statement on Form S-3 (File No. 333-50095), filed on April 14, 1998
— Third Amendment to the Partnership Agreement, dated as of November 12, 1998 - Incorporated by reference to Exhibit 3.2 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on November 30, 1998
— Fourth Amendment to the Partnership Agreement, dated as of November 30, 1998 - Incorporated by reference to Exhibit 3.1 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on February 9, 1999
— Fifth Amendment to the Partnership Agreement, dated as of March 3, 1999 - Incorporated by reference to Exhibit 3.1 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on March 17, 1999
— Sixth Amendment to the Partnership Agreement, dated as of March 17, 1999 - Incorporated by reference to Exhibit 3.2 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 7, 1999
— Seventh Amendment to the Partnership Agreement, dated as of May 20, 1999 - Incorporated by reference to Exhibit 3.3 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 7, 1999
— Eighth Amendment to the Partnership Agreement, dated as of May 27, 1999 - Incorporated by reference to Exhibit 3.4 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 7, 1999
— Ninth Amendment to the Partnership Agreement, dated as of September 3, 1999 - Incorporated by reference to Exhibit 3.3 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on October 25, 1999
— Tenth Amendment to the Partnership Agreement, dated as of September 3, 1999 - Incorporated by reference to Exhibit 3.4 to Vornado
Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on October 25, 1999
— Eleventh Amendment to the Partnership Agreement, dated as of November 24, 1999 - Incorporated by reference to Exhibit 3.2 to
Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on December 23, 1999
*
*
*
*
*
*
*
*
*
*
________________________________
Incorporated by reference
127
3.23
3.24
3.25
3.26
3.27
3.28
3.29
3.30
3.31
3.32
3.33
3.34
3.35
3.36
3.37
3.38
3.39
3.40
3.41
3.42
3.43
3.44
3.45
3.46
3.47
— Twelfth Amendment to the Partnership Agreement, dated as of May 1, 2000 - Incorporated by reference to Exhibit 3.2 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on May 19, 2000
— Thirteenth Amendment to the Partnership Agreement, dated as of May 25, 2000 - Incorporated by reference to Exhibit 3.2 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on June 16, 2000
— Fourteenth Amendment to the Partnership Agreement, dated as of December 8, 2000 - Incorporated by reference to Exhibit 3.2 to
Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on December 28, 2000
— Fifteenth Amendment to the Partnership Agreement, dated as of December 15, 2000 - Incorporated by reference to Exhibit 4.35 to
Vornado Realty Trust’s Registration Statement on Form S-8 (File No. 333-68462), filed on August 27, 2001
*
*
*
*
— Sixteenth Amendment to the Partnership Agreement, dated as of July 25, 2001 - Incorporated by reference to Exhibit 3.3 to Vornado
*
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001
— Seventeenth Amendment to the Partnership Agreement, dated as of September 21, 2001 - Incorporated by reference to Exhibit 3.4 to
Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001
— Eighteenth Amendment to the Partnership Agreement, dated as of January 1, 2002 - Incorporated by reference to Exhibit 3.1 to
Vornado Realty Trust’s Current Report on Form 8-K/A (File No. 001-11954), filed on March 18, 2002
— Nineteenth Amendment to the Partnership Agreement, dated as of July 1, 2002 - Incorporated by reference to Exhibit 3.47 to Vornado
Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-11954), filed on August 7, 2002
*
*
*
— Twentieth Amendment to the Partnership Agreement, dated April 9, 2003 - Incorporated by reference to Exhibit 3.46 to Vornado Realty
*
Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003
— Twenty-First Amendment to the Partnership Agreement, dated as of July 31, 2003 - Incorporated by reference to Exhibit 3.47 to
*
Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (File No. 001-11954), filed on
November 7, 2003
— Twenty-Second Amendment to the Partnership Agreement, dated as of November 17, 2003 – Incorporated by reference to Exhibit 3.49
*
to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-11954), filed on
March 3, 2004
— Twenty-Third Amendment to the Partnership Agreement, dated May 27, 2004 – Incorporated by reference to Exhibit 99.2 to Vornado
Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on June 14, 2004
— Twenty-Fourth Amendment to the Partnership Agreement, dated August 17, 2004 – Incorporated by reference to Exhibit 3.57 to
Vornado Realty Trust and Vornado Realty L.P.’s Registration Statement on Form S-3 (File No. 333-122306), filed on January 26,
2005
— Twenty-Fifth Amendment to the Partnership Agreement, dated November 17, 2004 – Incorporated by reference to Exhibit 3.58 to
Vornado Realty Trust and Vornado Realty L.P.’s Registration Statement on Form S-3 (File No. 333-122306), filed on January 26,
2005
— Twenty-Sixth Amendment to the Partnership Agreement, dated December 17, 2004 – Incorporated by reference to Exhibit 3.1 to
Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on December 21, 2004
— Twenty-Seventh Amendment to the Partnership Agreement, dated December 20, 2004 – Incorporated by reference to Exhibit 3.2 to
Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on December 21, 2004
— Twenty-Eighth Amendment to the Partnership Agreement, dated December 30, 2004 - Incorporated by reference to Exhibit 3.1 to
Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on January 4, 2005
— Twenty-Ninth Amendment to the Partnership Agreement, dated June 17, 2005 - Incorporated by reference to Exhibit 3.1 to Vornado
Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on June 21, 2005
— Thirtieth Amendment to the Partnership Agreement, dated August 31, 2005 - Incorporated by reference to Exhibit 3.1 to Vornado
Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on September 1, 2005
— Thirty-First Amendment to the Partnership Agreement, dated September 9, 2005 - Incorporated by reference to Exhibit 3.1 to Vornado
Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on September 14, 2005
— Thirty-Second Amendment and Restated Agreement of Limited Partnership, dated as of December 19, 2005 – Incorporated by
reference to Exhibit 3.59 to Vornado Realty L.P.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (File No.
000-22685), filed on May 8, 2006
— Thirty-Third Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of April 25, 2006 –
Incorporated by reference to Exhibit 10.2 to Vornado Realty Trust’s Form 8-K (File No. 001-11954), filed on May 1, 2006
— Thirty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of May 2, 2006 –
Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on May
3, 2006
— Thirty-Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of August 17, 2006 –
Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Form 8-K (File No. 000-22685), filed on August 23, 2006
— Thirty-Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of October 2, 2006 –
Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Form 8-K (File No. 000-22685), filed on January 22, 2007
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
__________________________________
Incorporated by reference
128
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
3.48
3.49
3.50
3.51
3.52
3.53
3.54
3.55
3.56
3.57
— Thirty-Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 –
Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on June
27, 2007
— Thirty-Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 –
Incorporated by reference to Exhibit 3.2 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on June
27, 2007
— Thirty-Ninth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 –
Incorporated by reference to Exhibit 3.3 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on June
27, 2007
— Fortieth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 – Incorporated by
reference to Exhibit 3.4 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on June 27, 2007
— Forty-First Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of March 31, 2008 –
Incorporated by reference to Exhibit 3.44 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2008 (file No. 001-11954), filed on May 6, 2008
— Forty-Second Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of December 17, 2010 –
Incorporated by reference to Exhibit 99.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No 000-22685), filed on
December 21, 2010
— Forty-Third Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of April 20, 2011 –
Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on April
21, 2011
— Forty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as, of
March 30, 2012 - Incorporated by reference to Exhibit 99.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No.
001-34482), filed on April 5, 2012
— Forty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership dated as of July 18, 2012 – Incorporated
by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 001-34482), filed on July 18, 2012
— Forty-Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of January 25, 2013 –
Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 001-34482), filed on
January 25, 2013
3.58
— Forty-Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated April 1,
2015 - Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 001-34482), filed on
April 2, 2015
3.59
3.60
3.61
3.62
3.63
4.1
4.2
4.3
4.4
— Forty-Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated
December 13, 2017 - Incorporated by reference to Exhibit 3.2 to Vornado Realty L.P.'s Current Report on Form 8-K (File No.
001-34482), filed on December 13, 2017
** — Forty-Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
January 12, 2018 - Incorporated by reference to Exhibit 3.53 to Vornado Realty Trust's Annual Report on 10-K for the year ended
December 31, 2017 (File No. 001-11954), filed on February 12, 2018
— Forty-Ninth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
August 7, 2019 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust's Current Report on Form 8-K (File No.
001-11954), filed on August 8, 2019
— Fiftieth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
November 24, 2020 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust's Current Report on Form 8-K (File No.
001-11954), filed on November 24, 2020
— Fifty-First Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
September 22, 2021 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust's Current Report on Form 8-K (File No.
001-11954), filed on September 22, 2021
— Indenture, dated as of November 25, 2003, between Vornado Realty L.P. and The Bank of New York, as Trustee - Incorporated by
reference to Exhibit 4.10 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No.
001-11954), filed on April 28, 2005
— Indenture, dated as of November 20, 2006, among Vornado Realty Trust, as Issuer, Vornado Realty L.P., as Guarantor and The Bank of
*
New York, as Trustee – Incorporated by reference to Exhibit 4.1 to Vornado Realty Trust’s Current Report on Form 8-K (File No.
001-11954), filed on November 27, 2006
Certain instruments defining the rights of holders of long-term debt securities of Vornado Realty Trust and its subsidiaries are omitted
pursuant to Item 601(b)(4)(iii) of Regulation S-K. Vornado Realty Trust hereby undertakes to furnish to the Securities and Exchange
Commission, upon request, copies of such instruments
— Description of Vornado Realty Trust securities registered pursuant to Section 12 of the Securities Exchange Act of 1934
— Description of Class A units of Vornado Realty L.P. and certain provisions of its agreement of limited partnership
***
***
*
**
***
__________________________________________
Incorporated by reference
Management contract or compensatory agreement
Filed herewith
129
10.1
10.2
10.3
10.4
— Registration Rights Agreement between Vornado, Inc. and Steven Roth, dated December 29, 1992 - Incorporated by reference to
Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February
16, 1993
** — Management Agreement between Interstate Properties and Vornado, Inc. dated July 13, 1992 – Incorporated by reference to Vornado,
Inc.’s Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993
** — Amendment to Real Estate Retention Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc. and Vornado Realty L.P. -
Incorporated by reference to Exhibit 10(i)(E)(3) to Alexander’s Inc.’s Quarterly Report for the quarter ended June 30, 2002 (File No.
001-06064), 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 by reference to Exhibit 10(i)(E)(4) to Alexander’s Inc.’s Quarterly Report for the quarter ended
June 30, 2002 (File No. 001-06064), filed on August 7, 2002
10.5
— 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 by reference to Exhibit 10(i)(F)(1) to Alexander's Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-06064), filed on August 7, 2020
10.6
10.7
10.8
10.9
10.10
10.11
10.12
** — Second Amendment to Real Estate Retention Agreement, dated January 1, 2007, by and between Vornado Realty L.P. and Alexander’s
Inc. – Incorporated by reference to Exhibit 10.55 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended
December 31, 2006 (File No. 001-11954), filed on February 27, 2007
** — Amendment to 59th Street Real Estate Retention Agreement, dated 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 by reference to Exhibit 10.56 to
Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-11954), filed on February
27, 2007
** — Vornado Realty Trust's 2010 Omnibus Share Plan - Incorporated by reference to Exhibit 10.41 to Vornado Realty Trust's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 001-11954) filed on August 3, 2010
** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 99.3
to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954) filed on April 5, 2012
** — Employment agreement between Vornado Realty Trust and Michael J. Franco dated January 10, 2014 - Incorporated by reference to
Exhibit 10.52 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File No. 001-11954),
filed on May 5, 2014
** — Form of Vornado Realty Trust 2010 Omnibus Share Plan AO LTIP Unit Award Agreement - Incorporated by reference to Exhibit 10.34
to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 001-11954), filed on
February 12, 2018
** — Form of 2019 Amendment to Restricted LTIP Unit and Restricted Stock Agreements - Incorporated by reference to Exhibit 10.37 to
Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-11954), filed on February
11, 2019
*
*
*
*
*
*
*
*
*
*
*
*
10.13
** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 10.38
*
to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-11954), filed on
February 11, 2019
10.14
** — Vornado Realty Trust 2019 Omnibus Share Plan - Incorporated by reference to Annex B to Vornado Realty Trust's Proxy Statement
dated April 5, 2019 (File No. 001-11954), filed on April 5, 2019
10.15
— Transaction Agreement between Vornado Realty L.P. and Crown Jewel Partner LLC, dated April 18, 2019 - Incorporated by reference
to Exhibit 10.42 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (File No.
001-11954), filed on July 29, 2019
10.16
10.17
10.18
10.19
10.20
10.21
** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Restricted Stock Agreement - Incorporated by reference to Exhibit 10.32 to
Vornado Realty Trust's Quarterly Report on Form 10-K for the year ended December 31, 2019 (File No. 001-11954), filed on
February 18, 2020
** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 10.33
to Vornado Realty Trust's Quarterly Report on Form 10-K for the year ended December 31, 2019 (File No. 001-11954), filed on
February 18, 2020
** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Incentive/Non-Qualified Stock Option Agreement - Incorporated by reference
to Exhibit 10.34 to Vornado Realty Trust's Quarterly Report on Form 10-K for the year ended December 31, 2019 (File No.
001-11954), filed on February 18, 2020
** — Employment agreement between Vornado Realty Trust and Glen J. Weiss dated May 25, 2018 - Incorporated by reference to Exhibit
10.35 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 001-11954), filed on
May 4, 2020
** — Employment agreement between Vornado Realty Trust and Haim Chera dated April 19, 2019 - Incorporated by reference to Exhibit
10.36 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 001-11954), filed on
May 4, 2020
** — Form of Vornado Realty Trust 2021 Outperformance Plan Award Agreement for Executives – Incorporated by reference to Exhibit
10.42 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-11954), filed on
February 16, 2021
10.22
** — Form of Vornado Realty Trust 2021 Outperformance Plan Award Agreement for Non-Executives – Incorporated by reference to
Exhibit 10.43 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-11954),
filed on February 16, 2021
*
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*
*
*
**
__________________________________________
Incorporated by reference
Management contract or compensatory agreement
130
10.23
10.24
10.25
— Second Amended and Restated Revolving Credit Agreement dated as of April 15, 2021 among Vornado Realty L.P., as Borrower, the
Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A., as Administrative Agent for the Banks - Incorporated
by reference to Exhibit 10.44 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (File
No. 001-11954), filed on August 2, 2021
** — Form of Vornado Realty Trust 2022 Long-term Performance Plan LTIP Unit Award Agreement - Incorporated by reference to Exhibit
10.36 to Vornado Realty Trust's Annual Report on form 10-K for the year ended December 31, 2021 (File No. 001-11954), filed on
February 14, 2022
** — Employment agreement between Vornado Realty Trust and Barry Langer dated June 4, 2018 - Incorporated by reference to Exhibit
10.37 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (File No. 001-11954), filed on
May 2, 2022
10.26
— Second Amended and Restated Term Loan Agreement dated as of June 30, 2022, among Vornado Realty L.P., as Borrower, Vornado
Realty Trust as General Partner, the Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A., as Administrative
Agent for the Banks - Incorporated by reference to Exhibit 10.38 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2022 (File No. 001-11954), filed on August 1, 2022
*
*
*
*
10.27
— Amendment No. 1 to Second Amended and Restated Revolving Credit Agreement dated as of June 30, 2022, among Vornado Realty
*
L.P., as Borrower, the Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A., as Administrative Agent for the
Banks - Incorporated by reference to Exhibit 10.39 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2022 (File No. 001-11954), filed on August 1, 2022
10.28
— Third Amended and Restated Revolving Credit Agreement dated as of June 30, 2022, among Vornado Realty L.P., as Borrower,
Vornado Realty Trust as General Partner, the Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A., as
Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.40 to Vornado Realty Trust's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2022 (File No. 001-11954), filed on August 1, 2022
*
10.29
** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Restricted LTIP Unit Agreement granted in 2023 - Incorporated by reference
*
to Exhibit 10.36 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2022 (File No.
001-11954), filed on February 13, 2023
10.30
** — Form of Vornado Realty Trust 2023 Long-term Performance Plan LTPP Unit Award Agreement - Incorporated by reference to Exhibit
10.37 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2022 (File No. 001-11954), filed on
February 13, 2023
10.31
** — Form of Vornado Realty Trust’s 2023 Omnibus Share Plan - Incorporated by reference to Annex A to Vornado Realty Trust’s Proxy
Statement dated April 7, 2023 (File No. 001-11954), filed on April 7, 2023
10.32
** — Form of Vornado Realty Trust 2023 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 10.1
to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 3, 2023
*
*
*
10.33
** — Form of Vornado Realty Trust 2023 Omnibus Share Plan Performance Conditioned AO LTIP Unit Award Agreement - Incorporated by
*
reference to Exhibit 10.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 3, 2023
*
**
__________________________________________
Incorporated by reference
Management contract or compensatory agreement
131
V O R N A D O C O R P O R A T E I N F O R M A T I O N
TRUSTEES
STEVEN ROTH
Chairman of the Board
CANDACE K. BEINECKE, Lead Trustee
Senior Partner of Hughes Hubbard & Reed LLP
MICHAEL D. FASCITELLI
Owner of MDF Capital LLC and former President
and Chief Executive Officer of Vornado
BEATRICE HAMZA BASSEY*
Group General Counsel, Chief Compliance Officer
and Corporate Secretary, Atlas Mara Ltd.
WILLIAM W. HELMAN IV
General Partner, Greylock Partners
DAVID M. MANDELBAUM
Partner, Interstate Properties
RAYMOND J. MCGUIRE
President, Lazard Ltd.
MANDAKINI PURI*
Independent Consultant and Private Investor
DANIEL R. TISCH*
Managing Member,
TowerView LLC
RUSSELL B. WIGHT, JR.
Partner, Interstate Properties
*Members of the Audit Committee
DIVISION EXECUTIVE VICE PRESIDENTS
DAVID BELLMAN
Design & Construction
STEVEN BORENSTEIN
Corporation Counsel
ELANA BUTLER
Leasing Counsel
PAMELA CARUSO
Leasing Counsel
MICHAEL DOHERTY
President – BMS Division
ROBERT ENTIN
Chief Information Officer
RICHARD FAMULARO
Controller
JOSHUA GLICK
Director of PENN DISTRICT Leasing
CORPORATE OFFICERS
STEVEN ROTH
Chairman of the Board
Chief Executive Officer
MICHAEL J. FRANCO
President and Chief Financial Officer
GLEN J. WEISS
Executive Vice President –
Office Leasing and Co-Head of Real Estate
BARRY S. LANGER
Executive Vice President –
Development and Co-Head of Real Estate
HAIM CHERA
Executive Vice President –
Head of Retail
THOMAS SANELLI
Executive Vice President –
Finance and Chief Administrative Officer
DEIRDRE MADDOCK
Senior Vice President –
Chief Accounting Officer
DAVID R. GREENBAUM
Vice Chairman
JOSEPH MACNOW
Senior Advisor
PAUL HEINEN
Chief Operating Officer – THE MART
ED HOGAN
Retail Leasing
JASON KIRSCHNER
Head of Capital Markets
FRANK MAIORANO
Head of Tax and Compliance
MICHAEL SCHNITT
Acquisitions and Capital Markets
GASTON SILVA
Chief Operating Officer – New York Division
LISA VOGEL
Marketing
Company Data
COMPANY DATA
EXECUTIVE OFFICES
888 Seventh Avenue
New York, New York 10019
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
New York, New York
COUNSEL
Sullivan & Cromwell LLP
New York, New York
TRANSFER AGENT AND REGISTRAR
Equiniti Trust Company, LLC
New York, New York
MANAGEMENT CERTIFICATIONS
The Company’s Chief Executive Officer and Chief Financial
Officer provided certifications to the Securities and Exchange
Commission as required by Section 302 of the Sarbanes-Oxley Act
of 2002 and these certifications are included in the Company’s
Annual Report on Form 10-K for the year ended December 31,
2023. In addition, as required by Section 303A.12(a) of the New
York Stock Exchange (NYSE) Listed Company Manual, on
May 23, 2023, the Company’s Chief Executive Officer submitted
to the NYSE the annual CEO certification regarding the
Company’s compliance with the NYSE’s corporate governance
listing standards.
REPORT ON FORM 10-K
Shareholders may obtain a copy of the Company’s annual report on
Form 10-K as filed with the Securities and Exchange Commission
free of charge (except for exhibits), by writing to the Secretary,
Vornado Realty Trust, 888 Seventh Avenue, New York, New York
10019; or visit the Company’s website at www.vno.com and refer
to the Company’s SEC filings.
ANNUAL MEETING
The annual meeting of shareholders of Vornado Realty Trust, will
be held virtually, via the internet, at 11:30 AM. New York City
time on May 23, 2024.
To attend the virtual 2024 Annual Meeting you will need to access
www.virtualshareholdermeeting.com/VNO2024 and enter the
16-digit control number found on your proxy card, voting
instruction form or Notice of Internet Availability of Proxy
Materials. There is no physical location for the annual meeting. We
encourage you to allow ample time for online check-in, which will
begin at 11:15 AM. New York City time. Additional details
regarding how to participate in the Annual Meeting can be
accessed at the Company’s website, www.vno.com or at
www.proxyvote.com.