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Vornado's (VNO) FFO and Revenues Surpass Estimates in Q3
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Vornado Realty Trust’s (VNO - Free Report) third-quarter 2022 funds from operations (FFO) plus assumed conversions as adjusted per share of 81 cents topped the Zacks Consensus Estimate of 74 cents.
Vornado’s results display better-than-anticipated top-line growth. Healthy leasing activity was witnessed across all portfolios.
Total revenues came in at $457.4 million in the reported quarter, surpassing the Zacks Consensus Estimate of $439.1 million.
On a year-over-year basis, FFO per share and revenues improved by 14.1% and 11.8%, respectively.
Behind the Headlines
In the reported quarter, total same-store net operating income (NOI) (at share) improved 11.7% year over year. While the metric at theMART increased significantly, the same for the 555 California Street portfolio grew 1.3%. The same-store NOI (at share) of the New York portfolio fell 0.8% from the prior-year period.
Operating expenses rose 4.2% to $221.6 million year over year.
During the quarter, in the New York office portfolio, 167,000 square feet of office space (140,000 square feet at share) was leased for an initial rent of $88.99 per square foot and a weighted average lease term of 5.8 years. The tenant improvements and leasing commissions were $16.21 per square foot per annum, or 18.2% of the initial rent.
In the New York retail portfolio, 62,000 square feet were leased (57,000 square feet at share) at an initial rent of $242.89 per square foot and a weighted average lease term of 10.5 years. The tenant improvements and leasing commissions were $17.96 per square foot per annum, or 7.4% of the initial rent.
Additionally, at theMART 67,000 square feet of space (all at share) was leased for an initial rent of $52.20 per square foot and a weighted average lease term of 7.3 years. The tenant improvements and leasing commissions were $11.64 per square foot per annum, or 22.3% of the initial rent.
For VNO’s 555 California Street portfolio, 154,000 square feet of space (108,000 square feet at share) was leased for an initial rent of $98.20 per square foot and a weighted average lease term of 5.6 years. The tenant improvements and leasing commissions were $4.73 per square foot per annum, or 4.8% of the initial rent.
Vornado ended the quarter with occupancy in the New York portfolio at 90.3%, down 10 basis points (bps) year over year. Occupancy in theMART declined 230 bps from the prior year period to 87.3%, while occupancy in 555 California Street fell 340 bps to 94.7%.
On Aug 17, 2022, Vornado entered into an agreement to sell 40 Fulton Street for $102 million. The sale of this 251,000 square feet Manhattan office and retail building is likely to be completed in fourth-quarter 2022. The company expects to recognize a net gain of $33 million from the disposition.
Balance Sheet
Vornado exited third-quarter 2022 with cash and cash equivalents of $845.4 million, down from $988.4 million as of Jun 30, 2022.
SL Green Realty Corp. (SLG - Free Report) reported third-quarter 2022 FFO per share of $1.66, beating the Zacks Consensus Estimate of $1.64. The company reported FFO per share of $1.83 in the prior-year quarter. On a pro-forma basis, FFO per share in the year-ago period was $1.78.
The results reflect better-than-anticipated revenues. SLG also witnessed decent leasing activity in the quarter and signed several significant leases at its properties. However, the same-store cash NOI fell year over year.
Highwoods Properties Inc.’s (HIW - Free Report) third-quarter 2022 FFO per share of $1.04 surpassed the Zacks Consensus Estimate of 97 cents. The figure climbed 8.3% year over year.
HIW’s quarterly results reflect robust leasing activity and improvement in rents. The top line grew year over year. However, the same-property cash NOI took a slight dip from the year-ago quarter’s figure.
Boston Properties Inc.’s (BXP - Free Report) third-quarter 2022 FFO per share of $1.91 outpaced the Zacks Consensus Estimate of $1.87. The figure increased 10.4% year over year.
BXP’s quarterly results reflect healthy leasing activity alongside year-over-year growth in the top line. It also carried out strategic acquisitions, redevelopments and dispositions during the quarter. The company revised its 2022 outlook for FFO.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Vornado's (VNO) FFO and Revenues Surpass Estimates in Q3
Vornado Realty Trust’s (VNO - Free Report) third-quarter 2022 funds from operations (FFO) plus assumed conversions as adjusted per share of 81 cents topped the Zacks Consensus Estimate of 74 cents.
Vornado’s results display better-than-anticipated top-line growth. Healthy leasing activity was witnessed across all portfolios.
Total revenues came in at $457.4 million in the reported quarter, surpassing the Zacks Consensus Estimate of $439.1 million.
On a year-over-year basis, FFO per share and revenues improved by 14.1% and 11.8%, respectively.
Behind the Headlines
In the reported quarter, total same-store net operating income (NOI) (at share) improved 11.7% year over year. While the metric at theMART increased significantly, the same for the 555 California Street portfolio grew 1.3%. The same-store NOI (at share) of the New York portfolio fell 0.8% from the prior-year period.
Operating expenses rose 4.2% to $221.6 million year over year.
During the quarter, in the New York office portfolio, 167,000 square feet of office space (140,000 square feet at share) was leased for an initial rent of $88.99 per square foot and a weighted average lease term of 5.8 years. The tenant improvements and leasing commissions were $16.21 per square foot per annum, or 18.2% of the initial rent.
In the New York retail portfolio, 62,000 square feet were leased (57,000 square feet at share) at an initial rent of $242.89 per square foot and a weighted average lease term of 10.5 years. The tenant improvements and leasing commissions were $17.96 per square foot per annum, or 7.4% of the initial rent.
Additionally, at theMART 67,000 square feet of space (all at share) was leased for an initial rent of $52.20 per square foot and a weighted average lease term of 7.3 years. The tenant improvements and leasing commissions were $11.64 per square foot per annum, or 22.3% of the initial rent.
For VNO’s 555 California Street portfolio, 154,000 square feet of space (108,000 square feet at share) was leased for an initial rent of $98.20 per square foot and a weighted average lease term of 5.6 years. The tenant improvements and leasing commissions were $4.73 per square foot per annum, or 4.8% of the initial rent.
Vornado ended the quarter with occupancy in the New York portfolio at 90.3%, down 10 basis points (bps) year over year. Occupancy in theMART declined 230 bps from the prior year period to 87.3%, while occupancy in 555 California Street fell 340 bps to 94.7%.
On Aug 17, 2022, Vornado entered into an agreement to sell 40 Fulton Street for $102 million. The sale of this 251,000 square feet Manhattan office and retail building is likely to be completed in fourth-quarter 2022. The company expects to recognize a net gain of $33 million from the disposition.
Balance Sheet
Vornado exited third-quarter 2022 with cash and cash equivalents of $845.4 million, down from $988.4 million as of Jun 30, 2022.
Vornado currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vornado Realty Trust Price, Consensus and EPS Surprise
Vornado Realty Trust price-consensus-eps-surprise-chart | Vornado Realty Trust Quote
Performance of Other REITs
SL Green Realty Corp. (SLG - Free Report) reported third-quarter 2022 FFO per share of $1.66, beating the Zacks Consensus Estimate of $1.64. The company reported FFO per share of $1.83 in the prior-year quarter. On a pro-forma basis, FFO per share in the year-ago period was $1.78.
The results reflect better-than-anticipated revenues. SLG also witnessed decent leasing activity in the quarter and signed several significant leases at its properties. However, the same-store cash NOI fell year over year.
Highwoods Properties Inc.’s (HIW - Free Report) third-quarter 2022 FFO per share of $1.04 surpassed the Zacks Consensus Estimate of 97 cents. The figure climbed 8.3% year over year.
HIW’s quarterly results reflect robust leasing activity and improvement in rents. The top line grew year over year. However, the same-property cash NOI took a slight dip from the year-ago quarter’s figure.
Boston Properties Inc.’s (BXP - Free Report) third-quarter 2022 FFO per share of $1.91 outpaced the Zacks Consensus Estimate of $1.87. The figure increased 10.4% year over year.
BXP’s quarterly results reflect healthy leasing activity alongside year-over-year growth in the top line. It also carried out strategic acquisitions, redevelopments and dispositions during the quarter. The company revised its 2022 outlook for FFO.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.