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Vornado's (VNO) FFO and Revenues Surpass Estimates in Q2

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Vornado Realty Trust’s (VNO - Free Report) second-quarter 2022 funds from operations (FFO) plus assumed conversions as adjusted per share of 83 cents topped the Zacks Consensus Estimate of 79 cents.

Vornado’s results display better-than-anticipated top-line growth. The same-store net operating income (NOI) improved across the portfolio.

Total revenues came in at $453.5 million in the reported quarter, surpassing the Zacks Consensus Estimate of $433.3 million.

Further, on a year-over-year basis, both FFO per share and revenues grew 20.3% and 19.7%, respectively.

Behind the Headlines

In the reported quarter, total same-store NOI (at share) improved 7.1% year over year. While the metric at theMART increased 8.3%, the same for the New York portfolio grew 7.1% year over year. The same-store NOI (at share) of Vornado’s 555 California Street climbed 6.1%.

However, operating expenses jumped 16.4% to $222.3 million year over year.

During the quarter, in the New York office portfolio, 301,000 square feet of office space (231,000 square feet at share) was leased for an initial rent of $85.27 per square foot and a weighted average lease term of 11.5 years. The tenant improvements and leasing commissions were $10.40 per square foot per annum, or 12.2% of initial rent.

In the New York retail portfolio, 8,000 square feet were leased (all at share) at an initial rent of $626.76 per square foot and a weighted average lease term of 12.7 years. The tenant improvements and leasing commissions were $66.28 per square foot per annum, or 10.6% of initial rent.

Additionally, at theMART 59,000 square feet of space (all at share) was leased for an initial rent of $56.33 per square foot and a weighted average lease term of 4.7 years. The tenant improvements and leasing commissions were $4.23 per square foot per annum, or 7.5% of initial rent.

On Jun 17, 2022, Vornado closed the sale of Center Building for $172.75 million. The sale of the eight-story 498,000 square foot office building located at 33 00 Northern Boulevard in Long Island City, NY, generated net proceeds of $58.95 million.

Vornado ended the quarter with occupancy in the New York portfolio at 90.8%, up 80 basis points (bps) year over year. Occupancy in theMART declined 50 bps from the prior year period to 88.6%, while occupancy in 555 California Street fell by 360 bps to 94.2%.

Balance Sheet

Vornado exited second-quarter 2022 with cash and cash equivalents of $988.4 million, up from $973.8 billion as of Mar 31, 2022.

In June 2022, VNO completed the refinancing of 100 West 33rd Street, a 1.1 million square foot building, and 770 Broadway, a 1.2 million square foot Class A Manhattan office building, for $480 million and $700 million, respectively.

In the same month, Vornado amended and extended one of its two revolving credit facilities. It also extended the maturity of its $800 million unsecured term loan from February 2024 to December 2027.

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 and EPS Surprise

Vornado Realty Trust price-consensus-eps-surprise-chart | Vornado Realty Trust Quote

Performance of Other REITs

Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2022 FFO per diluted share came in at 40 cents, surpassing the Zacks Consensus Estimate of 38 cents. The figure grew 17.6% from the year-ago quarter’s 34 cents.

Results reflect year-over-year growth in the top line. The rise in occupancy levels and rental rate growth aided KIM’s performance. It raised 2022 FFO outlook.

Boston Properties Inc.’s (BXP - Free Report) second-quarter 2022 FFO per share of $1.94 beat the Zacks Consensus Estimate of $1.85. The figure also compared favorably with the year-ago quarter’s $1.72.

BXP’s quarterly results reflect growth in the bottom line. Also, it experienced strong leasing activity during the quarter.

SITE Centers Corp. (SITC - Free Report) reported second-quarter 2022 operating FFO per share of 31 cents, beating the Zacks Consensus Estimate of 28 cents. The figure was in line with the prior-year quarter’s FFO per share.

SITC’s results were aided by strong top-line growth and an improvement in annualized base rent.

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.