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Vornado's (VNO) Q1 FFO Miss Estimates, Same-Store NOI Declines
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Vornado Realty Trust’s (VNO - Free Report) first-quarter 2024 funds from operations (FFO) plus assumed conversions as adjusted per share of 55 cents missed the Zacks Consensus Estimate of 58 cents. Moreover, the figure declined 8.3% year over year.
Results displayed lower-than-anticipated top-line growth despite decent leasing activity across the company’s portfolio. The year-over-year decline in total same-store net operating income (NOI) was also noticeable.
Total revenues came in at $436.4 million in the reported quarter, lagging the Zacks Consensus Estimate of $451.1 million. On a year-over-year basis, revenues declined nearly 2.1%.
Quarter in Detail
In the reported quarter, total same-store NOI (at share) came in at $255.1 million compared with the prior-year quarter’s $267.9 million. The metric for the New York, THE MART and 555 California Street portfolios decreased 4.6%, 10% and 2.4%, respectively, from the prior-year period.
Operating expenses decreased 1.1% to $226.2 million year over year.
During the quarter, in the New York office portfolio, 291,000 square feet of office space (250,000 square feet at share) was leased for an initial rent of $89.23 per square foot and a weighted average lease term of 11.1 years. The tenant improvements and leasing commissions were $12.98 per square foot per annum or 11.5% of the initial rent.
In the New York retail portfolio, 36,000 square feet were leased (33,000 square feet at share) at an initial rent of $253.83 per square foot and a weighted average lease term of 3.8 years. The tenant improvements and leasing commissions were $29.16 per square foot per annum or 11.5% of the initial rent.
Additionally, at THE MART, 51,000 square feet of space (all at share) was leased for an initial rent of $64.02 per square foot and a weighted average lease term of 4.5 years. The tenant improvements and leasing commissions were $8.37 per square foot per annum or 13.1% of the initial rent.
Vornado ended the quarter with occupancy in the New York portfolio at 88.2%, down 170 basis points (bps) year over year. Occupancy in THE MART declined to 77.6% from 80.3%. Further, occupancy in 555 California Street also declined 40 bps to 94.5%.
Balance Sheet
Vornado exited first-quarter 2024 with cash and cash equivalents of $892.7 million, down 10.5% from $997 million as of Dec 31, 2023.
Highwoods Properties Inc. (HIW - Free Report) reported first-quarter 2024 FFO per share of 89 cents, missing the Zacks Consensus Estimate of 90 cents. The figure was also lower than the prior-year quarter’s 98 cents.
Quarterly results reflect a fall in occupancy and higher operating expenses. HIW also revised its outlook for 2024.
Cousins Properties’ (CUZ - Free Report) first-quarter 2024 FFO per share of 65 cents beat the Zacks Consensus Estimate of 63 cents.
Results reflect better-than-anticipated revenues. Although the company witnessed healthy leasing activity, higher interest expenses acted as a dampener. CUZ also revised its 2024 outlook for FFO per share.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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Vornado's (VNO) Q1 FFO Miss Estimates, Same-Store NOI Declines
Vornado Realty Trust’s (VNO - Free Report) first-quarter 2024 funds from operations (FFO) plus assumed conversions as adjusted per share of 55 cents missed the Zacks Consensus Estimate of 58 cents. Moreover, the figure declined 8.3% year over year.
Results displayed lower-than-anticipated top-line growth despite decent leasing activity across the company’s portfolio. The year-over-year decline in total same-store net operating income (NOI) was also noticeable.
Total revenues came in at $436.4 million in the reported quarter, lagging the Zacks Consensus Estimate of $451.1 million. On a year-over-year basis, revenues declined nearly 2.1%.
Quarter in Detail
In the reported quarter, total same-store NOI (at share) came in at $255.1 million compared with the prior-year quarter’s $267.9 million. The metric for the New York, THE MART and 555 California Street portfolios decreased 4.6%, 10% and 2.4%, respectively, from the prior-year period.
Operating expenses decreased 1.1% to $226.2 million year over year.
During the quarter, in the New York office portfolio, 291,000 square feet of office space (250,000 square feet at share) was leased for an initial rent of $89.23 per square foot and a weighted average lease term of 11.1 years. The tenant improvements and leasing commissions were $12.98 per square foot per annum or 11.5% of the initial rent.
In the New York retail portfolio, 36,000 square feet were leased (33,000 square feet at share) at an initial rent of $253.83 per square foot and a weighted average lease term of 3.8 years. The tenant improvements and leasing commissions were $29.16 per square foot per annum or 11.5% of the initial rent.
Additionally, at THE MART, 51,000 square feet of space (all at share) was leased for an initial rent of $64.02 per square foot and a weighted average lease term of 4.5 years. The tenant improvements and leasing commissions were $8.37 per square foot per annum or 13.1% of the initial rent.
Vornado ended the quarter with occupancy in the New York portfolio at 88.2%, down 170 basis points (bps) year over year. Occupancy in THE MART declined to 77.6% from 80.3%. Further, occupancy in 555 California Street also declined 40 bps to 94.5%.
Balance Sheet
Vornado exited first-quarter 2024 with cash and cash equivalents of $892.7 million, down 10.5% from $997 million as of Dec 31, 2023.
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
Highwoods Properties Inc. (HIW - Free Report) reported first-quarter 2024 FFO per share of 89 cents, missing the Zacks Consensus Estimate of 90 cents. The figure was also lower than the prior-year quarter’s 98 cents.
Quarterly results reflect a fall in occupancy and higher operating expenses. HIW also revised its outlook for 2024.
Cousins Properties’ (CUZ - Free Report) first-quarter 2024 FFO per share of 65 cents beat the Zacks Consensus Estimate of 63 cents.
Results reflect better-than-anticipated revenues. Although the company witnessed healthy leasing activity, higher interest expenses acted as a dampener. CUZ also revised its 2024 outlook for FFO per share.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.