Vornado Realty Trust (VNO Quick QuoteVNO - Free Report) is scheduled to report first-quarter 2026 results on May 4, after market close. The company’s quarterly results are likely to display a year-over-year decline in revenues as well as funds from operations (FFO) per share.

In the last reported quarter, this New York-based real estate investment trust’s (REIT) FFO per share, plus assumed conversions, on an adjusted basis of 55 cents, which missed the Zacks Consensus Estimate of 57 cents. Results displayed a year-over-year decrease in same-store net operating income (NOI) and occupancy for the 555 California Street portfolio. The company witnessed decent leasing activities in the New York and THE MART portfolios.

Over the trailing four quarters, Vornado’s FFO per share, plus assumed conversions, on an adjusted basis, topped the Zacks Consensus Estimate on three occasions and missed in the remainder, the average surprise being 6.74%. This is depicted in the graph below:

Vornado Realty Trust Price and EPS Surprise

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

US Office Market in Q1

Per a Cushman & Wakefield report, U.S. office demand remained resilient in the first quarter of 2026 amid macro uncertainty. The booming demand for office spaces led to improved leasing and occupancy fundamentals. With new construction taking a back seat, vacancy is nearing an inflection point. To fill gaps caused by declining supply, the sublease market is seeing renewed interest. To adapt to the changing customer needs and tastes, obsolete offices are increasingly being renovated, converted and demolished.

With high demand, net absorption turned positive in approximately half of the U.S. markets. Though negative in the first quarter, the four-quarter rolling net absorption exceeded 5.2 msf, the highest since the pandemic.

High-quality office space demand has been an outperformer across the markets, with Class A net absorption at 1.4 million square feet (msf) in the first quarter of 2026. Out of 91 markets tracked by Cushman, 47 were on a positive trajectory. While the ongoing AI frenzy led this push in office demand, the same remained strong across sectors, including finance, hospitality, manufacturing, professional services and distribution/logistics.

As the new supply is on a downtick, a shrinking inventory is giving impetus to this high demand, with vacancy almost becoming non-existent. Class A office has passed peak vacancy as available space shrank 4 basis points (bps) quarter on quarter while falling 30 bps year on year.

Factors to Consider Ahead of VNO’s Q1 Results

In reference to the above U.S. office market environment, strong demand for high-quality office space is likely to have supported leasing activity for Vornado’s strategically located premium portfolio in the first quarter of 2026.

However, stiff competition from other office landlords continues to limit its ability to command higher rents. To attract and retain tenants, Vornado has been offering rent concessions and free rent, which has weighed on near-term cash NOI and delayed revenue recognition.

The company’s substantial debt burden remains a concern. Higher interest expenses, partly due to recent financing activities, are expected to have weighed on earnings growth, with management indicating that 2026 earnings may have remained largely in line with the 2025 levels.

Projections for VNO

The consensus mark for Vornado’s New York revenues is pinned at $364.9 million, down 3% from the prior-year quarter.

The Zacks Consensus Estimate for quarterly revenues is pegged at $443.3 million, implying a 4% year-over-year decline.

The consensus mark for Vornado’s other revenues stands at $77.6 million, down 9.1% from the prior-year quarter.

The Zacks Consensus Estimate for occupancy in the New York office portfolio is pegged at 91.4%, up from 90% reported in the prior quarter.

The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has moved southward to 52 cents over the past month. The figure indicates a 17.5% decrease from the prior-year period’s reported number.

What Our Quantitative Model Predicts for VNO

Our proven model does not conclusively predict a surprise in terms of FFO per share for Vornado this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Vornado has an Earnings ESP of -2.31% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Realty Income (O Quick QuoteO - Free Report) and Host Hotels & Resorts (HST Quick QuoteHST - Free Report) — you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Realty Income, scheduled to report quarterly numbers on May 6, has an Earnings ESP of +0.60% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Host Hotels & Resorts, slated to release quarterly numbers on May 6, has an Earnings ESP of +0.98% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.