We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Vornado's Q2 FFO Beats Estimates on Rent Starts, Same-Store NOI Grows
Read MoreHide Full Article
Key Takeaways
Vornado's Q2 FFO rose 19.6% as rent commencements, NYU's lease and signage aided growth.
New York same-store NOI grew 11.9%, with office, retail and residential assets driving gains.
Vornado leased 348,000 square feet of New York office space at an initial $107.24 per square foot.
Vornado Realty Trust (VNO - Free Report) reported second-quarter 2026 funds from operation (FFO), as adjusted, of 67 cents per share, up 19.6% year over year. The figure beat the Zacks Consensus Estimate of 57 cents by 17.54%. Rent commencements, the NYU master lease and signage operations supported adjusted FFO growth.
Revenues rose 4.7% year over year to $462.2 million but missed the consensus mark of $472.4 million by 2.16%.
VNO’s Revenue Mix Shows Rental Strength
Total rental revenues increased to $405.1 million from $382.3 million in the prior-year quarter. Property rentals were nearly flat year over year at $332.4 million, while tenant expense reimbursements increased to $46.3 million from $34.6 million.
Straight-line rental income rose to $26.3 million from $15.4 million. Fee and other income totaled $57.2 million compared with $59.2 million a year ago, as Building Maintenance Services cleaning fees declined to $33.3 million from $37.4 million.
Operating expenses increased to $223.7 million from $219.3 million. Depreciation and amortization climbed sharply to $171.2 million from $115.6 million.
VNO’s Same-Store Results Highlight New York Growth
Total net operating income (NOI) at share increased to $304.1 million from $277.7 million. New York NOI at share rose to $251.7 million from $230.1 million, driven by gains across the office, street retail and residential assets.
New York office NOI at share increased to $183.4 million from $170.9 million year over year. New York Street retail NOI rose to $52.5 million from $44.5 million, while New York residential NOI improved to $6.7 million from $6.4 million.
Total same-store NOI increased 9.8%, including growth of 11.9% in New York and 9.1% at THE MART. However, the metric declined 14.3% at 555 California Street. On a cash basis, total same-store NOI increased 2.9%, including growth of 6.2% in New York and 15.1% at THE MART.
VNO’s Leasing Activity Remains Healthy
During the second quarter, Vornado leased 348,000 square feet of New York office space at an initial rent of $107.24 per square foot. The weighted average lease term was eight years.
For second-generation New York office space, straight-line rents increased 7.7% from prior rents. Cash-basis rents rose 5%, while tenant improvements and leasing commissions represented 13.3% of initial rent.
The company also leased 61,000 square feet of New York retail space and 103,000 square feet at THE MART. Straight-line rents on second-generation space increased 12.1% for retail and 14% at THE MART. Total portfolio occupancy stood at 90.8%, including 92.2% for the New York office.
Vornado completed the acquisition of a 49% interest in Park Avenue Plaza at a gross asset valuation of $1.1 billion. The 1.2-million-square-foot Manhattan office building is encumbered by a $575 million loan bearing a fixed interest rate of 2.99%.
Alexander’s, in which Vornado owns a 32.4% interest, sold Rego Park I for $235.5 million. Vornado recognized a $44.3 million share of the net gain. Separately, a 50%-owned consolidated joint venture sold 606 Broadway, generating a $32.1 million gain on debt extinguishment.
VNO’s Liquidity Supports Capital Allocation
VNO ended June with $675.4 million in cash and cash equivalents, $113.6 million of restricted cash and $1.19 billion available under its revolving credit facilities. Total liquidity was $1.98 billion.
During the reported quarter, the company repurchased about 1.79 million common shares for $53.46 million at an average price of $29.92 per share. As of Aug. 3, 2026, $286.6 million remained available under the repurchase program.
Cousins Properties Inc. (CUZ - Free Report) reported second-quarter 2026 FFO of 75 cents per share, beating the Zacks Consensus Estimate of 74 cents. The metric rose 7.1% from the year-ago quarter.
Rental property revenues increased 11.8% year over year to $265.7 million and surpassed the consensus mark of $263.6 million. The results reflected strong leasing momentum, higher rental revenues and solid same-property NOI growth.
BXP, Inc. (BXP - Free Report) reported second-quarter 2026 FFO of $1.78 per share, beating the Zacks Consensus Estimate of $1.71. FFO rose 4.1% from the year-ago period.
Lease revenues increased 3.2% year over year to $831.68 million and surpassed the consensus mark of $812.49 million. The results reflected higher occupancy and same-property NOI growth, which supported the FFO beat.
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
View the Zacks #1 Rank List
Image: Bigstock
Vornado's Q2 FFO Beats Estimates on Rent Starts, Same-Store NOI Grows
Key Takeaways
Vornado Realty Trust (VNO - Free Report) reported second-quarter 2026 funds from operation (FFO), as adjusted, of 67 cents per share, up 19.6% year over year. The figure beat the Zacks Consensus Estimate of 57 cents by 17.54%. Rent commencements, the NYU master lease and signage operations supported adjusted FFO growth.
Revenues rose 4.7% year over year to $462.2 million but missed the consensus mark of $472.4 million by 2.16%.
VNO’s Revenue Mix Shows Rental Strength
Total rental revenues increased to $405.1 million from $382.3 million in the prior-year quarter. Property rentals were nearly flat year over year at $332.4 million, while tenant expense reimbursements increased to $46.3 million from $34.6 million.
Straight-line rental income rose to $26.3 million from $15.4 million. Fee and other income totaled $57.2 million compared with $59.2 million a year ago, as Building Maintenance Services cleaning fees declined to $33.3 million from $37.4 million.
Operating expenses increased to $223.7 million from $219.3 million. Depreciation and amortization climbed sharply to $171.2 million from $115.6 million.
VNO’s Same-Store Results Highlight New York Growth
Total net operating income (NOI) at share increased to $304.1 million from $277.7 million. New York NOI at share rose to $251.7 million from $230.1 million, driven by gains across the office, street retail and residential assets.
New York office NOI at share increased to $183.4 million from $170.9 million year over year. New York Street retail NOI rose to $52.5 million from $44.5 million, while New York residential NOI improved to $6.7 million from $6.4 million.
Total same-store NOI increased 9.8%, including growth of 11.9% in New York and 9.1% at THE MART. However, the metric declined 14.3% at 555 California Street. On a cash basis, total same-store NOI increased 2.9%, including growth of 6.2% in New York and 15.1% at THE MART.
VNO’s Leasing Activity Remains Healthy
During the second quarter, Vornado leased 348,000 square feet of New York office space at an initial rent of $107.24 per square foot. The weighted average lease term was eight years.
For second-generation New York office space, straight-line rents increased 7.7% from prior rents. Cash-basis rents rose 5%, while tenant improvements and leasing commissions represented 13.3% of initial rent.
The company also leased 61,000 square feet of New York retail space and 103,000 square feet at THE MART. Straight-line rents on second-generation space increased 12.1% for retail and 14% at THE MART. Total portfolio occupancy stood at 90.8%, including 92.2% for the New York office.
VNO Completes Manhattan Acquisition & Property Dispositions
Vornado completed the acquisition of a 49% interest in Park Avenue Plaza at a gross asset valuation of $1.1 billion. The 1.2-million-square-foot Manhattan office building is encumbered by a $575 million loan bearing a fixed interest rate of 2.99%.
Alexander’s, in which Vornado owns a 32.4% interest, sold Rego Park I for $235.5 million. Vornado recognized a $44.3 million share of the net gain. Separately, a 50%-owned consolidated joint venture sold 606 Broadway, generating a $32.1 million gain on debt extinguishment.
VNO’s Liquidity Supports Capital Allocation
VNO ended June with $675.4 million in cash and cash equivalents, $113.6 million of restricted cash and $1.19 billion available under its revolving credit facilities. Total liquidity was $1.98 billion.
During the reported quarter, the company repurchased about 1.79 million common shares for $53.46 million at an average price of $29.92 per share. As of Aug. 3, 2026, $286.6 million remained available under the repurchase program.
VNO’s Zacks Rank
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 Office REITs
Cousins Properties Inc. (CUZ - Free Report) reported second-quarter 2026 FFO of 75 cents per share, beating the Zacks Consensus Estimate of 74 cents. The metric rose 7.1% from the year-ago quarter.
Rental property revenues increased 11.8% year over year to $265.7 million and surpassed the consensus mark of $263.6 million. The results reflected strong leasing momentum, higher rental revenues and solid same-property NOI growth.
BXP, Inc. (BXP - Free Report) reported second-quarter 2026 FFO of $1.78 per share, beating the Zacks Consensus Estimate of $1.71. FFO rose 4.1% from the year-ago period.
Lease revenues increased 3.2% year over year to $831.68 million and surpassed the consensus mark of $812.49 million. The results reflected higher occupancy and same-property NOI growth, which supported the FFO beat.
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