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Mar 31
Vornado Q1 2025 Earnings Report
Vornado reported a return to profitability in Q1 2025 driven by asset sales and favorable rent adjustments.
Key Takeaways
Vornado Realty Trust posted a net income of $86.8M in Q1 2025, reversing a prior-year loss, largely due to a significant gain from the 666 Fifth Avenue sale and the reversal of accrued rent expense at PENN 1.
Net income surged to $86.8M from a $9M loss in Q1 2024.
A $76M gain was recognized from the sale of a portion of 666 Fifth Avenue to UNIQLO.
The reversal of $17M in previously accrued rent at PENN 1 contributed to earnings.
Adjusted FFO per share increased to $0.63 from $0.55 in the prior-year quarter.
Vornado
Vornado
Vornado Revenue by Geographic Location
Revenue by Geographic Location
New York Revenue
CapyFin.com Forward Guidance
The company provided a cautiously optimistic outlook, buoyed by strong leasing activity and cash inflows from recent transactions, while noting legal uncertainties and development risks.
Positive Outlook
- Secured a 70-year lease with NYU at 770 Broadway for $935M in prepaid rent.
- Interest savings from PENN 1 ground rent reset to $15M annually.
- Strong leasing momentum with 709K sq. ft. of total new leases signed.
- Qualified for sustainability-linked loan margin reductions.
- Achieved a 16.7% YoY increase in cash basis same store NOI at 555 California Street.
Challenges Ahead
- Ongoing litigation regarding the final PENN 1 ground rent may result in retroactive payment increase.
- Overall cash basis same store NOI in New York decreased by 0.7% YoY.
- Retail segment saw a 14.5% YoY decline in rent on a cash basis.
- Decline in interest income affected adjusted FFO growth.
- Debt reduction impacted cash reserves, which fell by $165M quarter-over-quarter.