Home Featured Vornado Realty Trust Calls Themselves “Best in Town”

Vornado Realty Trust Calls Themselves “Best in Town”

605
SHARE

When Vornado Realty Trust posted second quarter numbers, CEO Steven Roth was quick to say that the REIT was, “once again, the best in town. Here’s the math. FFO as adjusted was $0.98 per share as compared to $0.95 per share for the prior year second quarter, a 3.2% increase.”

On a cash basis, he said on the earnings call, FFO as adjusted was $0.96 per share as compared to $0.88 per share for the prior year second quarter, up a very strong 9.1%. “Cash basis NOI was $341.9 million, up 5.6% from the second quarter of 2017. This quarter’s company wide cash basis same-store NOI increase was 7.0% comprised of New York Office, up 11.0%; retail, down 1.3% with the total New York segment, up 5.9%. theMART, up 10.8%; and 555 California Street, up 23.8%.”

This quarter’s leasing activity was robust, he added. “We leased 611,000 square feet of New York Office space at a record average starting rent of $88.28 per square foot. The mark-to-market increase on 502,000 square feet of second-generation space was 41.3% GAAP and 28.4% cash. We leased 49,000 square feet of street retail space at an average starting rent of $165.98 per square foot, call it $166. The mark-to-market increase on 38,000 square feet of second generation space was 11.6% GAAP and 8.7% cash. At theMART, we leased 50,000 square feet at an average starting rent of $51.56 per square foot. The mark-to-market increase on second-generation space was 9.4% GAAP and 1.6% cash.”

He also pointed out, that the company’s office business continues to perform very well. “We are experiencing robust demand from all manner of industries in all of our submarkets. Our tenants are optimistic, aggressive, growing and upbeat about New York. As you can see from our New York Office mark-to-market cash increases of 50.3% in the first quarter, and 28.4% in the second quarter, great things happen when the rents reprice.”

Retail continues to be soft, he added. “While I am certainly not calling a bottom, there is noticeably increased retail activity in doors, albeit at rents in most submarkets substantially below the top pick. We reaffirmed our previous guidance that retail cash NOI will not go below $304 million, and we still expect GAAP FFO as adjusted for the year to be flat albeit, very nicely positive on a cash basis.”

The office investment sales market remains healthy but disciplined with volume up 15% year-over-year, he explained on the call. “Demand and pricing is very strong for assets in the south and west of Manhattan, and for deals under $400 million a function of investor preference to keep check sizes smaller at this point in the cycle. Pricing for large assets is stable though, bidding pools are thin and it’s taking longer to execute.”


Warning: A non-numeric value encountered in /home/scopii47/public_html/thereitwire.com/wp-content/themes/Newsmag/includes/wp_booster/td_block.php on line 997