Vornado (VNO) Q3 2024 Earnings Call Transcript

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Tuesday, November 5, 2024 astatine 10:00 a.m. ET

• Chairman and Chief Executive Officer — Steven Roth

• President and Chief Financial Officer — Michael Franco

• Executive Vice President, Leasing and Development — Glen Weiss

• Chief Operating Officer and Chief Accounting Officer — Tom Sanelli

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Steven Roth: Thank you, Steven. Good morning, everyone. Today is predetermination time successful America and other important since this is simply a once-in-four-year statesmanlike election. Election time is arguably the azygous astir important time successful the calendar of our democracy. Early voting information seems to bespeak that this year’s turnout volition beryllium a grounds and that’s great. Enough said. Now to business. I’ve been saying for the past fewer quarters that the bureau leasing marketplace successful Manhattan is astatine the foothills of betterment and I deliberation that’s becoming much and much apparent.

While Manhattan has implicit 400 cardinal quadrate feet of bureau space, we vie successful a overmuch smaller, say, 180 cardinal quadrate ft marketplace of the Class A amended buildings, wherever request is beardown and vacancies are rapidly evaporating. Look astatine Park Avenue and Sixth Avenue present with 7% and 9% Class A vacancy, which is the precise explanation of a landlord’s market. And the point connected the barroom is that determination is nary motion of further bureau proviso connected the horizon. There hasn’t been a large caller bureau commencement successful 5 years. The outgo of the gathering and the outgo of superior marque it wholly uneconomic to build. The enigma is simply a guide.

No caller proviso ever begets a landlord’s market. As Michael and Glen volition remark successful a moment, our rents are going up. I americium highly optimistic and the banal marketplace seems to agree. Year-to-date, we person leased 2.5 cardinal quadrate feet company-wide, including 2.1 cardinal quadrate feet successful Manhattan. As Michael and Glen volition cover, enactment is robust, and I americium assured that we volition motion betwixt 3.5 cardinal quadrate feet and 3.8 cardinal quadrate feet of Manhattan leases this year, which would fertile fig 2 successful our history. On the past call, we made notation of a woody with 770 Broadway. I americium pleased to study we person agreed to a transaction with NYU for 770 Broadway.

NYU volition maestro lease the full 1.1 cardinal quadrate ft bureau component, which excludes the residence, with an enactment to acquisition successful the 30th twelvemonth and the 70th year. Master lease volition supply for an upfront outgo of prepaid rent capable to wage disconnected our $700 cardinal indebtedness connected the property, arsenic good arsenic an yearly nett rent implicit the lease term. Both parties person signed a elaborate missive of intent and expect to execute last binding papers shortly. I expect the closing and rent commencement would hap successful January. We are delighted to grow our narration with NYU. Our liquidity is simply a beardown $2.6 billion, with $1 cardinal of currency connected equilibrium sheet.