Alexander's (ALX) Q4 2024 earnings summary

Executive summary

• Leasing momentum accelerated in 2024, with 3.4 million sq ft leased, including 2.65 million sq ft of New York office at market-leading rents, and several major deals in the PENN DISTRICT and other flagship assets.

• Office occupancy rose to 88.8% at year-end, with a pending master lease at 770 Broadway set to boost occupancy to 92.1%.

• The company expects a landlord's market in New York, with limited new supply, rising rents, and robust demand from financial, legal, and tech tenants.

• Major refinancing and asset sales, including the NYU lease at 770 Broadway and 1535 Broadway refinancing, are expected to generate $1 billion in new cash.

• Reported Q4 2024 net income of $12.3 million ($2.39 per diluted share), down from $16.3 million ($3.17 per diluted share) in Q4 2023.

Financial highlights

• Comparable FFO was $2.26 per share for 2024, down from 2023 due to lower NOI from known move-outs and higher net interest expense, but better than anticipated.

• Q4 comparable FFO was $0.61 per share, down from $0.63 in Q4 2023, mainly due to higher interest expense and lower NOI, partially offset by lease termination income and lower G&A.

• Q4 2024 revenues were $55.9 million, down from $62.9 million in Q4 2023.

• Full-year 2024 revenues were $226.4 million, up slightly from $225.0 million in 2023.

• Stock price increased 49% in 2024 after a 35% rise in 2023.

Outlook and guidance

• 2025 FFO is expected to be slightly lower than 2024, reflecting the absence of 2024's lease termination income.

• Significant earnings growth is projected for 2027 as lease-up at PENN 2 and other assets flows through.

• Office occupancy is expected to temporarily dip in Q1 2025 due to PENN 2 coming online, but stabilize in the low 90s as leasing progresses.

• Rents are expected to rise aggressively, with potential for spikes as market tightens and no new supply is anticipated.