Vornado Realty Trust (VNO) Q1 2025 earnings summary

Executive summary

• Net income attributable to common shareholders was $86.8M ($0.43 per diluted share) for Q1 2025, up from a net loss of $9.0M ($0.05 per share) in Q1 2024, driven by a $76.2M gain from the 666 Fifth Avenue sale and a $17.2M reversal of previously accrued PENN 1 rent expense.

• FFO attributable to common shareholders plus assumed conversions was $135.0M ($0.67 per diluted share), up from $104.1M ($0.53 per share) in Q1 2024; adjusted FFO was $126.2M ($0.63 per share) vs. $108.8M ($0.55 per share) last year.

• Major leasing wins included Universal Music Group at Penn 2 and a 1.1 million sq ft master lease with NYU at 770 Broadway.

• Significant asset sales and financings reduced debt by $915 million and increased cash by $500 million, with immediate liquidity of $3 billion.

• Manhattan office market remains robust, with rising rents and shrinking availability in Class A buildings.

Financial highlights

• Revenues for Q1 2025 were $461.6M, up from $436.4M in Q1 2024.

• Comparable FFO of $0.63 per share, up from $0.55 in Q1 2024.

• Same store NOI at share increased 3.5% year-over-year; New York segment up 3.0%, THE MART up 9.7%, and 555 California Street up 5.2%.

• Over 1 million sq ft leased in Q1, with New York office leases at $95 starting rents and positive mark-to-market spreads.

• Interest and debt expense rose to $95.8M from $90.5M, primarily due to higher average interest rates.

Outlook and guidance

• 2025 comparable FFO now expected to be flat with 2024, an improvement from prior guidance of a slight decline.

• Management anticipates sufficient liquidity to fund operations, distributions, and capital expenditures over the next twelve months.

• Full positive impact from Penn 1 and Penn 2 lease-up expected by 2027, driving significant earnings growth.

• Office occupancy projected to rise from 87.4% currently to low 90s over the next year, and potentially to 94% as Penn 1 and Penn 2 are fully leased.

• A common share dividend for 2025 is expected in Q4, subject to board approval.