Vornado Realty Trust (VNO) 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.

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

• Net income attributable to common shareholders for Q4 2024 was $1.2M ($0.01/share), reversing a net loss of $61.0M in Q4 2023; full-year net income was $8.3M ($0.04/share), down from $43.4M in 2023.

• 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.

• The entire portfolio achieved 100% LEED certification, a national first.

Financial highlights

• Comparable FFO for 2024 was $2.26 per share, 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, compared to $0.63 in Q4 2023.

• Q4 2024 revenues were $457.8M, up from $441.9M in Q4 2023; full-year revenues were $1.79B, down from $1.81B in 2023.

• Same store NOI at share for Q4 2024 decreased 4.5% year-over-year; full-year same store NOI at share fell 6.8%.

• Stock price increased 49% in 2024, following a 35% increase in 2023.

Outlook and guidance

• 2025 FFO is expected to be slightly lower than 2024, mainly due to one-time lease termination income in 2024.

• Significant earnings growth is projected for 2027 as PENN 1 and PENN 2 lease-up impacts flow through.

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

• The leasing pipeline remains robust, with 750,000 sq ft in negotiation and another 1.3 million sq ft in proposals.

• Active development projects include PENN 2 and Sunset Pier 94 Studios, with $154.5M in remaining expenditures and projected stabilization in 2026.