10q10k10q10k.net

What changed in ALEXANDERS INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of ALEXANDERS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+192 added−193 removedSource: 10-K (2024-02-12) vs 10-K (2023-02-13)

Top changes in ALEXANDERS INC's 2023 10-K

192 paragraphs added · 193 removed · 158 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

21 edited+5 added−0 removed15 unchanged
Biggest changeVornado relies on technology, as well as meaningful stakeholder collaboration with its tenants, its employees, and its communities, to achieve this plan. Vornado’s commitment to carbon neutrality and associated emissions reduction targets have been approved by the Science Based Targets Initiative as consistent with a 1.5°C climate scenario, the most ambitious goal of the Paris Agreement.
Biggest changeVornado’s commitment to carbon neutrality and associated emissions reduction targets have been approved by the Science Based Targets Initiative as consistent with a 1.5°C climate scenario, the most ambitious goal of the Paris Agreement. Vornado considers sustainability in all aspects of its business, including the design, construction, retrofitting and ongoing maintenance and operations of its portfolio of buildings.
Since we are externally managed by Vornado, Vornado’s Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters at Alexander’s, which includes climate change risk. Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with Vornado’s business units.
Since we are externally managed by Vornado, Vornado’s Corporate Governance and Nominating Committee of its Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters at Alexander’s, which includes climate change risk. Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with Vornado’s business units.
As of December 31, 2022, Vornado owned 32.4% of our outstanding common stock. Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2022, Mr.
As of December 31, 2023, Vornado owned 32.4% of our outstanding common stock. Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2023, Mr.
We have six properties in New York City consisting of: Operating properties • 731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan. The building contains 939,000 and 140,000 of net rentable square feet of office and retail space, respectively.
We have five properties in New York City consisting of: Operating properties • 731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan. The building contains 939,000 and 140,000 of rentable square feet of office and retail space, respectively.
There can be no assurance that Vornado’s Vision 2030 commitment will be achieved in the planned time frame. The ESG Report is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K. Competition We operate in a highly competitive environment. All of our properties are located in New York City.
There can be no assurance that Vornado’s Vision 2030 commitment will be achieved in the planned time frame. The ESG Report is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K. 6 Competition We operate in a highly competitive environment located in New York City.
In the discussion below, when we refer to Vornado’s buildings, it includes our buildings. Vornado is an industry leader in sustainability, owning and operating more than 27 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing 95% of its office portfolio, with over 23 million square feet at LEED Gold or Platinum.
In the discussion below, when we refer to Vornado’s buildings, it includes our buildings. Vornado is an industry leader in sustainability, owning and operating more than 25 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing 95% of its in-service office portfolio, with over 24 million square feet at LEED Gold or Platinum.
Vornado also submits public reports to CDP (formerly the Carbon Disclosure Project), CSA (the S&P Global Corporate Sustainability Assessment) and EP 100 (global initiative led by Climate Group). Further details on Vornado’s environmental sustainability initiatives and strategy, including Vornado’s Vision 2030 Roadmap, can be found in Vornado’s 2021 ESG Report at (esg.vno.com).
Vornado also submits public reports to CDP (formerly, the Carbon Disclosure Project), CSA (the S&P Global Corporate Sustainability Assessment) and EP100 (global initiative led by Climate Group). Further details on Vornado’s environmental sustainability initiatives and strategy, including its Vision 2030 Roadmap, can be found in Vornado’s 2022 ESG Report at (vno.com/sustainability).
Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant; • Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63 rd Road in Queens.
Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant; • Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63 rd Road in Queens. The center is anchored by a 50,000 square foot Burlington and a 36,000 square foot Marshalls.
Vornado is committed to transparent reporting of sustainability performance indicators and publishes an annual ESG Report in accordance with the Global Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and recommendations set forth by the Task Force on Climate-related Financial Disclosures.
Vornado is committed to transparent reporting of sustainability performance indicators and publishes an annual ESG Report in accordance with the Global Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and in 2023 published a report in accordance with the Task Force on Climate-related Financial Disclosures.
(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.0% of our outstanding common stock, in addition to the 2.3% they indirectly own through Vornado. 5 Significant Tenant Bloomberg accounted for revenue of $115,129,000 , $113,140,000 and $109,066,000 in the years ended December 31, 2022, 2021 and 2020, respectively, representing approximately 56%, 5 5% and 55% of our rental revenues in each year, respectively.
(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.0% of our outstanding common stock, in addition to the 2.3% they indirectly own through Vornado. 5 Significant Tenant Bloomberg accounted for revenue o f $120,351,000, $115,129,000 and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively, representing approximately 54%, 56% an d 55% of our rental revenues in each year, respectively.
Our employees are managed by Vornado in accordance with its employee policies and they have access to Vornado’s benefits, training and other programs. Executive Office Our executive office is located at 210 Route 4 East, Paramus, New Jersey, 07652 and our telephone number is (201) 587-8541.
We currently have 92 property-level employees w ho provide cleaning, engineering and security services. Our employees are managed by Vornado in accordance with its employee policies and they have access to Vornado’s benefits, training and other programs. Executive Office Our executive office is located at 210 Route 4 East, Paramus, New Jersey, 07652 and our telephone number is (201) 587-8541.
The center is anchored by a 145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased; • The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet; and • Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is sub-leased to New World Mall LLC.
The center is anchored by a 145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased; • Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is subleased to New World Mall LLC.
The lease includes a right to terminate effective no earlier than March 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term; • Rego Park II, a 615,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens.
The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term.
We compete with a large number of real estate investors, property owners and developers. Principal factors of competition are rents charged, attractiveness of location, the quality of the property and the breadth and the quality of services provided.
We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided.
Vornado prioritizes addressing climate change and in 2019 adopted a 10-year plan to make its buildings, including ours, carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy efficiency, demand management, and renewable power.
Vornado prioritizes addressing climate change and in 2019 adopted a 10-year plan to make its buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy reduction, recovery, and renewable power. Vornado relies on technology, as well as meaningful stakeholder collaboration with its tenants, its employees, and its communities, to achieve this plan.
In 2022, Vornado (i) was selected as a global “Sector Leader” for Diversified Office/Retail REITs in the Global Real Estate Sustainability Benchmark ("GRESB"), ranking first in the United States amongst peers and ranking third among 112 responding listed companies within the Americas, and received the “Green Star” distinction for the tenth consecutive year and GRESB's five star rating, (ii) received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for diversified REITs for the twelfth time, and (iii) was recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated seven years of sustained excellence.
In 2023, Vornado (i) ranked #1 in the US Diversified Office/Retail REIT peer group by GRESB, and received the “Green Star” distinction for the eleventh consecutive year and GRESB's five star rating, (ii) received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for diversified REITs for the thirteenth time, and (iii) was recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated eight years of sustained excellence.
Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due. 6 Human Capital Resources Since we are externally managed by Vornado, we do not have separate employees that provide management, leasing and development services. We currently have 69 property-level employees w ho provide cleaning, engineering and security services.
Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due. See “Item 1A. Risk Factors” in this Annual Report on Form 10-K for additional information regarding these factors. Human Capital Resources Since we are externally managed by Vornado, we do not have separate employees that provide management, leasing and development services.
Vornado considers sustainability in all aspects of its business, including the design, construction, retrofitting and ongoing maintenance and operations of its portfolio of buildings. Vornado operates its buildings sustainably and efficiently by seeking to establish best practices in energy and water consumption, carbon reduction, resource and waste management and ecologically sensitive procurement.
Vornado operates its buildings sustainably and efficiently by seeking to establish best practices in energy and water consumption, carbon reduction, resource and waste management and ecologically sensitive procurement. Vornado’s policies, from 100% green cleaning to procuring 100% renewable electricity certificates to energy efficiency, are implemented across its entire portfolio.
The center is anchored by a 112,000 square foot IKEA, a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls. On December 3, 2022, IKEA closed its store at the property. IKEA remains obligated under its lease which expires in December 2030.
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030.
The property is ground leased through January 2027 with one 10-year extension option. Property t o be developed • Rego Park III, a 140,000 square foot land parcel adjacent to the Rego Park II shopping center in Queens, at the intersection of Junction Boulevard and the Horace Harding Service Road.
The property is ground leased through January 2027 with one 10-year extension option; and • The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.
Vornado’s policies, from 100% green cleaning to energy efficiency, are implemented across its entire portfolio. Vornado undertakes significant outreach with its tenants, employees and investors regarding its sustainability programs and strategies.
Vornado undertakes significant outreach with its tenants, employees and investors regarding Vornado’s sustainability programs and strategies. Vornado gathers data to measure progress against its goals, aligns its goals with its tenants, plans for its longer-term projects and engages with its stakeholders in meaningful ways.
Added
On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024.
Added
Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term; • Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens.
Added
Disposition On May 19, 2023, we sold the Rego Park III land parcel in Queens, New York, for $71,060,000 inclusive of consideration for Brownfield tax benefits and reimbursement of costs for plans, specifications and improvements to date. Net proceeds from the sale were $67,821,000 after closing costs and the financial statement gain was $53,952,000.
Added
Vornado uses carbon accounting software, energy audits and models and building automation software to measure and track its portfolio-wide waste, water and energy reduction strategies, create roadmaps for each building to understand how to achieve carbon neutrality and provide accurate and actionable data for its measurement, verification and reporting requirements.
Added
Vornado’s 2022 and 2023 long-term performance plan awards specifically tie a portion of senior management’s compensation to the achievement of certain ESG targets, including reductions in greenhouse gas emissions, achieving a specified GRESB score and targeting a specified percentage of LEED Gold or Platinum certified square footage in its office portfolio.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+12 added−16 removed91 unchanged
Biggest changeAdditionally, our office tenant may see further delay in employee return-to-work plans as a result of the continued risks of the pandemic and further dependence on work from home and flexible work arrangements may lead our office tenant to reassess its long-term physical space needs.
Biggest changeThe impact of the COVID-19 pandemic caused retailers to reduce the number and size of their physical locations and further increase reliance on e-commerce, and future infectious or contagious diseases could have a similar impact. Additionally, our office tenant may adjust its employee work from home arrangements which may lead to a reassessment of its long-term physical space needs.
These costs, taxes or penalties could increase our operating costs and decrease the cash available to pay our indebtedness or make distributions to our stockholders. Changes to tax laws could affect REITs generally, the trading of our shares and our results of operations, both positively and negatively, in ways that are difficult to anticipate.
These costs, taxes or penalties could increase our operating costs and decrease the cash available to pay our indebtedness and make distributions to our stockholders. Changes to tax laws could affect REITs generally, the trading of our shares and our results of operations, both positively and negatively, in ways that are difficult to anticipate.
Unreimbursed increased operating expenses may reduce cash flow available to pay our indebtedness or make distributions to our stockholders. We may acquire, develop, or redevelop properties and this may create risks.
Unreimbursed increased operating expenses may reduce cash flow available to pay our indebtedness and make distributions to our stockholders. We may acquire, develop, or redevelop properties and this may create risks.
We may not succeed in (i) developing, redeveloping or acquiring properties; (ii) completing these activities on time or within budget; and (iii) leasing or selling developed, redeveloped or acquired properties at amounts sufficient to cover our costs. Competition in these activities could also significantly increase our costs.
We may not succeed in (i) acquiring, developing, or redeveloping properties; (ii) completing these activities on time or within budget; and (iii) leasing or selling acquired, developed, or redeveloped properties at amounts sufficient to cover our costs. Competition in these activities could also significantly increase our costs.
There are many factors that can affect the value of our equity securities and any debt securities we may issue in the future, including the state of the capital markets and economy. Demand for office and retail space typically declines nationwide due to an economic downturn, bankruptcies, downsizing, layoffs and cost cutting.
There are many factors that can affect the value of our equity securities and any debt securities we may issue in the future, including the state of the capital markets and the economy. Demand for office and retail space typically declines nationwide due to an economic downturn, bankruptcies, downsizing, layoffs and cost cutting.
We may also become subject to costs, taxes or penalties, or increases therein, associated with natural resource or energy usage, such as a “carbon tax” and by local legislation such as New York City’s Local Law 97, which sets limits on carbon emissions in our buildings and imposes penalties if we exceed those limits, and New York City’s Intro 2317, or the “gas ban” bill, which limits any onsite fossil fuel combustion in new construction and major renovations.
We may become subject to costs, taxes or penalties, or increases therein, associated with natural resource or energy usage, such as a “carbon tax” and by local legislation such as New York City’s Local Law 97, which sets limits on carbon emissions in our buildings and imposes penalties if we exceed those limits, and New York City’s Intro 2317, or the “gas ban” bill, which limits any onsite fossil fuel combustion in new construction and major renovations.
We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, ransomware, computer viruses, attachments to e-mails, persons who access our systems from inside or outside our organization, and other significant disruptions of our IT networks and related systems.
We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, ransomware, computer viruses, phishing, attachments to e-mails, persons who access our systems from inside or outside our organization, and other significant disruptions of our IT networks and related systems.
Consequently, we may have limited ability to dispose of assets in our portfolio promptly in response to changes in economic or other conditions which could have an adverse effect on our sources of working capital and our ability to satisfy our indebtedness. 13 RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL Capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the value of an investment in our common stock.
Consequently, we may have limited ability to dispose of assets in our portfolio promptly in response to changes in economic or other conditions which could have an adverse effect on our sources of working capital and our ability to satisfy our indebtedness. 13 RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL Significantly tighter capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the value of an investment in our common stock.
It is impossible for us to predict the future or the effect of trends in the economic and investment climates of the New York City metropolitan region, and more generally of the United States, on the real estate market in this area. Local, national or global economic downturns could negatively affect the value of properties, our business and profitability.
It is impossible for us to predict the future effects of trends in the economic and investment climates of the New York City metropolitan region, and more generally of the United States, on the real estate market in this area. Local, national or global economic downturns could negatively affect the value of our properties, our business and profitability.
We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations. 20 We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate.
We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations. 19 We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate.
Recent substantial increases in the rate of inflation and potential future elevated rates of inflation, both real and anticipated, may impact our investments and results of operations. In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit margins.
Recent substantial increases in the rate of inflation and potential future elevated rates of inflation, both real and anticipated, may impact our business and results of operations. In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit margins.
Our debt service costs generally will not be reduced if developments in the market or at our properties, such as the entry of new competitors or the loss of major tenants, cause a reduction in the income from our properties. Should such events occur, our operations may be adversely affected.
Our debt service costs generally will not be reduced if conditions in the market or at our properties, such as the entry of new competitors or the loss of major tenants, cause a reduction in the income from our properties. Should such events occur, our operations may be adversely affected.
In addition, Vornado manages and leases the real estate assets of Interstate. As of December 31, 2022, Vornado owned 32.4% of our outstanding common stock, in addition to the 26.0% o wned by Interstate and its partners. In addition to the relationships described in the immediately preceding paragraph, Ms.
In addition, Vornado manages and leases the real estate assets of Interstate. As of December 31, 2023, Vornado owned 32.4% of our outstanding common stock, in addition to the 26.0% o wned by Interstate and its partners. In addition to the relationships described in the immediately preceding paragraph, Ms.
Accordingly, our stockholders do not control these policies. 16 Steven Roth, Vornado and Interstate may exercise substantial influence over us. They and some of our other directors and officers have interests or positions in other entities that may compete with us.
Accordingly, our stockholders do not control these policies. 15 Steven Roth, Vornado and Interstate may exercise substantial influence over us. They and some of our other directors and officers have interests or positions in other entities that may compete with us.
As of December 31, 2022, Inter state and its partners owned approximately 7.0% of the common shares of beneficial interest of Vornado and approximately 26.0% of our outstanding common stock. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the partners of Interstate. Mr.
As of December 31, 2023, Inter state and its partners owned approximately 7.0% of the common shares of beneficial interest of Vornado and approximately 26.0% of our outstanding common stock. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the partners of Interstate. Mr.
Certain of our properties are New York City retail properties and thus are affected by the general and New York City retail environments, including office and residential occupancy rates, the level of consumer spending and consumer confidence, New York City tourism, employer remote-working policies, the threat of terrorism or other criminal acts, increasing competition from on-line retailers and other retail centers, and the impact of technological change upon the retail environment generally.
Certain of our properties are New York City retail properties and thus are affected by the general and New York City retail environments, including the level of consumer spending and consumer confidence, New York City tourism, office and residential occupancy rates, employer remote-working policies, the threat of terrorism or other criminal acts, increasing competition from online retailers and other retail centers, and the impact of technological change upon the retail environment generally.
Although we believe that we could find a replacement, the loss of his services could harm our operations and adversely affect the value of our common stock. 19 RISKS RELATED TO REGULATORY COMPLIANCE We might fail to qualify or remain qualified as a REIT, and may be required to pay federal income taxes at corporate rates.
Although we believe that we could find a replacement, the loss of his services could harm our operations and adversely affect the value of our common stock. 18 RISKS RELATED TO REGULATORY COMPLIANCE We might fail to qualify or remain qualified as a REIT, and may be required to pay federal income taxes at corporate rates, which could adversely affect the value of our common stock.
Although our stated business strategy is not to engage in acquisitions, we may acquire, develop or redevelop properties when we believe that an acquisition, development or redevelopment project is otherwise consistent with our business strategy.
Although our current business strategy is not to engage in acquisitions, we may acquire, develop or redevelop properties when we believe that an acquisition, development or redevelopment project is otherwise consistent with our business strategy.
If we had to pay federal income tax, the amount of money available to distribute to stockholders and pay our indebtedness would be reduced for the year or years involved, and we would not be required to make distributions to stockholders in that taxable year and in future years until it was able to qualify as a REIT and did so.
If we had to pay federal income tax, the amount of money available to distribute to stockholders and pay our indebtedness would be reduced for the year or years involved, and we would not be required to make distributions to stockholders in that taxable year and in future years until we were able to qualify as a REIT and did so.
In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in this area include: • financial performance and productivity of the media, advertising, professional services, financial, technology, retail, insurance and real estate industries; • business layoffs or downsizing; • any oversupply of, or reduced demand for, real estate; • industry slowdowns; • the effects of inflation; • relocations of businesses; • changing demographics; • increased work from home and use of alternative work places; • changes in the number of domestic and international tourists to our markets (including as a result of changes in the relative strengths of world currencies and the COVID-19 pandemic); • the fiscal health of New York State and New York City governments and local transit authorities, particularly as a result of the impact of the COVID-19 pandemic; • quality of life conditions; • infrastructure quality; • increased government regulation and costs of complying with such regulations; and • changes in rates or the treatment of the deductibility of state and local taxes.
In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in this area include: • financial performance and productivity of the media, advertising, professional services, financial, technology, retail, insurance and real estate industries; • business layoffs or downsizing; • any oversupply of, or reduced demand for, real estate; • industry slowdowns; • the effects of inflation; • rising interest rates; • relocations of businesses; • changing demographics; • increased work from home and use of alternative work places; • changes in the number of domestic and international tourists to our markets (including as a result of changes in the relative strengths of world currencies); • the fiscal health of New York State and New York City governments and local transit authorities; • quality of life conditions; • infrastructure quality; • increased government regulation and costs of complying with such regulations; and • changes in rates or the treatment of the deductibility of state and local taxes.
For NBCR acts, FNSIC is responsible for a $298,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for the payment of our indebtedness and make distributions to our stockholders. Compliance or failure to comply with the Americans with Disabilities Act (“ADA”) or other safety regulations and requirements could result in substantial costs.
These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available to pay our indebtedness and make distributions to our stockholders. Compliance or failure to comply with the Americans with Disabilities Act (“ADA”) or other safety regulations and requirements could result in substantial costs.
Actual or threatened terrorist attacks may adversely affect the value of our properties and our ability to generate cash flow. All of our properties are located in New York City, and our most significant property, 731 Lexington Avenue, is located on Lexington Avenue and 59th Street in Manhattan.
Actual or threatened terrorist attacks or other criminal acts may adversely affect the value of our properties and our ability to generate cash flow. All of our properties are located in New York City, and our most significant property, 731 Lexington Avenue, is located on Lexington Avenue and 59th Street in Manhattan.
The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
The risk of a security breach or disruption, particularly through a cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased, including through the use of artificial intelligence.
The factors that affect the value of our real estate include, among other things: • global, national, regional and local economic conditions; • competition from other available space, including co-working space and sub-leases; • local conditions such as an oversupply of space or a reduction in demand for real estate in the area; • how well we manage our properties; • the development and/or redevelopment of our properties; • changes in market rental rates; • increased competition from online shopping and its impact on retail tenants and their demand for retail space; • the timing and costs associated with property improvements and rentals; • whether we are able to pass all or portions of any increases in operating costs through to tenants; • changes in real estate taxes and other expenses; • the ability of state and local governments to operate within their budgets; • whether tenants and users such as customers and shoppers consider a property attractive; • changes in consumer preferences adversely affecting retailers and retail store values; • changes in tenant space utilization; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • consequences of any armed conflict involving, or terrorist attacks against, the United States or individual acts of violence in public spaces; • trends in office real estate, including many tenants’ preferences for space in modern amenitized buildings which may require the landlord to incur significant capital expenditures; • availability of financing on acceptable terms or at all; • inflation or deflation; • fluctuations in interest rates; • our ability to obtain adequate insurance; • changes in zoning laws and taxation; • government regulation; • potential liability under environmental or other laws or regulations; • natural disasters; • general competitive factors; • climate change; and • the impact of the COVID-19 pandemic or outbreaks of other highly infectious diseases.
The factors that affect the value of our real estate include, among other things: • global, national, regional and local economic conditions and geopolitical events; • competition from other available space, including co-working space and subleases; • local conditions such as an oversupply of space or a reduction in demand for real estate in the area; • how well we manage our properties; • the development and/or redevelopment of our properties; • changes in market rental rates; • increased competition from online shopping and its impact on retail tenants and their demand for retail space; • the timing and costs associated with property improvements and rentals; • whether we are able to pass all or portions of any increases in operating costs through to tenants; • changes in real estate taxes and other expenses; • the ability of state and local governments to operate within their budgets; • whether tenants and users such as customers and shoppers consider a property attractive; • changes in consumer preferences adversely affecting retailers and retail store values; • changes in tenant space utilization; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • consequences of any armed conflict involving, or terrorist attacks against, the United States or individual acts of violence in public spaces; • trends in office real estate, including many tenants’ preferences for space in modern amenitized buildings which may require the landlord to incur significant capital expenditures; • availability of financing on acceptable terms or at all; • inflation or deflation; • fluctuations in interest rates; • our ability to obtain adequate insurance; • government regulation, including changes in fiscal policies, taxation, and zoning laws; • potential liability and compliance costs associated with environmental or other laws or regulations; • natural disasters; • general competitive factors; • climate change; and • the impact of pandemics or outbreaks of other infectious diseases.
The incurrence of these losses, costs or business interruptions may adversely affect our operating and financial results. Our properties are located in urban areas, which means the vitality of our properties is reliant on sound transportation and utility infrastructure.
The incurrence of these losses, costs or business interruptions may adversely affect our operating and financial results. Our properties are located in an urban area, which means the vitality of our properties is reliant on sound transportation and utility infrastructure.
De-carbonization of grid-supplied energy could lead to increased energy costs and operating expenses for our buildings. Retrofitting our building systems to consume less energy could lead to increased capital costs. Buildings which consume fossil fuels onsite may be subject to penalties.
De-carbonization of grid-supplied energy could lead to increased energy costs and operating expenses for our buildings. Retrofitting our building systems to consume less energy could lead to increased capital costs. Buildings which consume fossil fuels onsite may be subject to penalties in the future.
If the level of sales of stores operating in our properties were to decline significantly due to economic conditions, increased competition from on-line shopping, closing of anchors or for other reasons, tenants may be unable to pay their minimum rents or expense recovery charges.
If the level of sales at stores operating in our properties were to decline significantly due to economic conditions, increased competition from online shopping, closing of anchors or for other reasons, tenants may be unable to pay their minimum rents or expense recovery charges.
As a result, the value of our properties and the level of our revenues and cash flows could decline materially. 11 Natural disasters and the effects of climate change could have a concentrated impact on the area which we operate and could adversely affect our results. Our investments are in New York City.
As a result, the value of our properties and the level of our revenues and cash flows could decline materially. 11 Natural disasters and the effects of climate change could have a concentrated impact on the area where we operate and could adversely affect our results. Our properties are located in New York City.
As of December 31, 2022, we had outstanding mortgage indebtedness of $1,096,544,000, secured by three of our properties. These mortgages contain covenants that limit our ability to incur additional indebtedness on these properties, provide for lender approval of tenants’ leases in certain circumstances, and in certain cases provide for yield maintenance or defeasance premiums to prepay them.
As of December 31, 2023, we had outstanding mortgage indebtedness of $1,096,544,000, secu red by three of our properties. These mortgages contain covenants that limit our ability to incur additional indebtedness on these properties, provide for lender approval of tenants’ leases in certain circumstances, and in certain cases provide for yield maintenance or defeasance premiums to prepay them.
This, in turn, could trigger a decrease in the demand for space in these areas, which could increase vacancies in our properties and force us to lease our properties on less favorable terms . Furthermore, we may experience increased costs for security, equipment and personnel.
This, in turn, could trigger a decrease in the demand for space in this area, which could increase vacancies in our properties and force us to lease space at our properties on less favorable terms . Furthermore, we may experience increased costs for security, equipment and personnel.
We depend on dividends and distributions from these subsidiaries. The creditors of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us. Substantially all of our properties and assets are held through our subsidiaries.
The creditors of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or make distributions to us. Substantially all of our properties and assets are held through our subsidiaries. We depend on cash distributions and dividends from our subsidiaries for substantially all of our cash flow.
A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income.
A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes in laws, regulations and administration of property and transfer taxes. If such changes occur, we may be required to pay additional taxes on our assets or income.
For a description of our related party transactions with Vornado, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Party Transactions.” 17 The occurrence of cyber incidents, or a deficiency in our cyber security, as well as other disruptions of our IT networks and related systems, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships or reputation, all of which could adversely affect our financial results.
For a description of our related party transactions with Vornado, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Party Transactions.” 16 RISKS RELATED TO TECHNOLOGY, CYBERSECURITY AND DATA PROTECTION The occurrence of cyber incidents, or a deficiency in our cybersecurity, as well as other disruptions to our IT networks and related systems, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships or reputation, all of which could adversely affect our financial results.
We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material and adversely affect our business, results of operations and financial condition. The principal amounts of our mortgage loans are non-recourse to us and the loans contain customary covenants requiring us to maintain insurance.
We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material and adversely affect our business, results of operations and financial condition. Our loans contain customary covenants requiring us to maintain insurance.
We compete with a large number of real estate investors, property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided.
We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided.
Loss of or damage to the building would adversely affect our financial condition and results of operations. 731 Lexington Avenue accounted for revenue of $138,778,000, $140,524,000 and $137,718,000 in the years ended December 31, 2022, 2021 and 2020, respectively, representing approximately 67%, 68% and 69% of our rental revenues in each year, respectively.
Loss of or damage to the building would adversely affect our financial condition and results of operations. 731 Lexington Avenue accounted for revenue of $148,806,000, $138,778,000 and $140,524,000 in the years ended December 31, 2023, 2022 and 2021, respectively, representing approximately 66%, 67% and 68% of our rental revenues in each year, respectively.
Even if tenants do renew or we can relet the space, the terms of renewal or reletting, considering among other things, rent and other concessions, the cost of improvements to the property and leasing commissions, may be less favorable than the terms in the expired leases.
Even if tenants do renew or we can relet the space, the terms of renewal or reletting, considering among other things, rent and concessions, the cost of improvements to the property and leasing commissions, may be on less economically favorable terms.
These risks include, without limitation, (i) the availability and pricing of financing on favorable terms or at all; (ii) the availability and timely receipt of zoning and other regulatory approvals; (iii) increased costs of construction and any cost overruns, especially in an inflationary environment, and untimely completion of construction (including risks beyond our control, such as weather or labor conditions, material shortages or supply chain delays); (iv) the potential for the fluctuation of occupancy rates and rents at redeveloped properties, which may result in our investment not being profitable; (v) start up, repositioning and redevelopment costs may be higher than anticipated; (vi) the potential that we may fail to recover expenses already incurred if we abandon development or redevelopment opportunities after we begin to explore them; (vii) the potential that we may expend funds on and devote management time to projects which we do not complete; (viii) the inability to complete leasing of a property on schedule or at all, resulting in an increase in carrying or redevelopment costs; (ix) the possibility that properties will be leased at below expected rental rates and (x) to the extent the redevelopment activities are conducted in partnership with third parties, the possibility of disputes with our joint venture development partners and the potential that we miss certain project milestone deadlines.
These risks include, without limitation, (i) the availability and pricing of financing on favorable terms or at all; (ii) the availability and timely receipt of zoning and other regulatory approvals; (iii) cost overruns, especially in an inflationary environment, and untimely completion of construction (including risks beyond our control, such as weather or labor conditions, material shortages or supply chain delays); (iv) the potential for the fluctuation of occupancy rates and rents at redeveloped properties, which may result in our investment not being profitable; (v) start up, repositioning and redevelopment costs may be higher than anticipated; (vi) the potential that we may fail to recover expenses already incurred if we abandon development or redevelopment opportunities after we begin to explore them; (vii) the potential that we may expend funds on and devote management’s time to projects which we do not complete; (viii) the inability to complete leasing of a property on schedule or at all, resulting in an increase in carrying or redevelopment costs; (ix) the possibility that properties will be leased at below expected rental rates.
All of our revenues come from properties located in New York City. Real estate markets are subject to economic downturns and we cannot predict how economic conditions will impact this market in either the short or long term.
All of our properties are in New York City and are affected by the economic cycles and risks inherent to this area. All of our revenues come from properties located in New York City. Real estate markets are affected by economic downturns and we cannot predict how economic conditions will impact this market in either the short or long term.
Among the factors that could affect the price of our common stock are: • our financial condition and performance; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • actual or anticipated quarterly fluctuations in our operating results and financial condition; • our dividend policy; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income securities; • uncertainty and volatility in the equity and credit markets; • fluctuations in interest rates; • changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; • failure to meet analysts’ revenue or earnings estimates; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of institutional investor interest in us; • the extent of short-selling of our common stock and the shares of our competitors; • fluctuations in the stock price and operating results of our competitors; • general financial and economic market conditions and, in particular, developments related to market conditions for office REITs and other real estate related companies and the New York City real estate market; • domestic and international economic factors unrelated to our performance (including the macro-economic impact of the conflict between Russia and Ukraine); • changes in tax laws and rules; and • all other risk factors addressed elsewhere in this Annual Report on Form 10-K.
These factors include: • our financial condition and performance; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • actual or anticipated quarterly fluctuations in our operating results and financial condition; • our dividend policy; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income securities; • uncertainty and volatility in the equity and credit markets; • fluctuations in interest rates; • changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; • failure to meet analysts’ revenue or earnings estimates; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of institutional investor interest in us; • the extent of short-selling of our common stock and the shares of our competitors; • fluctuations in the stock price and operating results of our competitors; • general financial and economic market conditions and, in particular, developments related to market conditions for office REITs and other real estate related companies and the New York City real estate market; • the impact of inflation; • local, domestic and international economic factors unrelated to our performance (including the macro-economic impact of geopolitical conflict); • fiscal policies or inaction at the U.S. federal government level that may lead to federal government shutdowns or negative impacts on the U.S. economy; • changes in tax laws and rules; and • all other risk factors addressed elsewhere in this Annual Report on Form 10-K.
See “Forward-Looking Statements” contained herein on page 4. RISKS RELATED TO OUR PROPERTIES AND INDUSTRY We may be adversely affected by trends in office real estate, including work from home trends. In 2022, approximately 56% of our rental revenue was from Bloomberg, the office tenant at our 731 Lexington Avenue office property.
See “Forward-Looking Statements” contained herein on page 4. RISKS RELATED TO OUR BUSINESS AND OPERATIONS We may be adversely affected by trends in office real estate, including work from home trends. In 2023, approximate ly 54% of our rental revenue was from Bloomberg, the office tenant at our 731 Lexington Avenue office property.
Over time, these factors could decrease the demand for office and retail space and ultimately decrease occupancy and/or rent levels across our portfolio, which may have a negative impact on our financial condition and/or access to capital.
Over time, these factors could decrease the demand for office and retail space and ultimately decrease occupancy and/or rent levels across our portfolio, which may have a negative impact on our financial condition and/or access to capital. Some of our potential losses may not be covered by insurance.
These increased tax costs could, among other things, adversely affect the trading price for our common shares, our financial condition, our results of operations and the amount of cash available for the payment of dividends. 12 RISKS RELATED TO OUR OPERATIONS AND STRATEGIES Significant inflation and continuing increases in the inflation rate could adversely affect our business and financial results.
These increased tax costs could, among other things, adversely affect the trading price for our common shares, our financial condition, our results of operations and the amount of cash available to pay our indebtedness and make distributions to our stockholders. 12 Significant inflation and continuing increases in the inflation rate could adversely affect our business and financial results.
Any compromise of our information security systems could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information (which may be confidential, proprietary and/or commercially sensitive in nature) and a loss of confidence in our security measures, which could harm our business. 18 RISKS RELATED TO OUR COMMON STOCK The trading price of our common stock has been volatile and may continue to fluctuate.
Any compromise of our information security systems could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information (which may be confidential, proprietary and/or commercially sensitive in nature) and a loss of confidence in our security measures, which could harm our business.
As of December 31, 2022, we had authorized but unissued 4,826,550 shares of common stock, par value of $1.00 per share and 3,000,000 shares of preferred stock, par value $1.00 per share; of which 19,796 shares of common stock are reserve d for issuance upon redemption of the deferred stock units previously granted to our Board of Directors.
As of December 31, 2023, we had authorized but unissu ed 4,826,550 shares of common stock, par value of $1.00 per share and 3,000,000 shares of preferred stock, par value $1.00 per share; of which 23,388 shares of common stock are reserved for issuance upon redemption of the deferred stock units previously granted to our Board of Directors.
We are dependent on the efforts of Steven Roth, our Chief Executive Officer.
We are dependent on the efforts of Steven Roth, the Chairman of our Board of Directors and our Chief Executive Officer.
Loss of or damage to the building in excess of our insurance coverage, including as a result of a terrorist attack, would adversely affect our results of operations and financial condition. Bloomberg represents a significant portion of our revenues.
Loss of or damage to the building in excess of our insurance coverage, including as a result of a terrorist attack, would adversely affect our results of operations and financial condition. Bloomberg represents a majority of our revenues. Loss of Bloomberg as a tenant or deterioration in Bloomberg’s credit quality could adversely affect our financial condition and results of operations.
No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition.
If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition.
If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be foreclosed upon by the mortgagee resulting in a loss of income and a decline in our total asset value. Substantially all of our assets are owned by subsidiaries.
If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be foreclosed upon by the mortgagee resulting in a loss of the asset.
If a tenant does not pay its rent, we might not be able to enforce our rights as landlord without delays and may incur substantial legal and other costs. Even if we are able to enforce our rights, a tenant may not have recoverable assets. We may be unable to renew leases or relet space as leases expire.
If a tenant does not pay its rent, we may face delays enforcing our rights as landlord and may incur substantial legal and other costs. Even if we are able to enforce our rights, a tenant may not have recoverable assets.
In addition, 485,991 shares are available for future grant under the terms of our 2016 Omnibus Stock Plan.
In addition, 482,399 s hares are available for future grant under the terms of our 2016 Omnibus Stock Plan.
Government efforts to combat climate change may impact the cost of operating our properties. Over time, these conditions could result in declining demand for space in our buildings or the inability of us to operate the buildings at all.
Over time, these conditions could result in declining demand for space in our buildings or the inability of us to operate the buildings at all.
We have outstanding debt, and the amount of debt and its cost may increase and refinancing may not be available on acceptable terms. As of December 31, 2022, total debt outstanding was $1,096,544,000 , excluding deferred financing costs, and our ratio of total debt to total enterprise value was 54%.
We have outstanding debt, and the amount of debt and its cost may continue to increase and refinancing may not be available on acceptable terms, which could affect our future operations. As of December 31, 2023, total mortgages payable, excluding deferred debt issuance costs, was $1,096,544,000, and our rate of total debt to total enterprise value was 66%.
If we are unable to promptly renew the leases or relet the space at similar rates or if we incur substantial costs in renewing or reletting the space, our cash flow and ability to service debt obligations and pay dividends and distributions to stockholders could be adversely affected. 731 Lexington Avenue accounts for a substantial portion of our revenues.
If we are unable to promptly renew the leases or relet the space at similar rates, lease vacant space, or if we are otherwise not able to maintain occupancy on favorable terms, our cash flow and ability to service debt obligations and pay dividends and distributions to stockholders could be adversely affected. 731 Lexington Avenue accounts for a majority of our revenues.
We depend on cash distributions and dividends from our subsidiaries for substantially all of our cash flow. The creditors of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them when due and payable before that subsidiary may make distributions or dividends to us.
The creditors of each of our subsidiaries are entitled to payment of that subsidiary’s obligations to them when due and payable before that subsidiary may pay dividends or make distributions to us.
As a result, the bankruptcy or insolvency of a major tenant or multiple tenants could result in decreased revenues, net income and funds available to pay our indebtedness or make distributions to stockholders. 10 Our business, financial condition, results of operations and cash flows have been and may continue to be adversely affected by the COVID-19 pandemic, or future outbreaks of other highly infectious diseases, and the impact could be material to us.
As a result, the bankruptcy or insolvency of, or nonpayment by, a major tenant could cause us to suffer lower revenues and operational difficulties, including leasing the remainder of the property, which could in turn result in decreased net income and funds available to pay our indebtedness and make distributions to stockholders. 10 Our business, financial condition, results of operations and cash flows have been and may continue to be adversely affected by outbreaks of highly infectious or contagious diseases.
The trading price of our common stock has been volatile and may continue to fluctuate widely as a result of several factors, many of which are outside of our control. In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies.
The trading price of our common stock has been volatile and may continue to fluctuate widely as a result of several factors, many of which are outside of our control.
Substantially all of our properties face competition from similar properties in the same market, which may adversely affect the rents we can charge at those properties and our results of operations. 9 We depend on leasing space to tenants on economically favorable terms and collecting rent from tenants who may not be able to pay.
Substantially all of our properties face competition from similar properties in the same market, which may adversely affect the rents we can charge at those properties and our results of operations. 9 We may be unable to renew leases, lease vacant space or relet space as leases expire on favorable terms.
Declines in the economy or declines in the real estate markets in New York City, including the effects of the COVID-19 pandemic, have hurt and could continue to hurt our financial performance and the value of our properties.
Declines in the economy and declines in the real estate markets in New York City have affected and could affect our financial performance and the value of our properties.
In addition, our participation in any distribution of the assets of any of our direct or indirect subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary, is only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the applicable direct or indirect subsidiaries are satisfied. 14 Our existing financing documents contain covenants and restrictions that may restrict our operational and financial flexibility.
In addition, our participation in any distribution of the assets of any of our subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary, is only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the applicable subsidiary, are satisfied. Alexander’s charter documents and applicable laws may hinder any attempt to acquire us.
Our business has been, and may continue to be, adversely affected by the economic and industry challenges created by the COVID-19 pandemic and preventive measures taken to curb the spread of the virus.
Our business has been, and may continue to be, adversely affected by the economic and industry challenges created by highly infectious or contagious diseases, including the COVID-19 pandemic.
In addition, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost, unless we were entitled to relief under the relevant statutory provisions. We may face possible adverse changes in federal tax laws, which may result in an increase in our tax liability.
In addition, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost, unless we were entitled to relief under the relevant statutory provisions. Our failure to qualify as a REIT could adversely affect our business and the value of our common stock.
If our hedges do not qualify as “highly effective,” the changes in the fair value of these instruments would be reflected in our results of operations and could adversely affect our earnings. We may be adversely affected by the discontinuation of London Interbank Offered Rate (“LIBOR”).
If our hedges do not qualify as “highly effective,” the changes in the fair value of these instruments would be reflected in our results of operations and could adversely affect our earnings. 14 RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE Substantially all of our assets are owned by subsidiaries. We depend on dividends and distributions from these subsidiaries.
Loss of Bloomberg as a tenant or deterioration in Bloomberg’s credit quality could adversely affect our financial condition and results of operations. Bloomberg accounted for revenu e of $115,129,000, $113,140,000 and $109,066,000 in the years ended December 31, 2022, 2021 and 2020, respectively, representing approximately 56% , 55% and 55% of our rental revenues in each year, respectively.
Bloomberg accounted for revenu e of $120,351,000, $115,129,000 and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively, representing approximately 54% , 56% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental revenues.
Changes in tenant space utilization, including increased acceptance of work from home and flexible work arrangement policies, may cause office tenants to reassess their long-term physical space needs, which could have an adverse effect on our business. All of our properties are in New York City and are affected by the economic cycles and risks inherent in that area.
Work from home, flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing remain prevalent in certain situations, following the COVID-19 pandemic. Changes in tenant space utilization, including from the continuation of work from home and flexible work arrangement policies, may cause office tenants to reassess their long-term physical space needs, which could have an adverse effect on our business.
Natural disasters, including earthquakes, storms, tornados, floods and hurricanes, could cause significant damage to our properties and the surrounding environment or area. Potentially adverse consequences of “global warming,” including rising sea levels, could similarly have an impact on our properties and the economies of the metropolitan area in which we operate.
Potentially adverse consequences of climate change, including rising sea levels and increased temperature fluctuations, could similarly have an impact on our properties and the economies of the metropolitan area in which we operate. Government efforts to combat climate change may impact the cost of operating our properties.
These risks could result in substantial unanticipated delays or expenses and could prevent the initiation or the completion of redevelopment activities or the ultimate rents achieved on new developments, any of which could have an adverse effect on our financial condition, results of operations, cash flow, the market value of our common shares and ability to pay our indebtedness and to make distributions to our stockholders.
These risks could result in substantial unanticipated delays or expenses and could prevent the initiation or the completion of redevelopment activities or reduce the ultimate rents achieved on new developments.
These broad market fluctuations have in the past and may in the future adversely affect the market price of our common stock. In particular, the market price of our common shares has been further adversely impacted since March 2020 due to the COVID-19 pandemic.
In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations have in the past and may in the future adversely affect the market price of our common stock.
There can be no assurance that audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations. At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended.
Although we believe that we have substantial arguments in favor of our positions, in some instances there is no controlling precedent or interpretive guidance. There can be no assurance that audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
In the normal course of business, certain entities through which we own real estate either have undergone or may undergo tax audits. Although we believe that we have substantial arguments in favor of our positions, in some instances there is no controlling precedent or interpretive guidance.
We may face possible adverse federal tax audits and changes in federal tax laws, which may result in an increase in our tax liability. In the normal course of business, certain entities through which we own real estate either have undergone or may undergo tax audits.
It may be difficult to sell real estate on a timely basis, which may limit our flexibility. Real estate investments are relatively illiquid.
These outcomes could have an adverse effect on our financial condition, results of operations, cash flow, the market value of our common shares and ability to pay our indebtedness and make distributions to our stockholders. It may be difficult to sell real estate on a timely basis, which may limit our flexibility. Real estate investments are relatively illiquid.
From time-to-time, some of our tenants have declared bankruptcy, and other tenants may declare bankruptcy or become insolvent in the future. The bankruptcy or insolvency of a major tenant could cause us to suffer lower revenues and operational difficulties, including leasing the remainder of the property.
Bankruptcy or insolvency of tenants may decrease our revenues, net income and available cash. From time-to-time, some of our tenants have declared bankruptcy, and other tenants may declare bankruptcy, become insolvent or experience a material business downturn adversely affecting their ability to make timely rental payments in the future.
We have a substantial amount of indebtedness that could affect our future operations. As of December 31, 2022, total debt outstanding was $1,096,544,000, excluding deferred financing costs. We are subject to the risks normally associated with debt financing, including the risk that our cash flow from operations will be insufficient to meet required debt service.
“Enterprise value” means the market equity value of our common stock, plus debt, less cash and cash equivalents at such date. We are subject to the risks normally associated with debt financing, including the risk that our cash flow from operations will be insufficient to meet our required debt service.
In the future, we may incur additional debt, and thus increase the ratio of total debt to total enterprise value. If our level of indebtedness increases, there may be an increased risk of default which could adversely affect our financial condition and results of operations.
If the cost or amount of our indebtedness continues to increase or we cannot refinance our debt in sufficient amounts or on acceptable terms, we are at risk of default on our obligations that could adversely affect our financial condition and results of operations. Our existing financing documents contain covenants and restrictions that may restrict our operational and financial flexibility.
Removed
Work from home, flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing are becoming more common, particularly as a result of the COVID-19 pandemic.
Added
The bankruptcy or insolvency of a major tenant may delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of these amounts altogether.
Removed
Furthermore, New York City tourism h as not yet fully reco vered from the effects of the COVID-19 pandemic.
Added
Any future outbreak of a highly infectious or contagious disease could impact how people live, work and travel in ways that have affected and may in the future affect our properties.
Removed
Our financial results depend significantly on leasing space in our properties to tenants on economically favorable terms.

… 23 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

16 edited+4 added−4 removed2 unchanged
Biggest changeSquare Feet Weighted Under Average Development Or In Service Escalated Lease Expiration(s) Land Total Not Available Occupancy Annual Original Option Property Acreage Property In Service For Lease Rate Rent PSF (1) Tenants Term (2) Term (3) Operating Properties: 731 Lexington Avenue New York, NY Office 939,000 939,000 — 100.0% $132.11 Bloomberg L.P. 2029 2039 Retail 83,000 83,000 — The Home Depot 2025 2035 57,000 57,000 — Various Various Various 140,000 140,000 — 90.3% 250.68 1.9 1,079,000 1,079,000 — Rego Park I Queens, NY 112,000 112,000 — IKEA (4) 2026 2030 50,000 50,000 — Burlington 2027 N/A 46,000 46,000 — Bed Bath & Beyond 2026 N/A 36,000 36,000 — Marshalls 2032 2037 16,000 16,000 — Old Navy 2027 N/A 78,000 — 78,000 (5) N/A N/A 4.8 338,000 260,000 78,000 100.0% 50.12 Rego Park II Queens, NY 145,000 145,000 — Costco 2034 2059 133,000 133,000 — Kohl’s (6) 2031 2051 202,000 202,000 — Various Various Various 135,000 — 135,000 (7) N/A N/A 6.6 615,000 480,000 135,000 87.3% 64.78 The Alexander apartment tower, 312 units Queens, NY — 255,000 255,000 — 98.7% 47.59 (8) Residential (9) N/A Flushing Queens, NY (10) 1 167,000 167,000 — 100.0% 32.08 New World Mall LLC 2037 N/A Property to be Developed: Rego Park III, adjacent to Rego Park II Queens, NY 3.2 — — — — — — — — 2,454,000 2,241,000 213,000 (1) Represents the weighted average escalated annual rent per square foot, which includes tenant reimbursements and excludes the impact of tenant concessions (such as free rent), as of December 31, 2022.
Biggest changeSquare Feet Weighted Under Average Development or Escalated Land Total In Not Available Occupancy Annual Expiration Property Acreage Property Service for Lease Rate Rent PSF (1) Tenants Date (2) Operating Properties: 731 Lexington Avenue New York, NY Office 939,000 939,000 — 100.0 % $ 135.44 Bloomberg L.P. 2029 Retail 83,000 83,000 — The Home Depot 2025 45,000 45,000 — Various Various 12,000 12,000 — Vacant N/A 140,000 140,000 — 90.3 % 252.89 1.9 1,079,000 1,079,000 — 98.9 % 147.65 Rego Park I Queens, NY 112,000 112,000 — IKEA (3) 2024 50,000 50,000 — Burlington 2027 36,000 36,000 — Marshalls 2032 16,000 16,000 — Old Navy 2024 124,000 — 124,000 Vacant N/A 4.8 338,000 214,000 124,000 100.0 % 53.08 Rego Park II Queens, NY 145,000 145,000 — Costco 2034 133,000 133,000 — Kohl’s (4) 2031 194,000 194,000 — Various Various 144,000 144,000 — Vacant N/A 6.6 616,000 616,000 — 76.9 % 70.28 Flushing Queens, NY (5) 1.0 167,000 167,000 — 100.0 % 32.82 New World Mall LLC 2037 2,200,000 2,076,000 124,000 92.6 % 107.78 The Alexander apartment tower, 312 units Queens, NY — 255,000 255,000 — 95.2 % 49.35 (6) Residential (7) 2,455,000 2,331,000 124,000 (1) Represents the weighted average escalated annual rent per square foot, which includes tenant reimbursements and excludes the impact of tenant concessions (such as free rent), as of December 31, 2023.
The property comprises a four-floor building containing 167,000 square feet and a parking garage, which is sub-leased to New World Mall LLC through January 2037. The property is ground leased through January 2027 with one 10-year extension option.
The property comprises a four-floor building containing 167,000 square feet and a parking garage, which is subleased to New World Mall LLC through January 2037. The property is ground leased through January 2027 with one 10-year extension option.
Rego Park II Rego Park II, a 615,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens, New York. The center is anchored by a 145,000 square foot Costco and a 133,000 squ are foot Kohl’s, which has been subleased.
Rego Park II Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens, New York. The center is anchored by a 145,000 square foot Costco and a 133,000 squ are foot Kohl’s, which has been subleased.
The lease includes a right to terminate effective no earlier than March 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term.
The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term.
The retail portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $300,000,000 which matures in August 2025. The interest-only loan is at SOFR p lus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
The retail portion of 731 Lexington Avenue is encumbered by a mortgage loan with a ba lance of $300,000,000 wh ich matures in August 2025. The interest-only loan is at SOFR p lus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
ITEM 2. PROPERTIES The following table shows the location, ownership, approximate size (excluding parking garages) and occupancy of each of our properties as of December 31, 2022.
ITEM 2. PROPERTIES The following table shows the location, approximate size (excluding parking garages) and occupancy of each of our properties as of December 31, 2023.
The center contains a parking deck ( 1,326 spaces ) that provides for paid parking. This center is encumbered by a mortgage loan in the amount of $202,544,000 which matures in December 2025. The interest-only loan is at SOFR plus 1.45 % (5.60% as of December 31, 2022).
The center contains a parking deck ( 1,326 spaces ) that provides for paid parking. This center is encumbered by a mortgage loan in the amount of $202,544,000 which matures in December 2025. The interest-only loan is at SOFR plus 1.45 % (6.80% as of December 31, 2023).
(10) Ground leased through January 2027 with one 10-year extension option. 22 Operating Properties 731 Lexington Avenue 731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan, New York, and is situated in the heart of one of Manhattan’s busiest business and shopping districts, with convenient access to several subway and bus lines.
(7) Residential tenants generally have one or two year leases. 22 Operating Properties 731 Lexington Avenue 731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan, New York, and is situated in the heart of one of Manhattan’s busiest business and shopping districts, with convenient access to several subway and bus lines.
IKEA remains obligated under its lease which expires in December 2030. The lease includes a right to terminate effective no earlier than March 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. (5) Formerly occupied by Sears.
The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term.
Rego Park I Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63rd Road in Queens, New York. The center is anchored by a 112,000 square foot IKEA, a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls.
Rego Park I Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63rd Road in Queens, New York. The center is anchored by a 50,000 square foot Burlington and a 36,000 square foot Marshalls. The center contains a parking deck (1,241 spaces) that provides for paid parking.
The building contain s 939,000 and 140,000 of net rentable square feet of office and retail space, respectively. Bloomberg occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant.
The building contain s 939,000 and 140,000 of rentable square feet of office and retail space, respectively. Bloomberg occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant. The office portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $500,000,000 which matures in June 2024.
Lease expiration dates are based on non-cancelable lease terms and do not extend beyond any early termination rights that the tenant may have under its lease. (3) Represents the year in which the tenant’s lease expires if all renewal or extension options are exercised. (4) On December 3, 2022, IKEA closed its store at the property.
Lease expiration dates are based on non-cancelable lease terms and do not extend beyond any early termination rights that the tenant may have under its lease. (3) On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030.
In connection therewith, we purchased an interest rate cap with a notional amount of $202,544,000 that caps SOFR at a rate of 4.15% through November 2024. The Alexander Apartment Tower The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.
In connection therewith, we purchased an interest rate cap with a notional amount of $202,544,000 that caps SOFR at a rate of 4.15% through November 2024. Flushing Our Flushing property is located on Roosevelt Avenue and Main Street in the downtown, commercial section of Flushing, Queens, New York.
The property is encumbered by a mortgage loan in the amount of $94,000,000 which matures in November 2027. The interest-only loan has a fixed rate of 2.63%. 23 Operating Properties - continued Flushing Our Flushing property is located on Roosevelt Avenue and Main Street in the downtown, commercial section of Flushing, Queens, New York.
The Alexander Apartment Tower The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet. The property is encumbered by a mortgage loan in the amount of $94,000,000 which matures in November 2027. The interest-only loan has a fixed rate of 2.63%. 23
In connection therewith, we purchased an interest rate cap with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.00% through June 2023. If we decide to exercise our one-year as-of right extension option, the interest rate of the loan will be equal to the Prime rate (7.50% as of December 31, 2022).
The interest-only loan was at LIBOR plus 0.90% through July 15, 2023 and currently bears interest at the Prime Rate (8.50% as of December 31, 2023) through loan maturity. In June 2023, we purchased an interest rate cap for $11,258,000, which capped LIBOR at 6.00% through July 15, 2023 and caps the Prime Rate at 6.00% through loan maturity.
The center contains a parking deck (1,241 spaces) that provides for paid parking. On December 3, 2022, IKEA closed its store at the property. IKEA remains obligated under its lease which expires in December 2030.
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030.
Removed
Currently out of service due to redevelopment. (6) Subleased through remaining original lease term. (7) Formerly occupied by Century 21. Currently out of service due to redevelopment. (8) Average monthly rent per unit is $3,227. (9) Residential tenants have one or two year leases.
Added
On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term. (4) Subleased through remaining original lease term.
Removed
The office portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $500,000,000 which matures in June 2023, with a one-year as-of right extension option. The interest-only loan is at LIBOR plus 0.90 % (5.22% as of December 31, 2022).
Added
(5) Ground leased through January 2027 with one 10-year extension option. (6) Average monthly rent per unit is $3,394.
Removed
Property to be Developed Rego Park III We own a 140,000 square foot land parcel adjacent to the Rego Park II shopping center in Queens, New York, at the intersection of Junction Boulevard and the Horace Harding Service Road.
Added
On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
Removed
In 2022, we secured permits to construct an apartment tower at the property and commenced foundation work necessary to vest the benefits of the Affordable New York (421a) residential program, provided we obtain a certificate of occupancy for the apartment tower by June 2026, subject to any extension that may be granted by the legislature. 24
Added
On April 23, 2023, Bed Bath & Beyond ($1,533,000 of annual revenue) filed for Chapter 11 bankruptcy and its 46,000 square foot lease at the property was rejected in the bankruptcy proceedings on July 31, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed1 unchanged
Biggest changeThere can be no assurance that the performance of our stock will continue in line with the same or similar trends depicted in the graph below. 2017 2018 2019 2020 2021 2022 Alexander’s $ 100 $ 81 $ 92 $ 82 $ 83 $ 75 S&P 500 Index 100 96 126 149 192 157 The NAREIT All Equity Index 100 96 123 117 166 124
Biggest changeThere can be no assurance that the performance of our stock will continue in line with the same or similar trends depicted in the graph below. 2018 2019 2020 2021 2022 2023 Alexander’s, Inc. $ 100 $ 114 $ 102 $ 102 ` $ 93 $ 99 S&P 400 MidCap Index 100 126 143 179 156 181 S&P 500 Index 100 131 156 200 164 207 The NAREIT All Equity Index 100 129 122 172 129 144
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange under the symbol “ALX.” As of January 31, 2023, there were 190 holders of record of our common stock. Recent Sales of Unregistered Securities None.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange under the symbol “ALX.” As of January 31, 2024, there were 181 holders of record of our common stock. Recent Sales of Unregistered Securities None.
Recent Purchases of Equity Securities None. 26 Performance Graph The following graph is a comparison of the five-year cumulative return of our common stock, the Standard & Poor’s 500 Index (the “S&P 500 Index”) and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index, a peer group index.
Recent Purchases of Equity Securities None. 24 Performance Graph The following graph is a comparison of the five-year cumulative return of our common stock, the Standard & Poor’s 400 MidCap Index (the “S&P 400 MidCap Index”), Standard & Poor’s 500 Index (the “S&P 500 Index”), and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index, a peer group index.
The graph assumes that $100 was invested on December 31, 2017 in our common stock, the S&P 500 Index and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions.
The graph assumes that $100 was invested on December 31, 2018 in our common stock, the S&P 400 MidCap Index, the S&P 500 Index, and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+13 added−14 removed20 unchanged
Biggest changeNet cash used in financing activities of $160,294,000 was primarily comprised of dividends paid of $92,220,000 and debt repayments of $68,000,000 in connection with the sale of our Paramus property. Dividends On January 18, 2023, our Board of Directors declared a regular quarterly dividend to $4.50 per share (an indicated annual rate of $18.00 per share).
Biggest changeDividends On February 7, 2024, our Board of Directors declared a regular quarterly dividend of $4.50 per share (an indicated annual rate of $18.00 per share). The dividend, if declared by the Board of Directors at the same rate for all of 2024, would require us to pay out approximately $92,350,000 in 2024.
The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $31,454,000, (ii) straight-lining of rental income of $7,960,000 and (iii) stock-based compensation of $450,000, partially offset by (iv) other non-cash adjustments of $2,928,000. Net cash used in investing activities of $279,266,000 was comprised of (i) the purchase of U.S.
The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $31,454,000, (ii) straight-lining of rental income of $7,960,000 and (iii) stock-based compensation expense of $450,000, partially offset by (iv) other non-cash adjustments of $2,928,000. Net cash used in investing activities of $279,266,000 was comprised of (i) the purchase of U.S.
In our opinion, the outcome of such pending matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows. 34 Funds from Operations (“FFO”) (non-GAAP) FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”).
In our opinion, the outcome of such pending matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows. 32 Funds from Operations (“FFO”) (non-GAAP) FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”).
Our MD&A for the year ended December 31, 2020, including year-to-year comparisons between 2021 and 2020, can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Overview Alexander’s, Inc.
Our MD&A for the year ended December 31, 2021, including year-to-year comparisons between 2022 and 2021, can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Overview Alexander’s, Inc.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2022, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and Russell B.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2023, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and Russell B.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) within this section is focused on the years ended December 31, 2022 and 2021, including year-to-year comparisons between these years.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) within this section is focused on the years ended December 31, 2023 and 2022, including year-to-year comparisons between these years.
(4) Interest at SOFR plus 1.45% (SOFR is capped at a rate of 4.15% through November 2024). Below is a summary of our principal and interest repayments scheduled as of December 31, 2022.
(4) Interest at SOFR plus 1.45% (SOFR is capped at a rate of 4.15% through November 2024). Below is a summary of our principal and interest repayments scheduled as of December 31, 2023.
For NBCR acts, FNSIC is responsible for a $298,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material. The principal amounts of our mortgage loans are non-recourse to us and the loans contain customary covenants requiring us to maintain insurance.
We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material. Our loans contain customary covenants requiring us to maintain insurance.
General and Administrative Expenses General and administrative expenses were $6,106,000 in the year ended December 31, 2022, compared to $5,924,000 in the prior year, an increase of $182,000. This was primarily due to higher professional fees.
General and Administrative Expenses General and administrative expenses were $6,341,000 in the year ended December 31, 2023, compared to $6,106,000 in the prior year, an increase of $235,000. This was primarily due to higher professional fees.
Recent Accounting Pronouncements See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements. 30 Results of Operations – Year Ended December 31, 2022 compared to December 31, 2021 Rental Revenues Rental revenues were $205,814,000 in the year ended December 31, 2022, compared to $206,148,000 in the prior year, a decrease of $334,000.
Recent Accounting Pronouncements See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements. 28 Results of Operations – Year Ended December 31, 2023 compared to December 31, 2022 Rental Revenues Rental revenues were $224,962,000 in the year ended December 31, 2023, compared to $205,814,000 in the prior year, an increase of $19,148,000.
Significant Tenant Bloomberg accounted for revenue of $115,129,000, $113,140,000, and $109,066,000 in the years ended December 31, 2022, 2021 and 2020, respectively, representing approximately 56%, 55% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental revenues.
Significant Tenant Bloomberg accounted for revenu e of $120,351,000, $115,129,000, and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively, representing approximately 54%, 56% and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental revenues.
Interest on variable rate debt is computed using rates in effect as of December 31, 2022. 33 Commitments and Contingencies Insurance We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.
Commitments and Contingencies Insurance We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.
A reconciliation of our net income to FFO is provided below. FFO (non-GAAP) for the years ended December 31, 2022 and 2021 FFO (non-GAAP) for the year ended December 31, 2022 was $87,090,000, or $16.99 per diluted share, compared to $89,757,000, or $17.52 per diluted share for the year ended December 31, 2021.
A reconciliation of our net income to FFO is provided below. FFO (non-GAAP) for the years ended December 31, 2023 and 2022 FFO (non-GAAP) for the year ended December 31, 2023 was $81,067,000, or $15.80 per diluted share, compared to $87,090,000, or $16.99 per diluted share for the year ended December 31, 2022.
The ongoing challenges posed by the COVID-19 pandemic could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures.
Recent increases in interest rates and inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures.
Treasury bills of $364,238,000 and (ii) $14,386,000 of construction in progress and real estate additions, partially offset by (iii) $99,358,000 of proceeds from maturities of U.S. Treasury bills.
Treasury bills of $364,238,000 and (ii) $14,386,000 of construction in progress and real estate additions, partially offset by (iii) $99,358,000 of proceeds from maturities of U.S. Treasury bills. Net cash used in financing activities of $92,310,000 was primarily comprised of dividends paid of $92,264,000.
Net cash provided by operating activities of $118,465,000 was comprised of (i) net income of $132,930,000 and (ii) the net change in operating assets and liabilities of $16,456,000, partially offset by (iii) adjustments for non-cash items of $30,921,000.
Net cash provided by operating activities of $109,111,000 was comprised of (i) net income of $102,413,000 and (ii) the net change in operating assets and liabilities of $16,753,000, partially offset by (iii) adjustments for non-cash items of $10,055,000.
Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset.
Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are prepared. Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset.
We have six properties in New York City. We compete with a large number of real estate investors, property owners and developers.
We have five properties in New York City. We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments.
Cash Flows for the Year Ended December 31, 2022 Cash and cash equivalents and restricted cash were $214,478,000 at December 31, 2022, compared to $483,505,000 at December 31, 2021, a decrease of $269,027,000.
Cash Flows for the Year Ended December 31, 2023 Cash and cash equivalents and restricted cash were $552,977,000 at December 31, 2023, compared to $214,478,000 at December 31, 2022, an increase of $338,499,000.
Balance Interest Rate Maturity (Amounts in thousands) 731 Lexington Avenue, office condominium (1)(2) $ 500,000 5.22 % Jun. 11, 2024 731 Lexington Avenue, retail condominium (1)(3) 300,000 1.76 % Aug. 05, 2025 Rego Park II shopping center (1)(4) 202,544 5.60 % Dec. 12, 2025 The Alexander apartment tower 94,000 2.63 % Nov. 01, 2027 Total 1,096,544 Deferred debt issuance costs, net of accumulated amortization of $16,071 (5,493) Total, net $ 1,091,051 (1) Interest rate listed represents the rate in effect as of December 31, 2022 based on LIBOR or SOFR as of contractual reset date plus contractual spread, adjusted for hedging instruments as applicable.
Balance Interest Rate Maturity (Amounts in thousands) 731 Lexington Avenue, office condominium (1) $ 500,000 6.00 % Jun. 11, 2024 731 Lexington Avenue, retail condominium (2)(3) 300,000 1.76 % Aug. 05, 2025 Rego Park II shopping center (2)(4) 202,544 5.60 % Dec. 12, 2025 The Alexander apartment tower 94,000 2.63 % Nov. 01, 2027 Total 1,096,544 Deferred debt issuance costs, net of accumulated amortization of $17,639 (3,993) Total, net $ 1,092,551 (1) Interest at the Prime Rate (capped at 6.00% through loan maturity).
Net cash used in financing activities of $92,310,000 was primarily comprised of dividends paid of $92,264,000. 32 Liquidity and Capital Resources - continued Cash Flows for the Year Ended December 31, 2021 Cash and cash equivalents and restricted cash were $483,505,000 at December 31, 2021, compared to $449,877,000 at December 31, 2020, an increase of $33,628,000.
Net cash used in financing activities of $92,424,000 was comprised of dividends paid of $92,320,000 and debt issuance costs of $104,000. 30 Liquidity and Capital Resources - continued Cash Flows for the Year Ended December 31, 2022 Cash and cash equivalents and restricted cash were $214,478,000 at December 31, 2022, compared to $483,505,000 at December 31, 2021, a decrease of $269,027,000.
The following table reconciles our net income to FFO (non-GAAP): For the Year Ended (Amounts in thousands, except share and per share amounts) December 31, 2022 2021 Net income $ 57,632 $ 132,930 Depreciation and amortization of real property 29,458 32,607 Net gains on the sale of real estate (2021 includes $2,348 from discontinued operations) — (72,298) Change in fair value of marketable securities — (3,482) FFO (non-GAAP) $ 87,090 $ 89,757 FFO per diluted share (non-GAAP) $ 16.99 $ 17.52 Weighted average shares used in computing FFO per diluted share 5,126,100 5,123,613 35
The following table reconciles our net income to FFO (non-GAAP): For the Year Ended (Amounts in thousands, except share and per share amounts) December 31, 2023 2022 Net income $ 102,413 $ 57,632 Depreciation and amortization of real property 32,606 29,458 Net gain on sale of real estate (53,952) — FFO (non-GAAP) $ 81,067 $ 87,090 FFO per diluted share (non-GAAP) $ 15.80 $ 16.99 Weighted average shares used in computing FFO per diluted share 5,129,330 5,126,100 33
Interest and Other Income, net Interest and other income, net was $6,769,000 in the year ended December 31, 2022, compared to $639,000 in the prior year, an increase of $6,130,000. This was primarily due to $3,570,000 of higher interest income from our investments in U.S.
Interest and Other Income Interest and other income was $22,245,000 in the year ended December 31, 2023, compared to $6,769,000 in the prior year, an increase of $15,476,000. This was primarily due to an increase in average interest rates.
This resulted from (i) $118,465,000 of net cash provided by operating activities and (ii) $75,457,000 of net cash provided by investing activities, partially offset by (iii) $160,294,000 of net cash used in financing activities.
This resulted from (i) $321,812,000 of net cash provided by investing activities and (ii) $109,111,000 of net cash provided by operating activities, partially offset by (iii) $92,424,000 of net cash used in financing activities. Net cash provided by investing activities of $321,812,000 was comprised of (i) proceeds from maturities of U.S.
Net income for the year ended December 31, 2021 included $72,298,000, or $14.11 per diluted share, of income as a result of net gains on the sale of real estate, including $2,348,000, or $0.46 per diluted share, from discontinued operations.
Net income for the year ended December 31, 2023 included $53,952,000, or $10.52 per diluted share, of income as a result of a net gain on the sale of real estate.
The dividend, if declared by the Board of Directors at the same rate for all of 2023, would require us to pay out approximately $92,300,000 in 2023. Debt Below is a summary of our outstanding debt and maturities as of December 31, 2022. We may refinance our maturing debt as it comes due or choose to repay it.
Debt Below is a summary of our outstanding debt and maturities as of December 31, 2023. We may refinance our maturing debt as it comes due or choose to repay it.
A discussion of our accounting policies is included in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K.
A discussion of our accounting policies is included in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K. Impairment Analyses for Real Estate Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
(2) Interest at LIBOR plus 0.90% (LIBOR is capped at a rate of 6.00% through June 2023). Maturity date represents the extended maturity based on our as-of right to extend. (3) Interest at SOFR plus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
(2) Interest rate listed represents the rate in effect as of December 31, 2023 based on SOFR as of contractual reset date plus contractual spread, adjusted for hedging instruments as applicable. (3) Interest at SOFR plus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
The adjustments for non-cash items were comprised of (i) net gains on sale of real estate of $72,298,000 (including $2,348,000 from discontinued operations) and (ii) the change in fair value of marketable securities of $3,482,000, partially offset by (iii) depreciation and amortization (including amortization of debt issuance costs) of $34,592,000, (iv) straight-lining of rental income of $9,817,000 and (v) stock-based compensation of $450,000.
The adjustments for non-cash items were comprised of (i) net gain on sale of real estate of $53,952,000 and (ii) other non-cash adjustments of $1,559,000, partially offset by (iii) depreciation and amortization (including amortization of debt issuance costs) of $34,605,000, (iv) interest rate cap premium amortization of $7,770,000, (v) straight-lining of rents of $2,631,000 and (vi) stock-based compensation expense of $450,000.
Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.
Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due. See “Item 1A. Risk Factors” in this Annual Report on Form 10-K for additional information regarding these factors.
Treasury bills and $2,744,000 of higher interest income primarily due to an increase in average interest rates. Interest and Debt Expense Interest and debt expense was $28,602,000 in the year ended December 31, 2022, compared to $19,686,000 in the prior year, an increase of $8,916,000.
Interest and Debt Expense Interest and debt expense was $58,297,000 in the year ended December 31, 2023, compared to $28,602,000 in the prior year, an increase of $29,695,000. This was primarily due to $21,614,000 of higher interest expense resulting from increases in rates and $7,770,000 of higher interest rate cap premium amortization.
Depreciation and Amortization Depreciation and amortization was $29,797,000 in the year ended December 31, 2022, compared to $32,938,000 in the prior year, a decrease of $3,141,000. This was primarily due to the sale of our Paramus property in October 2021.
Depreciation and Amortization Depreciation and amortization was $32,898,000 in the year ended December 31, 2023, compared to $29,797,000 in the prior year, an increase of $3,101,000. This was primarily due to higher depreciation expense on capital projects placed into service during the current year.
As of December 31, 2022, we had $481,441,000 of liquidity comprised of $214,478,000 cash and cash equivalents and restricted cash and $266,963,000 of investments in U.S. Treasury bills.
As of December 31, 2023, we had $552,977,000 of liquidity comprised of cash and cash equivalents and restricted cash.
Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 2022 was $87,090,000, or $16.99 per diluted share, compared to $89,757,000, or $17.52 per diluted share for the year ended December 31, 2021.
Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 2023 wa s $81,067,000, or $15.80 p er diluted share, compared to $87,090,000, or $16.99 per diluted share for the year ended December 31, 2022. Square Footage, Occupancy and Leasing Activity As of December 31, 2023, our portfolio was comprised of five properties aggregating 2,455,000 sq uare feet.
In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data. 29 Critical Accounting Estimate In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
In June 2023, we purchased an interest rate cap for $11,258,000, which capped LIBOR at 6.00% through July 15, 2023 and caps the Prime Rate at 6.00% through loan maturity. 27 Critical Accounting Estimate In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
As of December 31, 2022, the remaining right-of-use asset of $18,497,000 and lease liability of $20,066,000, are included in “other assets” and “other liabilities,” respectively, on our consolidated balance sheet. There are various legal actions brought against us from time-to-time in the ordinary course of business.
Letters of Credit Approximately $900,000 of standby letters of credit were issued and outstanding as of December 31, 2023. Other There are various legal actions brought against us from time-to-time in the ordinary course of business.
While substantially all of the limitations and restrictions imposed on our retail tenants during the onset of the COVID-19 pandemic have been lifted, economic conditions, including heightened inflation and interest rates, and other factors continue to adversely affect the financial health of our retail tenants. 28 Overview - continued Year Ended December 31, 2022 Financial Results Summary Net income for the year ended December 31, 2022 was $57,632,000 or $11.24 per diluted share, compared to $132,930,000 or $25.94 per diluted share for the year ended December 31, 2021.
These factors could have a material impact on our business, financial condition, results of operations and cash flows. 26 Overview - continued Year Ended December 31, 2023 Financial Results Summary Net income for the year ended December 31, 2023 wa s $102,413,000 or $19.97 per diluted share, compared to $57,632,000 or $11.24 per diluted share for the year ended December 31, 2022.
Operating Expenses Operating expenses were $90,446,000 in the year ended December 31, 2022, compared to $91,089,000 in the prior year, a decrease of $643,000.
Operating Expenses Operating expenses were $101,210,000 in the year ended December 31, 2023, compared to $90,446,000 in the prior year, an increase of $10,764,000. This was primarily due to higher real estate tax expense and operating expenses, including the impact of lower capitalized expenses during the current year.
Removed
Square Footage, Occupancy and Leasing Activity As of December 31, 2022, our portfolio was comprised of six properties aggregating 2,454,000 sq uare feet, of which 2 ,241,000 square feet was in service and 213,000 square feet (at our Rego Park I and Rego Park II properties) was out of service for redevelopment.
Added
Our business has been, and may continue to be, affected by the increase in inflation and interest rates, and other uncertainties including the potential for an economic downturn.
Removed
Excluding residential, the in service square feet was 96.4% occupied as of December 31, 2022. The in service residential square feet was 98.7% occupied as of December 31, 2022.
Added
The commercial occupancy rate was 92.6% and the residential occupancy rate was 95.2%. On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030.
Removed
Impairment Analyses for Real Estate Our properties, including properties to be developed in the future, are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are prepared.
Added
The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term.
Removed
This was primarily due to (i) $5,440,000 of lower revenue due to the sale of our Paramus property in October 2021 and (ii) $2,750,000 of lease termination fee income received in the prior year from a retail tenant at our 731 Lexington Avenue property, partially offset by (iii) $3,130,000 of higher revenue due to leasing activity, (iv) $2,039,000 of bankruptcy proceeds received from Century 21, a former tenant at our Rego Park II property and (v) $2,203,000 of higher revenue due to higher occupancy at The Alexander apartment tower.
Added
On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
Removed
This was primarily due to $2,434,000 of lower expenses due to the sale of our Paramus property in October 2021, partially offset by $1,415,000 of higher straight-line rent expense as the result of the remeasurement of our estimated ground lease liability related to our Flushing property during the first quarter of 2022.
Added
On April 23, 2023, Bed Bath & Beyond ($1,533,000 of annual revenue) filed for Chapter 11 bankruptcy and its 46,000 square foot lease at our Rego Park I property was rejected in the bankruptcy proceedings on July 31, 2023.
Removed
This was primarily due to $11,474,000 of higher interest expense due to increases in LIBOR and SOFR, partially offset by $2,470,000 of lower interest expense resulting from the sale of our Paramus property in October 2021.
Added
In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data. Disposition On May 19, 2023, we sold the Rego Park III land parcel in Queens, New York, for $71,060,000 inclusive of consideration for Brownfield tax benefits and reimbursement of costs for plans, specifications and improvements to date.
Removed
Change in Fair Value of Marketable Securities Change in fair value of marketable securities was income of $3,482,000 in the year ended December 31, 2021. This was due to the change in the Macerich Company’s (“ Macerich”) common share price through December 2021, when we sold our Macerich common shares.
Added
Net proceeds from the sale were $67,821,000 after closing costs and the financial statement gain was $53,952,000. Financing On June 9, 2023, we exercised our remaining one-year extension option on the $500,000,000 interest-only mortgage loan on the office condominium of our 731 Lexington Avenue property.
Removed
Net Gains on Sale of Real Estate Net gains on the sale of real estate were $69,950,000 in the year ended December 31, 2021. This was due to $60,826,000 from the sale of our Paramus property in October 2021 and $9,124,000 from the sale of a parcel of land in the Bronx, New York in June 2021.
Added
The interest rate on the loan remained at LIBOR plus 0.90% through July 15, 2023 and currently bears interest at the Prime Rate (8.50% as of December 31, 2023) through loan maturity on June 11, 2024.
Removed
Income from Discontinued Operations Income from discontinued operations was $2,348,000 in the year ended December 31, 2021. This was due to the recognition of a previously deferred gain on the 2012 sale of Kings Plaza Regional Shopping Center to Macerich. The deferred gain was recognized due to the sale of our Macerich common shares.
Added
This was primarily due to (i) $8,065,000 of higher straight-line rental revenue from IKEA’s lease modification, (ii) $4,184,000 of higher reimbursable operating expenses and capital expenditures, (iii) $3,750,000 of higher real estate tax reimbursements due to higher real estate tax expense, and (iv) $3,359,000 of higher revenue due to leasing activity, partially offset by (v) $1,467,000 of lower lease termination fee income.
Removed
See Note 7 - Discontinued Operations , to our consolidated financial statements in this Annual Report on Form 10-K. 31 Related Party Transactions Vornado As of December 31, 2022, Vornado owned 32.4% of our outstanding common stock.
Added
Net Gains on Sale of Real Estate Net gains on the sale of real estate were $53,952,000 in the year ended December 31, 2023, resulting from the sale of the Rego Park III land parcel in Queens, New York in May 2023. 29 Related Party Transactions Vornado As of December 31, 2023, Vornado owne d 32.4% of our outstanding common stock.
Removed
Net cash provided by investing activities of $75,457,000 was comprised of (i) proceeds from the sale of real estate of $81,871,000, (ii) proceeds from the sale of marketable securities of $9,506,000 and (iii) the return of short-term investments of $3,600,000, partially offset by (iv) construction in progress and real estate additions of $19,520,000.
Added
Treasury bills of $264,881,000, (ii) proceeds from sale of real estate of $67,821,000 and (iii) proceeds from interest rate cap of $5,049,000, partially offset by (iv) the purchase of interest rate cap of $11,258,000 and (v) construction in progress and real estate additions of $4,681,000.
Removed
Less than One to Three to More than (Amounts in thousands) Total One Year Three Years Five Years Five Years Long-term debt obligations $ 1,194,591 $ 45,811 $ 1,050,186 $ 98,594 $ — Total principal and interest repayments (1) $ 1,194,591 $ 45,811 $ 1,050,186 $ 98,594 $ — (1) Principal repayments based on extended loan maturity dates.
Added
Less than One to Three to More than (Amounts in thousands) Total One Year Three Years Five Years Five Years Long-term debt obligations $ 1,157,131 $ 533,204 $ 527,839 $ 96,088 $ — Total principal and interest repayments (1) $ 1,157,131 $ 533,204 $ 527,839 $ 96,088 $ — (1) Interest on variable rate debt is computed using rates in effect as of December 31, 2023 adjusted for hedging instruments as applicable. 31 Liquidity and Capital Resources - continued Capital Expenditures Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances and leasing commissions.
Removed
Letters of Credit Approximately $900,000 of standby letters of credit were issued and outstanding as of December 31, 2022. Other In January 2022, New World Mall LLC, the sub-tenant at the property, exercised its one remaining 10-year extension option through January 2037.
Added
During 2024, we expect to incur approximately $29,000,000 of capital expenditures at our properties. We plan to fund these capital expenditures from operating cash flow, existing liquidity, and/or borrowings.
Removed
As a result of the sub-tenant exercising its extension option, we were required by GAAP to remeasure our ground lease liability based upon an estimate of lease payments to be made during the 10-year extension period of our ground lease resulting in an incremental right-of-use asset and lease liability of approximately $16,000,000.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed3 unchanged
Biggest changeOur exposure to a change in interest rates is summarized in the table below. 2022 2021 December 31, Balance Weighted Average Interest Rate Effect of 1% Change in Base Rates December 31, Balance Weighted Average Interest Rate (Amounts in thousands, except per share amounts) Variable rate $ 702,544 5.33% $ 7,025 $ 702,544 1.14% Fixed rate 394,000 1.97% — 394,000 1.94% $ 1,096,544 4.12% $ 7,025 $ 1,096,544 1.42% Total effect on diluted earnings per share $ 1.37 We have an interest rate cap relating to the mortgage loan on the office condominium of our 731 Lexington Avenue property with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.00% through June 2023.
Biggest changeOur exposure to a change in interest rates is summarized in the table below. 2023 2022 December 31, Balance Weighted Average Interest Rate Effect of 1% Change in Base Rates December 31, Balance Weighted Average Interest Rate (Amounts in thousands, except per share amounts) Variable rate $ 702,544 5.88% $ 7,025 $ 702,544 5.33% Fixed rate 394,000 1.97% — 394,000 1.97% $ 1,096,544 4.48% $ 7,025 $ 1,096,544 4.12% Total effect on diluted earnings per share $ 1.37 We have an interest rate cap relating to the mortgage loan on the office condominium of our 731 Lexington Avenue property with a notional amount of $500,000,000 that capped LIBOR at 6.00% through July 15, 2023 and caps the Prime Rate (8.50% as of December 31, 2023) at 6.00% through loan maturity.
We have an interest rate cap relating to the mortgage loan on Rego Park II shopping center with a notional amount of $202,544,000 that caps SOFR at a rate of 4.15% through November 2024.
We have an interest rate cap relating to the mortgage loan on Rego Park II shopping center with a notional amount of $202,544,000 that caps SOFR at 4.15% through November 2024.
As of December 31, 2022 and 2021, the estimated fair value of our consolidated debt was $1,061,221,000 a nd $1,064,122,000 , respectively. Our fair value estimates, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments. 36
As of December 31, 2023 and 2022, the estimated fair value of our consolidated debt was $1,071,887,000 a nd $1,061,221,000 , respectively. Our fair value estimates, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments. 34
Removed
If we decide to exercise our one-year as-of right extension option, the interest rate of the loan will be equal to the Prime rate (7.50% as of December 31, 2022).

Other ALX 10-K year-over-year comparisons