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What changed in VORNADO REALTY TRUST's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of VORNADO REALTY TRUST'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.

+345 added−319 removedSource: 10-K (2024-02-12) vs 10-K (2023-02-13)

Top changes in VORNADO REALTY TRUST's 2023 10-K

345 paragraphs added · 319 removed · 239 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn 2022, we (i) were 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) were recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated seven years of sustained excellence.
Biggest changeIn 2023, we (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) were recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated eight years of sustained excellence.
MATERIALS AVAILABLE ON OUR WEBSITE Copies of our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.vno.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.
MATERIALS AVAILABLE ON OUR WEBSITE Copies of our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees and 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.vno.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.
Through our active participation in the Realty Advisory Board on Labor Relations, we work collaboratively with both unions and consider our relations with our union employees to be very positive. For additional information on human capital matters, please see our most recent ESG report, available for download on our website at www.vno.com and in digital format at esg.vno.com.
Through our active participation in the Realty Advisory Board on Labor Relations, we work collaboratively with both unions and consider our relations with our union employees to be very positive. For additional information on human capital matters, please see our most recent ESG report, available for download on our website at www.vno.com and in digital format at vno.com/sustainability.
(“Alexander’s”) (NYSE: ALX), which owns six properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens; • Signage throughout the Penn District and Times Square; and • Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for our buildings and third parties.
(“Alexander’s”) (NYSE: ALX), which owns five properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens; • Signage throughout the Penn District and Times Square; and • Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for our buildings and third parties.
It has been central to Vornado's business strategy for over 10 years. The Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters, which includes climate change risk. Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with our business units.
It has been central to Vornado's business strategy for over 15 years. The Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters, which includes climate change risk. Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with our business units.
Other Real Estate and Investments: • The 3.7 million square foot theMART in Chicago; • A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet; and • Other real estate and investments. OBJECTIVES AND STRATEGY Our business objective is to maximize Vornado shareholder value.
Other Real Estate and Investments: • The 3.7 million square foot THE MART in Chicago; • A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet; and • Other real estate and investments. OBJECTIVES AND STRATEGY Our business objective is to maximize Vornado shareholder value.
SEGMENT DATA We operate in the following reportable segments: New York and Other. Financial information related to these reportable segments for the years ended December 31, 2022, 2021 and 2020 is set forth in Note 23 – Segment Information to our consolidated financial statements in this Annual Report on Form 10-K.
SEGMENT DATA We operate in the following reportable segments: New York and Other. Financial information related to these reportable segments for the years ended December 31, 2023, 2022 and 2021 is set forth in Note 23 – Segment Information to our consolidated financial statements in this Annual Report on Form 10-K.
Compensation, Benefits and Employees Wellbeing To attract and retain the best-qualified talent and to help our employees stay healthy, balance their work and personal lives, and meet their financial and retirement goals, we offer competitive benefits including, but not limited to, market-competitive compensation, healthcare (medical, dental and vision coverage), a health savings account, 401(k) and employer match, dependent care flexible spending account, parental leave, adoption/surrogacy benefits, short-term and long-term disability insurance, life insurance, time off/paid holidays, tuition reimbursement, subsidized gym memberships, employee wellness programs and incentives, in-workplace COVID-19 and flu vaccinations, commuter benefits, an employee assistance program and workplace flexibility. 9 HUMAN CAPITAL MANAGEMENT - CONTINUED Talent Development We promote career and personal development, provide training and continuing education, and encourage innovation and engagement.
Compensation, Benefits and Employee Wellbeing To attract and retain the best-qualified talent and to help our employees stay healthy, balance their work and personal lives, and meet their financial and retirement goals, we offer competitive benefits including, but not limited to, market-competitive compensation, healthcare (medical, dental and vision coverage), a health savings account, 401(k) and employer match, dependent care flexible spending account, parental leave, adoption/surrogacy benefits, short-term and long-term disability insurance, life insurance, time off/paid holidays, tuition reimbursement, subsidized gym memberships, employee wellness programs and incentives, in-workplace vaccinations, commuter benefits, an employee assistance program and workplace flexibility. 9 HUMAN CAPITAL MANAGEMENT - CONTINUED Talent Development To foster talent and growth, we provide training and continuing education, promote career and personal development, and encourage innovation and engagement.
Copies of our filings under the Securities Exchange Act of 1934 are also available free of charge from us, upon request.
Copies of our filings under the Securities Exchange Act of 1934 are also available free of charge from us, upon request. 11
TENANTS ACCOUNTING FOR OVER 10% OF REVENUES None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2022, 2021 and 2020. 10 CERTAIN ACTIVITIES We do not base our acquisitions and investments on specific allocations by type of property.
TENANTS ACCOUNTING FOR OVER 10% OF REVENUES None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2023, 2022 and 2021. 10 CERTAIN ACTIVITIES We do not base our acquisitions and investments on specific allocations by type of property.
Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the event of any changes to these charters or the code or guidelines, changed copies will also be made available on our website.
Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the event of any changes to these charters or the code or guidelines, revised copies will also be made available on our website.
We prioritize addressing climate change and in 2019 adopted a 10-year plan to make our buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy efficiency, demand management, and renewable power. We rely on technology, as well as meaningful stakeholder collaboration with our tenants, our employees, and our communities, to achieve this plan.
We prioritize addressing climate change and in 2019 adopted a 10-year plan to make our buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy reduction, recovery, and renewable power. We rely on technology, as well as meaningful stakeholder collaboration with our tenants, our employees, and our communities, to achieve this plan.
We also submit 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 our environmental sustainability initiatives and strategy, including our Vision 2030 Roadmap, can be found in our 2021 ESG Report at (esg.vno.com).
We also submit public reports to CDP, CSA (the S&P Global Corporate Sustainability Assessment) and EP100 (global initiative led by Climate Group). Further details on our environmental sustainability initiatives and strategy, including our Vision 2030 Roadmap, can be found in our 2022 ESG Report at (vno.com/sustainability).
We have published Equal Employment Opportunity “EEO” data since 2017 and have a broadly diverse workforce across both our corporate base as well as our BMS division. Our employee demographics data can be found on our ESG micro-site (esg.vno.com), which is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K.
We have published Equal Employment Opportunity (EEO) data since 2017 and have a broadly diverse workforce across both our corporate base as well as our BMS division. Our employee demographics data can be found in our 2022 ESG report (vno.com/sustainability), which is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K.
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 our office portfolio, with over 23 million square feet at LEED Gold or Platinum.
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 our in-service office portfolio, with over 24 million square feet at LEED Gold or Platinum.
Our 2022 and 2023 long-term performance plan awards formally tie senior management compensation to achievement of certain ESG targets, including reductions in greenhouse emissions, achieving a specified GRESB score and targeting a specified percentage of LEED Gold or Platinum certified square footage in our office portfolio.
Our 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 emissions, achieving a specified GRESB score and targeting a specified percentage of LEED Gold or Platinum certified square footage in our office portfolio.
This includes tuition reimbursement for our employees’ continuing education and professional development, and the opportunity to participate in a variety of training and networking engagements. Culture and Engagement Our employees are critical to our success, and we believe creating a positive and inclusive culture is essential to attracting and retaining engaged employees.
To achieve our talent development goals, we provide tuition reimbursement for our employees’ continuing education and professional development, and the opportunity to participate in a variety of training and networking engagements. Culture and Engagement Our employees are critical to our success, and we believe creating a positive and inclusive culture is essential to attracting and retaining engaged employees.
We are committed to transparent reporting of sustainability performance indicators and publish 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.
We are committed to transparent reporting of sustainability performance indicators and publish 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.
Vornado is the sole general partner of and owned approximately 92% of the common limited partnership interest in the Operating Partnership as of December 31, 2022.
Vornado is the sole general partner of and owned approximately 91.0% of the common limited partnership interest in the Operating Partnership as of December 31, 2023.
Our diversity metrics set a baseline from where we constantly strive to improve. Health and Wellness As a building owner and landlord to thousands of business tenants, we focus on maintaining and improving the health of our indoor environments, as well as communicating the value of our health and wellness programs with consistency and clarity to our stakeholders.
Health and Wellness As a building owner and landlord to thousands of business tenants, we focus on maintaining and improving the health of our indoor environments, as well as communicating the value of our health and wellness programs with consistency and clarity to our stakeholders.
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.
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.
We currently own all or portions of: New York: • 62 Manhattan operating properties consisting of: • 19.9 million square feet of office space in 30 of the properties; • 2.6 million square feet of street retail space in 56 of the properties; • 1,664 units in six residential properties; • Multiple development sites, including 350 Park Avenue and the Hotel Pennsylvania site; • A 32.4% interest in Alexander’s, Inc.
We currently own all or portions of: New York: • 57 Manhattan operating properties consisting of: • 20.4 million square feet of office space in 30 of the properties; • 2.4 million square feet of street retail space in 50 of the properties; • 1,662 units in five residential properties; • Multiple development sites, including 350 Park Avenue, Sunset Pier 94 Studios and the Hotel Pennsylvania site; • A 32.4% interest in Alexander’s, Inc.
We operate our 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. Our policies, from 100% green cleaning to energy efficiency, are implemented across our entire portfolio. We undertake significant outreach with our tenants, employees and investors regarding Vornado’s sustainability programs and strategies.
We operate our 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. Our policies, from 100% green cleaning to procuring 100% renewable electricity certificates to energy efficiency, are implemented across our entire portfolio.
HUMAN CAPITAL MANAGEMENT As of December 31, 2022, we have approximately 3,146 employees, consisting of (i) 2,622 employees of Building Maintenance Services LLC, a wholly owned subsidiary, which provides cleaning, security, engineering and parking services primarily to our New York properties, (ii) 236 employees in our corporate office, (iii) 158 employees in leasing and property management, and (iv) 130 employees of theMART.
HUMAN CAPITAL MANAGEMENT As of December 31, 2023, we had 2,935 employees, consisting of (i) 2,437 employees of Building Maintenance Services LLC, a wholly owned subsidiary, which provides cleaning, security, engineering and parking services primarily to our New York properties, (ii) 394 employees in our corporate office, leasing, and property management, and (iii) 104 employees of THE MART.
The foregoing does not include employees of partially owned entities. Human capital management is critical to our success and our employees are the foundation of our human capital. To foster talent and growth, we provide training and continuing education, promote career and personal development, and encourage innovation and engagement.
The foregoing does not include employees of partially owned entities. Human capital management is critical to our success and our employees are the foundation of our human capital.
The development cost of this project is estimated to be $750,000,000, of which $393,126,000 of cash has been expended as of December 31, 2022. Hotel Pennsylvania Site We have permanently closed the Hotel Pennsylvania and plan to develop an office tower on the site. Demolition of the existing building structure commenced in the fourth quarter of 2021.
The development cost of this project is estimated to be $750,000,000, of which $638,959,000 has been expended as of December 31, 2023. Hotel Pennsylvania Site Demolition of the existing building was completed in the third quarter of 2023. We are also making districtwide improvements within the PENN District.
We are also making districtwide improvements within the PENN District. The development cost of these improvements is estimated to be $100,000,000, of which $41,776,000 of cash has been expended as of December 31, 2022. We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in particular, the PENN District and 350 Park Avenue.
We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in particular, the PENN District.
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DISPOSITIONS We completed the following sale transactions during 2022: • $173 million sale of the Center Building located at 33-00 Northern Boulevard in Long Island City, New York; • $101 million sale of 40 Fulton Street; • $88 million net proceeds from the sale of three condominium units and ancillary amenities at 220 Central Park South ("220 CPS"); • $85 million aggregate sale of two Manhattan retail properties located at 478-482 Broadway and 155 Spring Street; and • $24 million sale of 484-486 Broadway. 7 FINANCINGS We completed the following financing transactions during 2022: • $2.0 billion of interest rate swap arrangements and a $500 million extension of an existing interest rate swap arrangement; • $1.25 billion unsecured revolving credit facility amended and extended from March 2024 to December 2027; • $800 million unsecured term loan extended from February 2024 to December 2027; • $700 million refinancing of 770 Broadway; • $480 million refinancing of 100 West 33rd Street; and • $100 million refinancing of 330 West 34th Street land owner joint venture ($35 million at our 34.8% interest).
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DISPOSITIONS We completed the following sale transactions during 2023: • $100 million sale of four Manhattan retail properties located at 510 Fifth Avenue, 148–150 Spring Street, 443 Broadway and 692 Broadway; • $71 million sale by Alexander’s (32.4% interest) of its Rego Park III land parcel; • $24 million sale of The Armory Show located in New York; and • $24 million net proceeds from the sale of two condominium units at 220 Central Park South (“220 CPS”).
Removed
DEVELOPMENT AND REDEVELOPMENT EXPENDITURES PENN District The Farley Building Our 95% joint venture (5% is owned by the Related Companies ("Related")) is completing the development of The Farley Building, which includes approximately 846,000 rentable square feet of commercial space, comprised of approximately 730,000 square feet of office space and approximately 116,000 square feet of restaurant and retail space.
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FINANCINGS We completed the following financing transactions during 2023: • $1.2 billion of interest rate swap arrangements; • $950 million 1.00% SOFR interest rate cap arrangement for the 1290 Avenue of the Americas mortgage loan (70.0% ownership); • $355 million restructuring of 697-703 Fifth Avenue (44.8% ownership); • $183 million construction loan for Sunset Pier 94 Studios (49.9% ownership); • $129 million refinancing of 512 West 22nd Street (55% ownership); • $75 million refinancing of 150 West 34th Street; and • $54 million refinancing of 825 Seventh Avenue office condominium (50% ownership). 7 DEVELOPMENT / REDEVELOPMENT PROJECTS AND OPPORTUNITIES PENN District PENN 2 We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue between 31st and 33rd Street.
Removed
The total development cost of this project is estimated to be approximately $1,120,000,000 at our 95% share, of which $1,111,493,000 of cash has been expended as of December 31, 2022. PENN 1 We are redeveloping PENN 1, a 2,546,000 square foot office building located on 34th Street between Seventh and Eighth Avenue.
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The development cost of these improvements is estimated to be $100,000,000, of which $47,424,000 has been expended as of December 31, 2023. Sunset Pier 94 Studios On August 28, 2023, we, together with Hudson Pacific Properties and Blackstone Inc. (“HPP/BX”), formed a joint venture to develop Sunset Pier 94 Studios, a 266,000 square foot purpose-built studio campus in Manhattan.
Removed
In December 2020, we entered into an agreement with the Metropolitan Transportation Authority (the “MTA”) to oversee the redevelopment of the Long Island Rail Road Concourse at Penn Station (the "Concourse"). Skanska USA Civil Northeast, Inc. is performing the redevelopment under a fixed price contract for $396,000,000 which is being funded by the MTA.
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We own a 49.9% equity interest in the joint venture. The development cost of the project is estimated to be $350,000,000, which will be funded with $183,200,000 of construction financing and $166,800,000 of equity contributions.
Removed
In connection with the redevelopment, we entered into an agreement with the MTA which will result in the widening of the Concourse to relieve overcrowding and our trading of 15,000 square feet of back of house space for 22,000 square feet of retail frontage space.
Added
Our share of equity contributions will be funded by (i) our $40,000,000 Pier 94 leasehold interest contribution and (ii) $34,000,000 of cash contributions, which are net of an estimated $9,000,000 for our share of development fees and reimbursement for overhead costs incurred by us.
Removed
Vornado's total development cost of our PENN 1 project is estimated to be $450,000,000, of which $375,810,000 of cash has been expended as of December 31, 2022. PENN 2 We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue between 31st and 33rd Street.
Added
HPP/BX will fund 100% of cash contributions until such time that its capital account is equal to Vornado’s, after which equity will be funded in accordance with each partner’s respective ownership interest. We have funded $7,994,000 of cash contributions as of December 31, 2023.
Added
For further information about this transaction, see page 38 , Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview, in this Annual Report on Form 10-K. 350 Park Avenue On January 24, 2023, we and the Rudin family (“Rudin”) completed agreements with Citadel Enterprise Americas LLC (“Citadel”) and with an affiliate of Kenneth C.
Added
Griffin, Citadel’s Founder and CEO (“KG”), for a series of transactions relating to 350 Park Avenue and 40 East 52nd Street.
Added
In connection therewith, we entered into a joint venture with Rudin (the “Vornado/Rudin JV”) that purchased 39 East 51st Street for $40,000,000, funded on a 50/50 basis by Vornado and Rudin. 39 East 51st Street will be combined with 350 Park Avenue and 40 East 52nd Street to create a premier development site (the “Site”).
Added
From October 2024 to June 2030, KG will have the option to either (i) acquire a 60% interest in a joint venture with the Vornado/Rudin JV (with Vornado having an effective 36% interest in the entity) to build a new 1,700,000 square foot office tower, valuing the Site at $1.2 billion or (ii) purchase the Site for $1.4 billion ($1.085 billion to Vornado).
Added
From October 2024 to September 2030, the Vornado/Rudin JV will have the option to put the Site to KG for $1.2 billion ($900,000,000 to Vornado).
Added
For further information about this transaction and the options available to each of the parties, see page 37 , Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview, in this Annual Report on Form 10-K.
Added
We undertake significant outreach with our tenants, employees and investors regarding Vornado’s sustainability programs and strategies. We gather data to measure progress against our goals, align our goals with our tenants, plan for our longer-term projects and engage with our stakeholders in meaningful ways.
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We use carbon accounting software, energy audits and models and building automation software to measure and track our 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 our measurement, verification and reporting requirements.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese broad market fluctuations have in the past and may in the future adversely affect the market price of Vornado’s common shares and the redemption price of the Operating Partnership’s Class A units. In particular, the market price of our common shares has been further adversely impacted since March 2020 due to the COVID-19 pandemic and its lasting impacts.
Biggest changeIn 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 Vornado’s common shares and the redemption price of the Operating Partnership’s Class A units.
These properties 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, Manhattan tourism, employer remote-working policies, the threat of terrorism or other criminal acts, increasing competition from online retailers, other retail centers, and the impact of technological change upon the retail environment generally.
These properties are affected by the general and New York City retail environments, including the level of consumer spending and consumer confidence, Manhattan 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.
These ratings are subject to ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant such action. Moreover, these credit ratings are not recommendations to buy, sell or hold our common shares or any other securities.
Our ratings are subject to ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant such action. Moreover, these credit ratings are not recommendations to buy, sell or hold our common shares or any other securities.
These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for the payment of dividends and distributions to our security holders. 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 for the payment of dividends and distributions to our security holders. Compliance or failure to comply with the Americans with Disabilities Act (the "ADA") or other safety regulations and requirements could result in substantial costs.
ADA generally requires that public buildings, including our properties, meet certain Federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the Federal government or the award of damages to private litigants and/or legal fees to their counsel.
The ADA generally requires that public buildings, including our properties, meet certain Federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the Federal government or the award of damages to private litigants and/or legal fees to their counsel.
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 the current 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 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 16 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.
Joint venture and fund investments involve risk, including: the possibility that our partners might refuse to make capital 16 contributions when due and therefore we may be forced to make contributions to maintain the value of the property; that we may be responsible to our partners for indemnifiable losses; that our partners might at any time have business or economic goals that are inconsistent with ours; that third parties may be hesitant or refuse to transact with the joint venture or fund due to the identity of our partners; and that our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests.
Joint venture and fund investments involve risk, including: the possibility that our partners might refuse to make capital contributions when due and therefore we may be forced to make contributions to maintain the value of the property; that we may be responsible to our partners for indemnifiable losses; that our partners might at any time have business or economic goals that are inconsistent with ours; that third parties may be hesitant or refuse to transact with the joint venture or fund due to the identity of our partners; and that our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests.
Our operating and financial policies, including our policies with respect to acquisitions of real estate or other companies, growth, operations, indebtedness, capitalization, dividends and distributions, are exclusively determined by Vornado’s Board of Trustees. Accordingly, our equity holders do not control these policies. Steven Roth and Interstate Properties may exercise substantial influence over us.
Our operating and financial policies, including our policies with respect to acquisitions of real estate or other companies, growth, operations, indebtedness, capitalization, dividends and distributions, are exclusively determined by Vornado’s Board of Trustees. Accordingly, our equity holders do not control these policies. 20 Steven Roth and Interstate Properties may exercise substantial influence over us.
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.
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. 22 At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended.
We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could adversely affect our business, results of operations and financial condition, the impact of which could be material. Actual or threatened terrorist attacks or other criminal acts may adversely affect the value of our properties and our ability to generate cash flow.
We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could adversely affect our business, results of operations and financial condition, the impact of which could be material. 14 Actual or threatened terrorist attacks or other criminal acts may adversely affect the value of our properties and our ability to generate cash flow.
Further, if lenders insist on greater coverage than we are able to obtain it could result in acceleration of repayment of such debt instruments and adversely affect our ability to finance or refinance our properties and expand our portfolio. 18 A downgrade in our credit ratings could materially and adversely affect our business and financial condition.
Further, if lenders insist on greater coverage than we are able to obtain it could result in acceleration of repayment of such debt instruments and adversely affect our ability to finance or refinance our properties and expand our portfolio. A further downgrade in our credit ratings could materially and adversely affect our business and financial condition.
These costs, taxes or penalties could increase our operating costs and decrease the cash available to pay our obligations or distribute to our equity owners. 14 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 obligations or distribute to our equity owners. 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.
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. 23 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. We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate.
Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected 19 and, in fact, may not be detected.
Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected and, in fact, may not be detected.
Title 3, Subtitle 8 of the MGCL permits our Board of Trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, including adopting a classified board or 20 increasing the vote required to remove a trustee.
Title 3, Subtitle 8 of the MGCL permits our Board of Trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, including adopting a classified board or increasing the vote required to remove a trustee.
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 impact our earnings. Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities.
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 impact our earnings. 18 Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities.
If we are unable to successfully acquire additional properties, our ability to grow our business could be adversely affected. 15 We are exposed to risks associated with property development, redevelopment and repositioning that could adversely affect us, including our financial condition and results of operations.
If we are unable to successfully acquire additional properties, our ability to grow our business could be adversely affected. We are exposed to risks associated with property development, redevelopment and repositioning that could adversely affect us, including our financial condition and results of operations.
In addition, some of our major expenses, 12 including mortgage payments, real estate taxes and maintenance costs generally do not decline when the related rents decline and maintenance costs can increase substantially in an inflationary environment.
In addition, some of our major expenses, including mortgage payments, real estate taxes and maintenance costs generally do not decline when the related rents decline and maintenance costs can increase substantially in an inflationary environment.
Our acquisition activities and their success are subject to the following risks: • we may be unable to complete an acquisition of a property or portfolio even after entering into an acquisition agreement, making a non-refundable deposit and incurring certain other acquisition-related costs; • we may be unable to obtain or assume financing for acquisitions on favorable terms or at all; • acquired properties may fail to perform as expected; • the actual costs of repositioning, redeveloping or maintaining acquired properties may be greater than our estimates and may require significantly greater time and attention of management than anticipated; • the acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations to our satisfaction or other conditions that are not within our control, which may not be satisfied; • acquired properties may be located in new markets where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, costs associated with opening a new regional office and unfamiliarity with local governmental and permitting procedures; • we may acquire real estate through the acquisition of the ownership entity subjecting us to the risks of that entity and we may be exposed to the liabilities of properties or companies acquired, some of which we may not be aware of at the time of acquisition; • we may face competition for acquisition opportunities from other well-capitalized investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors, which may cause an increase in the purchase price for a desired acquisition property or result in a competitor acquiring the desired property instead of us; and • we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition.
Our acquisition activities and their success are subject to the following risks: • we may be unable to complete an acquisition of a property or portfolio even after entering into an acquisition agreement, making a non-refundable deposit and incurring certain other acquisition-related costs; • we may be unable to obtain or assume financing for acquisitions on favorable terms or at all; • increased interest rates will increase the cost of acquiring properties through financing, reducing the opportunities for attractive acquisitions; • acquired properties may fail to perform as expected; • the actual costs of repositioning, redeveloping or maintaining acquired properties may be greater than our estimates and may require significantly greater time and attention of management than anticipated; • the acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations to our satisfaction or other conditions that are not within our control, which may not be satisfied; • acquired properties may be located in new markets where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, costs associated with opening a new regional office and unfamiliarity with local governmental and permitting procedures; • we may acquire real estate through the acquisition of the ownership entity subjecting us to the risks of that entity and we may be exposed to the liabilities of properties or companies acquired, some of which we may not be aware of at the time of acquisition; • we may face competition for acquisition opportunities from other well-capitalized investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors, which may cause an increase in the purchase price for a desired acquisition property or result in a competitor acquiring the desired property instead of us; and • we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, operations and financial condition. See “Forward-Looking Statements” contained herein on page 6 . RISKS RELATED TO OUR PROPERTIES AND INDUSTRY We may be adversely affected by trends in office real estate, including work from home trends.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, operations and financial condition. See “Forward-Looking Statements” contained herein on page 6 . RISKS RELATED TO OUR BUSINESS AND OPERATIONS We may be adversely affected by trends in office real estate, including work from home trends.
As of December 31, 2022, Interstate Properties, a New Jersey general partnership, and its partners beneficially owned an aggregate of approximately 7.0% of the common shares of beneficial interest of Vornado and 26.0% of the common stock of Alexander’s, which is described below. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the three partners of Interstate Properties. Mr.
As of December 31, 2023, Interstate Properties, a New Jersey general partnership, and its partners beneficially owned an aggregate of approximately 7.0% of the common shares of beneficial interest of Vornado and 26.0% of the common stock of Alexander’s, which is described below. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the three partners of Interstate Properties. Mr.
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.
The factors that affect the value of our real estate investments 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; • 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; • 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; • 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 infectious diseases.
The factors that affect the value of our real estate investments include, among other things: • global, national, regional and local economic conditions and geopolitical events; • 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; • 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; • 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; • fluctuations in interest rates; • 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; • availability of financing on acceptable terms or at all; • inflation or deflation; • 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.
In addition to the 2.3% that they indirectly own through Vornado, Interstate Properties, which is described above, and its partners owned 26.0% of the outstanding common stock of Alexander’s as of December 31, 2022. Mr.
In addition to the 2.3% that they indirectly own through Vornado, Interstate Properties, which is described above, and its partners owned 26.0% of the outstanding common stock of Alexander’s as of December 31, 2023. Mr.
As a result, the value of our properties and the level of our revenues and cash flows could decline materially. Natural disasters and the effects of climate change could have a concentrated impact on the areas where we operate and could adversely impact our results. Our investments are concentrated in the New York, Chicago and San Francisco metropolitan areas.
As a result, the value of our properties and the level of our revenues and cash flows could decline materially. The effects of climate change could have a concentrated impact on the areas where we operate and could adversely impact our results. Our investments are concentrated in the New York City, Chicago and San Francisco metropolitan areas.
For instance, if we fail to maintain the investment grade credit ratings assigned to our senior debt, the interest rates payable on outstanding debt under our unsecured term loan and revolving credit facilities would increase and we may be required to post additional collateral under certain of our existing loan agreements.
For instance, if we fail to maintain the credit ratings currently assigned to our senior debt, the interest rates payable on outstanding debt under our unsecured term loan and revolving credit facilities would increase and we may be required to post additional collateral under certain of our existing loan agreements.
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 particular, increases, 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 Vornado common shares 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; • inflation; • domestic and international economic factors unrelated to our performance (including the macro-economic impact of the conflict between Russia and Ukraine); • 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.
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; • interest rates increases; • 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 Vornado common shares and the shares of our competitors; • fluctuations in the stock price and operating results of our competitors; 21 • share repurchase plans; • 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; • inflation; • local, domestic and international economic factors unrelated to our performance (including the macro-economic impact of geopolitical conflicts); • 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.
We may continue to concentrate a significant portion of our future acquisitions, development and redevelopment in this area. 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.
We may continue to concentrate a significant portion of our future acquisitions, development and redevelopment in this area. 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.
In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in this region 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 and 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 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; 11 • 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; • increased 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.
The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the applicable lender, to further mortgage the applicable property or to discontinue insurance coverage.
The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the applicable lender, to further mortgage the applicable property or to reduce or change insurance coverage.
Although we have not experienced cyber incidents that are individually, or in the aggregate, material, we have experienced cyber attacks in the past, which have thus far been mitigated by preventative, detective, and responsive measures that we have put in place.
Although we have not experienced cyber incidents that are individually, or in the aggregate, material, the incidents we have experienced thus far have been mitigated by preventative, detective, and responsive measures that we have put in place.
There may be conflicts of interest between Alexander’s and us. As of December 31, 2022, we owned 32.4% of the outstanding common stock of Alexander’s. Alexander’s is a REIT that has six properties, which are located in the greater New York metropolitan area.
There may be conflicts of interest between Alexander’s and us. As of December 31, 2023, we owned 32.4% of the outstanding common stock of Alexander’s. Alexander’s is a REIT that has five properties, which are located in the greater New York metropolitan area.
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, 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.
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, 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.
If a tenant does not pay its rent, we may 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.
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.
If any of the credit rating agencies that have rated our securities downgrades or lowers its credit rating, particularly to non-investment grade status, or if any credit rating agency indicates that it has placed any such rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for that rating is negative, such action could have a material adverse effect on our costs and availability of funding.
If any of the credit rating agencies that have rated our securities downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for that rating is negative, such action could have a material adverse effect on our costs and availability of funding.
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.
Changes in tenant space utilization, including from the continuation of work from home and flexible work arrangement policies, may continue to cause office tenants to reassess their long-term physical space needs, which could have an adverse effect on our business.
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 cyber attack, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks from around the world have increased, including through the use of artificial intelligence.
As of December 31, 2022, there were six series of preferred units of the Operating Partnership not held by Vornado with a total liquidation value of $52,918,000.
As of December 31, 2023, there were six series of preferred units of the Operating Partnership not held by Vornado with a total liquidation value of $52,921,000.
Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,774,525 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss.
Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $2,112,753 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss.
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.
A significant portion of our properties is located in the New York City Metropolitan area and is affected by the economic cycles and risks inherent to this area. In 2022, approximately 86% of our NOI is from properties located in the New York City metropolitan area.
A significant portion of our properties is located in the New York metropolitan area and is affected by the economic cycles and risks inherent to this area. In 2023, approximately 88% of our NOI is from properties located in the New York metropolitan area.
We and our respective joint venture partners may each have the right to trigger a buy-sell, put right or forced sale arrangement, which could cause us to sell our interest, or acquire our partner’s interest, or to sell the underlying asset, at a time when we otherwise would not have initiated such a transaction, without our consent or on unfavorable terms.
For certain of our joint venture arrangements, we and our respective joint venture partners have rights including the ability to trigger a buy-sell, put right or forced sale arrangement, which could cause us to sell our interest, or acquire our partner’s interest, or to sell the underlying asset, at a time when we otherwise would not have initiated such a transaction, without our consent or on unfavorable terms.
For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $250,000,000 includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of 13 $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage.
For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $275,000,000, increased from $250,000,000 effective June 20, 2023, includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage.
Bankruptcy or insolvency of tenants may decrease our revenue, 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.
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.
As of December 31, 2022, Vornado had authorized but unissued 58,133,120 common shares of beneficial interest, $0.04 par value, and 58,387,098 preferred shares of beneficial interest, no par value; of which 22,123,781 common shares are reserved for issuance upon redemption of Class A Operating Partnership units, convertible securities and employee stock options and 11,200,000 preferred shares are reserved for issuance upon redemption of preferred Operating Partnership units.
As of December 31, 2023, Vornado had authorized but unissued 59,609,297 common shares of beneficial interest, $0.04 par value, and 58,387,098 preferred shares of beneficial interest, no par value; of which 22,186,690 common shares are reserved for issuance upon redemption of Class A Operating Partnership units, convertible securities and employee stock options and 11,200,000 preferred shares are reserved for issuance upon redemption of preferred Operating Partnership units.
The number of competitive office properties in the New York metropolitan area, which may be newer or better located than our properties, could have a material adverse effect on our ability to lease office space at our properties and on the effective rents we are able to charge.
The number of competitive office properties in the New York metropolitan area, which may be newer, more amenitized or better located than our properties, could have a material adverse effect on our ability to lease office space at our properties and on the effective rents we are able to charge. 13 We may be unable to renew leases, lease vacant space or relet space as leases expire on favorable terms.
The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in turn, substantially all of Vornado’s cash flow is dependent on cash distributions to it by the Operating Partnership.
Substantially all of Vornado’s assets are held through the Operating Partnership which holds substantially all of its properties and assets through subsidiaries. The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in turn, substantially all of Vornado’s cash flow is dependent on cash distributions to it by the Operating Partnership.
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.
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. 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.
Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future.
In addition, our debt instruments contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future.
These factors could adversely affect the financial condition of our retail tenants, or result in the bankruptcy of such tenants, and the willingness of retailers to lease space in our retail locations, which could have an adverse effect on the value of our properties, our business and profitability.
These factors could adversely affect the financial condition of our retail tenants, or result in the bankruptcy of such tenants, and the willingness of retailers to lease space in our retail locations, which could have an adverse effect on the value of our properties, our business and profitability. 12 Our performance and the value of an investment in us are subject to risks associated with our real estate assets and with the real estate industry.
Government efforts to combat climate change may impact the cost of operating our properties. Over time, these conditions could result in declining demand for office and retail 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 office and retail space in our buildings or the inability of us to operate the buildings at all.
Increased inflation could also adversely affect us by increasing costs of construction and renovation. While increases in most operating expenses at our properties can be passed on to our office and retail tenants, some tenants have fixed reimbursement charges and expenses at our residential properties may not be able to be passed on to residential tenants.
While increases in most operating expenses at our properties can be passed on to our office and retail tenants, some tenants have fixed reimbursement charges and expenses at our residential properties may not be able to be passed on to residential tenants.
Furthermore, rent payments under such leasehold interests are periodically adjusted pursuant to the relevant contractual arrangements and may result in significantly higher rents that could adversely affect our financial condition and results of operation.
Furthermore, rent payments under such leasehold interests are periodically adjusted pursuant to the respective contractual arrangements, including the currently ongoing PENN 1 June 2023 rent reset process. These rent resets may result in materially higher rents that could adversely affect our financial condition and results of operation.
We may be unable to renew leases, lease vacant space or relet space as leases expire on favorable terms. When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space.
When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space.
In 2022, approximately 77% of our net operating income (“NOI” a non-GAAP measure) is from our office properties. 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.
In 2023, approximately 78% of our net operating income (“NOI” a non-GAAP measure) is from our office properties. Work from home, flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing remain prevalent in certain situations following the COVID-19 pandemic.
The cost and availability of credit may be adversely affected by illiquid credit markets and wider credit spreads, which may adversely affect our liquidity and financial condition, including our results of operations, and the liquidity and financial condition of our tenants.
The cost and availability of credit may be adversely affected by illiquid credit markets and wider credit spreads, which may adversely affect our liquidity and financial condition, including our results of operations, and the liquidity and financial condition of our tenants. Recently, domestic and international financial markets have experienced unusual volatility, significant interest rate increases and continuing uncertainty.
It is impossible for us to ensure the accuracy of predictions of the future or the effect of trends in the economic and investment climates of the geographic areas in which we concentrate, and more generally of the United States, or the real estate markets in these areas.
It is impossible for us to predict the future effect of trends in the economic and investment climates of the geographic areas in which we concentrate, and more generally of the United States, or the real estate markets in these areas. Local, national or global economic downturns could negatively affect the value of our properties, our businesses and profitability.
While we believe that we could find a replacement for him and other key personnel, the loss of their services could harm our operations and adversely affect the value of our securities. 22 RISKS RELATED TO REGULATORY COMPLIANCE Vornado may fail to qualify or remain qualified as a REIT and may be required to pay federal income taxes at corporate rates, which could adversely impact the value of our common shares.
RISKS RELATED TO REGULATORY COMPLIANCE Vornado may fail to qualify or remain qualified as a REIT and may be required to pay federal income taxes at corporate rates, which could adversely impact the value of our common shares.
For information about our available sources of funds, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and the notes to the consolidated financial statements in this Annual Report on Form 10-K. 17 We depend on dividends and distributions from our direct and indirect subsidiaries.
For information about our available sources of funds, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and the notes to the consolidated financial statements in this Annual Report on Form 10-K. The hedge instruments we may use to manage our exposure to interest rate volatility involve risks.
Declines in the economy or declines in real estate markets in the New York City metropolitan area, 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 New York metropolitan area real estate market have impacted and could continue to impact our financial performance and the value of our properties.
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. The hedge instruments we may use to manage our exposure to interest rate volatility involve risks.
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 our loss of the 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 and may have the effect of heightening other risks described under this heading “Risk Factors.” Some of our potential losses may not be covered by insurance.
Local, national or global economic downturns could negatively affect the value of our properties, our businesses and profitability. We are subject to risks that affect the general and New York City retail environments. In 2022, approximately 18% of our NOI is from Manhattan retail properties.
We are subject to risks that affect the general and New York City retail environments. In 2023, approximately 17% of our NOI is from Manhattan retail properties.
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. In addition, our cost of labor and materials could increase, which could have an adverse impact on our business and financial results.
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.
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 negatively impact 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 negatively impact our financial results.
However, identification of new compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, human exposure to contamination or changes in clean-up or compliance requirements could result in significant costs to us. 23 RISKS RELATED TO TECHNOLOGY, CYBERSECURITY AND DATA PROTECTION The occurrence of cyber incidents, or a deficiency in our cyber security, as well as other disruptions to our IT networks and related systems, could negatively impact 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 negatively impact our financial results.
The trading price of Vornado’s common shares has been volatile and may continue to fluctuate widely as a result of several factors, many of which are outside 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.
RISKS RELATED TO OUR COMMON SHARES AND OPERATING PARTNERSHIP CLASS A UNITS The trading price of Vornado’s common shares has been volatile and may continue to fluctuate. The trading price of Vornado’s common shares has been volatile and may continue to fluctuate widely as a result of several factors, many of which are outside our control.
Our credit rating and the credit ratings assigned to our debt securities and our preferred shares could change based upon, among other things, our results of operations and financial condition. Currently, our senior debt is rated BBB- by Fitch, Baa3 by Moody’s and BBB- by S&P.
Our credit rating and the credit ratings assigned to our debt securities and our preferred shares have been recently downgraded and could change in the future based upon, among other things, our results of operations and financial condition.
In addition, Vornado’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the liquidation, reorganization or insolvency is only after the claims of the creditors, including trade creditors and preferred equity holders, are satisfied. We have a substantial amount of indebtedness that could affect our future operations.
In addition, Vornado’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the liquidation, reorganization or insolvency is only after the claims of the creditors, including trade creditors and preferred equity holders, are satisfied. 19 Vornado’s Amended and Restated Declaration of Trust (the “declaration of trust”) sets limits on the ownership of its shares.
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 equity holders could be adversely affected.
If we are unable to promptly renew leases or relet the space on economically favorable terms, our cash flow and ability to service debt obligations and pay dividends and distributions to equity holders could be adversely affected. Bankruptcy or insolvency of tenants may decrease our revenues, net income and available cash.
Mandakini Puri is a Trustee of Vornado and Director of Alexander’s. We manage, develop and lease Alexander’s properties under management, development and leasing agreements under which we receive annual fees from Alexander’s.
Mandakini Puri is a Trustee of Vornado and Director of Alexander’s. We manage, develop and lease Alexander’s properties under management, development and leasing agreements under which we receive annual fees from Alexander’s. These agreements are described in Note 5 – Investments in Partially Owned Entities to our consolidated financial statements in this Annual Report on Form 10-K.
Additionally, due to the greater risk in a loan secured by a leasehold interest than a loan secured by a fee interest, we face risks related to the availability and pricing of financing on favorable terms or at all for such ground leasehold interests .
Additionally, due to the greater risk in a loan secured by a leasehold interest than a loan secured by a fee interest, we face risks related to the availability and pricing of financing on favorable terms or at all for such ground leasehold interests. 17 RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL Significantly tighter capital markets and economic conditions have affected and may continue to materially affect our liquidity, financial condition and results of operations as well as the value of an investment in our debt and equity securities.
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 climate change, including rising sea levels, extreme weather, and increased flooding, could similarly have an impact on our properties and the economies of the metropolitan areas 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 areas in which we operate. Government efforts to combat climate change may impact the cost of operating our properties.
If we are unable to obtain debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected. In addition, the current rising interest rate environment has increased the interest payable on our variable rate debt that is not subject to interest rate swap and cap arrangements, reducing our operating cash flows.
If we are unable to obtain debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected.
If such changes occur, we may be required to pay additional taxes on our assets or income and/or be subject to additional restrictions. 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.
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. 15 Significant inflation and future increases in the inflation rate could adversely affect our business and financial results.
Our performance and the value of an investment in us are subject to risks associated with our real estate assets and with the real estate industry. The value of our real estate and the value of an investment in us fluctuates depending on conditions in the general economy and the real estate business.
The value of our real estate and the value of an investment in us fluctuates depending on conditions in the general economy and the real estate business. These conditions may also adversely impact our revenues and cash flows.
The creditors and preferred equity holders 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 Vornado’s assets are held through its Operating Partnership that holds substantially all of its properties and assets through subsidiaries.
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE We depend on dividends and distributions from our direct and indirect subsidiaries. The creditors and preferred equity holders of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us.
As of December 31, 2022, our consolidated mortgages and unsecured indebtedness, excluding related premium, discount and deferred financing costs, totaled $8.5 billion. 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.
We rely on both secured and unsecured, variable rate and fixed rate debt to finance acquisitions and development activities and for working capital. 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.
Under those circumstances, other sources of capital may not be available to us or may be available only on unattractive terms. In addition, our debt instruments contain customary covenants requiring us to maintain insurance.
Under those circumstances, other sources of capital may not be available to us or may be available only on unattractive terms. Further, depending on market conditions at the time of any refinancing, the covenants included as part of the terms of such refinancing may be more restrictive than the existing indebtedness.
The impact of such conditions could cause retailers to continue to reduce the number and size of their physical locations and further increase reliance on e-commerce. Additionally, office tenants may see further delays 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.
The impact of the COVID-19 pandemic caused retailers to reduce the number and size of their physical locations and increase reliance on e-commerce, and future infectious or contagious diseases could have a similar impact.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOccupancy and average monthly rent per unit: Residential: Vornado's Ownership Interest As of December 31, Total Number of Units Total Number of Units Occupancy Rate Average Monthly Rent Per Unit 2022 1,976 941 96.7 % $ 3,882 2021 1,986 951 97.0 % 3,776 2020 1,995 960 84.9 % 3,714 2019 1,996 960 97.5 % 3,902 2018 2,004 968 96.6 % 3,788 29 NEW YORK – CONTINUED Lease expirations as of December 31, 2022 (at share): Number of Expiring Leases Square Feet of Expiring Leases (1) Percentage of New York Square Feet Annualized Escalated Rents of Expiring Leases Year Total Per Square Foot Office: Fourth Quarter 2022 (2) 7 47,000 0.3% $ 1,712,000 $ 36.43 2023 (3) 86 1,444,000 10.0% 137,383,000 95.14 (4) 2024 91 943,000 6.5% 88,875,000 94.25 2025 75 699,000 4.8% 57,307,000 81.98 2026 84 1,217,000 8.4% 99,016,000 81.36 2027 87 1,160,000 8.0% 89,200,000 76.90 2028 60 1,003,000 6.9% 74,602,000 74.38 2029 39 1,161,000 8.0% 94,292,000 81.22 2030 48 623,000 4.3% 51,308,000 82.36 2031 33 899,000 6.2% 79,770,000 88.73 2032 22 404,000 2.8% 35,215,000 87.17 Retail: Fourth Quarter 2022 (2) 5 16,000 1.3% $ 2,590,000 $ 161.88 2023 15 149,000 12.3% 19,287,000 129.44 (5) 2024 10 133,000 10.9% 22,680,000 170.53 2025 10 40,000 3.3% 12,898,000 322.45 2026 10 82,000 6.7% 26,076,000 318.00 2027 12 34,000 2.8% 18,872,000 555.06 2028 10 27,000 2.2% 13,470,000 498.89 2029 10 50,000 4.1% 26,772,000 535.44 2030 18 155,000 12.7% 22,645,000 146.10 2031 29 88,000 7.2% 29,201,000 331.83 2032 23 55,000 4.5% 28,490,000 518.00 ________________________________________ (1) Excludes storage, vacancy and other.
Biggest changeOccupancy and weighted average annual rent per square foot: Office: Vornado's Ownership Interest As of December 31, Total Square Feet In Service Square Feet In Service Square Feet At Share Occupancy Rate Weighted Average Annual Escalated Rent Per Square Foot 2023 20,383,000 18,699,000 16,001,000 90.7 % $ 86.30 2022 19,902,000 18,724,000 16,028,000 91.9 % 83.98 2021 20,630,000 19,442,000 16,757,000 92.2 % 80.01 2020 20,586,000 18,361,000 15,413,000 93.4 % 79.05 2019 20,666,000 19,070,000 16,195,000 96.9 % 76.26 Retail: Vornado's Ownership Interest As of December 31, Total Square Feet In Service Square Feet In Service Square Feet At Share Occupancy Rate Weighted Average Annual Escalated Rent Per Square Foot 2023 2,394,000 2,123,000 1,684,000 74.9 % $ 224.88 2022 2,556,000 2,289,000 1,851,000 74.4 % 215.72 2021 2,693,000 2,267,000 1,825,000 80.7 % 214.22 2020 2,690,000 2,275,000 1,805,000 78.8 % 226.38 2019 2,712,000 2,300,000 1,842,000 94.5 % 209.86 Occupancy and average monthly rent per unit: Residential: Vornado's Ownership Interest As of December 31, Total Number of Units Total Number of Units Occupancy Rate Average Monthly Rent Per Unit 2023 1,974 939 96.8 % $ 4,115 2022 1,976 941 96.7 % 3,882 2021 1,986 951 97.0 % 3,776 2020 1,995 960 84.9 % 3,714 2019 1,996 960 97.5 % 3,902 30 NEW YORK – CONTINUED Lease expirations as of December 31, 2023 (at share): Number of Expiring Leases Square Feet of Expiring Leases (1) Percentage of New York Square Feet Annualized Escalated Rents of Expiring Leases Year Total Per Square Foot Office: Fourth Quarter 2023 (2) 12 223,000 1.6% $ 23,965,000 $ 107.47 2024 76 713,000 5.0% 63,535,000 89.11 (3) 2025 67 586,000 4.1% 45,758,000 78.09 2026 79 1,163,000 8.1% 94,536,000 81.29 2027 95 1,301,000 9.1% 102,958,000 79.14 2028 (4) 65 1,044,000 7.3% 84,045,000 80.50 2029 59 1,241,000 8.7% 100,418,000 80.92 2030 50 643,000 4.5% 54,540,000 84.82 2031 31 891,000 6.2% 80,847,000 90.74 2032 22 958,000 6.7% 94,504,000 98.65 2033 21 502,000 4.0% 42,938,000 85.53 Retail: Fourth Quarter 2023 (2) 3 11,000 1.0% $ 1,122,000 $ 102.00 2024 11 197,000 17.7% 20,532,000 104.22 (5) 2025 12 50,000 4.5% 13,076,000 261.52 2026 10 82,000 7.3% 26,414,000 322.12 2027 10 32,000 2.9% 20,509,000 640.91 2028 9 32,000 2.9% 14,731,000 460.34 2029 14 53,000 4.7% 27,460,000 518.11 2030 21 153,000 13.7% 23,416,000 153.05 2031 24 68,000 6.1% 30,383,000 446.81 2032 21 57,000 5.1% 29,537,000 518.19 2033 7 17,000 1.5% 6,022,000 354.24 ________________________________________ (1) Excludes storage, vacancy and other.
ITEM 2. PROPERTIES PROPERTY LISTING We operate in two reportable segments: New York and Other. The following pages provide details of our real estate properties as of December 31, 2022.
ITEM 2. PROPERTIES PROPERTY LISTING We operate in two reportable segments: New York and Other. The following pages provide details of our real estate properties as of December 31, 2023.
ANNUALIZED ESCALATED RENTS (1) (AT SHARE) BY TENANT INDUSTRY: Industry Percentage Office: Financial Services 20 % Technology 16 % Professional Services 7 % Advertising/Marketing 5 % Real Estate 4 % Entertainment and Electronics 4 % Insurance 3 % Education 3 % Communications 3 % Apparel 2 % Engineering, Architect & Surveying 2 % Health Services 2 % Government 1 % Other 6 % 78 % Retail: Apparel 5 % Luxury Retail 4 % Banking 2 % Restaurants 1 % Grocery 1 % Other 4 % 17 % Showroom 5 % Total 100 % ________________________________________ (1) Represents monthly contractual base rent before free rent plus tenant reimbursements multiplied by 12.
ANNUALIZED ESCALATED RENTS (1) (AT SHARE) BY TENANT INDUSTRY: Industry Percentage Office: Financial Services 22 % Technology 16 % Professional Services 7 % Advertising/Marketing 5 % Entertainment and Electronics 4 % Real Estate 3 % Insurance 3 % Education 3 % Apparel 2 % Engineering, Architect & Surveying 2 % Health Services 2 % Communications 1 % Government 1 % Other 6 % 77 % Retail: Apparel 5 % Luxury Retail 4 % Banking 2 % Restaurants 2 % Grocery 1 % Other 4 % 18 % Showroom 5 % Total 100 % ________________________________________ (1) Represents monthly contractual base rent before free rent plus tenant reimbursements multiplied by 12.
(2) Denotes property not consolidated in the accompanying consolidated financial statements and related financial data included in the Annual Report on Form 10-K. (3) Excludes residential occupancy statistics. (4) Includes 962 Third Avenue (the Annex building to 150 East 58th Street) 50.0% ground leased through 2118 (assuming all renewal options are exercised).
(2) Denotes property not consolidated in the accompanying consolidated financial statements and related financial data included in the Annual Report on Form 10-K. (3) Excludes residential occupancy statistics. (4) Includes 962 Third Avenue (the Annex building to 150 East 58th Street) 50.0% ground leased through 2118 (assuming all renewal options are exercised). (5) Properties under development or to be developed.
Alexander’s As of December 31, 2022, we own 32.4% of the outstanding common stock of Alexander’s, which owns six properties in the greater New York metropolitan area aggregating 2.5 million square feet, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg L.P. headquarters building.
Alexander’s As of December 31, 2023, we own 32.4% of the outstanding common stock of Alexander’s, which owns five properties in the greater New York City aggregating 2.5 million square feet, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg L.P. headquarters building.
The 26.4 million square feet is comprised of 19.9 million square feet of Manhattan office in 30 of the properties, 2.6 million square feet of Manhattan street retail in 56 of the properties, 1,664 units in six residential properties, and our 32.4% interest in Alexander’s, which owns six properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens.
The 26.7 million square feet is comprised of 20.4 million square feet of Manhattan office in 30 of the properties, 2.4 million square feet of Manhattan street retail in 50 of the properties, 1,662 units in five residential properties, and our 32.4% interest in Alexander’s, which owns five properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens.
Annualized escalated rents at share include leases signed but not yet commenced in place of current tenants or vacancy in the same space. 28 NEW YORK As of December 31, 2022, our New York segment consisted of 26.4 million square feet in 65 properties.
Annualized escalated rents at share include leases signed but not yet commenced in place of current tenants or vacancy in the same space. 29 NEW YORK As of December 31, 2023, our New York segment consisted of 26.7 million square feet in 60 properties.
As of December 31, 2022, theMART had an occupancy rate of 81.6% and a weighted average annual rent per square foot of $52.07. 555 California Street We own a 70% controlling interest in a three-building office complex aggregating 1.8 million square feet, located at California and Montgomery Streets in San Francisco’s financial district (“555 California Street”).
As of December 31, 2023, THE MART had an occupancy rate of 79.2% and a weighted average annual rent per square foot of $52.06. 555 California Street We own a 70% controlling interest in a three-building office complex aggregating 1.8 million square feet, located at California and Montgomery Streets in San Francisco’s financial district (“555 California Street”).
The New York segment also includes nine garages totaling 1.6 million square feet (4,804 spaces). As of December 31, 2022, the occupancy rate for our New York segment was 90.4%.
The New York segment also includes nine garages totaling 1.6 million square feet (4,685 spaces). As of December 31, 2023, the occupancy rate for our New York segment was 89.4%.
As of December 31, 2022, Alexander's had an occupancy rate of 96.4% and a weighted average annual rent per square foot of $104.09. 30 OTHER REAL ESTATE AND INVESTMENTS theMART We own the 3.7 million square foot theMART in Chicago, whose largest tenant is Motorola Mobility at 609,000 square feet, the lease of which is guaranteed by Google.
As of December 31, 2023, Alexander's had an occupancy rate of 92.6% and a weighted average annual rent per square foot of $107.78. OTHER REAL ESTATE AND INVESTMENTS THE MART We own the 3.7 million square foot THE MART in Chicago, whose largest tenant is Motorola Mobility at 609,000 square feet, the lease of which is guaranteed by Google.
Square Feet NEW YORK SEGMENT Property % Ownership Type % Occupancy In Service Under Development or Not Available for Lease Total Property PENN 1 (ground leased through 2098) (1) 100.0 % Office / Retail 81.3 % 2,307,000 239,000 2,546,000 1290 Avenue of the Americas 70.0 % Office / Retail 99.2 % 2,120,000 — 2,120,000 PENN 2 100.0 % Office / Retail 100.0 % 414,000 1,206,000 1,620,000 909 Third Avenue (ground leased through 2063) (1) 100.0 % Office 93.1 % 1,350,000 — 1,350,000 280 Park Avenue (2) 50.0 % Office / Retail 98.6 % 1,264,000 — 1,264,000 Independence Plaza, Tribeca (1,327 units) (2) 50.1 % Retail / Residential 55.0 % (3) 1,258,000 — 1,258,000 770 Broadway 100.0 % Office / Retail 99.3 % 1,183,000 — 1,183,000 PENN 11 100.0 % Office / Retail 99.3 % 1,153,000 — 1,153,000 100 West 33rd Street 100.0 % Office / Retail 75.1 % 1,114,000 — 1,114,000 90 Park Avenue 100.0 % Office / Retail 98.7 % 956,000 — 956,000 One Park Avenue 100.0 % Office / Retail 95.0 % 945,000 — 945,000 888 Seventh Avenue (ground leased through 2067) (1) 100.0 % Office / Retail 89.2 % 887,000 — 887,000 The Farley Building (ground and building leased through 2116) (1) 95.0 % Office / Retail 89.8 % 846,000 — 846,000 330 West 34th Street (65.2% ground leased through 2149) (1) 100.0 % Office / Retail 75.7 % 724,000 — 724,000 85 Tenth Avenue (2) 49.9 % Office / Retail 89.6 % 638,000 — 638,000 650 Madison Avenue (2) 20.1 % Office / Retail 86.1 % 601,000 — 601,000 350 Park Avenue 100.0 % Office / Retail 79.0 % 585,000 — 585,000 150 East 58th Street (4) 100.0 % Office / Retail 88.1 % 544,000 — 544,000 7 West 34th Street (2) 53.0 % Office / Retail 100.0 % 477,000 — 477,000 595 Madison Avenue 100.0 % Office / Retail 81.5 % 331,000 — 331,000 640 Fifth Avenue (2) 52.0 % Office / Retail 92.9 % 315,000 — 315,000 50-70 West 93rd Street (324 units) (2) 49.9 % Residential 97.4 % 283,000 — 283,000 260 Eleventh Avenue (ground leased through 2114) (1) 100.0 % Office 95.5 % 209,000 — 209,000 4 Union Square South 100.0 % Retail 100.0 % 204,000 — 204,000 61 Ninth Avenue (2 buildings) (ground leased through 2115) (1)(2) 45.1 % Office / Retail 100.0 % 194,000 — 194,000 512 West 22nd Street (2) 55.0 % Office / Retail 82.6 % 173,000 — 173,000 825 Seventh Avenue 51.2 % Office (2) / Retail 78.9 % 173,000 — 173,000 1540 Broadway (2) 52.0 % Retail 79.9 % 161,000 — 161,000 Paramus 100.0 % Office 84.6 % 129,000 — 129,000 666 Fifth Avenue (2)(5) 52.0 % Retail 100.0 % 114,000 — 114,000 1535 Broadway (2) 52.0 % Retail / Theatre 100.0 % 107,000 — 107,000 57th Street (2 buildings) (2) 50.0 % Office / Retail 78.3 % 103,000 — 103,000 689 Fifth Avenue (2) 52.0 % Office / Retail 93.9 % 98,000 — 98,000 150 West 34th Street 100.0 % Retail 100.0 % 78,000 — 78,000 510 Fifth Avenue 100.0 % Retail 25.2 % 65,000 — 65,000 655 Fifth Avenue (2) 50.0 % Retail 100.0 % 57,000 — 57,000 435 Seventh Avenue 100.0 % Retail 100.0 % 43,000 — 43,000 692 Broadway 100.0 % Retail 64.4 % 36,000 — 36,000 606 Broadway 50.0 % Office / Retail 100.0 % 36,000 — 36,000 697-703 Fifth Avenue (2) 44.8 % Retail 100.0 % 26,000 — 26,000 1131 Third Avenue 100.0 % Retail 100.0 % 23,000 — 23,000 131-135 West 33rd Street 100.0 % Retail 100.0 % 23,000 — 23,000 ________________________________________ See notes on page 27 . 25 PROPERTY LISTING – CONTINUED Square Feet NEW YORK SEGMENT – CONTINUED Property % Ownership Type % Occupancy In Service Under Development or Not Available for Lease Total Property 715 Lexington Avenue 100.0 % Retail 100.0 % 22,000 — 22,000 537 West 26th Street 100.0 % Retail 100.0 % 17,000 — 17,000 443 Broadway 100.0 % Retail 100.0 % 16,000 — 16,000 334 Canal Street (4 units) 100.0 % Retail / Residential — % (3) 14,000 — 14,000 304 Canal Street (4 units) 100.0 % Retail / Residential 100.0 % (3) 13,000 — 13,000 759-771 Madison Avenue (40 East 66th Street) (4 units) 100.0 % Residential 100.0 % 10,000 — 10,000 431 Seventh Avenue 100.0 % Retail 100.0 % 9,000 — 9,000 138-142 West 32nd Street 100.0 % Retail 100.0 % 8,000 — 8,000 148 Spring Street 100.0 % Retail 42.4 % 8,000 — 8,000 339 Greenwich Street 100.0 % Retail 100.0 % 8,000 — 8,000 150 Spring Street (1 unit) 100.0 % Retail / Residential 74.2 % (3) 7,000 — 7,000 966 Third Avenue 100.0 % Retail 100.0 % 7,000 — 7,000 968 Third Avenue (2) 50.0 % Retail 100.0 % 7,000 — 7,000 137 West 33rd Street 100.0 % Retail 100.0 % 3,000 — 3,000 57th Street (2) 50.0 % Land (6) — — — Eighth Avenue and 34th Street 100.0 % Land (6) — — — Hotel Pennsylvania Site (7) 100.0 % Land (6) — — — Other (3 buildings) 100.0 % Retail 100.0 % 16,000 — 16,000 Alexander's, Inc.: 731 Lexington Avenue (2) 32.4 % Office / Retail 98.9 % 1,079,000 — 1,079,000 Rego Park II, Queens (6.6 acres) (2) 32.4 % Retail 87.3 % 480,000 135,000 615,000 Rego Park I, Queens (4.8 acres) (2) 32.4 % Retail 100.0 % 260,000 78,000 338,000 The Alexander Apartment Tower, Queens (312 units) (2) 32.4 % Residential 98.7 % 255,000 — 255,000 Flushing, Queens (1.0 acre ground leased through 2037) (1)(2) 32.4 % Retail 100.0 % 167,000 — 167,000 Rego Park III, Queens (3.2 acres) (2) 32.4 % Land (6) — — — Total New York Segment 91.2 % 24,753,000 1,658,000 26,411,000 Our Ownership Interest 90.4 % 19,371,000 1,514,000 20,885,000 ________________________________________ See notes on page 27 . 26 PROPERTY LISTING – CONTINUED Square Feet OTHER SEGMENT Property % Ownership Type % Occupancy In Service Under Development or Not Available for Lease Total Property theMART: theMART, Chicago 100.0 % Office / Retail / Trade show / Showroom 81.6 % 3,616,000 56,000 3,672,000 Piers 92 and 94 (New York) (ground and building leased through 2110) (1) 100.0 % Trade show / Other — % — 208,000 208,000 527 West Kinzie, Chicago 100.0 % Land (6) — — — Other (2 properties) (2) , Chicago 50.0 % Retail 93.9 % 19,000 — 19,000 Total theMART 81.7 % 3,635,000 264,000 3,899,000 Our Ownership Interest 81.6 % 3,626,000 264,000 3,890,000 555 California Street: 555 California Street 70.0 % Office / Retail 99.0 % 1,506,000 — 1,506,000 315 Montgomery Street 70.0 % Office / Retail 99.7 % 235,000 — 235,000 345 Montgomery Street 70.0 % Office / Retail — % 78,000 — 78,000 Total 555 California Street 94.7 % 1,819,000 — 1,819,000 Our Ownership Interest 94.7 % 1,273,000 — 1,273,000 Other: Rosslyn Plaza, VA (197 units) (2) 45.6 % Office / Residential 62.8 % (3) 685,000 304,000 989,000 Fashion Centre Mall / Washington Tower, VA (2) 7.5 % Office / Retail 92.0 % 1,038,000 — 1,038,000 Wayne Towne Center, Wayne, NJ (ground leased through 2064) (1) 100.0 % Retail 100.0 % 681,000 9,000 690,000 Annapolis, MD (ground leased through 2042) (1) 100.0 % Retail 100.0 % 128,000 — 128,000 Atlantic City, NJ (11.3 acres ground leased through 2070 to VICI Properties for a portion of the Borgata Hotel and Casino complex) 100.0 % Land 100.0 % — — — Total Other 89.3 % 2,532,000 313,000 2,845,000 Our Ownership Interest 92.6 % 1,197,000 149,000 1,346,000 ________________________________________ (1) Term assumes all renewal options exercised, if applicable.
Square Feet NEW YORK SEGMENT Property % Ownership Type % Occupancy In Service Under Development or Not Available for Lease Total Property PENN 1 (ground leased through 2098) (1) 100.0 % Office / Retail 82.4 % 2,329,000 228,000 2,557,000 1290 Avenue of the Americas 70.0 % Office / Retail 99.8 % 2,120,000 — 2,120,000 PENN 2 100.0 % Office / Retail 100.0 % 338,000 1,457,000 1,795,000 909 Third Avenue (ground leased through 2063) (1) 100.0 % Office 95.0 % 1,351,000 — 1,351,000 280 Park Avenue (2) 50.0 % Office / Retail 95.3 % 1,265,000 — 1,265,000 Independence Plaza, Tribeca (1,327 units) (2) 50.1 % Retail / Residential 57.6 % (3) 1,258,000 — 1,258,000 770 Broadway 100.0 % Office / Retail 79.7 % 1,183,000 — 1,183,000 PENN 11 100.0 % Office / Retail 99.3 % 1,149,000 — 1,149,000 100 West 33rd Street 100.0 % Office / Retail 70.6 % 1,114,000 — 1,114,000 90 Park Avenue 100.0 % Office / Retail 95.2 % 956,000 — 956,000 One Park Avenue 100.0 % Office / Retail 95.0 % 945,000 — 945,000 888 Seventh Avenue (ground leased through 2067) (1) 100.0 % Office / Retail 86.5 % 887,000 — 887,000 The Farley Building (ground and building leased through 2116) (1) 95.0 % Office / Retail 91.4 % 847,000 — 847,000 330 West 34th Street (65.2% ground leased through 2149) (1) 100.0 % Office / Retail 75.7 % 724,000 — 724,000 85 Tenth Avenue (2) 49.9 % Office / Retail 84.5 % 638,000 — 638,000 650 Madison Avenue (2) 20.1 % Office / Retail 86.1 % 601,000 — 601,000 350 Park Avenue 100.0 % Office 100.0 % 585,000 — 585,000 150 East 58th Street (4) 100.0 % Office / Retail 83.2 % 544,000 — 544,000 7 West 34th Street (2) 53.0 % Office / Retail 100.0 % 477,000 — 477,000 595 Madison Avenue 100.0 % Office / Retail 89.5 % 330,000 — 330,000 640 Fifth Avenue (2) 52.0 % Office / Retail 92.3 % 315,000 — 315,000 50-70 West 93rd Street (324 units) (2) 49.9 % Residential 99.7 % 283,000 — 283,000 Sunset Pier 94 Studios (ground and building leased through 2110) (1)(2) 49.9 % Studio (5) — 266,000 266,000 260 Eleventh Avenue (ground leased through 2114) (1) 100.0 % Office 100.0 % 209,000 — 209,000 4 Union Square South 100.0 % Retail 100.0 % 204,000 — 204,000 61 Ninth Avenue (2 buildings) (ground leased through 2115) (1)(2) 45.1 % Office / Retail 100.0 % 194,000 — 194,000 512 West 22nd Street (2) 55.0 % Office / Retail 85.2 % 173,000 — 173,000 825 Seventh Avenue 51.2 % Office (2) / Retail 80.1 % 173,000 — 173,000 1540 Broadway (2) 52.0 % Retail 78.5 % 161,000 — 161,000 Paramus 100.0 % Office 81.2 % 129,000 — 129,000 666 Fifth Avenue (2)(6) 52.0 % Retail 100.0 % 114,000 — 114,000 1535 Broadway (2) 52.0 % Retail / Theatre 100.0 % 107,000 — 107,000 57th Street (2 buildings) (2) 50.0 % Office / Retail 78.3 % 103,000 — 103,000 689 Fifth Avenue (2) 52.0 % Office / Retail 100.0 % 98,000 — 98,000 150 West 34th Street 100.0 % Retail 100.0 % 78,000 — 78,000 655 Fifth Avenue (2) 50.0 % Retail 100.0 % 57,000 — 57,000 435 Seventh Avenue 100.0 % Retail 100.0 % 43,000 — 43,000 606 Broadway 50.0 % Office / Retail 81.8 % 36,000 — 36,000 697-703 Fifth Avenue (2) 44.8 % Retail 100.0 % 26,000 — 26,000 1131 Third Avenue 100.0 % Retail 100.0 % 23,000 — 23,000 131-135 West 33rd Street 100.0 % Retail 100.0 % 23,000 — 23,000 ________________________________________ See notes on page 28 . 26 PROPERTY LISTING – CONTINUED Square Feet NEW YORK SEGMENT – CONTINUED Property % Ownership Type % Occupancy In Service Under Development or Not Available for Lease Total Property 715 Lexington Avenue 100.0 % Retail 100.0 % 22,000 — 22,000 537 West 26th Street 100.0 % Retail 100.0 % 17,000 — 17,000 334 Canal Street (4 units) 100.0 % Retail / Residential — % (3) — 14,000 14,000 304-306 Canal Street (4 units) 100.0 % Retail / Residential 100.0 % (3) 4,000 9,000 13,000 40 East 66th Street (3 units) 100.0 % Residential 100.0 % 10,000 — 10,000 431 Seventh Avenue 100.0 % Retail 100.0 % 9,000 — 9,000 138-142 West 32nd Street 100.0 % Retail 80.3 % 8,000 — 8,000 339 Greenwich Street 100.0 % Retail 100.0 % 8,000 — 8,000 966 Third Avenue 100.0 % Retail 100.0 % 7,000 — 7,000 968 Third Avenue (2) 50.0 % Retail 100.0 % 7,000 — 7,000 137 West 33rd Street 100.0 % Retail 100.0 % 3,000 — 3,000 57th Street (2) 50.0 % Land (5) — — — Eighth Avenue and 34th Street 100.0 % Land (5) — — — Hotel Pennsylvania Site (7) 100.0 % Land (5) — — — Other (3 buildings) 100.0 % Retail 65.4 % 16,000 — 16,000 Alexander's, Inc.: 731 Lexington Avenue (2) 32.4 % Office / Retail 98.9 % 1,079,000 — 1,079,000 Rego Park II, Queens (6.6 acres) (2) 32.4 % Retail 76.9 % 616,000 — 616,000 Rego Park I, Queens (4.8 acres) (2) 32.4 % Retail 100.0 % 214,000 124,000 338,000 The Alexander Apartment Tower, Queens (312 units) (2) 32.4 % Residential 95.2 % 255,000 — 255,000 Flushing, Queens (1.0 acre ground leased through 2037) (1)(2) 32.4 % Retail 100.0 % 167,000 — 167,000 Total New York Segment 90.0 % 24,632,000 2,098,000 26,730,000 Our Ownership Interest 89.4 % 19,185,000 1,881,000 21,066,000 ________________________________________ See notes on page 28 . 27 PROPERTY LISTING – CONTINUED Square Feet OTHER SEGMENT Property % Ownership Type % Occupancy In Service Under Development or Not Available for Lease Total Property THE MART: THE MART, Chicago 100.0 % Office / Retail / Trade show / Showroom 79.1 % 3,669,000 — 3,669,000 527 West Kinzie, Chicago 100.0 % Land (5) — — — Other (2 properties) (2) , Chicago 50.0 % Retail 100.0 % 19,000 — 19,000 Total THE MART 79.2 % 3,688,000 — 3,688,000 Our Ownership Interest 79.2 % 3,679,000 — 3,679,000 555 California Street: 555 California Street 70.0 % Office / Retail 98.7 % 1,506,000 — 1,506,000 315 Montgomery Street 70.0 % Office / Retail 99.7 % 235,000 — 235,000 345 Montgomery Street 70.0 % Office / Retail — % 78,000 — 78,000 Total 555 California Street 94.5 % 1,819,000 — 1,819,000 Our Ownership Interest 94.5 % 1,274,000 — 1,274,000 Other: Rosslyn Plaza, VA (197 units) (2) 45.6 % Office / Residential 58.4 % (3) 685,000 304,000 989,000 Fashion Centre Mall / Washington Tower, VA (2) 7.5 % Office / Retail 93.5 % 1,038,000 — 1,038,000 Wayne Towne Center, Wayne, NJ (ground leased through 2064) (1) 100.0 % Retail 100.0 % 686,000 4,000 690,000 Annapolis, MD (ground leased through 2042) (1) 100.0 % Retail 100.0 % 128,000 — 128,000 Atlantic City, NJ (11.3 acres ground leased through 2070 to VICI Properties for a portion of the Borgata Hotel and Casino complex) 100.0 % Land 100.0 % — — — Total Other 89.2 % 2,537,000 308,000 2,845,000 Our Ownership Interest 91.9 % 1,202,000 144,000 1,346,000 ________________________________________ (1) Term assumes all renewal options exercised, if applicable.
As of December 31, 2022, 555 California Street had an occupancy rate of 94.7% and a weighted average annual rent per square foot of $92.81.
As of December 31, 2023, 555 California Street had an occupancy rate of 94.5% and a weighted average annual rent per square foot of $94.93. 31
(2) Includes month-to-month leases, holdover tenants, and leases expiring on the last day of the current quarter. (3) Excludes the expiration of 492,000 square feet at 909 Third Avenue for U.S. Post Office as we assume the exercise of all renewal options through 2038 given the below-market rent on their options.
(2) Includes month-to-month leases, holdover tenants, and leases expiring on the last day of the current quarter. (3) Based on current market conditions, we expect to re-lease this space at rents between $85 to $95 per square foot. (4) Excludes the expiration of 492,000 square feet at 909 Third Avenue for U.S.
Demolition of the existing building structure commenced in the fourth quarter of 2021. 27 TOP 10 TENANTS BASED ON ANNUALIZED ESCALATED RENTS (1) (AT SHARE): Tenant Square Footage At Share Annualized Escalated Rents At Share % of Total Annualized Escalated Rents At Share Meta Platforms, Inc. 1,451,153 $ 158,889 8.8 % IPG and affiliates 967,552 67,279 3.6 % New York University 685,290 45,013 2.5 % Google/Motorola Mobility (guaranteed by Google) 759,446 41,220 2.2 % Bloomberg L.P. 306,768 40,252 2.2 % Equitable Financial Life Insurance Company 336,644 35,453 2.0 % Yahoo Inc. 313,726 32,202 1.8 % Amazon (including its Whole Foods subsidiary) 312,694 30,115 1.7 % Neuberger Berman Group LLC 306,612 27,283 1.5 % Madison Square Garden & Affiliates 412,551 27,143 1.5 % ________________________________________ See note below.
(7) Demolition of the existing building was completed in the third quarter of 2023. 28 TOP 10 TENANTS BASED ON ANNUALIZED ESCALATED RENTS (1) (AT SHARE): Tenant Square Footage At Share Annualized Escalated Rents At Share % of Total Annualized Escalated Rents At Share Meta Platforms, Inc. 1,451,153 $ 167,180 9.3 % IPG and affiliates 1,044,715 69,186 3.9 % Citadel 585,460 62,498 3.5 % New York University 685,290 48,886 2.7 % Google/Motorola Mobility (guaranteed by Google) 759,446 41,765 2.3 % Bloomberg L.P. 306,768 41,279 2.3 % Amazon (including its Whole Foods subsidiary) 312,694 30,699 1.7 % Neuberger Berman Group LLC 306,612 28,184 1.6 % Swatch Group USA 11,957 27,333 1.5 % Madison Square Garden & Affiliates 408,031 27,326 1.5 % ________________________________________ See note below.
(4) Based on current market conditions, we expect to re-lease this space at rents between $85 to $95 per square foot. (5) Based on current market conditions, we expect to re-lease this space at rents between $125 to $150 per square foot.
Post Office as we assume the exercise of all renewal options through 2038 given the below-market rent on their options. (5) Based on current market conditions, we expect to re-lease this space at rents between $125 to $150 per square foot.
(5) 75,000 square feet is leased from 666 Fifth Avenue Office Condominium. (6) Properties under development or to be developed. (7) We permanently closed the Hotel Pennsylvania and plan to develop an office tower on the site.
(6) 75,000 square feet is leased from 666 Fifth Avenue office condominium.
Removed
Occupancy and weighted average annual rent per square foot: Office: Vornado's Ownership Interest As of December 31, Total Square Feet In Service Square Feet In Service Square Feet At Share Occupancy Rate Weighted Average Annual Escalated Rent Per Square Foot 2022 19,902,000 18,724,000 16,028,000 91.9 % $ 83.98 2021 20,630,000 19,442,000 16,757,000 92.2 % 80.01 2020 20,586,000 18,361,000 15,413,000 93.4 % 79.05 2019 (1) 20,666,000 19,070,000 16,195,000 96.9 % 76.26 2018 21,495,000 19,858,000 16,632,000 97.2 % 74.04 ________________________________________ See note below.
Removed
Retail: Vornado's Ownership Interest As of December 31, Total Square Feet In Service Square Feet In Service Square Feet At Share Occupancy Rate Weighted Average Annual Escalated Rent Per Square Foot 2022 2,556,000 2,289,000 1,851,000 74.4 % $ 215.72 2021 2,693,000 2,267,000 1,825,000 80.7 % 214.22 2020 2,690,000 2,275,000 1,805,000 78.8 % 226.38 2019 (1) 2,712,000 2,300,000 1,842,000 94.5 % 209.86 2018 2,802,000 2,648,000 2,419,000 97.3 % 228.43 ________________________________________ (1) Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not expected to have a material effect on our financial position, results of operations or cash flows.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+7 added−4 removed3 unchanged
Biggest changeThere can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below. 2017 2018 2019 2020 2021 2022 Vornado Realty Trust $ 100 $ 82 $ 95 $ 56 $ 66 $ 35 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 shares will continue in line with the same or similar trends depicted in the graph below. 2018 2019 2020 2021 2022 2023 Vornado Realty Trust $ 100 $ 115 $ 68 $ 81 $ 43 $ 60 S&P 400 MidCap Index (1) 100 126 143 179 156 181 S&P 500 Index (2) 100 131 156 200 164 207 The NAREIT All Equity Index 100 129 122 172 129 144 ________________________________________ (1) In 2023, Vornado was added as a constituent of the S&P 400 MidCap Index.
Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unit holder is equal to the quarterly dividend paid to a Vornado common shareholder.
Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the distribution to a Class A unit holder is equal to the dividend paid to a Vornado common shareholder.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Vornado Realty Trust Vornado’s common shares are traded on the New York Stock Exchange under the symbol “VNO.” As of February 1, 2023, there were 783 holders of record of Vornado common shares. Vornado Realty L.P.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Vornado Realty Trust Vornado’s common shares are traded on the New York Stock Exchange under the symbol “VNO.” As of February 1, 2024, there were 758 holders of record of Vornado common shares. Vornado Realty L.P.
The graph assumes that $100 was invested on December 31, 2017 in our common shares, 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 shares, 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.
Recent Purchases of Equity Securities None. 31 Performance Graph The following graph is a comparison of the five-year cumulative return of Vornado’s common shares, 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.
Performance Graph The following graph is a comparison of the five-year cumulative return of Vornado’s common shares, 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 consideration received included $885,373 in cash proceeds. Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Such shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. There were no cash proceeds associated with these issuances. Vornado Realty L.P.
Information relating to compensation plans under which Vornado’s equity securities are authorized for issuance is set forth under Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein.
Information relating to compensation plans under which Vornado’s equity securities are authorized for issuance is set forth under Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein. 32 Recent Purchases of Unregistered Securities Vornado Realty Trust On April 26, 2023, the Company’s Board of Trustees authorized the repurchase of up to $200,000,000 of its outstanding common shares under a newly established share repurchase program.
The units were issued outside of Vornado's omnibus share plan and were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
All of the securities referred to above were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. There were no cash proceeds associated with these issuances.
On May 19, 2022, we granted 46,503 restricted units of the Operating Partnership at a market price of $33.88 per unit to Vornado Trustees that are not executives of the Company as part of their annual Trustee fees.
On November 1, 2023, the Operating Partnership granted 116,612 LTIP Units at a market price of $19.30 per unit to Vornado consultants that are not executives of the Company as part of their annual consulting fees. The units were issued outside of Vornado’s 2023 Omnibus Share Plan.
Removed
As of February 1, 2023, there were 854 Class A unitholders of record.
Added
As of February 1, 2024, there were 806 Class A unitholders of record. Recent Sales of Unregistered Securities Vornado Realty Trust During the fourth quarter of 2023, Vornado issued 64,056 of its common shares for the redemption of Class A units by certain limited partners of Vornado Realty L.P.
Removed
Recent Sales of Unregistered Securities During 2022, we issued 347,891 Class A units in connection with (i) the issuance of Vornado common shares and (ii) the exercise of awards pursuant to Vornado's omnibus share plan, including grants of restricted Vornado common shares and restricted units of the Operating Partnership and upon conversion, surrender or exchange of the Operating Partnership’s units or Vornado stock options.
Added
During the fourth quarter of 2023, Vornado Realty L.P. issued 375,369 Class A units to satisfy conversions of restricted Operating Partnership units (“LTIP Units”) and 20,731 pursuant to Vornado’s 2023 Omnibus Share Plan. There were no cash proceeds associated with the issuances.
Removed
On December 12, 2022, we granted 135,564 restricted units of the Operating Partnership at a market price of $22.13 per unit to Vornado consultants that are not executives of the Company for annual consulting fees.
Added
There were no common share repurchases during the three months ended December 31, 2023. As of December 31, 2023, $170,857,000 remained available and authorized for common share repurchases.
Removed
The units were issued outside of Vornado's omnibus share plan and were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Added
Share repurchases may be made from time to time in the open market, through privately negotiated transactions or through other means as permitted by federal securities laws, including through block trades, accelerated share repurchase transactions and/or trading plans intended to qualify under Rule 10b5-1.
Added
The timing, manner, price and amount of any repurchases will be determined in Vornado’s discretion depending on business, economic and market conditions, corporate and regulatory requirements, prevailing prices for Vornado’s common shares, alternative uses for capital and other considerations.
Added
The program does not have an expiration date and may be suspended or discontinued at any time and does not obligate Vornado to make any repurchases of its common shares. Vornado Realty L.P. None.
Added
(2) To facilitate comparison to the performance graph presented in our Annual Report for the prior year, the S&P 500 Index is presented above.

Item 7. Management's Discussion & Analysis

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

104 edited+66 added−40 removed43 unchanged
Biggest changeThe following table reconciles the difference between our net (loss) income attributable to common shareholders and our net income attributable to common shareholders, as adjusted: (Amounts in thousands) For the Year Ended December 31, 2022 2021 Certain expense (income) items that impact net (loss) income attributable to common shareholders: Non-cash real estate impairment losses on wholly owned and partially owned assets $ 595,488 $ 7,880 Hotel Pennsylvania loss (primarily accelerated building depreciation expense) 71,087 29,472 Net gains on disposition of wholly owned and partially owned assets (62,685) (15,315) After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units and ancillary amenities (35,858) (44,607) Deferred tax liability on our investment in The Farley Building (held through a taxable REIT subsidiary) 13,665 10,868 Refund of New York City transfer taxes related to the April 2019 transfer to Fifth Avenue and Times Square JV (13,613) — Other 7,289 (2,436) 575,373 (14,138) Noncontrolling interests' share of above adjustments (40,290) 1,205 Total of certain expense (income) items that impact net (loss) income attributable to common shareholders $ 535,083 $ (12,933) 35 Overview - continued Year Ended December 31, 2022 Financial Results Summary - continued The following table reconciles the difference between our FFO attributable to common shareholders plus assumed conversions and our FFO attributable to common shareholders plus assumed conversions, as adjusted: (Amounts in thousands) For the Year Ended December 31, 2022 2021 Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: After-tax net gain on sale of 220 CPS condominium units and ancillary amenities $ (35,858) $ (44,607) Net gains on disposition of wholly owned and partially owned assets (17,372) (643) Deferred tax liability on our investment in The Farley Building (held through a taxable REIT subsidiary) 13,665 10,868 Other 7,289 12,026 (32,276) (22,356) Noncontrolling interests' share of above adjustments 2,240 1,145 Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net $ (30,036) $ (21,211) Same Store Net Operating Income ("NOI") At Share The percentage increase in same store NOI at share and same store NOI at share - cash basis of our New York segment, theMART and 555 California Street are below.
Biggest changeThe following table reconciles the difference between our net income (loss) attributable to common shareholders and our net income attributable to common shareholders, as adjusted: (Amounts in thousands) For the Year Ended December 31, 2023 2022 Certain expense (income) items that impact net income (loss) attributable to common shareholders: Real estate impairment losses on wholly owned and partially owned assets $ 73,289 $ 595,488 Net gain on contribution of Pier 94 leasehold interest to joint venture (35,968) — After-tax net gain on sale of The Armory Show (17,076) — Our share of Alexander's gain on sale of Rego Park III land parcel (16,396) — Our share of income from real estate fund investments (14,379) (1,671) After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units and ancillary amenities (11,959) (35,858) Deferred tax liability on our investment in the Farley Building (held through a taxable REIT subsidiary) 11,722 13,665 Credit losses on investments 8,269 — Other 10,342 3,749 7,844 575,373 Noncontrolling interests' share of above adjustments and assumed conversion of dilutive potential common shares 64 (40,290) Total of certain expense (income) items that impact net income (loss) attributable to common shareholders $ 7,908 $ 535,083 The following table reconciles the difference between our FFO attributable to common shareholders plus assumed conversions and our FFO attributable to common shareholders plus assumed conversions, as adjusted: (Amounts in thousands) For the Year Ended December 31, 2023 2022 Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: Our share of income from real estate fund investments $ (14,379) $ (1,671) After-tax net gain on sale of 220 CPS condominium units and ancillary amenities (11,959) (35,858) Deferred tax liability on our investment in the Farley Building (held through a taxable REIT subsidiary) 11,722 13,665 Credit losses on investments 8,269 — Other 11,043 (8,412) 4,696 (32,276) Noncontrolling interests' share of above adjustments (337) 2,240 Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net $ 4,359 $ (30,036) 36 Overview - continued Same Store Net Operating Income ("NOI") At Share The percentage increase (decrease) in same store NOI at share and same store NOI at share - cash basis of our New York segment, THE MART and 555 California Street are below.
Net Gains on Disposition of Wholly Owned and Partially Owned Assets Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.
Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.
In connection with the development of the property, the joint venture admitted a historic Tax Credit Investor partner (the "Tax Credit Investor"). Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions.
In connection with the development of the property, the joint venture admitted a historic Tax Credit Investor partner. Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions.
We may also refinance or prepay other outstanding debt depending on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements. Details of 2022 financing activities are provided in the “Overview” of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We may also refinance or prepay other outstanding debt depending on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements. Details of 2023 financing activities are provided in the “Overview” of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(2) The Alexander Apartment Tower (312 units) is reflected in Residential unit count and occupancy. 39 Critical Accounting Estimates 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.
(2) The Alexander Apartment Tower (312 units) is reflected in Residential unit count and occupancy. 41 Critical Accounting Estimates 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.
Capital requirements for development and redevelopment expenditures and acquisitions may require funding from borrowings, equity offerings and/or asset sales. We may from time to time purchase or retire outstanding debt securities or redeem our equity securities. Such purchases, if any, will depend on prevailing market conditions, liquidity requirements and other factors.
Capital requirements for development and redevelopment expenditures and acquisitions may require funding from borrowings, equity offerings and/or asset sales. We may from time to time repurchase or retire our outstanding debt securities or repurchase or redeem our equity securities. Such purchases, if any, will depend on prevailing market conditions, liquidity requirements and other factors.
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.
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.
Leasing Activity For the Year Ended December 31, 2022 The leasing activity and related statistics below are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Leasing Activity For the Year Ended December 31, 2023 The leasing activity and related statistics below are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The calculations of both the numerator and denominator used in the computation of income per share are disclosed in Note 18 – (Loss) Income Per Share/(Loss) Income Per Class A Unit , in our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
The calculations of both the numerator and denominator used in the computation of income per share are disclosed in Note 13 – Income (Loss) Per Share/Income (Loss) Per Class A Unit , in our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
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.
The years ended December 31, 2022 and 2021 include certain items that impact net (loss) income attributable to common shareholders, which are listed in the table below.
The years ended December 31, 2023 and 2022 include certain items that impact net income (loss) attributable to common shareholders, which are listed in the table below.
Recent Accounting Pronouncements See Note 2 – Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements. 40 NOI At Share by Segment for the Years Ended December 31, 2022 and 2021 NOI at share represents total revenues less operating expenses including our share of partially owned entities.
Recent Accounting Pronouncements See Note 2 – Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements. 42 NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 NOI at share represents total revenues less operating expenses including our share of partially owned entities.
We own and operate office and retail properties with a concentration in the New York City metropolitan area. In addition, we have a 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns six properties in the greater New York metropolitan area, as well as interests in other real estate and investments.
We own and operate office and retail properties with a concentration in the New York metropolitan area. In addition, we have a 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns five properties in the greater New York metropolitan area, as well as interests in other real estate and investments.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2022 and 2021 are summarized below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
As of December 31, 2022, we are in compliance with all of the financial covenants required by our senior unsecured notes, our unsecured revolving credit facilities and our unsecured term loan. A summary of our consolidated debt as of December 31, 2022 and 2021 is presented below.
As of December 31, 2023, we are in compliance with all of the financial covenants required by our senior unsecured notes, our unsecured revolving credit facilities and our unsecured term loan. A summary of our consolidated debt as of December 31, 2023 is presented below.
Below is a summary of NOI at share and NOI at share - cash basis by segment for the years ended December 31, 2022 and 2021.
Below is a summary of NOI at share and NOI at share - cash basis by segment for the years ended December 31, 2023 and 2022.
Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the financial condition of the tenant, the impact of COVID-19 on tenants’ businesses, and other factors. Our assessment of the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our consolidated statements of income.
Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the financial condition of the tenant, and other factors. Our assessment of the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our consolidated statements of income.
Details of certain items that impact FFO are discussed in the financial results summary of our “Overview.” Below is a reconciliation of net (loss) income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions for the year ended December 31, 2022 and 2021.
Details of certain items that impact FFO are discussed in the financial results summary of our “Overview.” Below is a reconciliation of net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions for the years ended December 31, 2023 and 2022.
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, 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.
Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a refund or reduction of the Tax Credit Investor’s capital contributions. As of December 31, 2022, the Tax Credit Investor has made $92,400,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor.
Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a refund or reduction of the Tax Credit Investor’s capital contributions. As of December 31, 2023, the Tax Credit Investor has made $205,068,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the year ended December 31, 2022 compared to December 31, 2021.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
Vornado is the sole general partner of and owned approximately 92% of the common limited partnership interest in the Operating Partnership as of December 31, 2022. All references to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado.
Vornado is the sole general partner of and owned approximately 91.0% of the common limited partnership interest in the Operating Partnership as of December 31, 2023. All references to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado.
The ongoing challenges posed by the increase in interest rates and inflation and the continuing effect of the COVID-19 pandemic could adversely impact our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to our shareholders, debt amortization and recurring capital expenditures.
The ongoing challenges posed by increased interest rates and the effects of inflation could adversely impact our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to our shareholders, debt amortization and recurring capital expenditures.
The changes in the GAAP and cash mark-to-market rent on the 244,000 square feet of second generation space were negative 4.8% and negative 5.4%, respectively.
The changes in the GAAP and cash mark-to-market rent on the 244,000 square feet of second generation space were negative 3.3% and negative 7.8%, respectively.
Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,774,525 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss.
Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $2,112,753 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss.
As of December 31, 2022, we have construction commitments aggregating approximately $409,000,000. 54 Funds From Operations Vornado Realty Trust FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”).
As of December 31, 2023, we have construction commitments aggregating approximately $91,372,000. 55 Funds From Operations Vornado Realty Trust FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Number Overview 34 Critical Accounting Estimates 40 Net Operating Income At Share by Segment for the Years Ended December 31, 2022 and 2021 41 Results of Operations for the Year Ended December 31, 2022 Compared to December 31, 2021 44 Related Party Transactions 48 Liquidity and Capital Resources 49 Funds From Operations for the Years Ended December 31, 2022 and 2021 55 33 Introduction The following discussion should be read in conjunction with the financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Number Overview 35 Critical Accounting Estimates 42 Net Operating Income At Share by Segment for the Years Ended December 31, 2023 and 2022 43 Results of Operations for the Year Ended December 31, 2023 Compared to December 31, 2022 46 Related Party Transactions 49 Liquidity and Capital Resources 50 Funds From Operations for the Years Ended December 31, 2023 and 2022 56 34 Introduction The following discussion should be read in conjunction with the financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K.
In connection with the sale, we recognized a net gain of $551,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.
In connection with the sale, we recognized a net gain of $20,181,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income.
These factors could have a material impact on our business, financial condition, results of operations and cash flows. 34 Vornado Realty Trust Year Ended December 31, 2022 Financial Results Summary Net loss attributable to common shareholders for the year ended December 31, 2022 was $408,615,000, or $2.13 per diluted share, compared to net income attributable to common shareholders of $101,086,000, or $0.53 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. 35 Overview - continued Vornado Realty Trust Year Ended December 31, 2023 Financial Results Summary Net income attributable to common shareholders for the year ended December 31, 2023 was $43,378,000, or $0.23 per diluted share, compared to net loss attributable to common shareholders of $408,615,000, or $2.13 per diluted share, for the year ended December 31, 2022.
The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net loss attributable to common shareholders by $535,083,000, or $2.79 per diluted share, for the year ended December 31, 2022 and increased net income attributable to common shareholders by $12,933,000, or $0.07 per diluted share, for the year ended December 31, 2021.
The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased net income attributable to common shareholders by $7,908,000, or $0.04 per diluted share, for the year ended December 31, 2023 and increased net loss attributable to common shareholders by $535,083,000, or $2.79 per diluted share, for the year ended December 31, 2022.
Funds from operations ("FFO") attributable to common shareholders plus assumed conversions for the year ended December 31, 2022 was $638,928,000, or $3.30 per diluted share, compared to $571,074,000, or $2.97 per diluted share, for the year ended December 31, 2021.
Funds from operations ("FFO") attributable to common shareholders plus assumed conversions for the year ended December 31, 2023 was $503,792,000, or $2.59 per diluted share, compared to $638,928,000, or $3.30 per diluted share, for the year ended December 31, 2022.
Impairment analyses are based on information available at the time the analyses are prepared. Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future rental revenues, operating expenses, capital expenditures, discount rates and capitalization rates which could differ materially from actual results.
Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future rental revenues, operating expenses, capital expenditures, discount rates and capitalization rates which could differ materially from actual results.
Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period. • 894,000 square feet of New York Office space (753,000 square feet at share) at an initial rent of $84.51 per square foot and a weighted average lease term of 8.9 years.
Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period. • 2,133,000 square feet of New York Office space (1,661,000 square feet at share) at an initial rent of $98.66 per square foot and a weighted average lease term of 10.0 years.
Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal. 53 Liquidity and Capital Resources - continued Other Commitments and Contingencies - continued Our 95% consolidated joint venture (5% is owned by Related) is completing the development of The Farley Building.
Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal. Our 95% consolidated joint venture (5% is owned by Related Companies ("Related")) developed and owns the Farley Building.
During 2023 and 2024, $21,600,000 and $396,415,000, respectively, of our outstanding consolidated debt matures, assuming the exercise of as-of-right extension options. We may refinance this maturing debt as it comes due or choose to repay it using cash and cash equivalents or our unsecured revolving credit facilities.
During 2024 and 2025, $169,815,000 and $1,329,800,000, respectively, of our outstanding consolidated debt matures, assuming the exercise of as-of-right extension options. We may refinance this maturing debt as it comes due or choose to repay it using cash and cash equivalents or our unsecured revolving credit facilities.
The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO by $30,036,000, or $0.15 per diluted share, for the year ended December 31, 2022 and increased FFO by $21,211,000, or $0.11 per diluted share, for the year ended December 31, 2021.
The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO by $4,359,000, or $0.02 per diluted share, for the year ended December 31, 2023 and increased FFO by $30,036,000, or $0.15 per diluted share, for the year ended December 31, 2022.
Our unsecured revolving credit facilities and unsecured term loan contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB-.
Our unsecured revolving credit facilities and unsecured term loan contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for increased interest rates in the event of a decline in the credit rating assigned to our senior unsecured notes.
The changes in the GAAP and cash mark-to-market rent on the 498,000 square feet of second generation space were positive 9.0% and positive 5.4%, respectively.
The changes in the GAAP and cash mark-to-market rent on the 4,000 square feet of second generation space were positive 12.8% and positive 2.4%, respectively.
Tenant improvements and leasing commissions were $7.15 per square foot per annum, or 7.4% of initial rent. 38 Square footage (in service) and Occupancy as of December 31, 2022 (Square feet in thousands) Square Feet (in service) Number of properties Total Portfolio Our Share Occupancy % New York: Office 30 (1) 18,724 16,028 91.9 % Retail (includes retail properties that are in the base of our office properties) 56 (1) 2,289 1,851 74.4 % Residential - 1,976 units (2) 6 (1) 1,499 766 96.7 % (2) Alexander's 6 2,241 726 96.4 % (2) 24,753 19,371 90.4 % Other: theMART 4 3,635 3,626 81.6 % 555 California Street 3 1,819 1,273 94.7 % Other 11 2,532 1,197 92.6 % 7,986 6,096 Total square feet at December 31, 2022 32,739 25,467 ________________________________________ See notes below.
Square footage (in service) and Occupancy as of December 31, 2022 (Square feet in thousands) Square Feet (in service) Number of properties Total Portfolio Our Share Occupancy % New York: Office 30 (1) 18,724 16,028 91.9 % Retail (includes retail properties that are in the base of our office properties) 56 (1) 2,289 1,851 74.4 % Residential - 1,976 units (2) 6 (1) 1,499 766 96.7 % (2) Alexander's 6 2,241 726 96.4 % (2) 24,753 19,371 90.4 % Other: THE MART 4 3,635 3,626 81.6 % 555 California Street 3 1,819 1,273 94.7 % Other 11 2,532 1,197 92.6 % 7,986 6,096 Total square feet as of December 31, 2022 32,739 25,467 ________________________________________ (1) Reflects the Office, Retail and Residential space within our 65 and 71 total New York properties as of December 31, 2023 and 2022, respectively.
The years ended December 31, 2022 and 2021 include certain items that impact FFO, which are listed in the table on the following page.
The years ended December 31, 2023 and 2022 include certain items that impact FFO, which are listed in the table below.
Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments.
Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments.
(Amounts in thousands) For the Year Ended December 31, 2022 2021 Previously recorded unrealized loss on exited investments $ 59,396 $ — Realized (loss) income on exited investments (54,255) 1,364 Net unrealized (loss) income on held investments (7,730) 3,257 Net investment income 6,130 6,445 Income from real estate fund investments 3,541 11,066 Less income attributable to noncontrolling interests in consolidated subsidiaries (1,870) (7,309) Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries $ 1,671 $ 3,757 Interest and Other Investment Income, net The following table sets forth the details of interest and other investment income, net.
(Amounts in thousands) For the Year Ended December 31, 2023 2022 Previously recorded unrealized loss on exited investments $ 247,575 $ 59,396 Net realized loss on exited investments (245,714) (54,255) Net investment (loss) income (271) 6,130 Net unrealized loss on held investments — (7,730) Income from real estate fund investments 1,590 3,541 Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries 12,789 (1,870) Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries $ 14,379 $ 1,671 Interest and Other Investment Income, net The following table sets forth the details of interest and other investment income, net.
Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB- (our current ratings).
Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for increased interest rates in the event of a decline in the credit rating assigned to our senior unsecured notes.
NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments.
NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments.
Our business has been, and may continue to be, affected by the increase in interest rates and inflation and the continuing effect of the COVID-19 pandemic and other uncertainties including the potential for an economic downturn.
Our business has been, and may continue to be, affected by increased interest rates, the effects of inflation and other uncertainties including the potential for an economic downturn.
(Amounts in thousands) For the Year Ended December 31, 2022 2021 Interest on cash and cash equivalents and restricted cash $ 7,553 $ 284 Amortization of discount on investments in U.S.
(Amounts in thousands) For the Year Ended December 31, 2023 2022 Interest on cash and cash equivalents and restricted cash $ 44,786 $ 7,553 Credit losses on investments (8,269) — Amortization of discount on investments in U.S.
The changes in the GAAP and cash mark-to-market rent on the 42,000 square feet of second generation space were negative 38.3% and negative 34.2%, respectively.
The changes in the GAAP and cash mark-to-market rent on the 1,476,000 square feet of second generation space were positive 6.2% and negative 2.0%, respectively.
As of December 31, 2022, the estimated fair value of our consolidated debt was $8,093,000,000. 56
As of December 31, 2023, the estimated fair value of our consolidated debt was $8,013,000,000. 57
NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of certain real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries.
NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of certain real estate assets, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries.
For the year ended December 31, 2022, net cash provided by operating activities of $798,944,000 was comprised of $711,610,000 of cash from operations, including distributions of income from partially owned entities of $184,501,000 and return of capital from real estate fund investments of $5,141,000, and a net increase of $87,334,000 in cash due to the timing of cash receipts and payments related to changes in operating assets and liabilities. 49 Liquidity and Capital Resources - continued Summary of Cash Flows - continued Investing Activities Net cash flow used in investing activities is impacted by the timing and extent of our development, capital improvement, acquisition and disposition activities during the year.
For the year ended December 31, 2023, net cash provided by operating activities of $648,152,000 was comprised of $673,731,000 of cash from operations, including distributions of income from partially owned entities of $172,873,000 and return of capital from real estate fund investments of $1,861,000, and a net decrease of $25,579,000 in cash due to the timing of cash receipts and payments related to changes in operating assets and liabilities. 50 Liquidity and Capital Resources - continued Summary of Cash Flows - continued Investing Activities Net cash flow used in investing activities is impacted by the timing and extent of our development, capital improvement, acquisition and disposition activities during the year.
Tenant improvements and leasing commissions were $10.48 per square foot per annum, or 20.0% of initial rent. • 210,000 square feet at 555 California Street (147,000 square feet at share) at an initial rent of $96.40 per square foot and a weighted average lease term of 5.9 years.
Tenant improvements and leasing commissions were $11.44 per square foot per annum, or 21.6% of initial rent. • 10,000 square feet at 555 California Street (7,000 square feet at share) at an initial rent of $134.70 per square foot and a weighted average lease term of 5.9 years.
The following table details the net cash used in investing activities: (Amounts in thousands) For the Year Ended December 31, (Decrease) Increase in Cash Flow 2022 2021 Purchase of U.S. Treasury bills $ (1,066,096) $ — $ (1,066,096) Development costs and construction in progress (737,999) (585,940) (152,059) Proceeds from maturities of U.S.
The following table details the net cash used in investing activities: (Amounts in thousands) For the Year Ended December 31, Increase (Decrease) in Cash Flow 2023 2022 Development costs and construction in progress $ (552,701) $ (737,999) $ 185,298 Proceeds from maturities of U.S.
The changes in the GAAP and cash mark-to-market rent on the 135,000 square feet of second generation space were positive 24.3% and positive 13.6%, respectively.
The changes in the GAAP and cash mark-to-market rent on the 131,000 square feet of second generation space were positive 20.7% and positive 18.8%, respectively.
Below is a table comparing Vornado’s performance to the FTSE NAREIT Office Index (“Office REIT”) and the MSCI US REIT Index (“MSCI”) for the following periods ended December 31, 2022: Total Return (1) Vornado Office REIT MSCI Three-month (8.1 %) (1.5 %) 5.2 % One-year (46.7 %) (37.6 %) (24.5 %) Three-year (62.7 %) (37.9 %) (0.2 %) Five-year (64.7 %) (30.3 %) 19.9 % Ten-year (45.6 %) 10.7 % 87.3 % ________________________________________ (1) Past performance is not necessarily indicative of future performance.
Below is a table comparing Vornado’s performance to the FTSE NAREIT Office Index (“Office REIT”) and the MSCI US REIT Index (“MSCI”) for the following periods ended December 31, 2023: Total Return (1) Vornado Office REIT MSCI Three-month 25.8 % 23.5 % 16.0 % One-year 39.2 % 2.0 % 13.7 % Three-year (12.7 %) (22.3 %) 22.8 % Five-year (40.3 %) (16.8 %) 42.9 % Ten-year (33.9 %) 7.0 % 108.0 % ________________________________________ (1) Past performance is not necessarily indicative of future performance.
Tenant improvements and leasing commissions were $11.84 per square foot per annum, or 14.0% of initial rent. • 111,000 square feet of New York Retail space (100,000 square feet at share) at an initial rent of $266.25 per square foot and a weighted average lease term of 11.6 years.
Tenant improvements and leasing commissions were $7.44 per square foot per annum, or 7.5% of initial rent. • 299,000 square feet of New York Retail space (239,000 square feet at share) at an initial rent of $118.47 per square foot and a weighted average lease term of 6.5 years.
Expenses Our expenses were $1,534,249,000 for the year ended December 31, 2022 compared to $1,367,869,000 in the prior year, an increase of $166,380,000.
Expenses Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an increase of $30,918,000.
As of December 31, 2022, we have $3.4 billion of liquidity comprised of $1.0 billion of cash and cash equivalents and restricted cash, $472 million of investments in U.S. Treasury bills and $1.9 billion available on our $2.5 billion revolving credit facilities.
As of December 31, 2023, we have $3.2 billion of liquidity comprised of $1.3 billion of cash and cash equivalents and restricted cash and $1.9 billion available on our $2.5 billion revolving credit facilities.
Tenant improvements and leasing commissions were $22.68 per square foot per annum, or 8.5% of initial rent. • 299,000 square feet at theMART (all at share) at an initial rent of $52.40 per square foot and a weighted average lease term of 7.2 years.
Tenant improvements and leasing commissions were $21.90 per square foot per annum, or 18.5% of initial rent. • 337,000 square feet at THE MART (332,000 square feet at share) at an initial rent of $52.97 per square foot and a weighted average lease term of 7.2 years.
(2) Estimated interest for variable rate debt based on the 1-month LIBOR or Term SOFR curve available as of December 31, 2022. 51 Liquidity and Capital Resources - continued Capital Expenditures Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances and leasing commissions.
(2) Estimated interest for variable rate debt based on the Term SOFR curve available as of December 31, 2023. 52 Liquidity and Capital Resources - continued Capital Expenditures Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances and leasing commissions. During 2024, we expect to incur $250,000,000 of capital expenditures for our consolidated properties.
Treasury bills 7,075 — Interest on loans receivable 5,006 2,517 Other, net 235 1,811 $ 19,869 $ 4,612 45 Results of Operations – Year Ended December 31, 2022 Compared to December 31, 2021 - continued Interest and Debt Expense Interest and debt expense was $279,765,000 for the year ended December 31, 2022, compared to $231,096,000 in the prior year, an increase of $48,669,000.
Treasury bills 3,829 7,075 Interest on loans receivable 1,351 5,006 Other, net — 235 $ 41,697 $ 19,869 47 Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued Interest and Debt Expense Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year, an increase of $69,458,000.
(4) Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments. Income from Real Estate Fund Investments Below is a summary of income from the Vornado Capital Partners Real Estate Fund (“the Fund”) and the Crowne Plaza Times Square Hotel Joint Venture.
Income from Real Estate Fund Investments Below is a summary of income from the Vornado Capital Partners Real Estate Fund (“the Fund”) and the Crowne Plaza Times Square Hotel Joint Venture.
(Amounts in thousands) For the Year Ended December 31, 2022 2021 Net (loss) income $ (382,612) $ 207,553 Depreciation and amortization expense 504,502 412,347 General and administrative expense 133,731 134,545 Impairment losses, transaction related costs and other 31,722 13,815 Loss (income) from partially owned entities 461,351 (130,517) Income from real estate fund investments (3,541) (11,066) Interest and other investment income, net (19,869) (4,612) Interest and debt expense 279,765 231,096 Net gains on disposition of wholly owned and partially owned assets (100,625) (50,770) Income tax expense (benefit) 21,660 (10,496) NOI from partially owned entities 305,993 310,858 NOI attributable to noncontrolling interests in consolidated subsidiaries (70,029) (69,385) NOI at share 1,162,048 1,033,368 Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (10,980) 1,318 NOI at share - cash basis $ 1,151,068 $ 1,034,686 NOI At Share by Region For the Year Ended December 31, 2022 2021 Region: New York City metropolitan area 86 % 88 % Chicago, IL 8 % 6 % San Francisco, CA 6 % 6 % 100 % 100 % 43 Results of Operations – Year Ended December 31, 2022 Compared to December 31, 2021 Revenues Our revenues were $1,799,995,000 for the year ended December 31, 2022 compared to $1,589,210,000 in the prior year, an increase of $210,785,000.
(Amounts in thousands) For the Year Ended December 31, 2023 2022 Net income (loss) $ 32,888 $ (382,612) Depreciation and amortization expense 434,273 504,502 General and administrative expense 162,883 133,731 Impairment losses, transaction related costs and other 50,691 31,722 (Income) loss from partially owned entities (38,689) 461,351 Income from real estate fund investments (1,590) (3,541) Interest and other investment income, net (41,697) (19,869) Interest and debt expense 349,223 279,765 Net gains on disposition of wholly owned and partially owned assets (71,199) (100,625) Income tax expense 29,222 21,660 NOI from partially owned entities 285,761 305,993 NOI attributable to noncontrolling interests in consolidated subsidiaries (48,553) (70,029) NOI at share 1,143,213 1,162,048 Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other (3,377) (10,980) NOI at share - cash basis $ 1,139,836 $ 1,151,068 NOI At Share by Region (1) For the Year Ended December 31, 2023 2022 Region: New York metropolitan area 88 % 86 % Chicago, IL 6 % 8 % San Francisco, CA (1) 6 % 6 % 100 % 100 % ________________________________________ (1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses. 45 Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 Revenues Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an increase of $11,168,000.
The forward cap has a SOFR strike rate of 3.89% and expires in March 2024. (4) Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $850,710 at our pro rata share. The interest rate cap arrangements have a weighted average strike rate of 4.11% and a weighted average remaining term of ten months.
(4) Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $667,946 at our pro rata share. The interest rate cap arrangements have a weighted average strike rate of 4.59% and a weighted average remaining term of 5 months.
Our exposure to a change in interest rates on our consolidated and non-consolidated debt (all of which arises out of non-trading activity) is as follows: (Amounts in thousands, except per share and unit amounts) 2022 December 31, Balance Weighted Average Interest Rate (1) Effect of 1% Change In Base Rates Consolidated debt: Fixed rate (2) $ 6,145,000 3.59% $ — Variable rate (3) 2,307,615 5.67% 23,076 $ 8,452,615 4.16% 23,076 Pro rata share of debt of non-consolidated entities: Fixed rate (2) $ 1,447,457 3.72% $ — Variable rate (4) 1,249,769 6.19% 12,498 $ 2,697,226 4.87% 12,498 Noncontrolling interests’ share of consolidated subsidiaries (6,821) Total change in annual net income attributable to the Operating Partnership 28,753 Noncontrolling interests’ share of the Operating Partnership (1,995) Total change in annual net income attributable to Vornado $ 26,758 Total change in annual net income attributable to the Operating Partnership per diluted Class A unit $ 0.14 Total change in annual net income attributable to Vornado per diluted share $ 0.14 _______________________________________ (1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for hedging instruments, as applicable.
Our exposure to a change in interest rates on our consolidated and non-consolidated debt (all of which arises out of non-trading activity) is as follows: (Amounts in thousands, except per share and unit amounts) 2023 December 31, Balance Weighted Average Interest Rate (1) Effect of 1% Change In Base Rates Consolidated debt: Fixed rate (2) $ 6,993,200 3.50% $ — Variable rate (3) 1,311,415 6.26% 13,114 $ 8,304,615 3.94% 13,114 Pro rata share of debt of non-consolidated entities: Fixed rate (2) $ 1,201,092 3.87% — Variable rate (4) 1,453,609 6.62% 14,536 $ 2,654,701 5.38% 14,536 Noncontrolling interests’ share of consolidated subsidiaries (3,971) Total change in annual net income attributable to the Operating Partnership 23,679 Noncontrolling interests’ share of the Operating Partnership (1,939) Total change in annual net income attributable to Vornado $ 21,740 Total change in annual net income attributable to the Operating Partnership per diluted Class A unit $ 0.11 Total change in annual net income attributable to Vornado per diluted common share $ 0.11 _______________________________________ (1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for hedging instruments, as applicable.
There can be no assurance that the above projects will be completed, completed on schedule or within budget. Other Obligations We have contractual cash obligations for certain properties that are subject to long-term ground and building leases. During 2023, $46,847,000 of lease payments are due, including fair market rent resets accounted for as variable rent.
There can be no assurance that the above projects will be completed, completed on schedule or within budget. 53 Liquidity and Capital Resources - continued Other Obligations We have contractual cash obligations for certain properties that are subject to long-term ground and building leases.
(3) Primarily due to an increase in impairment losses on wholly owned street retail assets ($19,098 in 2022 and $7,880 in 2021). 44 Results of Operations – Year Ended December 31, 2022 Compared to December 31, 2021 - continued (Loss) Income from Partially Owned Entities Below are the components of (loss) income from partially owned entities.
(4) Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022). 46 Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued Income (Loss) from Partially Owned Entities Below are the components of income (loss) from partially owned entities.
We believe that our operating cash flow will be adequate to fund these lease payments. 52 Liquidity and Capital Resources - continued Insurance For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $250,000,000 includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage.
Insurance For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $275,000,000, increased from $250,000,000 effective June 20, 2023, includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage.
Our cash flow activities are summarized as follows: (Amounts in thousands) For the Year Ended December 31, Increase (Decrease) in Cash Flow 2022 2021 Net cash provided by operating activities $ 798,944 $ 761,806 $ 37,138 Net cash used in investing activities (906,864) (532,347) (374,517) Net cash used in financing activities (801,274) (29,477) (771,797) Operating Activities Net cash provided by operating activities primarily consists of cash inflows from rental revenues and operating distributions from our non-consolidated partially owned entities less cash outflows for property expenses, general and administrative expenses and interest expense.
Our cash flow activities are summarized as follows: (Amounts in thousands) For the Year Ended December 31, (Decrease) Increase in Cash Flow 2023 2022 Net cash provided by operating activities $ 648,152 $ 798,944 $ (150,792) Net cash used in investing activities (128,788) (906,864) 778,076 Net cash used in financing activities (278,937) (801,274) 522,337 $ 240,427 $ (909,194) $ 1,149,621 Operating Activities Net cash provided by operating activities primarily consists of cash inflows from rental revenues and operating distributions from our unconsolidated partially owned entities less cash outflows for property expenses, general and administrative expenses and interest expense.
Net Loss (Income) Attributable to Noncontrolling Interests in Consolidated Subsidiaries Net loss attributable to noncontrolling interests in consolidated subsidiaries was $5,737,000 for the year ended December 31, 2022, compared to net income of $24,014,000 in the prior year, a decrease in income of $29,751,000.
Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31, 2023, compared to $5,737,000 in the prior year, an increase of $70,230,000.
Development and Redevelopment Expenditures Development and redevelopment expenditures consist of all hard and soft costs associated with the development and redevelopment of a property. We plan to fund these development and redevelopment expenditures from operating cash flow, existing liquidity, and/or borrowings. See detailed discussion below for our current development and redevelopment projects.
We plan to fund these capital expenditures from operating cash flow, existing liquidity, and/or borrowings. Our partially owned non-consolidated subsidiaries typically fund their capital expenditures without any additional equity contribution from us. Development and Redevelopment Projects and Opportunities Development and redevelopment expenditures consist of all hard and soft costs associated with the development and redevelopment of a property.
(Amounts in thousands) As of December 31, 2022 As of December 31, 2021 Consolidated debt: Balance Weighted Average Interest Rate (1) Balance Weighted Average Interest Rate (1) Fixed rate $ 6,145,000 3.59% $ 4,140,000 3.06% Variable rate 2,307,615 5.67% 4,534,215 1.59% Total 8,452,615 4.16% 8,674,215 2.29% Deferred financing costs, net and other (63,572) (58,268) Total, net $ 8,389,043 $ 8,615,947 _______________________________________ (1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for hedging instruments, as applicable.
(Amounts in thousands) As of December 31, 2023 Consolidated debt: Balance Weighted Average Interest Rate (1) Fixed rate (2) $ 6,993,200 3.50% Variable rate (3) 1,311,415 6.26% Total 8,304,615 3.94% Deferred financing costs, net and other (53,163) Total, net $ 8,251,452 _______________________________________ (1) Represents the interest rate in effect as of period end based on the appropriate reference rate as of the contractual reset date plus contractual spread, adjusted for hedging instruments, as applicable.
(Amounts in thousands) For the Year Ended December 31, 2022 Total New York Other Total revenues $ 1,799,995 $ 1,449,442 $ 350,553 Operating expenses (873,911) (716,148) (157,763) NOI - consolidated 926,084 733,294 192,790 Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (70,029) (45,566) (24,463) Add: NOI from partially owned entities 305,993 293,780 12,213 NOI at share 1,162,048 981,508 180,540 Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (10,980) (18,509) 7,529 NOI at share - cash basis $ 1,151,068 $ 962,999 $ 188,069 (Amounts in thousands) For the Year Ended December 31, 2021 Total New York Other Total revenues $ 1,589,210 $ 1,257,599 $ 331,611 Operating expenses (797,315) (626,386) (170,929) NOI - consolidated 791,895 631,213 160,682 Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (69,385) (38,980) (30,405) Add: NOI from partially owned entities 310,858 300,721 10,137 NOI at share 1,033,368 892,954 140,414 Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other 1,318 (1,188) 2,506 NOI at share - cash basis $ 1,034,686 $ 891,766 $ 142,920 41 NOI At Share by Segment for the Years Ended December 31, 2022 and 2021 - continued The elements of our New York and Other NOI at share for the years ended December 31, 2022 and 2021 are summarized below.
(Amounts in thousands) For the Year Ended December 31, 2023 Total New York Other Total revenues $ 1,811,163 $ 1,452,158 $ 359,005 Operating expenses (905,158) (733,478) (171,680) NOI - consolidated 906,005 718,680 187,325 Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (48,553) (15,547) (33,006) Add: NOI from partially owned entities 285,761 274,436 11,325 NOI at share 1,143,213 977,569 165,644 Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (3,377) (7,700) 4,323 NOI at share - cash basis $ 1,139,836 $ 969,869 $ 169,967 (Amounts in thousands) For the Year Ended December 31, 2022 Total New York Other Total revenues $ 1,799,995 $ 1,449,442 $ 350,553 Operating expenses (873,911) (716,148) (157,763) NOI - consolidated 926,084 733,294 192,790 Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (70,029) (45,566) (24,463) Add: NOI from partially owned entities 305,993 293,780 12,213 NOI at share 1,162,048 981,508 180,540 Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (10,980) (18,509) 7,529 NOI at share - cash basis $ 1,151,068 $ 962,999 $ 188,069 43 NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
(Amounts in thousands, except per share amounts) For the Year Ended December 31, 2022 2021 Reconciliation of net (loss) income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions: Net (loss) income attributable to common shareholders $ (408,615) $ 101,086 Per diluted share $ (2.13) $ 0.53 FFO adjustments: Depreciation and amortization of real property $ 456,920 $ 373,792 Real estate impairment losses 19,098 7,880 Net gains on sale of real estate (58,751) — Proportionate share of adjustments to equity in net (loss) income of partially owned entities to arrive at FFO: Depreciation and amortization of real property 130,647 139,247 Net gains on sale of real estate (169) (15,675) Increase in fair value of marketable securities — (1,155) Real estate impairment losses 576,390 — 1,124,135 504,089 Noncontrolling interests' share of above adjustments (77,912) (34,144) FFO adjustments, net $ 1,046,223 $ 469,945 FFO attributable to common shareholders $ 637,608 $ 571,031 Convertible preferred share dividends 1,320 43 FFO attributable to common shareholders plus assumed conversions $ 638,928 $ 571,074 Per diluted share $ 3.30 $ 2.97 Reconciliation of weighted average shares outstanding: Weighted average common shares outstanding 191,775 191,551 Effect of dilutive securities: Convertible securities (1) 1,545 26 Share-based payment awards 250 571 Denominator for FFO per diluted share 193,570 192,148 ________________________________________ (1) On January 1, 2022, we adopted Accounting Standards Update 2020-06, which requires us to include our Series D-13 cumulative redeemable preferred units and Series G-1 through G-4 convertible preferred units in our dilutive earnings per share calculations, if the effect is dilutive. 55 ITEM 7A.
(Amounts in thousands, except per share amounts) For the Year Ended December 31, 2023 2022 Reconciliation of net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions: Net income (loss) attributable to common shareholders $ 43,378 $ (408,615) Per diluted share $ 0.23 $ (2.13) FFO adjustments: Depreciation and amortization of real property $ 385,608 $ 456,920 Real estate impairment losses 22,831 (1) 19,098 Net gains on sale of real estate (53,305) (58,751) Proportionate share of adjustments to equity in net income (loss) of partially owned entities to arrive at FFO: Depreciation and amortization of real property 108,088 130,647 Net gain on sale of real estate (16,545) (169) Real estate impairment losses 50,458 (2) 576,390 497,135 1,124,135 Noncontrolling interests' share of above adjustments (38,363) (77,912) FFO adjustments, net $ 458,772 $ 1,046,223 FFO attributable to common shareholders $ 502,150 $ 637,608 Convertible preferred share dividends 1,642 1,320 FFO attributable to common shareholders plus assumed conversions $ 503,792 $ 638,928 Per diluted share $ 2.59 $ 3.30 Reconciliation of weighted average shares outstanding: Weighted average common shares outstanding 191,005 191,775 Effect of dilutive securities: Convertible securities 2,468 1,545 Share-based payment awards 851 250 Denominator for FFO per diluted share 194,324 193,570 _______________________________________ (1) Net of $22,176 attributable to noncontrolling interests.
Year Ended December 31, 2022 compared to December 31, 2021: Total New York theMART (1) 555 California Street Same store NOI at share % increase 7.1 % 3.5 % 64.2 % 2.7 % Same store NOI at share - cash basis % increase 9.0 % 5.0 % 58.0 % 13.3 % ________________________________________ (1) Increase primarily due to (i) prior period accrual adjustments recorded in 2022 related to changes in the tax-assessed value and property tax rate of theMART and (ii) an increase in tradeshow activity in 2022 compared to 2021.
Year Ended December 31, 2023 compared to December 31, 2022: Total New York THE MART (1) 555 California Street (2) Same store NOI at share % increase (decrease) 0.4 % 2.2 % (34.8) % 26.3 % Same store NOI at share - cash basis % increase (decrease) 0.6 % 2.8 % (37.2) % 26.6 % ________________________________________ (1) 2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(Amounts in thousands) For the Year Ended December 31, 2022 2021 New York: Office $ 718,686 $ 677,167 Retail 205,753 173,363 Residential 19,600 17,783 Alexander's 37,469 37,318 Hotel Pennsylvania (1) — (12,677) Total New York 981,508 892,954 Other: theMART (2) 96,906 58,909 555 California Street 65,692 64,826 Other investments 17,942 16,679 Total Other 180,540 140,414 NOI at share $ 1,162,048 $ 1,033,368 ________________________________________ See notes below.
(Amounts in thousands) For the Year Ended December 31, 2023 2022 New York: Office $ 727,000 $ 718,686 Retail 188,561 205,753 Residential 21,910 19,600 Alexander's 40,098 37,469 Total New York 977,569 981,508 Other: THE MART (1) 61,519 96,906 555 California Street (2) 82,965 65,692 Other investments 21,160 17,942 Total Other 165,644 180,540 NOI at share $ 1,143,213 $ 1,162,048 ________________________________________ See notes below.
(Amounts in thousands) Percentage Ownership at December 31, 2022 For the Year Ended December 31, 2022 2021 Our share of net (loss) income: Fifth Avenue and Times Square JV: Non-cash impairment loss (1) 51.5% $ (489,859) $ — Equity in net income 55,248 47,144 Return on preferred equity, net of our share of the expense 37,416 37,416 (397,195) 84,560 Partially owned office buildings (2) Various (110,261) 6,384 Alexander's (3) 32.4% 22,973 40,121 Other investments (4) Various 23,132 (548) $ (461,351) $ 130,517 ________________________________________ (1) See Note 5 - Investments in Partially Owned Entities to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
(Amounts in thousands) Percentage Ownership as of December 31, 2023 For the Year Ended December 31, 2023 2022 Our share of net income (loss): Fifth Avenue and Times Square JV: Equity in net income (1) 51.5% $ 35,209 $ 55,248 Return on preferred equity, net of our share of the expense 37,416 37,416 Non-cash impairment loss — (489,859) 72,625 (397,195) Partially owned office buildings (2)(3) Various (73,589) (110,261) Alexander's Inc.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have exposure to fluctuations in market interest rates. Market interest rates are sensitive to many factors that are beyond our control.
(2) Includes a $21,114 impairment loss on advances made for our interest in a joint venture, resulting from a decline in the value of the underlying building. 56 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have exposure to fluctuations in market interest rates. Market interest rates are sensitive to many factors that are beyond our control.
Calculations of same store NOI at share, reconciliations of our net (loss) income to NOI at share, NOI at share - cash basis and FFO and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s Discussion and Analysis of Financial Condition and Results of Operations. 36 Dispositions 220 CPS During the year ended December 31, 2022, we closed on the sale of three condominium units and ancillary amenities at 220 CPS for net proceeds of $88,019,000 resulting in a financial statement net gain of $41,874,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.
Calculations of same store NOI at share, reconciliations of our net income (loss) to NOI at share, NOI at share - cash basis and FFO and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This dividend, if declared by the Board of Trustees for all of 2023, would require the Operating Partnership to distribute (i) approximately $288,000,000 of cash to Vornado for distribution to its common shareholders and (ii) $22,000,000 of cash to third party Class A unitholders. Additionally, during 2023, Vornado expects to pay approximately $62,000,000 of cash dividends on outstanding preferred shares.
If Vornado’s Board of Trustees were to declare a dividend consistent with our aggregate 2023 common dividend of $0.675, the Operating Partnership would be required to distribute (i) approximately $129,000,000 of cash to Vornado for distribution to its common shareholders and (ii) $11,475,000 of cash to third party Class A unitholders.
The following table details the net cash used in financing activities: (Amounts in thousands) For the Year Ended December 31, Increase (Decrease) in Cash Flow 2022 2021 Repayments of borrowings $ (1,251,373) $ (1,584,243) $ 332,870 Proceeds from borrowings 1,029,773 3,248,007 (2,218,234) Dividends paid on common shares/Distributions to Vornado (406,562) (406,109) (453) Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries (84,699) (190,876) 106,177 Dividends paid on preferred shares/Distributions to preferred unitholders (62,116) (65,880) 3,764 Debt issuance costs (32,706) (51,184) 18,478 Contributions from noncontrolling interests in consolidated subsidiaries 5,609 4,052 1,557 Proceeds received from exercise of Vornado stock options and other 885 899 (14) Repurchase of shares/Class A units related to stock compensation agreements and related tax withholdings and other (85) (1,567) 1,482 Purchase of marketable securities in connection with defeasance of mortgage payable — (973,729) 973,729 Redemption of preferred shares/units — (300,000) 300,000 Proceeds from the issuance of preferred shares/units — 291,153 (291,153) Net cash used in financing activities $ (801,274) $ (29,477) $ (771,797) 50 Liquidity and Capital Resources - continued Dividends On January 18, 2023, Vornado declared a quarterly common dividend of $0.375 per share (an indicated annual rate of $1.50 per common share).
The following table details the net cash used in financing activities: (Amounts in thousands) For the Year Ended December 31, Increase (Decrease) in Cash Flow 2023 2022 Repayments of borrowings $ (148,000) $ (1,251,373) $ 1,103,373 Contributions from noncontrolling interests in consolidated subsidiaries 132,701 5,609 127,092 Dividends paid on common shares/Distributions to Vornado (129,066) (406,562) 277,496 Dividends paid on preferred shares/Distributions to preferred unitholders (62,116) (62,116) — Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries (38,970) (84,699) 45,729 Repurchase of common shares/Class A units owned by Vornado (29,183) — (29,183) Deferred financing costs (4,424) (32,706) 28,282 Proceeds received from exercise of Vornado stock options and other 146 885 (739) Repurchase of shares/Class A units related to stock compensation agreements and related tax withholdings and other (25) (85) 60 Proceeds from borrowings — 1,029,773 (1,029,773) Net cash used in financing activities $ (278,937) $ (801,274) $ 522,337 51 Liquidity and Capital Resources - continued Dividends We anticipate that our common share dividend policy for 2024 will be to pay one common share dividend in the fourth quarter.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+4 added−3 removed1 unchanged
Biggest change(Amounts in thousands) Fair Value Asset (Liability) as of December 31, December 31, 2022 2022 2021 Notional Amount All-In Swapped Rate Swap Expiration Date Interest Rate Swaps: 555 California Street mortgage loan $ 49,888 $ 11,814 $ 840,000 (1) 2.26% 05/24 770 Broadway mortgage loan 29,226 — 700,000 4.98% 07/27 PENN 11 mortgage loan 26,587 6,565 500,000 2.22% 03/24 Unsecured revolving credit facility 24,457 — 575,000 3.88% 08/27 Unsecured term loan 14,694 (28,976) 800,000 4.05% (2) 100 West 33rd Street mortgage loan 6,886 — 480,000 5.06% 06/27 888 Seventh Avenue mortgage loan 6,544 — 200,000 (3) 4.76% 09/27 Unsecured term loan (effective October 2023) 6,330 — 500,000 4.39% 10/26 4 Union Square South mortgage loan 4,050 (3,861) 100,000 (4) 3.74% 01/25 Interest Rate Caps: 1290 Avenue of the Americas mortgage loan 7,590 411 950,000 (5) 11/23 One Park Avenue mortgage loan 5,472 — 525,000 (6) 03/24 Various mortgage loans 2,080 139 Included in other assets $ 183,804 $ 18,929 Included in other liabilities $ — $ 32,837 ________________________________________ (1) Represents our 70.0% share of the $1.2 billion mortgage loan.
Biggest change(Amounts in thousands) Debt Balance Variable Rate Spread Notional Amount All-In Swapped Rate Expiration Date Interest rate swaps: 555 California Street mortgage loan $ 1,200,000 S+205 $ 840,000 (1) 2.29% 05/24 Effective beginning 5/24 840,000 (1) 6.03% 05/26 770 Broadway mortgage loan 700,000 S+225 700,000 4.98% 07/27 PENN 11 mortgage loan 500,000 S+206 500,000 2.22% 03/24 Effective beginning 3/24 (2) 250,000 6.34% 10/25 Unsecured revolving credit facility 575,000 S+114 575,000 3.87% 08/27 Unsecured term loan 800,000 S+129 Through 07/25 700,000 4.52% 07/25 07/25 through 10/26 550,000 4.35% 10/26 10/26 through 08/27 50,000 4.03% 08/27 100 West 33rd Street mortgage loan 480,000 S+165 480,000 5.06% 06/27 888 Seventh Avenue mortgage loan 259,800 S+180 200,000 4.76% 09/27 4 Union Square South mortgage loan 120,000 S+150 98,200 3.74% 01/25 Index Strike Rate Interest rate caps: 1290 Avenue of the Americas mortgage loan (3) 950,000 S+162 950,000 1.00% 11/25 One Park Avenue mortgage loan 525,000 S+122 525,000 3.89% 03/25 Various mortgage loans 510,000 Various 510,000 Various Various ____________________ (1) Represents our 70.0% share of the $1.2 billion mortgage loan.
The following table summarizes our consolidated hedging instruments, all of which hedge variable rate debt, as of December 31, 2022 and 2021.
The following table summarizes our consolidated hedging instruments, all of which hedge variable rate debt, as of December 31, 2023.
Removed
(2) Comprised of a $750,000 interest rate swap arrangement expiring October 2023 and a $50,000 interest rate swap arrangement expiring August 2027. (3) The remaining $77,800 amortizing mortgage loan balance bears interest at a floating rate of SOFR plus 1.80% (5.92% as of December 31, 2022).
Added
(2) In January 2024, we entered into a forward swap arrangement for the remaining $250,000 balance of the $500,000 PENN 11 mortgage loan which is effective upon the March 2024 expiration of the current in-place swap. Together with the forward swap above, the loan will bear interest at an all-in swapped rate of 6.28% effective March 2024 through October 2025.
Removed
(4) Upon the sale of 33-00 Northern Boulevard in June 2022, the $100,000 corporate-level interest rate swap was reallocated and now hedges the interest rate on $100,000 of the 4 Union Square South mortgage loan through January 2025. The remaining $20,000 mortgage loan balance bears interest at a floating rate of SOFR plus 1.50% (5.62% as of December 31, 2022).
Added
(3) In connection with the arrangement, we made a $63,100 up-front payment, of which $18,930 was attributable to noncontrolling interests. See Note 9 - Debt in Part II, Item 8 of this Annual Report on Form 10-K for details.
Removed
(5) LIBOR cap strike rate of 4.00%. (6) SOFR cap strike rate of 4.39%. In December 2022, we entered into a forward cap for the $525,000 One Park Avenue mortgage loan effective upon the March 2023 expiration of the existing cap. The forward cap has a SOFR strike rate of 3.89% and expires in March 2024. 57
Added
The following table summarizes our hedging instruments of our unconsolidated subsidiaries (shown at our pro rata ownership interest) as of December 31, 2023.
Added
(Amounts in thousands and at share) Debt Balance Variable Rate Spread Notional Amount All-In Swapped Rate Expiration Date Interest rate swaps: 731 Lexington Avenue retail condominium (32.4% interest) $ 97,200 S+151 $ 97,200 1.76% 05/25 50-70 West 93rd Street (49.9% interest) 41,667 S+164 41,168 3.14% 06/24 Index Strike Rate Interest rate caps: 640 Fifth Avenue (52.0% interest) 259,925 S+111 259,925 4.00% 05/24 731 Lexington Avenue office condominium (32.4% interest) 162,000 Prime+0 162,000 6.00% 06/24 61 Ninth Avenue (45.1% interest) (1) 75,543 S+146 75,543 4.39% 02/24 512 West 22nd Street (55.0% interest) 70,729 S+200 70,729 4.50% 06/25 Rego Park II (32.4% interest) 65,624 S+145 65,624 4.15% 11/24 Fashion Centre/Washington Tower (7.5% interest) 34,125 S+305 34,125 3.89% 05/24 ____________________ (1) In February 2024, we entered into a 4.39% interest rate cap arrangement expiring January 2026 and effective upon expiration of the currently in-place cap. 58

Other VNO 10-K year-over-year comparisons