Vornado’s Adjusted FFO Rebounds as Leasing Turns Positive
Second-quarter revenue rose 4.7% to $462.2 million.
Vornado Realty Trust (VNO), the New York-focused office and retail landlord, increased adjusted funds from operations 15.7% to $131.1 million, while adjusted FFO rose to $0.67 a share from $0.56 a year earlier.
The quarter broke a three-period sequential decline. Adjusted FFO rebounded 27.1% from $103.1 million in the first quarter after falling from $114.5 million in the third quarter of 2024 to $110.9 million in the fourth quarter and then again in early 2025.
Net income attributable to common shareholders fell to $16.4 million, or $0.08 a diluted share, from $743.8 million, or $3.70 a share, a year earlier. The comparison reflected an $803.2 million gain in the prior-year quarter from the 770 Broadway master lease with New York University.
Leasing helped drive the adjusted-FFO recovery, with rent commencements net of expirations contributing $13.3 million from a year earlier. Expirations net of commencements had reduced adjusted FFO by $2.1 million in the first quarter. The year-over-year interest-expense drag narrowed to $10.2 million from $15.9 million, while variable businesses contributed $8.0 million, up from $3.4 million.
Total net operating income at Vornado’s share increased 9.5% to $304.1 million and rose 11.7% sequentially. Cash-basis NOI climbed 13.6% from a year earlier to $263.2 million. New York office NOI advanced to $183.4 million from $170.9 million a year earlier, while Street Retail NOI increased to $52.5 million from $44.5 million.
THE MART added to the sequential improvement, with same-store NOI at Vornado’s share rising 71.8% from the first quarter, partly reflecting a reversal of a prior-period property-tax accrual. Performance at 555 California Street remained weaker, where same-store NOI declined 14.3% from a year earlier and cash-basis NOI fell 48.6%. Across the disclosed portfolios, second-generation GAAP lease spreads remained positive, ranging from 7.7% in New York offices to 14.0% at 555 California Street.
Vornado repurchased 1.79 million shares for $53.5 million at an average price of $29.92 during the quarter, slowing from the first quarter’s $79.8 million of purchases. The company had $286.6 million remaining under its expanded authorization as of Aug. 3.