ALX

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Alexander's (ALX) reported second quarter 2026 results with sales of $54.71 million and net income of $155.36 million, alongside a regular $4.50 quarterly dividend declared in late July. These figures give investors fresh data on both profitability and ongoing cash returns, which can be useful when reassessing how Alexander's stock fits within an income focused or total return portfolio. See our latest analysis for Alexander's. The earnings and dividend news has come alongside a 26.51% year to date share price return for Alexander's and a 34.35% 1 year total shareholder return. This suggests that recent momentum has been building rather than fading. If this kind of move has you thinking about where else capital could work, it might be a good moment to broaden your search and check out 19 top founder-led companies For Alexander's, the question now is whether that strong recent return reflects a shift in how the market views its New York focused portfolio, or if sentiment has simply run ahead of what the current numbers support. Alexander's closed at $276.89, and on a P/E of 8.3x it is being valued at a lower earnings multiple than both the broader US market and the US Retail REITs industry. The P/E multiple compares the current share price to earnings per share, so it gives a quick read on how much investors are paying for each dollar of Alexander's earnings. On this measure, Alexander's is trading at a discount to the US market average P/E of 19.4x and also to its Retail REITs peers at 28.6x. It also sits below an estimated fair P/E of 10.1x. That level is a reference point the market could move toward if sentiment and earnings align with it. This combination of a lower current P/E and a higher fair ratio estimate points to a valuation that is cheaper than both peers and that reference fair multiple, based on the information available. Explore the SWS fair ratio for Alexander's Result: Price-to-earnings of 8.3x (UNDERVALUED) However, Alexander's story is not risk free, given that annual net income growth has declined 76.41% and the stock trades above a lower analyst price target. Find out about the key risks to this Alexander's narrative. While the P/E of 8.3x makes Alexander's look inexpensive, our DCF model points the other way. With the stock at $276.89 and the SWS DCF model indicating a future cash flow value of $192.39, DCF suggests Alexander's is overvalued on this measure. Which lens do you trust more for your own process? For investors who like to see how a cash flow based view is built step by step, it can be useful to go straight to the underlying model output: Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Alexander's for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. The mix of strong recent returns and split valuation signals around Alexander's is likely to leave opinions divided, so it can help to review the detailed data yourself and weigh both sides quickly before sentiment shifts again. To see how the positives stack up against the concerns in one place, take a look at the 3 key rewards and 4 important warning signs If you want to build on the work you have done with Alexander's, use this moment to line up a few other quality ideas before the next move. Target potential mispricings by scanning for companies that combine strong fundamentals with attractive valuations through the 52 high quality undervalued stocks Strengthen your income stream by reviewing stocks that pair high yields with resilient payout profiles using the 8 dividend fortresses Reduce portfolio stress by focusing on companies that score well on financial stability through the 83 resilient stocks with low risk scores This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ALX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Comparable FFO: $0.67 per share for Q2 2026, up from $0.56 per share in Q2 2025, an increase of $0.11. New York Office Same-Store NOI: Up 13.7% on a GAAP basis and 11.9% on a cash basis. New York Retail Same-Store NOI: Up 7.3% on a GAAP basis and 5.7% on a cash basis. New York Business Overall Same-Store NOI: Up 11.9% on a GAAP basis and 6.2% on a cash basis. New York Office Occupancy: Increased 60 basis points quarter-over-quarter to 92.2%, up from 84.4% in Q1 2025. Manhattan Office Leasing Volume (Q2): 29 deals totaling 348,000 square feet at an average starting rent of $107 per square foot, with mark-to-markets of positive 7.7% GAAP and positive 5.0% cash. First-Half 2026 Leasing: 978,000 square feet overall; Manhattan office leased 659,000 square feet at $105 per square foot average starting rents, with mark-to-markets of positive 9.5% GAAP and positive 7.1% cash. Liquidity: $2 billion, comprised of $789 million in cash and $1.2 billion in undrawn credit lines. Stock Buyback: Repurchased 1.8 million shares at $29.92 per share in Q2 2026; 8 million shares repurchased at $26.61 per share since 2023. Warning! GuruFocus has detected 12 Warning Signs with ALX. Is ALX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Alexander's Inc (NYSE:ALX) reported a strong second quarter with comparable FFO of $0.67 per share, beating analyst consensus by $0.10 or 17.5%. New York office occupancy increased to 92.2%, up from 84.4% in Q1 2025, reflecting strong leasing momentum and a landlord's market. The company is achieving triple-digit average starting rents in Manhattan, with mark-to-market gains of 9.5% GAAP and 7.1% cash in the first half of 2026. The Penn District transformation is delivering strong returns, with rents at Penn.1 and Penn.2 well above underwriting and a projected 25% return on investment. The company has a robust leasing pipeline of over 2.2 million square feet, including the 1 million square foot Citadel lease at 350 Park Avenue, and expects occupancy to exceed 93% by year-end. Alexander's Inc (NYSE:ALX) maintains a strong balance sheet with $2 billion in liquidity and is actively repurchasing shares at attractive prices, having bought back 8 million shares at an average of $26.61 since 2023. Interest rates are rising, which could increase financing costs and pressure property valuations. The company faces a significant gap between physical occupancy (92.2%) and GAAP economic occupancy (83-84%), indicating a lag in rent commencement. Leasing activity includes a high proportion of short-term retail deals, which may limit long-term revenue stability. The 350 Park Avenue project requires substantial future capital outlays, with incremental equity contributions of approximately $350 million expected to begin in 2029. The company is exposed to potential market downturns, and management acknowledges the cyclicality of the real estate market, which could impact future performance. Asset sales are planned to bolster liquidity, but selling assets at current market values may not capture full future appreciation potential. Q: Can you discuss the gap between leased and economic occupancy today, and how much more runway there is to reach peak occupancy levels?A: Michael Franco (President and CFO) noted that historically, the company ran at 95%-96% physical occupancy. Currently, they are at 92.2% and expect to return to their historical run rate within the next couple of years, potentially sooner given the market's pace. On a GAAP basis, economic occupancy is around 83%-84%, which will close up as signed leases commence. Steven Roth (Chairman and CEO) added that signed-but-not-commenced leases represent roughly $180 million in future revenue, or about $150 million in FFO, which is not yet reflected in earnings. Q: What is the status of the 350 Park Avenue project, and what are the expected incremental capital requirements for Vornado?A: Michael Franco (President and CFO) stated that Vornado will exercise its option to participate at its maximum 36% ownership stake. The company is contributing its land at a $900 million valuation. Incremental capital requirements are estimated at around $350 million, but this will not begin in any significant scale until 2029, as Ken Griffin's equity trues up first and the construction loan funds. The expected joint venture closing will take place in September. Q: How does the high rent required to make new developments like 350 Park Avenue pencil out impact the value of older, well-located buildings like Park Avenue Plaza?A: Steven Roth (Chairman and CEO) explained that the high rents required for new buildings (around $350 per square foot) create an "umbrella" effect that pulls up the value of older buildings with in-place rents at a fraction of that level. Park Avenue Plaza, with rents about a third of the new building rate, is a prime example. This dynamic is why the company is bullish on the appreciation potential of its existing assets, as the scarcity of new supply and high construction costs force rents upward across the market. Q: Can you provide an update on the company's stock buyback program and the rationale for continuing it?A: Steven Roth (Chairman and CEO) reiterated that the stock remains "stupid cheap," citing a 23% NAV discount per Green Street, which is deeper than peers. In Q2 2026, the company repurchased 1.8 million shares at $29.92 per share. Since 2023, Vornado has repurchased 8 million shares at an average of $26.61 per share. Roth emphasized that NAV calculations are static and backward-looking, not giving credit for future growth from projects like 350 Park Avenue, Park Avenue Plaza, or 628 Sixth Avenue, making the stock even more attractive relative to future value. Q: What is the outlook for full-year 2026 FFO and the previously mentioned $0.40 FFO uplift for 2027?A: Michael Franco (President and CFO) confirmed that the company now clearly expects full-year 2026 comparable FFO to be higher than 2025, with Q2 2026 FFO of $0.67 per share being a decent average run rate for the rest of the year. Regarding the $0.40 uplift previously discussed for 2027, Franco noted that some of that growth is now flowing through in 2026, but the expectation for significant growth in 2027 remains intact, and given current dynamics, there is potential for it to exceed the original estimate. Q: Can you provide details on the planned sale of two non-essential assets and the buyer pool for the 350 Park Avenue partial sale?A: Steven Roth (Chairman and CEO) confirmed the company is in conversations to sell two non-essential assets, which would "very substantially increase" liquidity. He clarified that one is a non-core asset and one is a core asset where they are crystallizing private market valuations. For the 350 Park Avenue sell-down of a 25% interest, Roth stated they are targeting high net worth family offices in a club deal structure, with individual investments of $100 million to $200 million, rather than a single institutional buyer. Q: How is the leasing market trending in terms of concessions and tenant improvement (TI) costs?A: Glen Weiss (Executive Vice President - Office Leasing) reported that concessions are coming down, rents are going up, and free rent periods are shortening. TI packages are also tightening, with caps being placed on tenant funds for turnkey spaces. All metrics are trending in the landlord's direction, and the company expects this to continue as the market strengthens. Michael Franco added that TI spending is expected to be fairly consistent year-over-year, with a tail-down expected in 2028 as the major lease-up phase concludes. Q: What is the status of the Pier 94 occupancy drop, and what are the prospects for that asset?A: Glen Weiss (Executive Vice President - Office Leasing) explained that the occupancy drop was due to a couple of vacates at the end of June, but occupancy is already back up into the high 80s by the end of July. The asset is performing well with top-tier users like Google, Netflix, Paramount, and Apple, and the experience has been rated A-plus. Steven Roth added that Pier 94 is analogous to a long-stay hotel, with tenants using it for production facilities, so occupancy will naturally fluctuate, but it remains a unique asset in Manhattan with strong demand. Q: How is the signage business performing, and is there a limit to growth in the Penn District?A: Steven Roth (Chairman and CEO) highlighted that the signage business is capital-light and has been growing at 5% per year. The key differentiator is that Vornado owns the space where the signs are placed, unlike competitors who rent space, resulting in much higher margins. As the company develops new buildings in the Penn District, including the transformation of 7th Avenue and 34th Street, new signage opportunities will emerge. Michael Franco added that both volume and pricing are increasing, with digital signs allowing for revenue management optimization similar to hotel pricing strategies. Q: What is the company's approach to capital allocation between New York and San Francisco, and how does it view the risk-reward in each market?A: Steven Roth (Chairman and CEO) expressed confidence in both markets. In San Francisco, the company owns 555 California, the best building in the city, which is a financial services building For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Alexander's, Inc.? Here are five stocks we like better. Vornado’s comparable FFO rose to $0.67 per share in the second quarter from $0.56 a year earlier, beating consensus by $0.10, driven by PENN District leasing, higher signage revenue and stronger New York office and retail performance. New York office occupancy and leasing improved significantly: occupancy reached 92.2%, while first-half Manhattan office leasing totaled 659,000 square feet with positive mark-to-market gains. Management expects occupancy to exceed 93% by the end of 2026 and PENN 2 to be effectively fully leased by year-end. Management raised its outlook for 2026 and expects further growth in 2027 as signed leases commence and Park Avenue Plaza contributes. Vornado reported $2 billion in liquidity, plans to sell two nonessential assets, and repurchased 1.8 million shares during the quarter. Vornado Realty Trust reported second-quarter comparable funds from operations of $0.67 per share, up from $0.56 a year earlier, as leasing gains at its PENN District properties, signage revenue and New York office and retail performance contributed to growth. Chairman and Chief Executive Officer Steven Roth said the company’s comparable FFO exceeded analyst consensus by $0.10 per share. President and Chief Financial Officer Michael Franco said the year-over-year increase was driven primarily by rent from PENN 2, the absence of a prior-year effect related to New York University’s master lease at 770 Broadway, and higher signage revenue, partly offset by increased net interest expense. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Vornado said its New York office same-store net operating income increased 13.7% under GAAP and 11.9% on a cash basis from the prior-year quarter. New York retail same-store NOI rose 7.3% on a GAAP basis and 5.7% on a cash basis. The company’s New York office occupancy rose 60 basis points sequentially to 92.2%, compared with a trough of 84.4% in the first quarter of 2025. Franco said Vornado expects occupancy to exceed 93% by the end of 2026, with additional gains thereafter. Historically, the company has operated at physical occupancy of roughly 95% to 96%, he said. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? During the first half of 2026, Vornado leased 978,000 square feet overall. Manhattan office leasing totaled 659,000 square feet at average starting rents of $105 per square foot, with positive mark-to-market changes of 9.5% under GAAP and 7.1% on a cash basis. For the second quarter, Vornado completed 29 Manhattan office leases totaling 328,000 square feet, at average starting rents of $107 per square foot. Those leases included 181,000 square feet in the PENN District and 167,000 square feet elsewhere in Manhattan. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Roth said the company has 67,000 square feet of leases out for signature at PENN 2 and expects the property to be effectively fully leased by year-end. At PENN 1, Vornado has 246,000 square feet of leases out for signature, with an average mark-to-market increase of 44%, he said. The company projected third-quarter companywide mark-to-market increases of more than 20%. Franco said signed but not yet commenced leases represent approximately $180 million of revenue and more than $150 million of FFO. He estimated that roughly 60% of that signed-but-not-commenced pipeline is related to PENN 2. Roth described Manhattan’s Class A office market as increasingly landlord-favorable, citing rising leasing activity, shrinking availability and limited supply of large office blocks. He said office leasing volume in Manhattan is at its highest level in 25 years and that vacancy in the 180 million-square-foot Class A market in which Vornado competes has declined to 6.2%. He also said new office development can take as long as five years to deliver and requires rents of roughly $300 per square foot to support construction economics. During the question-and-answer session, Roth said new buildings on Park Avenue may require rents in the mid- to high-$200s per square foot, with anchor tenants sometimes receiving lower rents than subsequent tenants. Executive Vice President and Co-Head of Real Estate and Office Leasing Glen Weiss said Vornado’s office pipeline includes more than 2.2 million square feet in various stages of negotiation and proposal, including Citadel’s planned 1 million-square-foot lease at 350 Park Avenue and more than 500,000 square feet in the PENN District. Weiss said the company is seeing concessions decline, rents rise and tenant-improvement allowances tighten. Vornado said demolition is underway at its 350 Park Avenue site. Roth said the company intends to exercise an option to invest at its maximum 36% ownership level in the planned joint venture with Ken Griffin, who will hold a 60% interest, and Citadel, the project’s 1 million-square-foot anchor tenant. Franco said Vornado’s incremental equity requirements for the project are expected to be approximately $300 million to $350 million over time. He said meaningful equity contributions are not expected for roughly two and a half to three years, with the company’s contribution likely becoming more substantial in 2029 and thereafter. The project has a $3.3 billion construction loan arranged, according to Roth, and the venture closing is expected in September. Management also discussed two recent acquisitions: 623 Fifth Avenue and Park Avenue Plaza. Roth said Vornado is redeveloping 623 Fifth Avenue, a 383,000-square-foot property above Saks Fifth Avenue, into boutique office space and is preparing to execute its first lease there with a financial services firm for two floors at rents consistent with underwriting. For Park Avenue Plaza, where Vornado acquired a half interest with Fisher Brothers, Roth said the transaction valued the 1.2 million-square-foot tower at $950 per square foot. He said in-place leases are at about half of current market rents, which management believes provides potential for future appreciation and earnings growth. Franco said Vornado now expects full-year 2026 comparable FFO to exceed 2025 levels, with the second-quarter result serving as “a decent average run rate” for the rest of the year. He added that management still expects significant earnings growth in 2027 as leases at PENN 1, PENN 2 and other vacant space commence, along with contributions from Park Avenue Plaza. Vornado reported liquidity of $2 billion, including $789 million of cash and $1.2 billion of undrawn credit facilities. Roth said the company is in discussions to sell two nonessential assets, while Franco said one potential sale would be in a non-core category and another would be aimed at crystallizing private-market value. The company repurchased 1.8 million shares during the quarter at an average price of $29.92 per share. Since beginning its repurchase program in 2023, Vornado has bought back 8 million shares at an average price of $26.61 per share. Roth said Vornado plans to maintain liquidity for both investment opportunities and potential market downturns, while continuing to invest in its existing portfolio, acquisitions, development projects and share repurchases. Alexander's (NYSE: ALX) is a publicly traded real estate investment trust focused on owning, leasing and managing commercial properties in the New York metropolitan area. The company's portfolio encompasses office buildings, retail storefronts and parking facilities, all held on a wholly owned basis. By concentrating on prime urban and suburban locations, Alexander's seeks to generate stable rental income and long-term asset appreciation. Founded in 1928 as a family-run department store chain, Alexander's transitioned during the early 1990s into a pure-play real estate company following the sale of its retail operations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Alexander's Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

PARAMUS, N.J., Aug. 03, 2026 (GLOBE NEWSWIRE) -- ALEXANDER’S, INC. (New York Stock Exchange: ALX) filed its Form 10-Q for the quarter ended June 30, 2026 today and reported: Second Quarter 2026 Financial Results Net income for the quarter ended June 30, 2026 was $155.4 million, or $30.24 per diluted share, compared to $6.1 million, or $1.19 per diluted share for the quarter ended June 30, 2025. Net income for the quarter ended June 30, 2026 included $148.0 million, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property. Funds from operations (“FFO”) (non-GAAP) for the quarter ended June 30, 2026 was $15.5 million, or $3.02 per diluted share, compared to $14.8 million, or $2.88 per diluted share for the quarter ended June 30, 2025. Six Months Ended June 30, 2026 Financial Results Net income for the six months ended June 30, 2026 was $160.0 million, or $31.15 per diluted share, compared to $18.4 million, or $3.59 per diluted share for the six months ended June 30, 2025. Net income for the six months ended June 30, 2026 included $148.0 million, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property. FFO (non-GAAP) for the six months ended June 30, 2026 was $28.9 million, or $5.63 per diluted share, compared to $35.6 million, or $6.93 per diluted share for the six months ended June 30, 2025. Alexander’s, Inc. is a real estate investment trust which has four properties in New York City. CONTACT: GARY HANSEN(201) 587-8541 Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see "Risk Factors" in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments, the financial condition of our tenants, and general competitive factors. Below is a table of selected financial results. The following table reconciles net income to FFO (non-GAAP): Below is a table of selected financial results. The following table reconciles net income to FFO (non-GAAP): FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). 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. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. A reconciliation of net income to FFO is provided above.

PARAMUS, N.J., July 21, 2026 (GLOBE NEWSWIRE) -- Alexander’s, Inc. (NYSE: ALX) today announced that it will file its quarterly report on Form 10-Q for the quarter ended June 30, 2026 with the U.S. Securities and Exchange Commission and issue its second quarter earnings release on Monday, August 3, 2026, before the New York Stock Exchange opens. Vornado Realty Trust (NYSE: VNO), the manager which conducts Alexander’s operations, announced it will host its quarterly earnings conference call and an audio webcast on Tuesday, August 4, 2026 at 10:00 a.m. Eastern Time (ET). On the call, information concerning Alexander’s may be discussed. The conference call can be accessed by dialing 888-317-6003 (domestic) or 412-317-6061 (international) and entering the passcode 0217387. A live webcast of the conference call will be available on Vornado’s website at www.vno.com in the Investor Relations section and an online playback of the webcast will be available on the website following the conference call. Alexander’s, Inc. is a real estate investment trust that has four properties in New York City. CONTACT:GARY HANSEN(201) 587-8541 Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. Currently, some of the factors are interest rate fluctuations and the effects of inflation on our business, financial condition, results of operations, cash flows, operating performance and the effect that these factors have had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2025. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Alexander's, Inc. has reported its first-quarter 2026 results, with sales of US$53.41 million and net income of US$4.66 million, both lower than the same period a year earlier. Despite the weaker earnings, the company affirmed a quarterly cash dividend of US$4.50 per share, payable on May 29, 2026, highlighting a continued focus on shareholder distributions. Next, we will examine how the sharp year-over-year drop in earnings per share shapes Alexander's investment narrative for investors. AI is about to change healthcare. These 35 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. To own Alexander's today, you really have to believe in the long-term value of its New York real estate and the reliability of its rent flows, even as reported earnings move around. The sharp drop in first-quarter EPS, on top of softer full-year 2025 results, reinforces that earnings are under pressure right now, while the decision to hold the US$4.50 quarterly dividend steady keeps the spotlight on the balance between income and payout sustainability. In the short term, the key catalysts remain leasing outcomes, refinancing progress after last year’s Rego Park II debt deal, and any change in the dividend stance, all now viewed through a more cautious lens given weaker profits and already high leverage and valuation. So far, the share price reaction suggests the latest miss has not fundamentally reset expectations. However, the gap between earnings pressure and that hefty dividend is something investors should watch closely. Alexander's shares are on the way up, but they could be overextended by 39%. Uncover the fair value now. Investors in the Simply Wall St Community currently see fair value between US$176.40 and US$190 across 2 viewpoints, yet recent earnings softness and an uncovered dividend remind you that sentiment and fundamentals can easily diverge. Explore 2 other fair value estimates on Alexander's - why the stock might be worth as much as $190.00! Disagree with this assessment? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Alexander's research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision. Our free Alexander's research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alexander's overall financial health at a glance. Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped: Find 50 companies with promising cash flow potential yet trading below their fair value. Capitalize on the AI infrastructure supercycle with our selection of the 39 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. Uncover the next big thing with 25 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ALX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Tuesday, May 6, 2025 at 10 a.m. ET Chairman — Steven Roth President and Chief Executive Officer — Michael Franco Executive Vice President, Leasing — Glen Weiss Executive Vice President, Development — Barry Langer Need a quote from a Motley Fool analyst? Email [email protected] Steven Roth: Thank you, Steve, and good morning, everyone. Well, the macro environment in which we operate is certainly different today than when we last spoke 3 months ago. On their calls, a couple of office CEOs didn't think all this would affect their businesses too much, but it will affect our customers, clients and tenants. So of course, this will affect all of us somewhat. I know nothing more than you all do. But the way I see it, the objectives of the tariffs are to introduce symmetry and fairness, but even more so to generate a new revenue stream for the federal government, which at, say, a 10% tariff is large enough to make a big dent in getting our federal budget deficit under control. And notwithstanding the tactics, reducing government load has to be a good thing and will also reduce the deficit. I am agnostic. Whatever the outcome, I believe the best bet is that this global kerfuffle will be resolved, settled and over much more quickly than you think. The basic dynamics that I outlined in my recent annual shareholders' letter that make us so enthusiastic about the future of our business still hold. Our stock performance is at the head of the office class, having increased 49% in 2024 after having increased 36% in 2023. And while year-end is down 12%, we are down less than the other CBD office companies. Manhattan continues to be the best real estate market in the country, especially so for office, but also for apartments and retail. In the 180 million square foot Class A better building market in which we compete, demand continues to be robust. Available space is evaporating quickly and with the cost of a new build, i.e., replacement cost at, say, $2,500 per square foot and interest rates at 6% to 7%, no new supply is on the horizon. All this is the very definition of a landlord's market. We've seen this all play out in past cycles, and the story has always been the same. The supply and demand dynamics will push rents higher and existing better buildings will increase in value quite substantially, all good, very good. Here at Vornado, our teams have been very busy building liquidity and doing leases and deals. In January, we completed the UNIQLO sale at 666 Fifth Avenue at a record-breaking $20,000 per square foot. We used the $342 million of net proceeds from the sale to partially redeem our retail JV preferred equity on the asset. So $342 million cash to Vornado. We used this cash to pay at maturity our 3.5% $450 million unsecured bonds. Next, last month, we completed a $450 million financing of 1535 Broadway and used the $407 million of net proceeds to partially redeem our retail JV preferred equity on the asset. So $407 million cash to Vornado, which increased our cash balances. This financing was done in a very choppy market with skill and relationships by our capital markets team. So all thanks to them. Next, on April 22, we received a favorable ruling on the PENN 1 ground lease rent reset arbitration. The panel determined that the annual ground rent payable for the 25-year period beginning June 17, 2023, will be $15 million. There is pending litigation and the panel's decision provides that if the fee owner prevails in a final judgment, the annual rent for the 25-year term will be $20.2 million retroactive to June 17, 2023. For GAAP, we have been accruing $26.2 million per annum of ground rent. And therefore, as a result of the panel's determination, we reversed $17.2 million of previously over-accrued rent expense in the first quarter. Of note, commencing in the first quarter of 2025, we are now paying $15 million annual rents, and so our GAAP earnings will increase by $11 million annually. By the way, this PENN 1 ground lease as fully extended goes to 2098. Next, in March, we finalized a major 337,000 square foot lease at PENN 2 with Universal Music Group, the world's leading music company, think Taylor Swift and her friends. This important deal brings an exciting tenant to the PENN District and takes the building to approximately 50% leased. More leasing at PENN 2 will follow. Next, yesterday, we finally announced the completion of an important deal with NYU at 770 Broadway, completing a master lease for 1.1 million square feet on an as is triple net basis for a 70-year lease term. Under the terms of the lease, a rental agreement under Section 467 of the Internal Revenue Code, NYU made a prepaid rent payment of $935 million and will also make annual lease payments of $1.3 million during the lease term. NYU has an option to purchase the lease premises in 2055 and at the end of the lease term in 2095. NYU will assume the existing office leases and related tenant income at the property. We used a portion of the prepaid rent payment to repay the $700 million mortgage loan, which previously encumbered the property and $200 million to increase our cash balances. Although this transaction is a lease under GAAP, which can be a little wacky, it is treated as a sale. As such, we will recognize a GAAP financial statement gain of approximately $800 million in the second quarter. We will retain the Wegmans retail condo, which will produce $4.7 million in income this year. The NYU lease absorbs 500,000 square feet currently vacant at the asset. Overall, the transaction is accretive by $25 million annually. If we pro forma leasing the vacancy at market rents with related capital spend, downtime and free rent, it would have been a pro forma push, as you might expect. We are delighted to expand our relationship with NYU and congratulate NYU Board Chair, Evan Chesler and President, Linda Mills and their teams. We are excited about their ambitions for this project. As I have said before, this is all very good for NYU and is very good for New York. NYU's press release issued yesterday is available at www.nyu.edu. All told so far this year as a result of the above activity, we reduced our debt by $915 million, increased our cash by $500 million and our retail JV preferred equity, which is an asset on our balance sheet, which began the year at $1.828 billion is now down to [ $1.079 billion. ] Our cash balances are now $1.4 billion and together with our undrawn credit lines of $1.6 billion, we have immediate liquidity of $3 billion. The above transactions will increase GAAP earnings by approximately $36 million, $25 million from the NYU transaction and $11 million from the PENN 1 ground rent reset results. Tom, that would be Tom Cinelli, who all of you know, in a more complete analysis, including debt repayments and the loss of preferred income, calculates $30 million of accretion I'm happy to defer the talk. In a moment, Michael will review the quarter and the financials, but here are a few headlines of a very good first quarter. Comparable FFO of $0.63 increased by $0.08 versus last year's first quarter and is $0.09 higher than analyst consensus. Our overall GAAP same-store NOI was up 3.5%. We leased 1,039,000 square feet overall, of which 709,000 square feet was New York office at $95 starting rents with mark-to-markets of 6.5% cash and 9.5% GAAP and an average lease term of 14.7 years. In addition to the 337,000 square foot lease with Universal Music at PENN 2, we leased 163,000 square feet at PENN 1. We completed leases totaling 222,000 square feet at our 555 California office tower in San Francisco at $120 starting rents. 555 continues to be the preferred financial services headquarters in San Francisco. And even in this historically soft market, 555 continues to outperform. It is proving that it is the best building in San Francisco. We are big fans of the new San Francisco Mayor Dan Lurie. Our New York leasing pipeline is a robust 2 million square feet. As I said in my annual shareholders' letter released on April 8, the lease-up of PENN 2 and the lease-up of our retail vacancies alone will generate incremental NOI of $125 million and $50 million, respectively, over the next several years. Tom, here is Tom again, specifies that while NOI for PENN 2 is budgeted to increase by $125 million, FFO is budgeted to increase by $95 million, the difference being capitalized interest. Either way, these are big numbers and with PENN 2 built and ready, this $125 million per year is as close to a short thing as there is. The PENN District, our 3 block long city within a city continues to amaze and receive outstanding reviews. We sit on top of Penn Station adjacent to our good neighbors to the West, Manhattan and Hudson Yards. The 3 of us combined are what I call the new booming West side of Manhattan. One of our analysts calls the PENN District, one of the largest mixed-use projects in the country, be that as it may, the PENN District will be a growth engine for our company for years to come. As I said in my annual letter, we raised market rents in the PENN District from $50 to $100. Our neighbors to the West are achieving rents of over $150, and I predict that we will do the same in the PENN District in due time. You can all do the math as to what an incremental $50 on 4.3 million square feet will do to our earnings and values. 350 Park Avenue with Citadel as our anchor tenant and Ken Griffin as our 60% partner, has begun the development process to create a grand 1.8 million square foot headquarters tower on the best site on Park Avenue. The new building will stand out as being truly the best-in-class. And we have several other assets for sale in the market. We recently filed our very comprehensive sustainability report, which can be found in the sustainability page of our website. Vornado was the first in the nation to achieve 100% LEED certification across our entire portfolio of in-service buildings. The many awards we have achieved can also be found on the sustainability page of our website. Kudos to Lauren Moss and her team. Finally, one other observation I would make is that the majority of our secured loans reflect current market rates, while others are still living off their low-rate loans. As I have said before, there is really no protection against loans that mature into a rising rate market. Now to Michael. Michael Franco: Thank you, Steve, and good morning, everyone. First quarter comparable FFO was $0.63 per share compared to $0.55 per share for last year's first quarter, an increase of $0.08. The increase is primarily due to the impact of the positive ground rent reset determination at PENN 1, higher signage NOI and higher NOI from rent commencements, partially offset by the impact from known move-outs and lower interest and investment income. We have provided a quarter-over-quarter bridge on Page 2 of our earnings release and on Page 5 of our financial supplement. On our last earnings call, we said that we expected 2025 comparable FFO to be slightly lower than 2024 comparable FFO of $2.26 per share. As a result of the lower-than-originally estimated PENN 1 ground rent, we now expect 2025 comparable FFO to be essentially flat compared to last year. Looking beyond that, we expect the lease-up of PENN 1 and PENN 2 to occur with full positive impact in 2027, resulting in significant earnings growth by 2027. Turning to occupancy. As expected, our New York office occupancy decreased this quarter to 84.4% from 88.8% last quarter, which, as previously mentioned, is primarily the result of PENN 2 being placed fully into service. However, with the full building master lease at 770 Broadway now completed, our current office occupancy has increased to 87.4%, and we anticipate it will tick up over the next year or so into the low 90s. The New York office leasing market maintained strong momentum during the first quarter with the strongest quarterly volume since fourth quarter 2019. Availability in the best of the Class A market continues to shrink and with only 500,000 square feet of new construction set to deliver during the next several years and 13 million square feet of office to residential conversions in process or announced. We expect the market to continue to tighten, which sets the table for strong rental rate growth. While we are, of course, mindful of companies potentially becoming more cautious in their decision-making given the current market volatility, we do not believe it will impact most tenants' ultimate decisions to lease space, and we remain very constructive on the market and the deal pipeline across our portfolio. The recent major commitments by NYU at 770 Broadway, Deloitte at Hudson Yards and Amazon at 522 Fifth Avenue are perfect examples. During the first quarter, our leasing activity once again led the marketplace. We completed 31 transactions totaling 709,000 square feet at average starting rents of $95 per square foot and 6.5% positive mark-to-market. Our activity was highlighted by the largest new lease done in the market in the quarter, Universal Music Group's 337,000 square foot lease at our new PENN 2, anchoring the base of the building on floors 4 through 7. We are delighted with this transaction and look forward to Universal creating a world-class office and studio production headquarters at PENN 2. The transaction strongly reflects the overall quality of the project's new modern, high-quality workspace and continued attraction to our robust work-life amenity program across the PENN District campus. Leasing at PENN 1 continues at a healthy pace as we leased 163,000 square feet here during the quarter, including a 61,000 square foot lease renewal with Cisco, along with a 36,000 square foot relocation with United Healthcare and a new lease with Dish Networks for 27,000 square feet. Our deal pipeline at PENN 1 and PENN 2 is very strong with a variety of new transactions already in lease documentation or deep in letter of intent stages. Excluding the just completed master lease with NYU at 770 Broadway, our New York pipeline consists of 2 million square feet of leases in negotiation in various stages of proposal. In San Francisco at 555 California Street, we completed 2 large headquarter renewal and expansion deals with Dodge & Cox and Goldman Sachs, both at positive cash mark-to-markets. 555 continues to strongly outperform the market as we have leased 657,000 square feet since 2022. 555 is the city's flagship office tower with world-class tenants and is brilliantly leased in a market which has been one of the more challenging in the country coming out of the pandemic. The market, though, is finally showing signs of improvement. The new mayor is off to a great start, and we are confident that he will help restore the city's health and vibrancy. Lastly, turning to the capital markets. During the first quarter, the CMBS market was wide open for large high-quality assets such as ours, with spreads continuing to tighten. Since the President announced his new tariff policy on April 2, there's been significant volatility in the financing markets with spreads widening out and new issuances being delayed. Despite this volatility, we're able to complete our 1535 Broadway financing. We expect the market to settle near term with high-quality issuers and assets continuing to have access to it. We are hard at work on refinancing or extending our upcoming maturities with many in process. With that, I'll turn it over to the operator for Q&A. Operator: [Operator Instructions] And your first question today will come from Steve Sakwa with Evercore ISI. Steve Sakwa: Michael, I was wondering if you could just maybe break down that 2 million square foot, I guess, lease negotiation between PENN 1, PENN 2 and then the balance of the portfolio. I guess I wanted to just maybe circle back to Steve's comment last quarter about PENN 2 being 80% leased. I'm just trying to understand the volume of activity that you've got, particularly at PENN 2. Michael Franco: Steve, why don't you start off and then I'll shift in. Glen Weiss: Steve, it's Glen Weiss. So the 2 million pipeline, about 50% is PENN 1, PENN 2 to start off. There's a lot of great activity at PENN 2. We finished, obviously Universal. We've got more to come, and PENN 1 continues to flood with new tenants. And at the same time as all this is going on, we continue to press rents upwards by the week. So PENN is really in fifth gear. It's a big part of the pipeline, not all the pipeline. The portfolio overall is performing very well right now. So we're feeling very, very good about where we are along all of our portfolio. Steve Sakwa: And just, I guess, confidence level around kind of getting to that 80% mark by the end of the year a PENN 2? Michael Franco: I mean, Steve, look, what I would say is, as we sit here today, we still feel good about it, right? Whether it happens by the end of the year, first quarter or whatnot, I think as Steve said in his opening remarks, we're going to lease the building, right, right? We're generally going to hit the numbers that we laid out. There's a significant uptick and whether it happens a quarter earlier, a quarter later, from our perspective, it's not going to have a meaningful impact. So we're going to get there. The rents that we're going to achieve, as we published last quarter, are higher. Glen started prebuild program at PENN 2. The rents we're achieving there are spectacular. We may do a little bit more of it. And so I wouldn't get focused on whether it happens exactly by year. But yes, as we sit here today, our confidence level is the same as it was last quarter. Glen Weiss: We love our spot here -- if you think about it, Steve, there's a dwindling supply of quality blocks in the market and certainly nothing like what we did at PENN 2. So we think even with more patients, the rents will keep rising, the quality of tenants will keep getting better. So we're feeling better and better as we go here overall. Steve Sakwa: Okay. And maybe just a follow-up to -- I think Steve made a comment. I don't know if I caught all of it about 350 Park. I just can't remember what your decision to fully go or no go on that project is. And just can you remind us kind of the milestones and maybe achievements that you need to see or want to see in the market to ultimately make that decision? Steven Roth: Steve, our disclosure on the details that you just asked about is very robust. Go back and read the 10-K and the press release. I think that will be the best way to do it. Operator: And your next question today will come from Dylan Burzinski with Green Street. Dylan Burzinski: Congrats on closing the NYU transaction. I guess, Steve, I think you mentioned now after all the transactions closed subsequent to quarter end that you have about $1.4 billion of cash on the balance sheet. I guess, can you guys just talk about what some of those proceeds might be earmarked for? Michael Franco: Sure. First of all, I want to commend you on your report you published. I think you nailed 770 better than anybody. So kudos to you and the team. Churn and overall, quite thoughtful. In terms of the cash, look, we're... Steven Roth: So what that means is that he liked your report. Michael Franco: So in terms of the cash, look, we're obviously pleased with what we've done. I think we've done quite a bit. These are all large substantial transactions. And if you think about it, we've been able to delever the balance sheet meaningfully and yet still have that significant cash balance, right? So we're in a very good spot. What are our plans, right? In an environment like this, where there's clearly a little bit more volatility, having more cash, things. We hope and expect that's going to lead to some opportunity to deploy some of that cash in new investments. We're looking. At the same time, we have some higher cost debt that we might either pay down or pay off. So I think you'll see a combination of, a, leaving in cash as is our history to make sure we have an appropriate buffer for anything; two, tackle some of the debt; and then three is hopefully deploy that into new opportunities we see. Steven Roth: Taking it a little bit further. We are loading in cash to pay off an unsecured bond that comes due in a year at a fraction. We are loading in cash because we are going to have a robust development program, both at 350 Park and at the PENN District and perhaps one other site that we control. And so the cash is a good thing, and we're going to be using it to grow the company. Dylan Burzinski: That's helpful. And I appreciate the comments on our report from last night. I guess just maybe one other follow-up. Obviously, you guys have done a successful job monetizing some of the pref and selling some of the assets within the Street retail joint venture. I guess I think last quarter, you guys alluded to having additional dispositions or looking to go out and execute additional dispositions. I guess, can you kind of talk about just the appetite of some of these luxury retailers and the desire to want to continue to own the real estate versus lease the real estate? Steven Roth: So I think I said this in my letter. I advertised in a very subtle way, that's some of the buildings that are outside of New York are -- might be for sale at the right price. That continues to be true. And these are a couple of very large assets. So that -- we'll see how that works. In Manhattan, we have a couple of noncore buildings that are in the for-sale market now. And I think as I said in my letter, there are no sacred cows. So the other thing is we have shown a willingness to sell some of these important retail assets when we get a buyer that is willing to pay an appropriate price. That continues to be the case. The interesting thing is it's not just the retailers that are buying these assets. Like for example, Amazon is coming in and buying significant assets in Midtown Manhattan for, I guess, their HQ3 or whatever it might be. So there is lots of examples of some of these larger companies which are switching their strategy from leasing to buying, and that's a good thing. We know that, that's aggressively happening in New York. I'm not aware of whether that's true in the rest of the country. But for New York and for the New York real estate market, that's a very good thing. Operator: And your next question today will come from John Kim with BMO Capital Markets. John Kim: Can I just follow up on real estate valuations. We've seen high street retail kind of go back to 2019 levels. On the assets that you're looking to potentially sell, whether in New York or outside and including 555 Cal, are we going to go back to 2019 valuations or exceed them? Steven Roth: Sure. Michael Franco: I think, John, I would just add on to what Steve said. And I think if you look at what we've done to date, I don't know that any of these assets were "on the market," right? We're being targeted, opportunistic about the right counterparty. I think that continues to generally be the case. The capital markets continue to improve on the sales side, but you got to be -- you got to figure out who the right buyer or investor is. And I think what's the cycle is once again validated is that great assets command great prices, right? The best is always the best and may be out of favor for a little bit of time. But if you're patient, you weather the storm, then that's going to recover, right? And that clearly was the case in street retail. I think that's going to be the case with -- if you look at some of the financings and the implied values for New York office and certainly the trophy assets in San Francisco. So the best is generally always the best. Steven Roth: My succinct one-word answer, sure, really to interpret that was that we are not going to sell great assets at distressed prices that came from COVID or whatever. So the benchmark is pre-COVID, which is 2019. And these assets have recovered. They are recovering, and they will command increasing prices over time. John Kim: That's great color. On the leasing pipeline, which increased pretty significantly from last quarter, can you describe how much of that is on your in-service portfolio or leases that could drive occupancy over the next couple of years versus maybe 350 Park or an early renewal that won't drive FFO... Glen Weiss: And a very significant portion of the pipeline will increase occupancy without a doubt. So a lot of it's absorption, a lot of new deals, a lot of expansion. There's a lot of expansion in New York in our properties right now. So a lot of our significant activity will absorb vacant space over the next 9, 12 months without a doubt. Steven Roth: This is the first time on this call that the word occupancy came up. So will somebody cover occupancy because the occupancy number that we reported is aberrantly low. And let's see if we can get an accurate portrayal of what our expected occupancy is into this call. Michael Franco: So John, to follow Steve's comment, I think we had telegraphed this the last couple of quarters that our occupancy was going to go down when we brought PENN 2 in service, which we did fully this quarter, right? So we published 84.4%. We talked about pro forma what it is when you add in 770, which goes to 87.4%. And then I said in my prepared remarks that we expect it to be 90% plus in the next 12 months or so. And obviously, a lot of that's driven by PENN 2. I think as we look more broadly in New York, if we lease up PENN 1 and PENN 2 or when we lease up PENN 1 and PENN 2 fully, and let's say that happens in the next 24 months and a couple of things here and there, we're going to be at about 94% occupancy. So I can't tell you exactly when that's going to happen. But if you just think about if we execute on PENN 1, PENN 2, a little bit of space, 1290, 280, we're going to be at that 94% level, and we love that position, right? So from our standpoint in terms of driving growth, we have our best assets that have some holes in them today. There's fewer options in the market. We've just deployed a significant amount of capital in these assets. Glen talked about how the rents are rising, not just in the market, but specifically at these assets. And so that's all going to translate into growth. And I think as we've said in the last couple of calls, that really kicks in, in 2027. So we feel good about the position. And then I think from an occupancy standpoint, we always ran the business at around 95%, 96%. And I think when we get a couple of years out, our expectation is we're going to get back there. Steven Roth: The most significant thing to keep in your mind is that as occupancy rises, earnings rise, and they rise significantly. And so that's a very interesting factor. Operator: And your next question today will come from Floris Van Dijkum with Compass Point. Floris Gerbrand van Dijkum: Getting back to your comment on the -- one of the most valuable mixed-use projects in the country, which the PENN District is... Steven Roth: Who said that? Floris Gerbrand van Dijkum: I don't know. Somebody mentioned that. Hopefully, that caught your attention. One is the, obviously, $300 million of NOI once PENN 1, PENN 2 are stabilized is pretty impressive. But can you talk about -- one of the things we noticed this quarter, and I suspect it's going to be the case for the next couple of quarters is the gap -- there's roughly a $20 million gap between GAAP NOI and cash NOI, presumably as free rents in the -- in PENN 2 as that comes online before you actually get the actual cash. How long is that going to last? And at some point, are you going to see -- when do you think you're going to inflect and see cash NOI actually be stronger than your GAAP NOI going forward? Unknown Executive: Yes. I think, Floris, it's a great question. I think we should probably take it offline. Most of that is going to happen in the later years. As Michael indicated, we start seeing 2027 earnings really pop. So that's probably the years you're going to see, but that's something that we probably take offline in more detail. Floris Gerbrand van Dijkum: Great. And then the other thing -- and again, I think you guys sometimes do yourself with this service by being as transparent as -- well, transparent in some ways, as you are with the occupancy, in particular, have you ever thought about showing what your core occupancy is or in line or in service properties? Because obviously, you've got a couple of assets that you're keeping vacant right now, particularly in your retail portfolio, which impact your stated occupancy level significantly. Michael Franco: We have thought about that, Floris, but your comment now makes us think a little bit harder about whether we should do that because we are -- we have kept certain assets offline and continue to do that pending either redevelopment or maybe in a case or 2, a workout. So that's a fair comment. Operator: And your next question today will come from Alexander Goldfarb with Piper Sandler. Alexander Goldfarb: Steve, a question for you. Looking at the Deloitte deal, pretty impressive, 800,000 square feet to anchor new development. How does the math behind that project compare to what you guys would need for PENN 15? And just trying to understand if we're getting closer where a $2 million-plus project can pencil or if the market is still limited to, call it, $1 million, $1.2 million type developments? Steven Roth: Alex. Before we get into that, you wrote a piece on Alexander's that came out, I think, yesterday... Alexander Goldfarb: Yes, yesterday. Steven Roth: And so I think you're the only person that I know covers it, but in any event, let me help you by saying, correcting you on tow things. Number one, we will not, let me emphasize the word not, use our cash to pay down the 731 retail loan? We're not doing that. Alexander Goldfarb: Okay. We'll note that. Steven Roth: And the second thing is we are not merging Alexander's into Vornado, okay? So once we get beyond that. Look, we were shown as the most ideal as was all of the developers in town. We think we have the best vacant piece of land on the west side of Manhattan. Now I've said frequently that I think it's the second-best piece of land in town, the first best being our Park Avenue site. And so the deal that was made was a very aggressive deal for the tenant. The pricing was very tight. We're not bashful to say no to a deal that doesn't give us the financial results that we think our shareholders are entitled to. So we're getting there. And I think we're on the foothills of a landlord's bull market, and we think that the values, prices and transactions are going to go up. We think that the number of new builds will be very scarce. And so we think we're in a pretty good spot. We are patient. If you just look at what happened with the Alexander's deal, which was a long time ago, but nonetheless, we let deal after deal pass by until we did the deal with Bloomberg, which turned out to be extraordinary. So we're getting there, and we're very -- we're very happy with our position. By the way, the interesting thing is that a lot of this comes from our financial strength. So we can be relatively patient because of our financial strength. So the PENN 15 lot has no debt on it. The PENN 1 building has no debt on it. The PENN 2 building has no debt on it. The Farley Meta building has no debt on it. So that's a pretty good spot to be in. And it's not -- we're basically a secured lender is the way we structure our business. Those assets have no debt, and that's a great place to be. Alexander Goldfarb: Okay. So let me ask you, you wrote a Chairman's letter, as you always do. You talked about the attractiveness of apartment developments in part because of the smaller size. However, if you look at some of the legislation that Albany has passed, it makes the math tougher if you do tax incentive deals, the bigger the projects. So as you think about our apartment potential, are you thinking about it on as-of-right sites? Or are you thinking about smaller-scale projects? Or how are you thinking about apartments fitting in as you expand your thoughts on development and harvesting your different sites? Are these existing sites, new sites, your thoughts? Steven Roth: Oh, Lord, when you have the kind of city down at Penn that we have, you have to consider both office -- we're principally an office company. We like the dynamics of the office business. We like them as they are improving today. But you cannot disregard the fact that if you look back over the past decades, apartments have created more value than office has. The office market is volatile over long periods of time, the apartment markets are very -- are less volatile. Nonetheless, the political overtone of the apartment business is much more complicated than the office business. So there's a little bit of this, a little bit that we will be building some apartments in the PENN District. It will not be a total apartment development project. And remember, we're not paying off that loan with cash. Alexander Goldfarb: I will tell my colleague, [ Conor ] that. Operator: And your next question today will come from Jana Galan with Bank of America. Unknown Analyst: Congrats on a strong start to the year. It seems like a recent big trend in New York City is a kind of owner occupiers, both in office and retail. And I was just curious if you could kind of comment on what you're seeing in particular with some of the dispositions you may be looking to do. Steven Roth: I think we covered a lot of that. Mike, I'll give it another shot. Michael Franco: Thanks, [ Jana. ] I appreciate the comment. Look, I think you're seeing the owner-occupiers. I mean retail, I think we've talked about going back over the last year, where you saw that activity first. You saw it with Prada, you saw with Kering, you saw UNIQLO, and there continues to be interest there. And I think that's a function and all that was on Fifth Avenue, although you saw a couple of situations down in SoHo recently. If you look at what Ralph Lauren just did in SoHo, paid a significant number for that store, Dyson down in SoHo. And so what these retailers are basically saying is that in these great forever spots, Fifth Avenue, SoHo, Madison Avenue, Times Square, that are sort of the 4 key areas of Manhattan, they want to be here forever, right? These sales volumes that they do in Manhattan are multiples of what they do anywhere in the U.S. and in many cases, around the world. So they want to be here forever. And rather than wrangling with the tornadoes of the world every 10 or 15 years, they just want to own it, right? And they're prepared to pay a significant number to control that forever. So that's a good thing. We have some additional incomings on that. And if we get the right numbers on situations, then we'll transact. But that continues to be an area where retailers are active. On the office side, as well, you've seen some owner-user activity. And again, let's go back to what that is a function of, right? And I think Steve made the distinction that we really haven't seen that elsewhere. Maybe it's occurred, but don't think it's occurred in the volume here. And I think it's fundamentally driven by talent wants to be in New York, right? And it really is driving every asset class. And so Alex, to your point, how can you make the math work? The math works on these bigger sites, right, notwithstanding your comment on the 99, the math works. Why does it work? Because rents are continuing to go up. We have a massive housing shortage in New York City. It's not going to get eradicated in the next decade. So anybody that build apartments are probably going to do fine in the city, right? But back to office. So talent wants to be here. Employers have no issue getting their employees in the office. This is where all the young people want to come to. And so they're basically staking out their ground. And many of these companies' cases, they borrow cheaper than real estate companies. They borrow cheaper than any companies for that matter, and they're using that capital, right? So in Amazon's case, where they have stepped up in a big way here recently, they want to be here. They want to grow here, and they're going to use their balance sheet aggressively given, again, the fact that they want to be here long term and the amount of capital they're going to deploy in their assets above what a landlord would normally deploy is significant. So they want to own that forever. And so when you think about NYU, NYU didn't buy the building from us, but they committed to lease it for a long term, so they can amortize the capital, they're going to deploy in that asset. And so they have long-term control of that asset. So is it going to be something we're going to see every week? Probably not, but I don't think this will be the last of those given companies that have significant capital and can deploy that cost effectively, it's a good solution. Operator: Your next question today will come from [ Seth Berge ] with Citi. Unknown Analyst: I guess it sounds like demand has improved. Your leasing pipeline has grown what types of behavior are you seeing change from tenants? Like are you seeing any improvement on concessions or early renewal activity in addition to the rent growth that you're seeing? Glen Weiss: It's Glen. Certainly, we're seeing rent growth. That's the first discussion. Rents are going up and tenants realize rents are going up. Number two, we are starting to see a reduction in the free rent packages. On the TI, the TIs have stubbornly stayed basically at the same levels. So I would say rents are improving and free rents are starting to come down. As part of early renewals, we're definitely seeing people come to us earlier now because they're concerned about where the market is going to go more and more towards the landlord's market. So we have some larger deals in this pipeline as it relates to early renewals for sure. But I'll tell you the one takeaway I would tell you is expansions. The expansions in New York, there's expansions going on all over the market in every submarket and definitely in our portfolio. So a lot of growth in New York and not just financial, you're seeing tech now grow, the law firms grow, consulting firms grow, media, entertainment, like the universal deal. So I mean, that's basically around what you're asking. Unknown Analyst: Yes. That's helpful. And then I guess for a follow-up, I just wanted to go back to your comments about the capital intensiveness of office buildings versus apartments. I guess, does that -- it sounds like there's kind of puts and takes to both asset classes, but does that change how you think about investing in the portfolio over the longer term? Michael Franco: Look, I think it orient you to is you want to own high-quality buildings, the highest quality buildings, right? Because that -- those are the buildings that are experiencing the demand where you can push rents the most where you can start to tighten some of the concessions. You're seeing that play out now, and we think that's going to continue to play out. So the capital is not going to be avoided, right? Even if TIs go down a little bit, every time you turn these spaces over every 10, 15 years, if a tenant leaves, there's going to be meaningful capital requirements there. So in order for that to be an appropriate investment, rents have to rise and that orient you towards the higher-quality buildings. So I think what we've tried to do in the last several years is reshape our portfolio, sell assets that we viewed as not best positioned for the future and have a portfolio that we think is well positioned for that. And are we 100% there? No, but we're pretty close, and we feel good about it. And so I think that's where you have to be investing in. We've modernized our assets. We're in the right locations. I think your portfolio has to be oriented that way to succeed given the capital requirements. Steven Roth: A couple of things. We expect rents to rise. We expect free rent to start to come in as the market tightens. We don't believe that cash TIs are going to come in because the tenants really are spending a lot more than that to develop the space. So rents and free rent, face rent and free rents will go -- will improve. We don't believe that cash TIs will improve. So there's that. With respect to the mix between apartments and office, we're an office company. In our major development activities, we will be developing office. In the PENN District, we will be sprinkling in, I want to say, a not insignificant amount of apartments as well. I don't believe that we will be a buyer of existing apartment buildings. We've looked at some, but basically, I think we'll be -- we'd be a developer of apartments, but a reluctant buyer of apartments. Operator: And your next question today will come from Anthony Paolone with JPMorgan. Anthony Paolone: So I guess, just following up to some of these questions around PENN District and apartments versus office. I mean what do you think is the next project that Vornado pursues in the PENN District, like is it apartments because it's smaller versus PENN 15? Or how should we think about that? And also in the same vein, your thoughts on federal government getting involved with the planning of Penn Station and how that might impact you? Steven Roth: We're not going to pregame what we're doing by announcing today what the mix of apartments. We'll do that when we actually start to do something that's a real project, we will notify the market. We've already said that we are focused on doing a small apartment project on 8th Avenue and 34th Street. on a piece of land we -- a smallish piece of land we own there. So that's in the works. Otherwise, we will announce development starts when they start. With respect to the question about the federal government getting involved in Penn, we think that's great. I'm going to turn that over to Barry because he likes to talk about that one. Go ahead, Barry. Barry Langer: As you're aware, we've spent a lot of time over the last several years working on several public-private partnerships, making Penn Station better, whether or not that's the Moynihan Train Hall, the Long Island Railroad 33rd Street Concourse, a couple of new entrants as we work with the government building on Seventh Avenue. Anyone that wants to keep investing in Penn Station and continuing the good work we've done to continue making Penn Station that we support. Steven Roth: So there's that. By the way, when was the last time that you walked through the PENN District? Anthony Paolone: Last weekend. Steven Roth: Oh good. So I think that you'll agree that the PENN District, the legacy idea that PENN is -- what's a good word? -- that Penn is a sloppy district, that's passed. So when you walk down there now, what we've done on Seventh Avenue, what we've done with the buildings, all the granite that we put in the sidewalks, the Moynihan train station is spectacular. The train hall is spectacular. The Long Island Railroad Concourse. So the PENN District looks a lot different today than it did 5 years ago, and we're pretty proud of that. Anybody that wants to come in and help us finish the job below ground, basically, we own all of the above ground. So -- but the government and the railroads own the below ground. Anybody that wants to help us fix that, we're in favor of it. Anthony Paolone: Okay. And then just a quick follow-up. I may have missed this, it might be in the queue, but just what is the remaining par value for the preps that you have in the Fifth Avenue JV now and the yield on that? Steven Roth: It's about $1.050 billion in round numbers, and the yield on that is 5.5%. Michael Franco: It probably blends to about 5%, Tony. It probably blends about 5%. So [indiscernible]. Operator: And your next question today will come from Caitlin Burrows with Goldman Sachs. Caitlin Burrows: Maybe first, I feel like it's been talked about it a couple of different ways. But you mentioned in the prepared remarks at the very beginning, how you didn't think the uncertainty in the macro would impact leasing. So I was just wondering if you could talk about that a little bit more, kind of what gives you that confidence? And any more specific detail you can give on like trends through 1Q and April and now into May. Glen Weiss: We have not seen an impact on our leasing as of yet. But of course, we're mindful of it. We're getting our deals done, and we'd be irresponsible enough to be thinking about it and paying attention to it. But thus far, we've had no impact yet on the leasing. Michael Franco: Caitlin, what I would say is, just to add on to what Glen said, that if you look at the Amazon announcement, the Deloitte announcement, the NYU announcement, I mean, these are all done in the last couple of weeks. So of course, companies, tenants are fully aware of what's going on and making decisions and still proceed. Now that's not to say every deal is going to proceed. But I think there's a bias towards -- we're in some volatility. And I think as Steve said in the outset, this is going to get settled in the near term. On the retailer side, those that source product overseas, obviously, it's got a more dramatic impact on their business, right? They're going to certainly pause until they see what that -- what exact translates into. And so we've seen a little impact from some of those players. So I think Glen characterized it right. To date, not much, but you have to be mindful of it. Caitlin Burrows: Got it. Okay. And then you guys did talk about how of this kind of NOI and earnings will come on over the next couple of years, and you have great visibility, but that there will also be some refi headwinds. So I was just wondering, as it relates to maybe even the remaining 2025 and early '26 maturities, if there's any guidepost? Or how do you think about the amount of refi headwinds that it could be? Like would you assume similar spreads that are in place or those go up as well? Anything on that topic? Michael Franco: Yes. I mean, look, we -- the team is hard at work on everything that's maturing. We're feeling great about the pricing about 45 days ago. Obviously, that's gapped that a little bit. But the market is definitely open and you can execute. And so we have a number of things in process that we hope to get done over the course of the next -- this quarter. So we feel pretty good about executing everything. I think in terms -- I'm just looking through the list right now in terms of pricing and amounts. I think generally, and I think reflective of the market, all these can be refinanced at par. Now whether we choose to do that or not based on pricing, we'll make that decision as we get closer. But the market is supportive of the proceeds level because, again, that high leverage to start with. And then I think you have to go asset by asset. In some cases, we'll roll those over pretty close to where they are today. And other cases, for example, like an Independence Plaza, we're coming off a 4.25% fixed rate loan. That's not going to hold given that treasuries themselves are at 4% today. So we'll have some -- we'll have some coupon expansion there. In other cases, I think it will roll over pretty close to flat. So -- but all that's sort of baked in the guidance that we sort of talked about in terms of where we thought we'd be this year and where we think we'll be in the next couple of years. So look, we'll have to see where the markets are when we actually price the assets, but the market is open. We expect to tackle these over the next couple of quarters. And in total, I think there'll be a little bit of increase in terms of interest, but not dramatic. Operator: Our next question today will come from Ronald Kamdem with Morgan Stanley. Ronald Kamdem: Just 2 quick ones. The first is just the occupancy trajectory was really helpful. Just wondering if we could sort of take that a step further, should we be expecting sort of the same-store NOI and so forth to also be sort of accelerating through to 2027 or are there sort of other considerations? Michael Franco: *Yes. I think in terms of '27 absolutely, this year, we'll see. I think, again, it's flattish as we talked about. So I don't think you'll see it this year. But I think as we get -- as the assets get leased up, will it follow that same trajectory? Yes. Ronald Kamdem: Great. And then my second one is just on capital allocation, if you could just remind us what sort of the waterfall is now between development, redevelopment, buying back stock and so forth? And any update on sort of the Hotel Penn site and that potential sale? Michael Franco: We look at -- the answer is we look at all opportunities and decide where we can best deploy that capital. And obviously, we don't want to sort of spend down our last dollar. But development is a long process, right? So some things we're talking about today, you may proceed, but that capital doesn't get spent for really several years as you ramp that up. I think in terms of stock buybacks, not front of mind today. We still see good value there, but it was -- obviously, when it was back in the teens when we started the program, that was more dramatic. So that's -- I'd say today, the focus is on investing in our existing business, whether that's new development or paying down some debt. And then as I said, we are looking at some external opportunities and just hard to put the odds on whether any of those move forward or not yet. Operator: Your next question today will come from Nick Yulico with Scotiabank. Nicholas Yulico: Just going back to the NYU transaction. I think you said it's accretive by $25 million annually. So paying off the mortgage, it looks like is a $35 million benefit. So can you just walk us through what's the offset from that? And then also on the NOI side, how we should think about if there's any difference on the cash versus GAAP treatment going forward there? Unknown Executive: That sounds like Tom. Unknown Executive: Sure. So I think your $35 million, you're including the swap that we have. That's at the corporate level. So we're moving that swap. So if you exclude the swap, it's the interest expense on that asset is $47 million. The current NOI is around $49.50. So that gets you the current NOI at about flat. When you look forward and you include the payment that we're going to get from NYU plus the Wegmans deal, plus the interest on the $200 million plus that we're retaining, that gets you to about, call it, $29 million, that's the $25 million, $26 million Steve referenced in the prepared remarks. Nicholas Yulico: Okay. That's very helpful. Just second question is on -- I think you gave the leased number for PENN 2 at around 50%. Is it possible to get the leased number for PENN 1? I know it's 88% occupied. Is the lease number higher than that? Unknown Executive: It's the same number. Operator: And your final question today will come from Alexander Goldfarb of Piper Sandler with a follow-up. Alexander Goldfarb: Steve, I realize you're probably not going to give the intimate details of the ground rent litigation. But from a big picture perspective, the arbitration panel agreed to $15 million, but now there's litigation pursuing $20 million. From a big picture perspective, can you help us understand how this works? I would have thought the arbitration panel was the final determinant. Steven Roth: Alex, it is. The arbitration -- there's litigation pending, that litigation will extend through appeals for who knows how much longer. By the way, we think we have a very good position there, but see that as it may. The arbitration panel handled the eventuality as to whether the landlord or the tenant, where the tenant wins that arbitration. So the $15 million is set for the base case. If we win the litigation, the $15 million continues for the 25 years. If we lose the litigation, the $15 million becomes $20 million. So we're in a pretty good spot. We have -- the values have been established in whichever way the litigation goes. So it's as simple as that, Alex. Operator: That concludes our question-and-answer session. I would like to turn the conference back over to Steven Roth for any closing remarks. Steven Roth: Thank you, everyone. We've had a very robust conversation this morning. The first quarter was very active, very constructive with lots of good stuff. And we look forward to seeing you at the next call, which will be -- the next call is August 5, so we look forward to that. Have a good summer so far. Operator: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect. Before you buy stock in Alexander's, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alexander's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alexander's (ALX) Q1 2025 Earnings Transcript was originally published by The Motley Fool

Image source: The Motley Fool. Tuesday, May 5, 2026 at 10 a.m. ET Chairman and Chief Executive Officer — Steven Roth President and Chief Financial Officer — Michael Franco EVP, Head of Leasing — Glen Weiss Chief Operating Officer and Treasurer — Thomas Sanelli Need a quote from a Motley Fool analyst? Email [email protected] On the call today from management for our opening remarks are Steven Roth, Chairman and Chief Executive Officer, and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Steven Roth. Steven Roth: Thank you, Steve, and good morning, everyone. Business at Alexander's, Inc. continues to be excellent, and it is getting better and better. We are riding the wave of a strengthening, long-lasting landlord's market. And New York is by far and away the strongest real estate market in the country. Michael will get into the details shortly. But today, I have different fish to fry, and I will ask the first question. Question. What do you make of the spat between Mayor Mandami and Ken Griffin, and how will it affect your 350 Park Avenue development? Answer. Let me begin by saying that I do not and cannot speak for Ken. But I do unambiguously stand with him. Notwithstanding the mistakes and bad swarm of the recent video that went viral, we are pulling for Mayor Mandami to succeed. Let me establish my credentials. Alexander's, Inc. is a New York company, and I am a New Yorker. Born in Brooklyn and attended D. W. Clinton Public High School in the Bronx. Both Alexander's, Inc. and I are lucky to be New Yorkers. My daughter and three granddaughters live in the Bronx. And my son and his family live in Brooklyn. My wife of 56 years and I live and work in Manhattan. We follow the rules, and we pay our fair share. Alexander's, Inc. will pay $560 million in real estate taxes this year, and I am pretty sure that is in the top three. That does not begin to count the personal income taxes that I and our Alexander's, Inc. population pay to the city and state of New York. We work our asses off, and we are not boastful. We are very proud of our lifetime of achievement. We are the company that is investing billions to transform the Penn District. New York is a union town, and we are a union shop. It is thousands of hardworking New Yorkers in our buildings and on our construction sites. The ugly, unnecessary video spat is personal to Ken and sort of personal to me too. You see, Alexander's, Inc. and I are the developers of both 220 Central Park South residential building and the 350 Park Avenue Citadel Tower. We are all shocked that our young mayor would pull this stunt in front of Ken's home and single him out for ridicule. This was both irresponsible and dangerous. As I said, Alexander's, Inc. is the owner of the 65-year-old building on the Park Avenue block front that will be razed to make way for the Citadel New York headquarters tower. It will employ thousands, further cementing New York as the financial capital of the world. It will pay significant taxes and on and on. This building is being designed by the same Foster and Partners architectural team that designed JPMorgan Chase's new headquarters down the block. This is now the if-we-move-forward project. Now, a project of this scale takes years, and we have already worked with two prior city administrations, both of whom have recognized the benefits and have been enthusiastically welcoming and supporting, as evidenced by the rare unanimous ULURP approval for this project. Demolition began literally days ago, and we at Alexander's, Inc. are ready to go. I must say that I consider the phrase “tax the rich,” spit out with anger and contempt by politicians both here and across the country, to be just as hateful as some disgusting racial slurs and even the phrase from the river to the sea. What these whole pols seem to be saying is that the rich are evil, or the enemy, or the targets, or maybe even just suckers. But the rich whom the politicians are targeting started with nothing, are the epitome of the American dream. They are our largest employers and largest philanthropists. And it is the 1% that pay 50% of New York's income taxes. They are at the top of the great American economic pyramid for a reason. They should be praised and thanked. Ken, our partner and friend, is the best of the best. So where are we now? As we discussed last quarter, Ken exercised his option to enter our development joint venture and build a new 1.9 million square foot tower with Citadel as the anchor tenant. We have until July to decide whether to participate with Ken in the venture or to sell to him. It is a good bet that we will go all in. This fence cannot be amended by a short, terse, insincere private apology. What I beg my mayor to do is to begin every day being business welcoming and business friendly as his first priority. That is the only way to get the growth and financial wherewithal to accomplish his program, some of which, I must say, are interesting and valid: public safety, schools, child care, clean streets, housing affordability, homeless programs, etc. The election is over. Now is the time for hard work and management, not showboating. New York is an enormous enterprise with a city budget of $120 billion and state budget of $250 billion. If there is a $5 billion or $10 billion budget shortfall, surely that money can be found by managing rather than by taxes. It is interesting to note that high-tax New York spends more than double per capita than low-tax or no-tax Florida or Texas. There is a lesson here. Maybe something good could come out of this blunder. Maybe we can draft Ken to become active and lead an effort to educate New York voters and to elect like-minded candidates. Ken can do it. He is the one who could galvanize the entire business community. Here is an interesting fact: members of the Partnership for New York City alone employ 1 million voters. Hundreds of our business leaders would line up to support Ken. I would be first in that line. I was taught, and I believe, that in America after an election, all sides get behind and support the winning candidate for the greater good. Our mayor is young, smart, and energetic. With a little tweak here, a little tweak there, his leadership could make this great city even greater. He will learn over time that growing the tax base is a winner, and raising taxes is a loser. I will say it again. He will learn over time that a growing tax base is the winner, and raising taxes is the loser. And that the hardworking 1% are allies, not enemies. Let us learn from this mistake and move upward. Turning to Alexander's, Inc. We now have a lineup of assets and in-process projects which I am confident will deliver the highest growth in our sector. Executing on all this is now our singular focus. In this year, 2026, we will complete the heavy lifting of leasing at PENN 1 and PENN 2. As Michael and Tom have already been saying, quarter after quarter, our published numbers will reflect all this by 2026 and going into 2027. As part of our focus on enhancing our portfolio and making great deals, we announced last week the acquisition of a 49% interest in Park Avenue Plaza, a 1.2 million square foot Class A office building along the prime stretch of Park Avenue. This asset is directly across the street from our 350 Park Avenue project. The building is 99% occupied by blue-chip tenants with an 11-year weighted average lease term at rents 40% to 50% below market. Prime Park Avenue AAA assets rarely trade. We believe we made an excellent purchase. We are buying the asset at $950 per square foot, which is a 65% to 70% discount to replacement cost, and we are inheriting a fixed-rate sub-3% loan through 2031 to leverage off an enhanced return. We expect the transaction to be approximately $0.10 accretive on a full-year basis in the first year. We are happy to be partnering with the Fisher family, who own the other 51% of the asset. We have a long relationship with the Fisher family. They are first-class operators who think much like we do. With Park Avenue Plaza, our recent acquisition of 623 5th Avenue, and the pending development of 350 Park Avenue, we will be adding, call it, 2 million square feet at share of the very highest quality to our core portfolio at very accretive economics. Speaking of 623 5th Avenue, our 383,000 square foot asset, which we are redeveloping to be the premier boutique office building in Alexander's, Inc., we are far along in our design and planning. We are receiving outstanding reactions from the market and already have active tenant interest at or above our underwrote. Demand for our retail assets is robust and accelerating. We have a handful of assets for sale in the market. I covered share buybacks in my recently posted shareholders' letter. To date, under our $200 million share buyback program, we have repurchased 7 million common shares at an average of $25.80 per share, totaling $180 million. Last week, our Board authorized an additional $300 million buyback program. Now to Michael. Michael Franco: Thank you, Steve, and good morning, everyone. First quarter comparable FFO was $0.52 per share, compared to $0.63 per share for last year's first quarter. This decrease is consistent with our comments from the prior quarters and is primarily due to the reversal of previously accrued N1 ground rent expense in prior year's first quarter and higher net interest expense, partially offset by higher FFO resulting from the execution of the NYU master lease at $7.70 in the prior year and strong income growth at PENN 1 and PENN 2. We have provided a quarter-over-quarter bridge on Page 2 of our earnings release and on Page 6 of our financial supplement. We now expect full-year 2026 comparable FFO to be slightly higher than 2025, ramping up each quarter due to GAAP rents coming online, lower interest expense after our June 2026 bonds are repaid, and some seasonality relating to our sign. As previously indicated, we expect there to be significant earnings growth in 2027 as the positive impact from PENN 1 and PENN 2 lease-up takes effect, as well as the positive impact of the recent acquisition of Park Avenue Plaza. Turning to leasing. The Manhattan office market is head and shoulders the best in the country and is off to its strongest start to a year in over a decade. Manhattan leasing volume reached nearly 12 million square feet, the highest first quarter level since 2014. There is a significant supply-demand imbalance in the 180 million Class A and better building market in which we compete, as the availability rate in the prime submarkets in Midtown and the West Side has tightened significantly and there is little new supply coming for the foreseeable future given the significant cost and duration to build. This is all resulting in tenants competing for space and rents rising aggressively. The landlord's market we have been long predicting is very much here. While the macro environment we operate in today has gotten even more complicated since our last call, and the geopolitical volatility is as high as we have seen in some time, the U.S. economy just continues to chug along, as does New York's. While there is a risk that the Middle East conflict lasts much longer and has a greater economic impact, to date we have not seen any change in tenant behavior. Moreover, while there has been a lot of AI fear mongering out there, while we are respectful of the risk, we believe it is overblown. Over the past 50 years, office-using jobs have continually evolved based on new technology—from the computer revolution of the 1980s, when personal computers and word processors were introduced, to the era when the Internet transformed workflows and the way we communicate, to now with AI improving efficiencies and increasing productivity. In every example, office-using jobs were not reduced, but they shifted from clerical-based functions to knowledge-based roles. And each new revolution spurred productivity and economic growth with new businesses and net positive jobs created. There will be winners and losers by industry, by job function, and by geography. But make no mistake: New York and San Francisco will be winners as the intellectual and innovation capitals of the country. Their talent will continue to aggregate in the best buildings. At Alexander's, Inc., we are coming off our second-best leasing year in our company's history, where we leased 3.7 million square feet, with 960,000 square feet of New York office in the fourth quarter. Business continues to be very good, and the momentum from last year has continued during 2026. In the first quarter, we leased 426,000 square feet of office space overall, including 311,000 square feet in New York. Our metrics were very strong. Average starting rents in Manhattan were $103 per square foot, with mark-to-market of positive 11.7% GAAP and positive 9.7% cash, and an average lease term of nine years. Our New York office pipeline is robust and has over 1 million square feet of leases in negotiation in various stages of the cycle. Turning to the capital markets. The financing markets continue to be strong and liquid for Class A New York office assets, though pricing has widened a bit given the current geopolitical environment. The investment sales market continues to heat up as well, with a broadening set of buyers keenly focused on New York City. We were very active in the capital markets in the first quarter, most of which we covered on the last call. Given we have dealt with almost all of our 2026 and 2027 maturities, we do not have any significant financings we need to complete for the next 18 months. We do still have a few loans that we need to work through with lenders over the next two to three years. Finally, our liquidity remains strong at $2.6 billion, which is comprised of cash of $1.2 billion and an undrawn credit line of $1.4 billion. With that, I will turn it over to the operator for Q&A. Operator: Thank you. We will now open the call for questions. Star then 1 on your touch-tone phone. If you wish to be removed from the queue, please press star then 2. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Each caller will be allowed to ask a question and a follow-up before we move on to the next caller. Our first question comes from Steve Sakwa at Evercore ISI. Steve Sakwa: Yes, thanks. Good morning. Steve, thanks for your opening comments on the City and the administration. I guess maybe going to Michael's commentary on just the pipeline and the million feet. I did not know if Michael or Glenn could maybe expound a little bit—how much of that is for upcoming lease expirations, how much of that is for kind of within the portfolio? And I guess most of that is probably in New York, but maybe discuss the New York versus Chicago versus San Francisco demand trends. Glen Weiss: So, you know, our pipeline is extremely well balanced. Of the million feet, it is right down the middle—50% new/expansion, 50% renewal. The other thing I will note is on renewals, due to the lack of quality space available in the market, we are seeing many of our tenants coming to us early on renewals since they cannot find quality alternatives, which is a key indicator of a rising landlord’s market. As it relates city to city, San Francisco is coming on very strong. While we have some vacancy, as you see from the first quarter numbers, we have tremendous activity on all the vacancy. Our deals in the tower at 555 are now north of $160 a foot. Volume in San Francisco overall is strengthening week to week, and certainly everyone out there is feeling a lot better and deals are happening in a very rhythmic pace. Chicago is starting to come up. Demand is improving. The deals are tough, but there are certainly tenants coming new to the market, and we are seeing a lot more tour proposals coming to the market as we go into the second quarter and into the summer. Steve Sakwa: Great, thanks. And then maybe just as a follow-up, we did notice that in terms of lease commencements, the Verizon lease kind of had a little bit of a change in status. I am just wondering if you could maybe talk about their ultimate status with the building and did that lease start earlier, and is that a benefit to the 2026 earnings growth? Thomas Sanelli: Steve, it is Thomas. I will take the first part of it, and I guess Glen can talk about the status. So, because Verizon told us they are not going to build out their space and they put them on the sublet market, GAAP allows us to start revenue recognition early. You will see that flow through all of 2026. It started in the first quarter. Glen Weiss: On the leasing front, the block of space is excellent. It is 200,000 feet and includes 30,000 feet of outdoor space. We are in a great position. We have a Verizon public parent guarantee for the entire lease to begin with, so great credit. We continue to show this space as does Verizon. There is very good action, and whatever the outcome, Alexander's, Inc. is in a great spot as it relates to that position. Operator: Thank you. Our next question today comes from John Kim at BMO Capital Markets. Please go ahead. John Kim: Thank you. Steve, really appreciate your opening remarks. It really provided a lot of clarity on how you are thinking about moving forward. But I wanted to ask you about your statement that you are already at 350 Park. Are you all in even if Citadel will not commit to the building? And how should we think about the put option you have in July? Steven Roth: I did not hear the last part. What— John Kim: How should we think about the put option, is that something that you will let pass or that the date could be extended? Steven Roth: The answer is that Ken exercised the go-ahead. We have until the summer to decide whether we are a participant or a seller. John Kim: And— Steven Roth: I expect that we will take all of that time, which is the smart and correct thing for us to do. There are still some documents and other details to be ironed out. But my remarks were that I expect we will be all in. I do expect we will be all in, but that is not a legal commitment at this time yet. John Kim: And that is all in with or without Citadel commitment? No—the question is, is it all in regardless of whether Citadel is committed or not from a lease standpoint? Steven Roth: No. Citadel will have to be committed. They will be committed. So, I mean, this whole deal is based upon the fact that Citadel will be the anchor tenant taking no less than 850,000 square feet, although we expect more. And Ken Griffin is the 60% partner. We are a 36% partner, and the Rudin family is the 4% partner. That is the state of play. Ken has committed to start. This whole thing will all come together and become very clear in the mid-summer. Operator: Thank you. John Kim: And then I wanted to ask about the $200 million of signed leases not commenced figure that you provided last quarter—if there is an update to that figure in terms of dollar volume, timing, and if there are any offsets through move-outs during that timeframe. Michael Franco: Good morning, John. I would say the number is still in that general neighborhood. It is probably a touch larger today, but it is still in the same ballpark. In terms of thinking about it, probably 10% to 12% comes in per quarter over the next couple of years from a pacing standpoint. There are some offsets, whether it is expiries, vacancies, etc. I think Steve on the last call said from a modeling standpoint assume $0.40 a share flows through to the bottom line. So we are going to stick with that for now, but that will give you a sense in terms of the pacing of that $200-ish million. And that started this first quarter. Thank you. Operator: Our next question today comes from Floriss VanDekum with Ladenburg. Please go ahead. Floriss VanDekum: Hey, thanks, guys. Appreciate some more color on that large SNO pipeline. Could you maybe just expand on that a little bit? What percentage of that SNO pipeline is in the Penn District, and how much does it include retail leases? You have done some leasing on Upper 5th Avenue in particular. Maybe if you give us a little bit more color on the Penn District versus other areas in your portfolio. Michael Franco: Morning, Floriss. That number is pretty much all office. So I cannot give you the retail number as we sit here right now. Obviously, the lease with Meta is a big positive. And in terms of the $200 million, in terms of Penn versus others, I would say probably two-thirds Penn. That should not be surprising given the lease-up of PENN 2 and the balance in PENN 1. Floriss VanDekum: And maybe my follow-up question as it relates to your Park Avenue Plaza acquisition: what caused that deal to happen? Why did the Fisher Brothers, I guess, sell out? It looks like it is like a 6%–7% yield on cost, if I am not mistaken, to get to the $0.10 accretion. That seems pretty attractive. Is that a cash yield or is that a GAAP yield? And how much of a mark-to-market—how much more growth in terms of earnings do you expect to get from that property going forward? Michael Franco: I cannot remember everything you asked here, Floriss. We are thrilled about the acquisition. These types of assets do not trade very often on Park Avenue. It is certainly one of the best assets on Park Avenue. In terms of the yields, on a cash basis—given the in-place debt is sub-3%—the cash-on-cash to us is roughly high single digits. On a GAAP basis, it is well into the double digits. And as Steve said in his remarks, rents are well below market here—probably at least $50 a foot below market. So over time, things are not static; there is action with tenants. We will capture that—and that is without rents growing. So if rents go further, that gap should widen. We are excited about it. The Fishers did not sell out. They remain; they still hold their 51%, and I think their track record of performance on the asset is stellar. It is a blue-chip set of tenants. The leases are long term. They are quite effective at signing long-term leases with high-quality tenants, and that is reflected in this asset. And the tenants—some of which we spoke to about their experience—could not have raved more about the quality of the asset, and they have grown over time there. So we are excited about the asset. We think there is tremendous value to be created over time. I think I addressed all your questions. Operator: Thank you. Our next question today comes from Alexander Goldfarb at Piper Sandler. Please go ahead. Alexander Goldfarb: Hey, good morning down there. And, Steve, yeah, echoing, appreciate your comments upfront. Just crazy. But thank you for your statements. Michael, just following up on Floriss' question. The two items in the 2026 guidance: one, the $0.10 accretion for Park Avenue—was that the GAAP impact or cash, just as we think about FFO? And then the second part is, there was an item about the master lease changing at 350, and just want to know how that impacts the earnings for this year. That is my first question. Michael Franco: Park Avenue Plaza, the $0.10 is a full-year run rate on GAAP. So obviously we are not going to have that for all of 2026. That is a GAAP number. On 350, the change there was done given Citadel wanted to kick off the development. They wanted to vacate; we could not start demolition without defeasing the old CMBS loan. And so that loan was defeased, as you saw in our 10-Q. The master lease was modified. There were a number of changes made in the documents. And that was a negative to 2026 earnings—we talked about it. Steven Roth: Alex, the deal always contemplated that when Citadel vacated the building so the building could be demolished, that the rent would be reduced or even go away. The earnings ding by that reduction—much of it will be made up by capitalizing interest, etc. So while the earnings do not get what exactly is going to happen— Michael Franco: So in 2026, for the next few months until we decide whether we are going into the JV, that is an awash. There is no earnings coming out of 350 Park. Once we make that decision, assuming we go into the JV, we are going to start capitalizing interest and costs. Steven Roth: And so you will start seeing— Alexander Goldfarb: Will that equal or exceed—or be less than—the basis? Michael Franco: It will initially be a little less, and then eventually over 2027, 2028, 2029 basically equates to what we would get. For five or six months, there is a negative ding given the master lease. But, again, that is previously communicated. Does that satisfy you, Alex? Alexander Goldfarb: That is awesome. Second question, Steve, is big picture. With regard to Citadel and the whole tension with the mayor, back in 2019, Amazon wanted to open in Queens. They were rebuffed. I do not recall this amount of instant negativity and political nervousness. Today, it is clearly escalated a lot quicker. What do you think has changed? I mean, certainly, politics have become more left, more progressive here. But why do you think this time the politicians seem to be much more eager to make everyone be happy versus Amazon—the city and the state seemed happy. It was not even a ripple when Amazon walked from Queens. It does not seem that. What is the difference now versus then? Steven Roth: Gee, I do not know. But you are correct that the body politic does not seem to have any remorse about losing Amazon. On the other hand, the body politic thinks that Citadel is important and an enormous contributor, and there is a significant feeling amongst the political leadership and the business leadership that this was a mistake—which I described as a blunder. And this is something that should be repaired. We will see where it goes. Operator: Thank you. Our next question today comes from Dylan Burzinski at Green Street. Please go ahead. Dylan Burzinski: Hi, guys, thanks for taking the question. Michael, I think you mentioned that pricing has widened given some capital markets volatility associated with the war in Iran. Curious if you can provide more color on that. And then maybe if you can flavor in some commentary around—last quarter you guys mentioned looking to put assets in the market—just any color you can provide on how those processes are going. Michael Franco: On the financing markets, financing markets were incredibly strong in the last year and beginning of this year—tightest spreads as we have seen in some time. Given the volatility, it has backed off a little bit. There is still depth in the market. Deals still can get done, particularly for high-quality assets. I would not call it a huge impact, but the reality is, look, Treasuries are probably up 30 basis points or so, and spreads have widened out a little bit, so that makes the borrowing cost a little wider—but not wildly different. It is still a very functioning marketplace for high-quality assets, but off maybe 40–50 basis points in total. I am glad we did what we did when we did it. We are not really dealing in today’s markets, but again, you can get deals done. On the asset sales side, as Steve referenced, we are working on some asset sales, and that is true. When we have something ready to announce, we will announce. But the answer is we have a few things that are meaningful in the pipeline. We are in active discussions with potential buyers. I would say the interest in New York City, as I said in my remarks, continues to expand in terms of type of buyer. I think there is consensus on New York being head and shoulders the best market. Rents are rising; assets are at a discount to replacement cost. There is recognition that not a lot of supply is coming. And so I think global capital has a lot of comfort in it. One of the things we are hearing from capital sources around the world is the U.S. remains the safest, most liquid market—particularly given everything going on around the world. I think you are going to continue to see capital M&A from other parts of the world come into the U.S. New York City is going to get a heavily disproportionate share of that. So that is what we are seeing. When we have specifics to announce, we will announce them, but we are encouraged by what we are working on. Dylan Burzinski: And then just on the rent growth piece, several quarters ago I asked—if you saw 20%–25% rent growth over the next five years, what would your thoughts be on that? Steve, I think you mentioned while that is good, that would be disappointing given everything you are seeing on the supply and demand imbalance—especially for high quality office. Can you just talk about how far rent growth could go in your mind? And have your thoughts around that 25% cumulative rent growth figure changed at all? Michael Franco: I think we would still be disappointed in that, Dylan. The backdrop for office is as favorable as it has been in a long, long time. Glen Weiss: And it is very difficult to add supply here. Michael Franco: Which at some point we are going to need. There is going to be a building a year maybe as we get into the next decade—but that is very little. At the same time, we have supply coming out of the bottom end of the market. So, the fundamentals are great. Glen Weiss: Companies, as we have said, continue to want to grow here. Michael Franco: We are seeing still significant activity from the financial services sector, law firms, accounting firms; frankly, AI has picked up more recently. So I think all that results in rents continuing to rise. I do not know if it makes sense to give you a prediction, but we would be disappointed if it is 25% over five years. Glen, do you want to add any comments on what you are seeing? Glen Weiss: Tenant rent sensitivity is not even high on the list right now. Tenants want to be in the best buildings with the best landlords. If you think about our leasing performance, $100 a foot has become the norm for us because of the quality of our product. Over the past eight or nine quarters, our average starting rent is $100 a foot. That is a great trend. As we go on here, and the way we are shaping the portfolio with the addition of 623, Park Avenue Plaza, the new 350 Park—being balanced on the West Side and now Park Avenue—we are really excited about that. We think we are in perfect position for what is to come on rents and tenant demand. Operator: Thank you. Next question today comes from Analyst at Bank of America. Please go ahead. Analyst: Good morning. Thank you, and congrats on the strong start to the year. Michael, appreciate your comments on the 2026 FFO now expected to exceed 2025. Just curious if that is primarily from the Park Avenue Plaza closing in 2Q or also from 1Q being slightly ahead and carrying throughout the year? Michael Franco: I would say it is the latter. Analyst: Great. And then maybe on 555 California, you could give some update on demand, leasing, and rents there, and are AI tenants becoming a bigger part of the pipeline there and in the New York pipeline as well? Glen Weiss: Thank you. It is Glen. How are you? Rents in San Francisco are rising a lot. As I said earlier, our rents in the tower have now gone north of $160 a foot for substantial leases—50,000 feet and greater, not small deals. We are leading the market by far at 555 California. We are also seeing a lot of really good activity at 315 Montgomery in the campus, with more technology/AI-type tenants. So, certainly, that activity we are seeing at our complex as well. But other than tech and AI, financial services is growing in San Francisco—something we have kept a very keen eye on—as well as law firms. So it is not just AI, although it is helping a lot as the city improves. The other industry sectors are really coming on strong, and the city overall feels great. I was out there a few months ago—walking the street, meeting with people. It is really feeling good out there, and people are already positive again in San Francisco. Operator: Thank you. Our next question today comes from Anthony Paolone with JPMorgan. Please go ahead. Anthony Paolone: Great, thanks. You talked about having some assets out in the market for sale. But if we think about just 350 Park, 54th Street, and then 5th Avenue—some of these projects that are going to be in the pipeline—how are you thinking about your pro rata leverage level over the next couple of years, and whether there will likely be a bigger disposition program, or whether you think you will just use project financing and take on a bit more leverage? Michael Franco: Morning, Tony. We have the capital earmarked for all these opportunities in our cash forecast. We have some asset sales in the works. We obviously have a lot going on between these investments that we have made recently—623, Park Avenue Plaza, the buybacks, some of the future development. What I would say about the future developments—something like a 350—is the bulk of our equity is coming from our land contribution. So any incremental capital is really not required from Alexander's, Inc. for probably close to three years. We have ample time to plan for that, and so forth. When you look at our capital needs over the next few years, it is fairly well laddered. At the same time, as we execute, hopefully, on some of these asset sales, that is going to give us some additional firepower, frankly beyond just what we are talking about in terms of these developments. Steven Roth: If you look at our history with respect to capital planning, we have three or four things that we have historically done. Number one, we generally hold billion-dollar-plus cash balances. Second, we almost always pre-fund well in advance of our capital needs. For example, we loaded in—call it—$2.0–$2.5 billion of capital two years before we started the PENN 1 and PENN 2 development so that, notwithstanding the fact that the capital markets got a little bit rough and volatile when we were actually building, we had the capital on our balance sheet. That is what you can look at for what we do. The other thing is we like to operate with lower rather than higher debt levels, for the obvious reason. The last is that our philosophy is that we like non-recourse, project-level debt as opposed to unsecured credit, which basically makes the entire corpus—call it the company—liable. So, we like non-recourse project-level debt, which is the majority of the way we finance our business. Anthony Paolone: Got it. And then just a follow-up question on the leasing side. I think there is about 600,000 square feet in the fourth quarter that comes up. Is there anything larger in there that is a known vacate? I just cannot remember if there are any big deals in that mix to watch out for. Glen Weiss: There are two larger tenants expiring in the second half of this year, and we believe both will renew their leases. We feel good about our expirations for the remainder of 2026. And as you would expect, we are all over the 2027–2028 expirations as well. But 2026—we are pretty well taken care of. We feel good about what is going to happen. Operator: Thank you. Our next question today comes from Vikram Malhotra with Mizuho. Please go ahead. Vikram Malhotra: Good morning. Thanks for taking the question. First one—given all the activity you have had with the Penn assets, any update on Hotel Penn and Manhattan Mall in terms of users, monetization, etc.? Glen Weiss: No update. Vikram Malhotra: Okay. And then just on the earnings side, you mentioned 2027 FFO nice pickup. I am wondering two things. One, are there any offsets we should be thinking about for 2027? And then, particularly, FAD—given the ramp in FFO, I am assuming there will still be elevated TI in 2027. So should we think about FAD really perhaps picking up only in 2028? Thanks. Steven Roth: Hey, Vikram. I would make one comment. I cannot wait for the free rent to burn off. That is when this business will get to be real fun and will generate substantial positive cash. That happens over the next year or two. I cannot wait for that. Now go ahead, Michael. By the way, Glen, take note of what I say. Michael Franco: On the FAD side, Vikram, your comment is right. There will be continued elevated TIs this year and next year. Even on deals we have committed this year, tenants do not occupy for a while, so that will go into next year. And then 2028, we expect to see that drop materially and cash flow be much higher. So I think your general direction is accurate. On the earnings side, there are always ins and outs. There are always offsets. I cannot tell you specifically what those are, but in the history of Alexander's, Inc., I think we have given you as much guidance as we can give you with respect to next year in terms of what the bottom line is going to be. Operator: Thank you. Our next question today comes from Nick Yulico at Scotiabank. Please go ahead. Nick Yulico: Thanks. I just wanted to go back to 350 Park to be clear on a couple of things. One, in terms of the new $16 million annual rent versus the old rent—did that already happen in the first quarter? Is that a second quarter accounting impact? And then I also want to be clear on that new rent that is being paid—what is the maturity on that lease? Is that concurrent with the new mortgage that matures next year, or does it extend beyond that? Michael Franco: Good morning, Nick. On your first question, the new rent started—there were a few days in March where it started—but by and large, it will be second quarter. So maybe there were 15 days in the first quarter where the new rent was reflected. The new rent is coterminous with the execution of the new mortgage. That new lease runs until early 2027. Why is that? Because there will be a resolution—either the venture will be formed, we will put the asset—something will happen—prior to that maturity. Nick Yulico: Okay. So the new rent is only in place until the point at which the mortgage matures. There is no rent being paid beyond that date on the new agreement. Michael Franco: Correct. But there will be a resolution—door A or door B—before that, which the rent would have gone away anyway. There is no building for the tenant to pay rent for. Nick Yulico: Got it. Okay. I just wanted to be clear on that. And then second question is—you have talked a lot about breadcrumbs on 2027, how to think about that. It is also the 2027 FFO is a piece of the executive comp per the proxy plan. So I guess I am just wondering, Steve, any new thoughts about finally getting earnings guidance? You are at the point now where the tide is turning. You are being measured by that from a comp standpoint. Why not give formal FFO guidance at some point? Steven Roth: Oh, lord. How do I answer that question? You know, there are two sides of it. We have a simple business which has complexity, and the numbers are moving. We find that it is difficult to guide and counterproductive. Warren Buffett—who is not a friend of mine but an acquaintance of mine—he has been a no-guidance guy for his whole career. The big banks’ guy—he does not guide either. But all of our competitors seem to be able to guide. So what is wrong with us? Right now, we have no plan to guide, other than the snippets that we put in these calls here and there, which I hope you find helpful. Now, what I think you are saying is that if our earnings are going to explode up, why do we not just pat ourselves on the back for that and guide to that? That is something that I am going to put under my pillow and think about, because that sounds like maybe it is a good idea. But as of right now, our policy is we selectively and in a limited way guide, but we do not give full guidance. And you could probably guess that is going to continue for the future. Thomas Sanelli: I agree. Steven Roth: Tom says he is happy he does not have to guide. Operator: Thank you. Our next question today comes from Analyst at Citi. Please go ahead. Analyst: Hi, thanks for taking my question. In the annual shareholder letter, you referenced the “no sacred cows” policy again. It sounds like the New York office market is improving. You mentioned inflows given the U.S. is a liquid and safe market. How do you think about potential asset sales? Should we think about those being more non-core dispositions, or any core asset sales that you are thinking about? Steven Roth: I do not want to shock you, but basically, I am in it for the money. And so, therefore, there are no sacred cows. There are assets that are critical to the business; there are assets that are important to the business; there are assets that we love more than other assets. But based upon price, economics, and business strategy, there are no sacred cows. Now, what does that mean? There is a handful of assets that we have already determined that we do not want in the business mix, and those assets are for sale. Our intensity to liquidate those assets rises and falls with the market, but over a short period of time, there is a handful of assets that will not be part of our portfolio. Now, getting to the rest of it, there are assets that we hold near and dear that we think are very valuable, that we underwrite as being much more valuable than apparently the stock market underwrites them. Even those assets—if, I think Sam Zell said, a godfather-like bid came in for one of those important assets—we would execute on that, because that would be the right thing to do. That is the right thing for the management to do, and more importantly, it is the right thing for the shareholders too. So there are no sacred assets. There are places that are critical, but in terms of whether we would execute on selling something, it is all a function of what the price is. Analyst: Great, thank you. And then for my second question, how do you think about incremental potential acquisitions versus accelerating the share buyback, and balancing that versus your current leverage levels? Steven Roth: There are three things inherent in that question—acquisitions versus stock acquisition and leverage levels. The answer is that we are certain that we can basically do all three. We are certain that we can buy selectively important assets that come up in the bull's-eye location of our heartland. We are certain that we have the capital to buy back our stock in a measured way. And we are also certain that we are able to keep our leverage to a controlled level. We think we can do all of that. And we have some things that are in process that will augment all of that. Our two most recent acquisitions of 623 5th Avenue—which we think is a terrific deal—and the Park Avenue Plaza acquisition that we just announced—we think is a terrific deal. And then we think buying back our stock at $30 a share is a terrific deal as well. So we are doing all of that. I hope that answers your question. Operator: Thank you. Our next question today comes from Caitlin Burrows at Goldman Sachs. Please go ahead. Caitlin Burrows: Good morning, everyone. Maybe just on the pricing side—I realize the reported leasing spreads are only on a subset of second-generation space. So first, I was just wondering if you can go through your expectation today of portfolio mark-to-market across New York, San Francisco, the Mart, and then also whether you expect that portion that gets included in the spreads to increase as in, could downtime become smaller? Glen Weiss: Good morning. It is Glen. On the question of mark-to-markets, we expect to continue the performance we have had over the past couple of years, which are positive, positive, and positive. During the last two years, we have only had one quarter negative—which we like—and we expect to continue. Many have been in the double-digit positive. We expect free rent to continue to reduce, and even TIs are starting to come down. So we are working hard on that piece, of course. San Francisco is the same; with the rents we are achieving, the mark-to-markets will continue to improve. Chicago, as I said, is still most challenging, although demand is picking up. Rents are staying firm. Concessions are high in Chicago; those have yet to break downward. But demand is certainly improving. Steven Roth: Think about just Economics 101 or macroeconomics, focusing on New York for the moment. We have said—and I have written—that we compete in a subset of better-building Class A space, which is under 200 million feet. So the fact that there may be 400 million feet in New York is irrelevant because we really compete in a market which is about half that size. The availability of space in that market is evaporating very quickly—somebody used the analogy of an ice cube in a microwave. We know that we are a key factor in the market. We know that because the incoming calls from brokers looking for space with their clients are starting to get more anxious and even more desperate. As this availability of space shrinks, obviously, the price goes up. Now there is something else going on which is equally important. The cost of a new building has gone to somewhere around—pick a number—$2,500 a foot. Interest rates and the cost of capital have gone from, you know, zero or 2% to 5%, 6%, and 7%. So the rents that have to be achieved to make a new building economic are well into the $200 a foot and even touching $300. That has never happened before. So, obviously, rents on older buildings—which are still great buildings in great locations—are going up because of scarcity and because of the cost of new supply coming on the market. This is just basic Economics 101. The next part of it is that I believe—and my team can speak for themselves—we are in a long, long, long-term landlord's market where these dynamics will continue. Why is that? Because there is nothing in the short term that can change that other than if interest rates get down to 2% or something like that, which—you can make your own judgment whether that might happen. So if that happens—basically—I am not in a big rush to rent space at today's prices because I think tomorrow's prices are going to be higher and maybe even a fair amount higher. Thanks. Caitlin Burrows: I guess maybe just to follow up on that last point. I know leasing volume in the first quarter was relatively low. Would you say that is lumpy? Is it more about that you are not in a rush because prices could be rising? Or something else? Steven Roth: Glen is in the business of renting space as quickly, aggressively, and as hungry as he can be. So if there is any fall-off in volume, it is not because I directed Glen to get out of the market. Glen is in the market every day working his ass off. Thank you, Glen. Operator: Thank you. Our next question today comes from Ronald Kamdem at Morgan Stanley. Please go ahead. Ronald Kamdem: Hey, just two quick ones, and thanks for taking the questions. Number one, I think last call you talked about some guideposts for occupancy over the next 12 to 18 months—and thinking sort of mid-90s on a leased basis. If you could provide any update both on a leased and on a physical basis—what that occupancy target looks like over the next 12 to 18 months again? Thanks. Michael Franco: We have historically run our portfolio in the mid to high-90s, and we expect to get back there. That probably is over a couple-year period. Given all the dynamics that Steve alluded to and we have talked about in the market—and the lack of space availability—that is going to happen. Obviously, leasing up Penn is a key part of that. One of the analysts picked up this quarter that our occupancy actually went up 70 basis points, not the 40, because we took 350 Park out of service. That is what we are expecting. I cannot tell you exactly what quarter it is going to be, but over the next couple years or so, that is where we expect to get back to. But there are a couple of things to focus on. Steven Roth: There are a couple of buildings that we are not renting. Why is that? Because they are overleveraged and underwater, and it is uneconomic for us to rent space in those buildings—which really are almost owned by the banks. If we put TI into those buildings, it is basically burning money. We have chosen to leave those in the aggregate statistics—where some of the folks in our industry have taken those buildings out of the numbers, which makes their occupancy higher. If you take those buildings out of our numbers, our occupancy goes to—what—94%? So we know that number, although we do not publish that number, and maybe we should—although, right now, I am publishing that number. The thing is that I look upon—in a landlord's market like this—vacancy and available space as an asset. Because as we rent that space—and we will with 100% certainty—that will grow our earnings. So when you think about investing, maybe the best company to invest in is the company that does have available space in this market, as opposed to a company that has all space already rented. You can make out of that whatever you will. Ronald Kamdem: Thanks. Really helpful color. And then my second one, if I may, was regarding a lot of the footnotes in the supplement. On PENN 1—any idea when that litigation will be—just in terms of timing? Obviously, you cannot comment either way, but in terms of timing, is that something that can be done this year? And also, the change in retail from the base of the office buildings being put in the office segment—just the thinking there. Thanks. Steven Roth: I will take the litigation. I have absolutely no comment on anything having to do with that litigation, other than I am optimistic. Michael Franco: On the segment reporting, we did not change our segment reporting—obviously, we have two segments: New York and Other. This is a sub-segment. Ronald, what we did here is we tried to align the sub-segment more on how we view the assets. So we grouped all the retail assets together and the office assets. So the base of 1290 retail is now included in office as opposed to being in retail. Any ancillary office that is in a retail building is obviously in the retail sub-segment. It is all disclosed in the supplement, and we give you the exact buildings that are in each sub-segment so you can follow along. I think this is the better way of looking at it as opposed to the way we were doing it previously. Operator: Thank you. Our next question today comes from Brendan Lynch at Barclays. Please go ahead. Brendan Lynch: Great, good morning. Thanks for taking my questions. First one on Sunset Pier Studio—any interest from the current short-term tenants in converting to longer-term leases? Just an update on that. Glen Weiss: There is great interest in Sunset—in the studio. We are leased right now. The place is unbelievably great—great location. We have very good activity: long-term folks looking, short-term folks looking. We expect to fill up the project once this year's leases expire. The reception has been A-plus. We expect to do really good things during the leasing. Direct answer to your question, I would definitely prefer to be in the long-term leasing business with that asset rather than month-by-month leasing. So the ownership of that asset prefers to be in long-term leasing if the market gives us that opportunity. Brendan Lynch: Okay, thank you. That is helpful. And then a follow-up on the Verizon space at PENN 2. Can you just walk us through if they find us a subtenant versus you finding a tenant—and how we should think about potential termination fees? Any accounting around the TIs that you might still be responsible for if it is just a sublease instead of a cancellation and new lease? Steven Roth: Glen prefers that I do not talk about it. Go ahead. Glen Weiss: As I said earlier, we are in a great spot no matter how it comes out. We will only be opportunistic to make money on this space. We have a very good lease position, and we will see how it plays out. But that is as much as I want to talk about it for now. Steven Roth: We have basically a 19- or 20-year lease. So we have a long-term lease with a super credit. That lease will never be terminated under any condition. The only thing that might happen is around the dynamics of a subtenant coming in because Verizon wants to reduce their liability. But we do not have anything to say other than that long-term credit lease is not something that we are going to terminate or monkey with. Operator: Thank you. There are no further questions at this time. I would like to hand it back to Steven Roth for any closing remarks. Steven Roth: Thank you all very much. I think the team and I are delighted with our activity over the last three, four, six months. We are excited. I did make the statement in my remarks this morning that I am certain that over the next year or two, we will have the highest growth performance of any company in our sector. We are excited about that. We have a lot of great stuff going on, and thank you for participating. We will see you next quarter. Operator: Thank you. That concludes today's conference call. We thank you all for attending today's presentation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alexander's (ALX) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Manhattan office fundamentals are strengthening: management said leasing volume reached nearly 12 million square feet in Q1 (the highest first-quarter level since 2014), Vornado leased 426,000 sq ft (311,000 in NYC) with average starting rents of $103 per square foot and a pipeline of more than 1 million sq ft under negotiation. Q1 comparable FFO fell to $0.52 per share (from $0.63), but Vornado expects full‑year 2026 comparable FFO to be slightly higher than 2025 with results ramping each quarter and "significant earnings growth in 2027" as PENN 1/2 lease‑up and Park Avenue Plaza contributions materialize. Key strategic and capital moves include a decision on the 350 Park Avenue redevelopment JV with Citadel (Vornado has until mid‑July and participation hinges on Citadel anchoring ≥850,000 sq ft), a 49% acquisition of Park Avenue Plaza priced at $950/sq ft, $180 million of buybacks completed with an additional $300 million authorized, and liquidity of $2.6 billion. Interested in Alexander's, Inc.? Here are five stocks we like better. Vornado Realty Trust executives struck an upbeat tone on the company’s first-quarter 2026 earnings call, pointing to what they described as a strengthening “landlord’s market” in New York and accelerating leasing activity across key portfolios. Chairman and CEO Steven Roth said “business at Vornado continues to be excellent, and it’s getting better and better,” while President and CFO Michael Franco said the company believes the landlord’s market it has long anticipated “is very much here.” Franco reported first-quarter comparable FFO of $0.52 per share, down from $0.63 per share in the prior-year period. He attributed the decline primarily to the “reversal of previously accrued PENN 1 ground rent expense in the prior year’s first quarter” and higher net interest expense, partially offset by the execution of the NYU master lease at 770 in the prior year and “strong income growth” at PENN 1 and PENN 2. → Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook Looking ahead, Franco said Vornado expects full-year 2026 comparable FFO to be slightly higher than 2025, with results “ramping up each quarter” as GAAP rents come online, interest expense declines after June 2026 bonds are repaid, and signing-fee seasonality plays out. He reiterated expectations for “significant earnings growth in 2027” as PENN 1 and PENN 2 lease-up takes effect and the company begins to realize the impact of its Park Avenue Plaza acquisition. When asked whether the improvement versus 2025 was tied to Park Avenue Plaza closing in the second quarter or to first-quarter performance carrying through, Franco said it was “the latter.” → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Management emphasized what it sees as a sharp improvement in Manhattan office fundamentals. Franco said Manhattan leasing volume reached “nearly 12 million square feet,” the highest first-quarter level since 2014, and described a “significant supply-demand imbalance” in the Class A segment where Vornado competes. He said availability has tightened in prime submarkets and “there’s little new supply coming for the foreseeable future,” contributing to tenants competing for space and rents “rising aggressively.” Vornado reported leasing 426,000 square feet of office space in the first quarter, including 311,000 square feet in New York. Franco said average starting rents in Manhattan were $103 per square foot, with mark-to-markets of +11.7% GAAP and +9.7% cash and an average lease term of nine years. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries EVP of Office Leasing and Co-Head of Real Estate Glen J. Weiss said the company’s pipeline of more than 1 million square feet of leases in negotiation is “extremely well-balanced,” with roughly 50% new expansion and 50% renewal. Weiss added that because of the shortage of quality space, tenants are approaching the company earlier on renewals, calling it a “key indicator of a rising landlord’s market.” Franco also discussed signed-not-commenced leasing, saying the “$200-ish million” figure referenced previously is “still in that general neighborhood” and “probably a touch larger today.” He said, from a pacing standpoint, “probably 10%-12% comes in per quarter over the next couple of years,” and reiterated a prior modeling assumption: “assume $0.40 a share flows through to the bottom line,” noting that the benefit began in the first quarter. On the composition of the signed-not-commenced pool, Franco said it is “pretty much all office,” and estimated it is “probably two-thirds PENN.” Roth devoted a significant portion of his prepared remarks to political tension involving New York Mayor Mamdani and Citadel founder Ken Griffin, framing the situation around Vornado’s planned 350 Park Avenue redevelopment. Roth said Vornado owns the existing building slated for demolition and that the project received “rare unanimous ULURP approval.” He said demolition began “literally days ago.” Roth also addressed Vornado’s decision timeline with Griffin. “As we discussed last quarter, Ken exercised his option to enter our development joint venture,” Roth said, adding Vornado has until “the middle of July” to decide whether to participate in the venture or sell to Griffin. Roth said he expects the company will use the available time and that, while he expects Vornado will be “all in,” it is “not a legal commitment at this time yet.” In response to an analyst question, Roth and Franco said participation is dependent on Citadel’s lease commitment. Roth said, “This whole deal is based upon the fact that Citadel will be the anchor tenant taking no less than 850,000 square feet, although we expect more.” Roth also outlined the contemplated ownership structure: Griffin as a 60% partner, Vornado at 36%, and the Rudin family at 4%. Franco and EVP of Finance and Chief Administrative Officer Thomas Sanelli provided additional detail about near-term earnings impacts at 350 Park. Franco said the master lease was modified as part of steps required to begin demolition, including defeasance of the existing CMBS loan, and that the changes were a “negative to 2026 earnings.” Sanelli said that for the next several months, “there’s a wash” with “no earnings coming out of 350 Park” until Vornado decides whether to enter the JV; if it does, the company would begin capitalizing interest and costs. Sanelli said capitalization “initially will be a little less, and then it eventually…basically equates to what we were getting.” Franco also clarified that the revised rent at the property started with only “a few days in March” and would largely be reflected in the second quarter. He said the new lease runs “until early 2027,” and that the rent is not expected to extend beyond that because “there’ll be a resolution…before that.” Roth highlighted several portfolio initiatives, including the acquisition of a 49% interest in Park Avenue Plaza, a 1.2 million-square-foot Class A office building. He said the property is 99% occupied, has an 11-year weighted average lease term, and in-place rents are “40%-50% below market.” Roth said Vornado is buying at $950 per square foot, which he described as a 65%-70% discount to replacement cost, and noted the deal includes a fixed-rate, sub-3% loan through 2031. Franco said the investment’s yield is “roughly 8%” on a cash basis given the in-place debt and “well into double digits” on a GAAP basis, and he emphasized that the Fisher family remains as the 51% owner. In response to another question, Franco said the previously cited expectation that the transaction would be approximately $0.10 accretive is a “full year run rate” and is a GAAP number. Roth also provided an update on share repurchases. Under a $200 million program, he said Vornado repurchased 7 million common shares at an average of $25.80 per share, totaling $180 million. He added that the board authorized an additional $300 million buyback program. On capital markets, Franco said financing remains “strong and liquid for Class A New York office assets,” though spreads have widened “a little bit” amid geopolitical volatility, referencing the “war in Iran.” He said borrowing costs have moved modestly, estimating treasuries up about 30 basis points and overall costs “off maybe 40, 50 basis points.” Franco said Vornado has addressed “almost all” of its 2026 and 2027 maturities and doesn’t have significant financings to complete for the next 18 months. He also reported liquidity of $2.6 billion, comprised of $1.2 billion of cash and $1.4 billion of undrawn credit lines. Management also discussed asset sales, with Franco saying the company has “a few things that are meaningful in the pipeline” and is in active discussions with potential buyers, though no specific transactions were disclosed. Roth reiterated his “no sacred cows” approach, saying that assets may be sold depending on price and strategy, including some that the company has “already determined” it doesn’t want in its mix. Outside New York, Weiss said San Francisco leasing is “coming on very strong.” He said deals at Tower 555 are now “north of $160 a foot” for substantial leases of 50,000 square feet or more, and he described improving activity across sectors including tech/AI, financial services, and law firms. Weiss also said Chicago demand is improving, though he called deals “tough” and noted concessions remain high. On the PENN 2 Verizon lease, Sanelli said Verizon decided not to build out its space and put it on the sublet market, allowing GAAP revenue recognition to start early; he said it began in the first quarter and will flow through 2026. Weiss said the company has a Verizon parent guarantee and reported “very good action” on the space. Roth emphasized that Vornado does not intend to terminate the long-term Verizon lease. Vornado also briefly touched on other items, including Sunset Pier Studio. Weiss said the project is currently leased and has strong interest from both long- and short-term users, and Roth said ownership would “definitely prefer” long-term leasing there. On Hotel Penn and Manhattan Mall, Roth said there was “no update.” Alexander's (NYSE: ALX) is a publicly traded real estate investment trust focused on owning, leasing and managing commercial properties in the New York metropolitan area. The company's portfolio encompasses office buildings, retail storefronts and parking facilities, all held on a wholly owned basis. By concentrating on prime urban and suburban locations, Alexander's seeks to generate stable rental income and long-term asset appreciation. Founded in 1928 as a family-run department store chain, Alexander's transitioned during the early 1990s into a pure-play real estate company following the sale of its retail operations. The article "Alexander's Q1 Earnings Call Highlights" was originally published by MarketBeat.