Vornado Realty Trust Reports Significant Decline in Net Income and Revenues for Fiscal Year 2024

Vornado Realty Trust reported a net income of $8.3 million, or $0.04 per diluted share, for the fiscal year ending December 31, 2024, a significant decrease from the $43.4 million, or $0.23 per diluted share, recorded in 2023. The company's total revenues fell to $1.79 billion, down from $1.81 billion in the previous year, primarily due to a decline in rental revenues and same-store net operating income (NOI). Funds from operations (FFO) attributable to common shareholders decreased to $470 million, or $2.37 per diluted share, compared to $503.8 million, or $2.59 per diluted share, in 2023.

The decline in financial performance was attributed to several factors, including a decrease in same-store NOI, which fell by 6.8% overall, with the New York segment experiencing a 4.7% decline. The company noted that same-store operations were negatively impacted by increased competition and changing tenant preferences, particularly in the office sector, where 76% of Vornado's net operating income is derived. Additionally, the company recognized a $31.2 million gain from the extinguishment of a mezzanine loan, which contributed to the previous year's stronger results.

Strategically, Vornado engaged in various acquisitions and dispositions during the year. Notably, the company completed a $50 million investment in a B-Note secured by a Midtown Manhattan property, which is currently in default. Vornado also sold its 49.9% interest in 50-70 West 93rd Street for $2 million in net proceeds and two condominium units at 220 Central Park South for $31.6 million, resulting in a net gain of $15.2 million. The company continues to focus on its development projects, including the ongoing redevelopment of PENN 2, with an estimated cost of $750 million.

As of December 31, 2024, Vornado's total assets amounted to approximately $16 billion, with a significant portion concentrated in the New York metropolitan area, which accounted for 89% of its NOI. The company reported an occupancy rate of 87.6% across its New York segment, with office properties at 88.8% occupancy and retail properties at 73.7%. Vornado's employee headcount stood at 2,996, with a majority employed through its subsidiary, Building Maintenance Services LLC.

Looking ahead, Vornado anticipates continued challenges in the office real estate market, particularly due to ongoing work-from-home trends and economic uncertainties. The company plans to focus on enhancing its portfolio through strategic acquisitions and developments while maintaining a strong emphasis on sustainability initiatives. Vornado aims to achieve carbon neutrality in its buildings by 2030, aligning with its long-term sustainability goals.