Vornado Realty Trust (VNO) Q1 2026 earnings summary

Executive summary

• Business performance remains strong, but Q1 2026 reported a net loss of $22.8M ($0.12 per diluted share), compared to net income of $86.8M ($0.43 per diluted share) in Q1 2025.

• FFO attributable to common shareholders plus assumed conversions was $96.3M ($0.49 per diluted share), down from $135.0M ($0.67 per diluted share) year-over-year; adjusted FFO was $103.1M ($0.52 per diluted share), compared to $126.2M ($0.63 per diluted share) in the prior year.

• Same store NOI at share increased 6.1% overall, with New York segment up 8.9%, but THE MART and 555 California Street segments showed minimal or negative growth.

• Major focus on leasing at PENN 1 and PENN 2, with significant earnings growth expected by end of 2026 and into 2027.

• Recent acquisitions and development projects, including Park Avenue Plaza and 3 East 54th Street, are expected to be highly accretive and enhance portfolio quality.

Financial highlights

• Q1 2026 revenues were $459.1M, slightly down from $461.6M in Q1 2025.

• Comparable FFO was $0.52 per share, down from $0.63 per share year-over-year, mainly due to prior period ground rent reversal and higher net interest expense.

• Liquidity stands at $2.6B as of March 31, 2026, including $1.2B in cash and $1.4B in undrawn credit lines.

• Operating expenses increased by $30.3M year-over-year, primarily due to higher same store operations and BMS expenses.

• Interest and debt expense decreased by $6.6M to $89.2M, mainly from lower average debt balances and lower amortization of interest rate cap premiums.

Outlook and guidance

• Full year 2026 Comparable FFO expected to be slightly higher than 2025, with quarterly ramp-up as new rents come online and interest expense declines.

• Significant earnings growth projected for 2027, driven by PENN 1 and PENN 2 lease-up and Park Avenue Plaza acquisition.

• Free rent burn-off and reduced tenant improvements expected to materially boost cash flow by 2028.

• Management anticipates sufficient liquidity to fund operations, dividends, and capital expenditures over the next twelve months.

• Projected incremental cash yield for 623 Fifth Avenue office condominium development is 10.1%, with stabilization expected in 2028.