In these documents and during today's call, we will discuss certain non-GAAP financial measures. You go -- run this out a year, 1.5 years, and that will all change. And so we prepared for this. I will remind you, which I think we've told you multiple times over the course of the last period that the Farley Building has no debt on it. We don't know what the future holds beyond 5, 6 years. So things change. We recognized a $305.9 million noncash impairment loss on our investment in Fifth Avenue and Times Square retail joint venture. Now the Facebook, the Farley building, as I think you know, I hope you know, is a very, very, very differentiated, different, unique and marvelous piece of property. If it comes down at all, marginally, okay? Will they commit to physical assets in light of all the work-from-home stuff? They're not fluid. Neither parties, neither we or Facebook flinched at all during the entire period of time. Across the street from Madison Square Garden, you get the picture. With office building census about 8%, street traffic is very light. NEW YORK Sep 21, 2020 (Thomson StreetEvents) -- Edited Transcript of Vornado Realty Trust earnings conference call or presentation Tuesday, August 4, 2020 at 2:00:00pm GMT. Second of all, don't make that conclusion. And we will see. -------------------------------------------------------------------------------- Alexander David Goldfarb, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [32] -------------------------------------------------------------------------------- Okay. In addition, obviously, you have Trump and they're all the people who love to write critical things of him. -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [43] -------------------------------------------------------------------------------- I don't think -- the answer is, I'm not going to comment on that. And our belief is still that we can redeem the preferred and the timing may be different per asset. Now I would remind you that Long Island city is 1 to 2 train stops away from almost every office building in the city. 220 Central Park South is the most successful residential development ever. We didn't say not making a decision. So we have basically a 4-plus million square foot campus in -- on top of Penn Station, which is I submit an unbelievably scarce asset and valuable. Fundamental company data provided by Morningstar and Zacks Investment Research. -------------------------------------------------------------------------------- Michael J. Franco, Vornado Realty Trust - President [72] -------------------------------------------------------------------------------- The only thing I'd add, Nick, is that the retail Joe referenced in terms of the bad debt reserves and it's got the impact of the Forever 21 bankruptcy. I guess, what are you thinking about in terms of putting incremental capital to work? I don't believe it, and I'm bidding against it. The time to invest is when things look a little bleak. And that's my answer to your question. TEXT version of Transcript ===== And therefore, the refinancing proceeds would not be anywhere near as robust as 555. Farley is a unique property like none other in New York. And my guess is that we are not going to see a dramatic reversal of densification, but I think what we are going to see is certainly the densification that we've seen over this last cycle is going to plateau and maybe even begin to reverse a bit as people focus on this space usage over the next 5 and 10 years. So first, to Bilerman's point, I mean, Steve and Michael, you could have New York returned to more of the commuter days where New York office works, but the residential returns to a lower price point. Will they continue to expand in New York, in effect, doubling down? -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [16] -------------------------------------------------------------------------------- Glenn, take that one. Can you just talk a little bit more about what drove that despite Manhattan Mall and other issues? Hope the market has stabilized, recovered, maybe not back to peak, but we're in a vibrant market. Tom, do you have it handy? Most importantly, this deal further validates the west side of Manhattan as the place to be and it further validates our plans to redevelop our 10 million square feet of Penn District Holdings into the bull's eye location in New York. -------------------------------------------------------------------------------- Michael J. Franco, Vornado Realty Trust - President [13] -------------------------------------------------------------------------------- I would just add to what Steve said that at the end of the day, in addition to all the infrastructure that New York has, right? I hate the homeless situation. We are not in the abatement business. But leave that as I say, look, New York is the world city. So there's no connection from one deal to the other. -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [24] -------------------------------------------------------------------------------- No, they would only take one. Getting through these items, though, our core office business was essentially flat. You have major companies from various different industries that are looking beyond this short-term period, which it is short term. The call may include time-sensitive information that may be accurate only as of today's date. So thank you all. And I guess I'm talking my book just -- Vikram, I think I'm talking my book just a little bit because I really believe it. This should also not be a surprise since the general feeling is that these assets are worth less today than they were then. Looking for new stock ideas? Quarterly Earnings; Earnings Calendar; SEC Filings & Other Reports. You didn't make a final decision about which path to go down because you're evaluating what the best outcome is for Vornado shareholders, which is perfect. So going forward, more than half of all the rents not collected in the second quarter are now on a cash basis. Do Not Sell My Information. In June, we announced that we were going to market to recapitalize 2 large, highly -- high-quality assets, 555 California Street, which has to be a top 5 in the nation Trophy and 1290, one of the premier buildings on Avenue of the Americas. All earnings call transcripts on Vornado Realty Trust (VNO) stock. Was that specific to one lease or multiple leases? -------------------------------------------------------------------------------- Joseph Macnow, Vornado Realty Trust - Executive VP, CFO & Chief Administrative Officer [59] -------------------------------------------------------------------------------- I don't know, Steve. -------------------------------------------------------------------------------- Stephen Thomas Sakwa, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Equity Research Analyst [2] -------------------------------------------------------------------------------- Michael or Steve, I didn't know if you could maybe just address, in general, how the economics on Facebook lease might have changed over the past 9 months. This article is a transcript of this conference call produced for The Motley Fool. What we said was that we were in the marketplace to be -- expose ourselves to whatever financial opportunities might be there, and then we will select what is best for us. There is an elephant company that's in the marketplace that is looking -- by the way happens to be looking at both 350 Park Avenue and 2 PENN, which is an interesting combination of locations. Download the investor presentation - earnings call slides. We believe this will continue to be the case. That building is adjacent to their business. And our feeling is that it will continue to flourish. But to emphasize a point that Steve made earlier, the trend of users wanting to be in the best product with the most modern amenities and healthiest environments will only accelerate coming out of the crisis. Vornado Realty Trust (NYSE:VNO) will be posting its quarterly earnings results after the market closes on Monday, November 2nd. We have been talking to investors for about a month, and interest in these high-quality assets is quite strong. It's not impossible that in this cycle, which I think is going to be a soft cycle for a while that our capital will be able to attract a transaction or other transaction where we will be able to buy great assets at less than par. And we are confident this is exactly what tenants want as we emerge in the post-COVID world. -------------------------------------------------------------------------------- James Colin Feldman, BofA Merrill Lynch, Research Division - Director and Senior US Office & Industrial REIT Analyst [15] -------------------------------------------------------------------------------- Can you talk about the implications of the Facebook deal on 770 Broadway? We're going to have a vaccine or set of therapeutics, it looks like near term. This is Joe. It's a vertical campus and the floors are enormous. I would just add a couple of other comments. I couldn't be more proud of Glen and Barry and our teams, and I couldn't be more proud of David and me who are middling, okay? So I know you lapped the yield unchanged in the supplemental, but anything that you could talk about on rental rates or concession packages or kind of how that might have evolved over the course of time would be helpful. And the way I describe it most of the time is the people that wear ties go to the Plaza district, the people don't wear ties go to the west side. We disclose what's appropriate to be disclosed in our docs, and there will be certain disclosure in our docs about this deal as well. Lenders are appropriately concerned. That being said, tours have picked up a bit in New York in the past few weeks, and we are responding to several new major tenant acquirements. Vornado Realty Trust (VNO) Earnings Report: Q3 2015 Conference Call Transcript The following Vornado Realty Trust conference call took place on November 3, 2015, 10:00 AM ET. Though a few strong and healthy ones are, as evidenced by our recent deal with Target on the Upper East Side. Now turning to the leasing markets. And then one of the things you talked about in your terms letter and also in the proxy was the whole element of a tracking stock. And we learned a lot from that. Do you foresee any changes in Manhattan, whether it's with lease structures or co-working or maybe a little bit more big, big firms maybe thinking about suburban? If we thought it was impaired, we would have impaired it. Correct. Number one, 555 California has a very low loan-to-value mortgage on it now, okay? We have indications of upsizing the 555 California Street mortgage from the existing $550 million to as much as $1.5 billion. And we acknowledge that frankly on many of those you had to re-read that today, those numbers would be lower. So New York has this enormous built-in infrastructure. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. And I -- by the way, this is -- we've been doing this for a long time. So it's obviously higher than it was a few years ago, but we still feel appropriate today. Now the other thing is that economics are important. And more to the point, I realize that the cash flows are still good. Second quarter FFO as adjusted was $0.55 per share compared to $0.91 for last year's second quarter, a decrease of $0.36. And 1 PENN Plaza has no debt on it. Over the past 11 years, they have paid us $200 million in rent in Manhattan Mall, though we do have a $20 million hold of failure. Again, when life returns to normal, we expect those to return to normal. Welcome to Vornado Realty Trust third quarter earnings call. If anything, I think the Farley transaction reflects the very strong relationship between the companies, which has grown from our initial deal down at 770 some 7 years ago. All of that retail funnels through all of the pedestrian traffic and commuter traffic and funnels through the retail portion of the Farley Building. Good morning, everyone. -------------------------------------------------------------------------------- Michael Jason Bilerman, Citigroup Inc., Research Division - MD, Head of the US Real Estate & Lodging Research and Senior Real Estate Analyst [9] -------------------------------------------------------------------------------- It's Michael Bilerman here with Manny. And that's something that the Penn District will provide and the Farley Building will provide. And the scarcest product is in the dense metropolitan areas of which New York is the densest is to get space, which can satisfy that requirement with enormous loading facilities and the ability to get panel trucks on and off the streets. And one of the things that we learned was the way these tech companies like to work. Just second question is going back to the Facebook deal. The vast preponderance of office tenants are opting to renew their leases rather than uproot the organizations and spend money building out new space. -------------------------------------------------------------------------------- Piljung Kim, BMO Capital Markets Equity Research - Senior Real Estate Analyst [44] -------------------------------------------------------------------------------- Okay. Vornado (VNO) 11 mins California regulator flags concerns over PG&E’s wildfire safety measures Investing.com -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [89] -------------------------------------------------------------------------------- Glen, David? The preferred was originally proxy for senior mortgage, right? Learn everything you need to know about successful options trading with this three-part video course. But this is -- in the froze of this financial crisis, this is probably -- or not, in this health crisis, this is probably not the perfect timing. Can you give us a sense of any larger tenant that may be up for renewal? They have bicycle storage. We have activity and interest for this property. And I couldn't be proud of the accomplishment. And then just second on street retail again. Everything else was a miss. Second, as we had specifically guided on our first quarter call, we recalled our variable businesses, which include Hotel Pennsylvania, BMS cleaning, signage and trade shows, came in as we had predicted. -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [75] -------------------------------------------------------------------------------- Glen, we did not, correct? So I would say up to this point, we've seen no real change that I could pinpoint for you, too. -------------------------------------------------------------------------------- Glen J. Weiss, Vornado Realty Trust - Executive VP of Office Leasing & Co-Head of Real Estate [47] -------------------------------------------------------------------------------- The 174,000 foot lease is with one tenant. And in some of those cases, the tenants are thinking about doing some major reworking of their spaces. 2 PENN Plaza has no debt on it. Please go ahead. Truth be told, recovery in the nation and in our city will be slow. Learn more. Crew, Brooks Brothers and so on. Jumping to our earnings. Steve, in your commentary, you said it was a great time to be looking through the fog and putting capital to work. Or is it the combination of the retail and the Facebook lease? A little color on the largest one. The 1290 building has an appropriate loan on it. ... See Earnings Report Transcript . And as the west side flourishes and gets to be higher price points and higher price points, other places will flourish as well. Noncomparable items in the second quarter were disclosed in a press release on July 20. But basically, our intention is to not start to lease it for a year. So now with respect to the 174,000 foot lease, Glen is going to answer. Number two, I look upon it as being not impaired on our balance sheet. I couldn't resist getting the plug in. So we're extremely excited about that. We also abated $3 million, and we set up reserves for $9 million as uncollectible. -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [29] -------------------------------------------------------------------------------- The first thing you should say is, hey, Glen and David, congratulations on this Facebook deal. Now I love Nashville, Austin, et cetera. Importantly, as the market recovers from the COVID pandemic, our New York office expiries through the end of 2022 are modest and portend well for stability of our cash flow, amounting to only 1.8 million square feet or 10% of our portfolio, an average of only 4% per year at a weighted average expiring rent of only $76.53 per square foot. And at the time of the transaction, 0 to a little bit less than 50% LTV on those assets. This process will play out over the next few months. That's certainly conceivable that you can have the 2 work in concert. I realize this lease has been in negotiation for quite some time. We took JCPenney because they rejected their lease out of the occupancy. How does this impact the preferred? And you think about putting aside the announcement, obviously, of Facebook that you had overnight, there is obviously a lot of retail vacancy, a lot of crime. And should we decide that we wanted to end up liquefying that. But we had term, right? The real estate financing markets are beginning to yield. It's unencumbered. -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [10] -------------------------------------------------------------------------------- Michael, first of all, we're in great shape, okay? Facebook is now our largest tenant by both revenue and square footage. And that is as Michael mentioned in his script, we are engaged now in some active dialogues with some tenants in renewal discussions. The lenders are still in triage mode and highly selective in what they finance. -------------------------------------------------------------------------------- Michael J. Franco, Vornado Realty Trust - President [38] -------------------------------------------------------------------------------- Alex, thanks for the model as well. When you take the size of those cities and you take the size of their workforce, you take the after-hours activities in those cities, there is a group of -- there's a small subset of people who want to live there. We are 92% sold or under contract and we are now reaping the financial rewards from 2020. We have no bone to pick with Penney's. -------------------------------------------------------------------------------- Vikram Malhotra, Morgan Stanley, Research Division - VP [61] -------------------------------------------------------------------------------- Okay, sounds good. As these projects are completed and leased up, they will generate large accretive earnings. -------------------------------------------------------------------------------- Steven Roth, Vornado Realty Trust - Chairman of the Board & CEO [66] -------------------------------------------------------------------------------- That's a very, very, very sophisticated question, which obviously, we in running our business, we think about every single day. Vornado Realty Trust last announced its earnings results on November 2nd, 2020. I think I was on the side of this that in this very sloppy market, it would take an extraordinary building to get investors' attention and to get a price or a value that would -- that's appropriate. So it's 5 separate assets, it can be redeemed in whole and in part, as we elect over time. So that's there. This comes a little more than a year after we recognized a $2.56 billion net gain on the April 2019 transfer to the joint venture and related GAAP require a write-off of our retained interest in these assets to the deal price, which was fair value. Contents: The canyons of our commercial bull was not so much. They paid us, I think the exact number is $194 million in rent over the last kind of 11 years. We look forward to seeing you soon. We are early in the process. And I think everyone is kind of in a holding pattern in terms of how space will be utilized as they go forward with life. What gives you the confidence that we can -- that the city can rebound? But the other aspects in terms of it being down is really driven by the variable businesses that I referenced earlier, whether that's lower cleaning fees, signage, garage income, trade shows, those are the drivers. So we are -- the part on the street phrase, we're loaded. So in the process of being a miss, the other places, whether it be south or west or wherever were a lot cheaper. -------------------------------------------------------------------------------- Stephen Thomas Sakwa, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Equity Research Analyst [4] -------------------------------------------------------------------------------- Good. From Manhattan West from Hudson Yards to get to Penn Station. To be honest, there was a little bit of give and take in the end as a result of the environment. These documents as well as our supplemental financial information package are available on our website, www.vno.com, under the Investor Relations section. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- Our next question on the line comes from Manny Korchman from Citi. -------------------------------------------------------------------------------- Joseph Macnow, Vornado Realty Trust - Executive VP, CFO & Chief Administrative Officer [56] -------------------------------------------------------------------------------- That was JCPenney. They became gentrified and low and behold now after 20 years of movement, the Upper East Side is the cheapest submarket in the city and what have you. It occupies a double wide block. Premium Research for VNO. -------------------------------------------------------------------------------- Michael Jason Bilerman, Citigroup Inc., Research Division - MD, Head of the US Real Estate & Lodging Research and Senior Real Estate Analyst [85] -------------------------------------------------------------------------------- Okay. People were speculating, will even a great company such as Facebook commit it in the middle of the pandemic crisis? With the city reopening for construction in mid-June, our development efforts have resumed in the Penn District. And by the way, we look upon PENN2 and PENN1 as a campus because those 2 buildings will be interconnected. As we have said before, these 3 large Penn District projects are debt-free and are big funded out of our balance sheet, including the aforementioned proceeds from 220 Central Park South closes. Products to be the case would never make bad conclusions, when life returns to normal a! 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