- Vornado reported third-quarter funds from operations of $126.6 million, up from $114.5 million a year earlier, on revenue of $467.6 million.
- The REIT signed 30 Manhattan office deals totaling 489,000 square feet at a $123 average starting rent and 9.5-year terms, while same-store office NOI rose 11.9%.
- Management says top-tier availability is shrinking, calls Manhattan a landlord’s market, and expects earnings growth to continue through 2028 and beyond.
Vornado Realty Trust’s funds from operations rose to $126.6 million in the third quarter, up from $114.5 million a year earlier, Commercial Observer reported.
That is a 10.6% gain, and it came with a Manhattan leasing story that CEO Steven Roth called the strongest he has seen.
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Earnings Snapshot
Revenue rose about 3%, reaching $467.6 million from $453.7 million. On the Election Day call, Roth said comparable FFO grew 14%.
However, the REIT still posted a $47.1 million net loss. A year earlier, it reported $11.5 million in net income. The two measures differ because FFO adds back depreciation and amortization.
Leasing Carries the Quarter
In the third quarter, Vornado signed 30 Manhattan office leases covering 489,000 SF. Starting rents averaged $123 per square foot, with average terms of 9.5 years.
So far this year, the company has leased 1.6M SF at an average starting rent of $113. Therefore, third-quarter deals priced about 9% above the nine-month average.
Meanwhile, same-store NOI at its New York office portfolio rose 11.9%.
Penn 1 and 350 Park
Penn 1 is a 57-story Midtown tower with 2.5M SF. Vornado closed 10 leases there for 248,000 SF at an average starting rent of $123. Roughly 96% of its office space is now leased.
At 350 Park Avenue, Vornado secured $3.3B in construction financing. It also signed a 1.05M SF lease with Citadel. We covered that construction loan on October 21. Wells Fargo and JPMorgan led the lender group, while Ken Griffin holds 60% of the joint venture to Vornado’s 36%.
Additionally, Roth expects the project to deliver a return on cost above 9%.
A Landlord’s Market
Roth said Manhattan leasing volume is up 9% year over year. He added that it is at its highest level since 2000. Third-quarter activity reached 10M SF, beating the quarterly norm over both the past five and 10 years.
He put the Class A-or-better market at roughly 180M SF. In his words, demand is accelerating while availability is evaporating.
Why It Matters
Vornado’s results offer a landlord’s view of Manhattan’s recovery. They show higher starting rents, longer lease terms and shrinking availability in top buildings.
Moreover, third-quarter deals priced above the year-to-date average. This suggests rents are still climbing in the best space rather than leveling off. Roth’s claim that this may be the strongest New York office market ever reflects his view as CEO. However, the volume figure he cited is the highest in 26 years.
What’s Next
CFO Michael Franco expects about 2.4M SF of leasing in the New York portfolio this year. That’s below the 3.7M SF he cited for 2025.
Still, he expects full-year 2026 FFO to exceed 2025 levels. He also sees growth accelerating in 2028 and beyond. Roth said Vornado’s budgets show this performance continuing through 2028.
