Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Citi Investor Presentation (March 2017)
34 slides from Vornado Realty Trust's conference presentation, March 2017
Slide 1: Vornado Realty Trust March 2017
VORNADO REALTY TRUST lis piiidiiait & March 2017
Slide 2: Forward Looking Statements
F O R WA R D L O O K I N G S TAT E M E N T S Certain statements contained in this investor presentation 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-
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Non-GAAP Measures This investor presentation contains certain non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net operating income (“NOI”). EBITDA is earnings before interest, taxes, depreciation and amo
Slide 4: GAAP Net Income and Revenue
GAAP NET INCOME AND REVENUE Vornado Net Income for the twelve months ended December 31, for the fiscal years 2007 through 2016 Vornado RemainCo’s Total Incremental GAAP Revenue attributable to leases signed, but not yet commenced, for the twelve months ended December 31, 2017 and 2018 GAAP Increm en
Slide 5: Relentless Focus on Shareholder Value Creation
R E L E N T L E S S F O C U S O N S H A R E H O L D E R VA L U E C R E AT I O N In the past few years, we have exited multiple business lines and non-core holdings - $15.7 Billion of total transactions • Disposed of $6.1 Billion of non-core assets including regional malls, the Mart business (retaini
Slide 6: Why New York?
WHY NEW YORK? • Global city favored by businesses, residents, tourists and investors • US gateway city with the strongest long-term population growth1 – vibrant 24/7 environment benefits from trend towards urbanization • Diversified employment base continues path of outsized growth • In 1990, 1 in 2
Slide 7: Vornado RemainCo
VORNADO REMAINCO Peerless NYC focused real estate company with premier office assets and the only publicly investable high street retail portfolio of scale • Following the Washington, D.C. spin-off, Vornado RemainCo will be a pure-play New York City Vornado RemainCo EBITDA1 real estate company, with
Slide 8: Near-Term Catalysts for Shareholder Value Creation
VORNADO REMAINCO – N E A R - T E R M C ATA LY S T S F O R S H A R E H O L D E R VA L U E C R E AT I O N • Spin-merger of the DC Business with JBG creates the market-leading DC focused REIT and the premier NYC pure-play REIT • Spotlights Vornado’s unique NYC franchise and irreplaceable portfolio • Si
Slide 9: Fortress Balance Sheet
VORNADO REMAINCO - FORTRESS BALANCE SHEET In millions unless noted At 12/31/16 Secured Debt $ 9,374 • Over $4.2 Billion of liquidity Unsecured Debt 1,341 Pro Rata Share of Non-Consolidated Debt (Excluding Toys R Us) 3,229 Less: Noncontrolling Interests' Share of Consolidated Debt (598) • ~$11 Billio
Slide 10: Deep and Experienced Management Team
VORNADO REMAINCO – DEEP AND EXPERIENCED MANAGEMENT TEAM • Vertically-integrated platform that includes best-in-class in-house development, leasing, operations and investment teams • With over 680 associates, no other company offers more in-house expertise 6
Slide 11: Leader Among Best-in-Class REITs
VORNADO REMAINCO – LEADER AMONG BEST-IN-CLASS REITS Since 2005, Vornado RemainCo has delivered superior same-store NOI growth relative to blue-chip peers 5.2% 4.5% 4.3% 3.9% 3.9% 3.6% 3.3% 3.3% 3.0% 2.8% 2.6% 1.6% 1.6% Vornado SLG BXP DEI KRC PSA EQR AVB SPG TCO VTR FRT PLD RemainCo 2005– 2015 Same-
Slide 12: Consistent Track Record of Strong Growth
VORNADO REMAINCO – CONSISTENT TRACK RECORD OF STRONG GROWTH Vornado RemainCo 10-year NOI1 $37 $116 $994 $896 $849 $804 $685 $694 $639 $589 $551 $513 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1. NOI from continuing operations (excludes sold properties and includes acquisitions from
Slide 13: Premier New York City Platform
VORNADO REMAINCO – P R E M I E R N E W Y O R K C I T Y P L AT F O R M NYC Gross Asset Value (GAV) (in BN’s)1 NYC Gross Office Rents (PSF)2 (Per Green Street Advisors) $102 $25.0 $20.9 $79 $76 $69 $10.7 $60 $7.0 $6.4 $51 Vornado SL Green Boston Empire State Paramount Vornado Vornado Penn Boston Param
Slide 14: Premier New York City Platform (Continued)
VORNADO REMAINCO – P R E M I E R N E W Y O R K C I T Y P L AT F O R M ( C O N T I N U E D ) Vornado is the only REIT with significant NYC high street retail holdings and the only publicly investable high street retail portfolio of scale Number of Buildings with Signed NYC NOI (Office / Retail, in MM
Slide 15: Select New York City Office Properties
VORNADO REMAINCO – SELECT NEW YORK CITY OFFICE PROPERTIES 11
Slide 16: Blue-Chip Office Tenant Roster
VORNADO REMAINCO – BLUE-CHIP OFFICE TENANT ROSTER 12
Slide 17: Select New York City Street Retail Properties
VORNADO REMAINCO – S E L E C T N E W Y O R K C I T Y S T R E E T R E TA I L P R O P E R T I E S 13
Slide 18: Blue-Chip Retail Tenant Roster
VORNADO REMAINCO – B L U E - C H I P R E TA I L T E N A N T R O S T E R 14
Slide 19: Control of the Key High Street Retail Submarkets in Manhattan
VORNADO REMAINCO – C O N T R O L O F T H E K E Y H I G H S T R E E T R E TA I L S U B M A R K E T S I N M A N H AT TA N UPPER FIFTH AVENUE - OWN 23% OF FRONTAGE1 TIMES SQUARE CONTROL BOTH SIDES OF THE BOWTIE Note 1. Excludes churches, clubs and retail owned by users. 1540 BROADWAY 1535 BROADWAY 15
Slide 20: New York Portfolio by Submarket
VORNADO REMAINCO – NEW YORK PORTFOLIO BY SUBMARKET NEW YORK OFFICE NEW YORK RETAIL BY SQUARE FOOTAGE BY GROSS REVENUE AT 12/31/16 FOR THE YEAR ENDED 12/31/16 Chelsea/Meatpacking Other 3% Other 10% 4% Penn Plaza Union Square Penn Plaza 39% 4% 23% Midtown South 8% Times Square 14% Soho/Tribeca 5% Plaz
Slide 21: Staggered Lease Expirations
VORNADO REMAINCO – S TA G G E R E D L E A S E E X P I R AT I O N S AT 1 2 / 3 1 / 1 6 Office Weighted Average Lease Term: 7.9 years Retail Weighted Average Lease Term: 9.9 years 6,000 Office Expirations by SF Retail Expirations by Revenue 180 39% 32% 5,000 160 140 4,000 Thousands of SF 120 Millions
Slide 22: Tenant Diversity
VORNADO REMAINCO TENANT DIVERSITY T O P 2 0 T E N A N T S R E P R E S E N T O N LY 2 4 % O F 2 0 1 6 R E V E N U E Annualized 2016 NY Office Rental Revenue by Tenant's Industry: Revenue % of Rank Tenant At Share Total 1% 13% 15% 1 IPG and affiliates $56,184 2.4% 1% 2 Swatch Group USA 38,158 1.6% 3%
Slide 23: Leader in Repositioning/Modernizing Properties and Creating Value
VORNADO REMAINCO – L E A D E R I N R E P O S I T I O N I N G / M O D E R N I Z I N G P R O P E R T I E S A N D C R E AT I N G VA L U E 1 1 A S S E T S TO TA L I N G 1 0 . 3 M M S F 90 PARK AVENUE – 2016 1290 AVENUE OF THE AMERICAS– 2014 640 FIFTH AVENUE – 2005 959,000 SF 2,110,000 SF 313,000 SF • Pr
Slide 24: theMART and 555 California Street
VORNADO REMAINCO – theMART AND 555 CALIFORNIA STREET 555 California Street – the franchise office building in San Francisco and theMART (Chicago) – best example of contemporary office space outside of Silicon arguably the most iconic building on the west coast – further NOI growth Valley. Transforme
Slide 25: Penn Plaza – An Unprecedented Opportunity
VORNADO REMAINCO – PENN PLAZA – AN UNPRECEDENTED OPPORTUNITY W 35TH STREET FIFTH AVENUE 7 WEST MACY’S 34TH ST W 34TH STREET 330 WEST 1 PENN Tremendous Value Creation Opportunity 34TH ST PLAZA W 33RD STREET • Existing office leasable space of 6.8MM SF with average in-place rents of 15 PENN PLAZA MANH
Slide 26: Farley Post Office Development
VO R N A D O R E M A I N C O - FA R L E Y P O ST O F F I C E D E V E LO P M E N T FURTHER TRANSFORMING THE PENN PLAZA NEIGHBORHOOD • A 50/50 joint venture between Vornado and the Related Companies has been conditionally designated as the developer to convert the Farley Post Office in Penn Plaza into
Slide 27: Growth from New Projects in Chelsea/Meatpacking
VORNADO REMAINCO – G R O W T H F R O M N E W P R O J E C T S I N C H E L S E A / M E AT PA C K I N G 260 ELEVENTH AVENUE Size: 173,000 RSF Size: 325,000 RSF Completion: 4Q 2017 Est. Completion: 2021 85 TENTH AVENUE Size: 170,000 RSF Size:618,000 RSF Completion: 4Q 2017 23
Slide 28: 220 Central Park South
2 2 0 C E N T R A L PA R K S O U T H – THE PREMIER RESIDENTIAL BUILDING IN NYC • Topped out 4Q16, final scheduled completion for 3Q18 • Incremental net proceeds after repayment of debt and taxes is expected to be $900MM 1 (1) $100MM of which is part of dividends paid to shareholders through 2016. 24
Slide 29: Leader in Sustainability
VORNADO REMAINCO – L E A D E R I N S U S TA I N A B I L I T Y • Global Real Estate Sustainability Benchmark (GRESB) “Green Star” Achieved 2016 • NAREIT Leader in the Light Award Recipient, 2010 through 2016 • 4.8% reduction in same-store energy use, 2015 to 2016, representing over 18,500 tons of car
Slide 30: Sustainability Programs and Policies
VORNADO REMAINCO – S U S TA I N A B I L I T Y P R O G R A M S A N D P O L I C I E S • Asset-specific carbon emissions reduction goals, ranging from 30-50% reduction of Landlord-controlled energy by 2026 below a 2009 baseline, measured in metric tons CO2e / SF, in partnership with New York City’s 80
Slide 31: Appendix
VORNADO REALTY TRUST ly. 8 p = i p y - iS ty! ta } y a : S i aa et Hi ity i - jinbibtaana i 7 ef “Fe ' es & Appendix
Slide 32: GAAP Reconciliation
G A A P R E C O N C I L I AT I O N All #’s in MM’s Reconciliation of Vornado Net Income to EBITDA, EBITDA, as adjusted and Cash Net Operating Income for the twelve months ended December 31, for the fiscal years 2007 through 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 NYC Only Net income a
Slide 33: GAAP Reconciliation (Cont'd)
G A A P R E C O N C I L I AT I O N ( C O N T ’ D ) All #’s in MM’s Reconciliation of Vornado Net Income to EBITDA and EBITDA, as adjusted for the twelve months ended December 31, 2016 2016 Net income attributable to the Operating Partnership 961 Interest and debt expense 507 Depreciation and amortiz
Slide 34: March 2017
VORNADO REALTY TRUST lis piiidiiait & March 2017
Vornado Realty Trust — Citi Investor Presentation (March 2017) on 6ix