Vornado Reports Strong Q3 Cash Flow, Revenue Behind Brisk Office Leasing
Vornado Realty Trust’s leadership argued Tuesday that the firm has rarely been healthier as it reported positive leasing and robust capital markets metrics.
During an Election Day third-quarter earnings call, Vornado reported that funds from operations (FFO) hit $126.6 million in the three months ending Sept. 30, compared to $114.5 in the prior year’s third quarter. Revenue rose as well, increasing to $467.6 million in the third quarter, compared to the $453.7 million the firm reported in the same period one year ago.
Vornado also reported a net loss of $47.1 million, compared to net income of $11.5 million over the same period in 2025, a metric that is more reflective of depreciation and amortization within the office- and retail-focused real estate investment trust’s broader portfolio.
“We had another excellent quarter with eye-catching mark-to-market results, thanks to our same-store growth,” said Steven Roth, CEO of Vornado Realty Trust, who noted that comparable FFO was up 14 percent from last year’s third quarter. “Everyone’s metrics were pretty good, but our metrics were outstanding.”
In the first nine months in 2026, the firm leased 1.6 million square feet, with Manhattan office deals averaging $113 per square foot in starting rents. In the third quarter, Vorando executed 30 office deals totaling 489,000 square feet, with an industry-leading average starting rent of $123 per square foot and an average lease term of 9.5 years.
Moreover, its New York office same-store net operating income was up 11.9 percent.
“Our budgets show this strong performance will continue through 2028,” said Roth. “The New York office market is by far the strongest in the country and maybe even the strongest it’s ever been.”
Roth noted that Manhattan office leasing volume rose 9 percent over the last year, reaching its highest total leasing metrics since 2000. During the third quarter, overall Manhattan office leasing was 10 million square feet, exceeding five-year and 10-year quarterly averages.
“We compete in a market of about 180 million square feet of Class A or better buildings, where demand for good space is accelerating and availability of good space is evaporating,” he said. “We are most definitely in a landlord’s market.”
Roth also touched on the status of a pair of prime Vornado assets. During the third quarter, Penn 1 — the firm’s 57-story, 2.5 million-square-foot Midtown skyscraper — has leased 10 deals totaling 248,000 square feet with average starting rents of $123 per square foot. The office space in that asset is roughly 96 percent leased, according to the firm.
Vornado also closed a $3.3 billion construction loan for 350 Park Avenue, its supertall office tower it is developing with Citadel’s Ken Griffin and Rudin. The firm secured a 1.05 million-square-foot lease with Citadel on the project this quarter and said that it expects a return on cost of over 9 percent, according to Roth.
“Vornado’s best-in-class assets and ability to attract and retain an attractive roster of tenants, including some of the world’s leading companies, continues to set the standard for the New York office market,” Roth said during the call.
Michael Franco, president and chief financial officer of Vornado Realty Trust, listed some other positive capital markets metrics, primarily an expected 2.4 million square feet of New York office leasing in 2026, which comes on the heels of 3.7 million square feet of office leasing in 2025,
Franco also noted that the firm expects full-year FFO in 2026 to be higher than 2025, as well as in the years ahead
“We expect significant additional growth in 2028 and beyond,” he said. “To put it simply: We are firing on all cylinders at Vornado.”
Brian Pascus can be reached at bpascus@commericalobserver.com.
Source: commercialobserver.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.