Vornado Realty Trust VNO reported first-quarter 2021 funds from operations (FFO) plus assumed conversions as adjusted of 65 cents per share, surpassing the Zacks Consensus Estimate of 63 cents. The reported figure, however, plunged 15.6% year over year.

Lower interest expenses and lower G&A expenses, owing to the overhead reduction program announced in December 2020, aided the bottom line. Yet, a year-over-year decline in same-store net operating income (NOI) in the New York portfolio and theMART affected the company’s quarterly results.

Total revenues were around $380 million in the reported quarter, lagging the Zacks Consensus Estimate of $384.6 million. Also, revenues compare unfavorably with the year-ago number of $444.5 million.

With the exception of grocery stores and other "essential" businesses, Vornado’s numerous retail tenants continue to be impacted by limitations on occupancy and other restrictions, impeding their ability to resume operations fully.

Amid this, the company has continued to agree to rent deferrals and rent abatements for certain tenants. In fact, for the reported quarter, it collected 96% of the rent. This comprised collections of 97% from its office tenants and 90% from retail tenants.

Also, on Apr 5, 2021, Vornado announced the permanent closure of Hotel Pennsylvania.

Behind the Headline Numbers

In the New York portfolio, 208,000 square feet of office space (147,000 square feet at share) and 46,000 square feet of retail space (36,000 square feet at share) were leased in the March-end quarter. Also, 85,000 square feet of area (all at share) was leased at theMart.

At the end of the first quarter, occupancy in the New York portfolio was 91.6%, down from 96.7% at the prior-year quarter end. Occupancy in theMART was 88.9%, significantly down from 91.9% reported as of Mar 31, 2020. Furthermore, occupancy in 555 California Street was 97.8%, down from 99.8% in the prior year.

Moreover, in the reported quarter, total same-store NOI (at share) slipped 8.4% year over year. In fact, same-store NOI at theMART and the New York portfolio declined 12.5% and 8.9%, respectively. Nonetheless, same-store NOI in the company’s 555 California Street improved 4.7%.

As of Mar 31, 2021, the company had $1.64 billion of cash and cash equivalents, up from $1.62 billion reported as of Dec 31, 2020.

Vornado currently carries a Zacks Rank #4 (Sell).

Vornado Realty Trust Price, Consensus and EPS Surprise

Vornado Realty Trust price-consensus-eps-surprise-chart | Vornado Realty Trust Quote

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