This article first appeared on GuruFocus .
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Comparable FFO:$0.67 per share for Q2 2026, up from $0.56 per share in Q2 2025, an increase of $0.11.
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New York Office Same-Store NOI:Up 13.7% on a GAAP basis and 11.9% on a cash basis.
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New York Retail Same-Store NOI:Up 7.3% on a GAAP basis and 5.7% on a cash basis.
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New York Business Overall Same-Store NOI:Up 11.9% on a GAAP basis and 6.2% on a cash basis.
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New York Office Occupancy:Increased 60 basis points quarter-over-quarter to 92.2%, up from 84.4% in Q1 2025.
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Manhattan Office Leasing Volume (Q2):29 deals totaling 348,000 square feet at an average starting rent of $107 per square foot, with mark-to-markets of positive 7.7% GAAP and positive 5.0% cash.
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First-Half 2026 Leasing:978,000 square feet overall; Manhattan office leased 659,000 square feet at $105 per square foot average starting rents, with mark-to-markets of positive 9.5% GAAP and positive 7.1% cash.
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Liquidity:$2 billion, comprised of $789 million in cash and $1.2 billion in undrawn credit lines.
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Stock Buyback:Repurchased 1.8 million shares at $29.92 per share in Q2 2026; 8 million shares repurchased at $26.61 per share since 2023.
Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Alexander's Inc ( NYSE:ALX ) reported a strong second quarter with comparable FFO of $0.67 per share, beating analyst consensus by $0.10 or 17.5%.
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New York office occupancy increased to 92.2%, up from 84.4% in Q1 2025, reflecting strong leasing momentum and a landlord's market.
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The company is achieving triple-digit average starting rents in Manhattan, with mark-to-market gains of 9.5% GAAP and 7.1% cash in the first half of 2026.
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The Penn District transformation is delivering strong returns, with rents at Penn.1 and Penn.2 well above underwriting and a projected 25% return on investment.
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The company has a robust leasing pipeline of over 2.2 million square feet, including the 1 million square foot Citadel lease at 350 Park Avenue, and expects occupancy to exceed 93% by year-end.
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Alexander's Inc ( NYSE:ALX ) maintains a strong balance sheet with $2 billion in liquidity and is actively repurchasing shares at attractive prices, having bought back 8 million shares at an average of $26.61 since 2023.
Negative Points
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Interest rates are rising, which could increase financing costs and pressure property valuations.
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The company faces a significant gap between physical occupancy (92.2%) and GAAP economic occupancy (83-84%), indicating a lag in rent commencement.
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Leasing activity includes a high proportion of short-term retail deals, which may limit long-term revenue stability.
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The 350 Park Avenue project requires substantial future capital outlays, with incremental equity contributions of approximately $350 million expected to begin in 2029.
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The company is exposed to potential market downturns, and management acknowledges the cyclicality of the real estate market, which could impact future performance.
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Asset sales are planned to bolster liquidity, but selling assets at current market values may not capture full future appreciation potential.
Q & A Highlights
Q: Can you discuss the gap between leased and economic occupancy today, and how much more runway there is to reach peak occupancy levels? A: Michael Franco (President and CFO) noted that historically, the company ran at 95%-96% physical occupancy. Currently, they are at 92.2% and expect to return to their historical run rate within the next couple of years, potentially sooner given the market's pace. On a GAAP basis, economic occupancy is around 83%-84%, which will close up as signed leases commence. Steven Roth (Chairman and CEO) added that signed-but-not-commenced leases represent roughly $180 million in future revenue, or about $150 million in FFO, which is not yet reflected in earnings.
Q: What is the status of the 350 Park Avenue project, and what are the expected incremental capital requirements for Vornado? A: Michael Franco (President and CFO) stated that Vornado will exercise its option to participate at its maximum 36% ownership stake. The company is contributing its land at a $900 million valuation. Incremental capital requirements are estimated at around $350 million, but this will not begin in any significant scale until 2029, as Ken Griffin's equity trues up first and the construction loan funds. The expected joint venture closing will take place in September.
Q: How does the high rent required to make new developments like 350 Park Avenue pencil out impact the value of older, well-located buildings like Park Avenue Plaza? A: Steven Roth (Chairman and CEO) explained that the high rents required for new buildings (around $350 per square foot) create an "umbrella" effect that pulls up the value of older buildings with in-place rents at a fraction of that level. Park Avenue Plaza, with rents about a third of the new building rate, is a prime example. This dynamic is why the company is bullish on the appreciation potential of its existing assets, as the scarcity of new supply and high construction costs force rents upward across the market.
Q: Can you provide an update on the company's stock buyback program and the rationale for continuing it? A: Steven Roth (Chairman and CEO) reiterated that the stock remains "stupid cheap," citing a 23% NAV discount per Green Street, which is deeper than peers. In Q2 2026, the company repurchased 1.8 million shares at $29.92 per share. Since 2023, Vornado has repurchased 8 million shares at an average of $26.61 per share. Roth emphasized that NAV calculations are static and backward-looking, not giving credit for future growth from projects like 350 Park Avenue, Park Avenue Plaza, or 628 Sixth Avenue, making the stock even more attractive relative to future value.
Q: What is the outlook for full-year 2026 FFO and the previously mentioned $0.40 FFO uplift for 2027? A: Michael Franco (President and CFO) confirmed that the company now clearly expects full-year 2026 comparable FFO to be higher than 2025, with Q2 2026 FFO of $0.67 per share being a decent average run rate for the rest of the year. Regarding the $0.40 uplift previously discussed for 2027, Franco noted that some of that growth is now flowing through in 2026, but the expectation for significant growth in 2027 remains intact, and given current dynamics, there is potential for it to exceed the original estimate.
Q: Can you provide details on the planned sale of two non-essential assets and the buyer pool for the 350 Park Avenue partial sale? A: Steven Roth (Chairman and CEO) confirmed the company is in conversations to sell two non-essential assets, which would "very substantially increase" liquidity. He clarified that one is a non-core asset and one is a core asset where they are crystallizing private market valuations. For the 350 Park Avenue sell-down of a 25% interest, Roth stated they are targeting high net worth family offices in a club deal structure, with individual investments of $100 million to $200 million, rather than a single institutional buyer.
Q: How is the leasing market trending in terms of concessions and tenant improvement (TI) costs? A: Glen Weiss (Executive Vice President - Office Leasing) reported that concessions are coming down, rents are going up, and free rent periods are shortening. TI packages are also tightening, with caps being placed on tenant funds for turnkey spaces. All metrics are trending in the landlord's direction, and the company expects this to continue as the market strengthens. Michael Franco added that TI spending is expected to be fairly consistent year-over-year, with a tail-down expected in 2028 as the major lease-up phase concludes.
Q: What is the status of the Pier 94 occupancy drop, and what are the prospects for that asset? A: Glen Weiss (Executive Vice President - Office Leasing) explained that the occupancy drop was due to a couple of vacates at the end of June, but occupancy is already back up into the high 80s by the end of July. The asset is performing well with top-tier users like Google, Netflix, Paramount, and Apple, and the experience has been rated A-plus. Steven Roth added that Pier 94 is analogous to a long-stay hotel, with tenants using it for production facilities, so occupancy will naturally fluctuate, but it remains a unique asset in Manhattan with strong demand.
Q: How is the signage business performing, and is there a limit to growth in the Penn District? A: Steven Roth (Chairman and CEO) highlighted that the signage business is capital-light and has been growing at 5% per year. The key differentiator is that Vornado owns the space where the signs are placed, unlike competitors who rent space, resulting in much higher margins. As the company develops new buildings in the Penn District, including the transformation of 7th Avenue and 34th Street, new signage opportunities will emerge. Michael Franco added that both volume and pricing are increasing, with digital signs allowing for revenue management optimization similar to hotel pricing strategies.
Q: What is the company's approach to capital allocation between New York and San Francisco, and how does it view the risk-reward in each market? A: Steven Roth (Chairman and CEO) expressed confidence in both markets. In San Francisco, the company owns 555 California, the best building in the city, which is a financial services building
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
