FFO and Vornado (VNO) Revenue Exceed Estimates in Q4 – February 15, 2022


Vornado Real Estate Trustit is (WNV Free Report) Q4 2021 funds from operations (FFO) plus adjusted assumed conversions of 81 cents per share exceeded Zacks’ consensus estimate of 74 cents. The reported figure improved 19.1% from 68 cents in the year-ago quarter.

Vornado’s results show growth in same-store net operating income (NOI) from a year ago in the New York portfolio and at 555 California Street, partially offset by a decline in theMART.

Total revenue was $421.1 million in the quarter under review, beating Zacks’ consensus estimate of $414.1 million. In addition, revenues compare favorably to the previous year’s figure of $376.4 million.

For the full year, adjusted FFO per share was $2.86, higher than the prior year count of $2.62 and Zacks’ consensus estimate of $2.80. This was supported by a 4% growth in total revenue to $1.59 billion.

Behind the headlines

In the New York portfolio, 954,000 square feet of office space (852,000 square feet in quota share) and 54,000 square feet of retail space (50,000 square feet in quota share) were leased during the fourth quarter . In addition, 28,000 square feet of space (all shared) has been leased to theMART.

At the end of the fourth quarter, the occupancy rate for the New York portfolio was 91.3%, down from 92.2% at the end of the year-ago quarter. MART occupancy was 88.9%, compared to 89.5% as of December 31, 2020. Additionally, occupancy at 555 California Street was 93.8%, compared to 98.4% in the quarter. of the previous year.

In the reported quarter, total comparable store NOI (share) improved 5.9% year-over-year. While the metric at theMART fell 6.6%, the same at the New York portfolio rose 6.2%. The NOI of the same store at 555 California Street in Vornado jumped 15.6%.

As of December 31, 2021, VNO had $1.76 billion in cash and cash equivalents, compared to $1.62 billion as of December 31, 2020.

Vornado currently wears a Zacks rank #5 (sale).

You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of other REITs

Alexandria Real Estate Equities, Inc. (ARE Free Report) reported adjusted FFO of $1.97 per share for the fourth quarter of 2021, up 7.1% from the prior year quarter of $1.84. The figure topped Zacks’ consensus estimate of $1.96.

ARE’s year-over-year improvement in FFO resulted from revenue growth of 24.4% to $576.9 million. The results reflect decent internal growth. Alexandria saw continued healthy rental activity and rental rate growth during the quarter.

Mid-America Apartment Communities, Inc. (MAA Free Report), commonly referred to as MAA, reported Q4 2021 basic FFO per share of $1.90, beating Zacks’ consensus estimate of $1.87. The reported number was up 15.2% from the figure of $1.57 a year ago.

MAA’s quarterly results are attributable to an increase in the average effective rent per unit for the comparable store portfolio. The average physical occupancy rate of the comparable store portfolio also increased year-on-year.

Residential Equityit is (QRA Free Report) in the fourth quarter of 2021, the normalized FFO per share of 82 cents exceeded the Zacks consensus estimate of 80 cents. Rental revenue of $645.1 million also beat the consensus mark of $628.6 million.

On an annual basis, Equity Residential’s normalized FFO per share improved by 7.9%, while rental income increased by 5.2%. EQR’s results were driven by high physical occupancy, significantly improved pricing power and higher non-residential income.

To note: Everything related to earnings presented in this article represents funds from operations (FFO) – a metric widely used to assess the performance of REITs.


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