Vornado Realty Trust VNO reported second-quarter 2026 funds from operation (FFO), as adjusted, of 67 cents per share, up 19.6% year over year. The figure beat the Zacks Consensus Estimate of 57 cents by 17.54%. Rent commencements, the NYU master lease and signage operations supported adjusted FFO growth.
Revenues rose 4.7% year over year to $462.2 million but missed the consensus mark of $472.4 million by 2.16%.
VNO’s Revenue Mix Shows Rental Strength
Total rental revenues increased to $405.1 million from $382.3 million in the prior-year quarter. Property rentals were nearly flat year over year at $332.4 million, while tenant expense reimbursements increased to $46.3 million from $34.6 million.
Straight-line rental income rose to $26.3 million from $15.4 million. Fee and other income totaled $57.2 million compared with $59.2 million a year ago, as Building Maintenance Services cleaning fees declined to $33.3 million from $37.4 million.
Operating expenses increased to $223.7 million from $219.3 million. Depreciation and amortization climbed sharply to $171.2 million from $115.6 million.
VNO’s Same-Store Results Highlight New York Growth
Total net operating income (NOI) at share increased to $304.1 million from $277.7 million. New York NOI at share rose to $251.7 million from $230.1 million, driven by gains across the office, street retail and residential assets.
New York office NOI at share increased to $183.4 million from $170.9 million year over year. New York Street retail NOI rose to $52.5 million from $44.5 million, while New York residential NOI improved to $6.7 million from $6.4 million.
Total same-store NOI increased 9.8%, including growth of 11.9% in New York and 9.1% at THE MART. However, the metric declined 14.3% at 555 California Street. On a cash basis, total same-store NOI increased 2.9%, including growth of 6.2% in New York and 15.1% at THE MART.
VNO’s Leasing Activity Remains Healthy
During the second quarter, Vornado leased 348,000 square feet of New York office space at an initial rent of $107.24 per square foot. The weighted average lease term was eight years.
For second-generation New York office space, straight-line rents increased 7.7% from prior rents. Cash-basis rents rose 5%, while tenant improvements and leasing commissions represented 13.3% of initial rent.
The company also leased 61,000 square feet of New York retail space and 103,000 square feet at THE MART. Straight-line rents on second-generation space increased 12.1% for retail and 14% at THE MART. Total portfolio occupancy stood at 90.8%, including 92.2% for the New York office.
VNO Completes Manhattan Acquisition & Property Dispositions
Vornado completed the acquisition of a 49% interest in Park Avenue Plaza at a gross asset valuation of $1.1 billion. The 1.2-million-square-foot Manhattan office building is encumbered by a $575 million loan bearing a fixed interest rate of 2.99%.
Alexander’s, in which Vornado owns a 32.4% interest, sold Rego Park I for $235.5 million. Vornado recognized a $44.3 million share of the net gain. Separately, a 50%-owned consolidated joint venture sold 606 Broadway, generating a $32.1 million gain on debt extinguishment.
VNO’s Liquidity Supports Capital Allocation
VNO ended June with $675.4 million in cash and cash equivalents, $113.6 million of restricted cash and $1.19 billion available under its revolving credit facilities. Total liquidity was $1.98 billion.
During the reported quarter, the company repurchased about 1.79 million common shares for $53.46 million at an average price of $29.92 per share. As of Aug. 3, 2026, $286.6 million remained available under the repurchase program.
VNO’s Zacks Rank
Vornado currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Office REITs
Cousins Properties Inc. CUZ reported second-quarter 2026 FFO of 75 cents per share, beating the Zacks Consensus Estimate of 74 cents. The metric rose 7.1% from the year-ago quarter.
Rental property revenues increased 11.8% year over year to $265.7 million and surpassed the consensus mark of $263.6 million. The results reflected strong leasing momentum, higher rental revenues and solid same-property NOI growth.
BXP, Inc. BXP reported second-quarter 2026 FFO of $1.78 per share, beating the Zacks Consensus Estimate of $1.71. FFO rose 4.1% from the year-ago period.
Lease revenues increased 3.2% year over year to $831.68 million and surpassed the consensus mark of $812.49 million. The results reflected higher occupancy and same-property NOI growth, which supported the FFO beat.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs
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