Vornado Posts Q3 Loss, Expects $485 Million Gain From Citadel-Anchored 350 Park Venture

A $48 million mortgage on 825 Seventh Avenue went into maturity default in late October, while lenders on 888 Seventh Avenue have agreed to forbear into March 2027.

November 3, 2026

Vornado Realty Trust (NYSE: VNO) reported a third-quarter net loss attributable to common shareholders of $47.1 million, or $0.25 per diluted share, compared with net income of $11.6 million, or $0.06 per share, a year earlier. The REIT expects to book an estimated net gain of about $485 million in the fourth quarter from the October closing of its 350 Park Avenue joint venture with an affiliate of Citadel founder and CEO Kenneth Griffin.

Funds from operations (FFO) attributable to common shareholders plus assumed conversions, as adjusted, rose to $126.7 million, or $0.65 per diluted share, from $114.5 million, or $0.57 per share, in the third quarter of 2025.

For the first nine months of 2026, Vornado reported a net loss of $53.5 million, or $0.28 per share, against net income of $842.3 million, or $4.19 per share, in the prior-year period. The 2025 figure included an $803.2 million gain tied to the 770 Broadway master lease with NYU. Nine-month adjusted FFO was $1.84 per share, compared with $1.76.

350 Park Avenue Venture Closes

On October 20, Vornado's existing joint venture with Rudin and the Griffin affiliate formed a new venture to develop an office tower of approximately 1.9 million square feet on the combined sites of 350 Park Avenue, 39 East 51st Street and 40 East 52nd Street. The following were executed at closing:

• Citadel Enterprise Americas signed a 1.05 million-square-foot anchor lease.
• The venture closed a $3.3 billion construction loan priced at SOFR plus 3.00%, stepping down to SOFR plus 2.50% once the building reaches substantial completion and meets a minimum debt service coverage ratio. The loan matures in October 2032 and carries a one-year extension option.

Vornado contributed 350 Park Avenue at a value of $900 million, or $500 million net of the $400 million mortgage satisfied at closing. The Vornado/Rudin venture received a 40% stake in the new entity and the Griffin affiliate holds 60%, leaving Vornado with a 36.1% effective interest and Rudin with 3.9%. Rudin also holds $150 million of preferred equity in the Vornado/Rudin venture.

Because Vornado now shares control over leasing, budgets and refinancings with the Griffin affiliate, it deconsolidated 350 Park Avenue and 39 East 51st Street and accounts for the venture under the equity method. Vornado puts its share of the project budget at $2.134 billion and its cash equity obligation at $290 million, none of which had been funded as of September 30. The company projects leasing stabilization in 2030 and an unlevered cash yield of 9.2%, a figure that includes management fee income paid to Vornado.

Leasing and Occupancy

Vornado leased 489,000 square feet of New York office space during the quarter, 443,000 of it at the company's share, at an average initial rent of $122.96 per square foot and a weighted average term of 9.5 years. On second-generation relet space, GAAP straight-line rents ran 37.2% above prior levels and cash rents were 25.9% higher.

New York retail relets moved the other way on a cash basis, with initial rents 15.7% below prior escalated rents, though GAAP rents rose 4.5%. At 555 California Street in San Francisco, Vornado leased 55,000 square feet with cash rents up 38.0%, and at THE MART in Chicago it leased 33,000 square feet with cash rents up 7.7%.

Occupancy at Vornado's share stood at 91.5% in New York (93.0% for office and 78.4% for retail), 79.5% at THE MART and 87.5% at 555 California Street.

Same-store NOI at share increased 9.0% year over year, with New York up 10.2% and 555 California Street down 3.4%. On a cash basis, same-store NOI rose 3.2%. New York cash same-store NOI grew 4.9%, or 8.4% excluding a rent abatement Alexander's granted Bloomberg for April 1 through December 1, 2026, which was offset by a matching reduction in Bloomberg's tenant fund. Total NOI at share reached $300.1 million, up from $266.7 million.

Rent commencements net of lease expirations added $17.5 million to quarterly adjusted FFO, the Park Avenue Plaza acquisition added $9.0 million and variable businesses, primarily signage, contributed $3.2 million. Lower interest and other investment income subtracted $9.3 million, and higher interest expense, mainly on the 2033 senior notes, subtracted $8.7 million.

Loan Defaults and Forbearance

On October 26, the $48 million non-recourse mortgage on the 825 Seventh Avenue office condominium, held by a joint venture in which Vornado owns 50%, matured without repayment, putting the loan in maturity default. The interest-only loan carries a rate of SOFR plus 2.75% and provides for an additional 5.00% in default interest.

The $244.5 million non-recourse loan on 888 Seventh Avenue matured unpaid on December 10, 2025, and the lenders declared a default. Under a forbearance agreement signed March 9, 2026, the lenders agreed not to exercise remedies and waived default interest through March 2027. Scheduled interest and amortization continue to accrue during the forbearance period, with payment deferred until it ends.

In May, a 50%-owned consolidated venture sold 606 Broadway to a buyer that acquired the property's defaulted non-recourse mortgage at a discount and paid the venture $3 million. The transaction produced a $32.1 million gain on debt extinguishment, of which $15.9 million is attributable to noncontrolling interests.

Corporate Financing and Acquisitions

In January, Vornado sold $500 million of 5.75% senior unsecured notes due 2033 and later used part of the proceeds to repay $400 million of 2.15% notes at their June 1 maturity. The company also refinanced or upsized three bank facilities:

• One revolving credit facility was refinanced at $1.13 billion, priced at SOFR plus 1.01% and maturing in February 2031 as fully extended.
• The second revolver was upsized to $1.0 billion.
• The unsecured term loan was refinanced at $850 million and SOFR plus 1.15%.

Revolver borrowings stood at $918.0 million on September 30, up from $720.4 million at year-end 2025, while cash and cash equivalents fell to $580.5 million from $840.9 million.

At the property level, Vornado refinanced the $525 million loan on One Park Avenue at SOFR plus 1.78%, up from SOFR plus 1.22% on the prior loan. A 53%-owned venture refinanced 7 West 34th Street with a $250 million non-recourse loan fixed at 5.79%, replacing a $300 million full-recourse loan at 3.65%. Part of the paydown was funded with a $25 million member loan from Vornado that accrues interest at 16.00% and has priority on distributions.

In June, Vornado bought a 49.0% interest in Park Avenue Plaza at a gross asset valuation of $1.1 billion, or $950 per square foot, subject to its share of a $575 million loan fixed at 2.99% through November 2031. Fisher Brothers keeps the other 51.0% and continues to manage and lease the building. In January, Vornado acquired 3 East 54th Street for $141 million after earlier buying the property's defaulted A-Note and B-Note, with the $107 million loan balance credited toward the price. Vornado is demolishing the existing buildings on the site.

Vornado repurchased no shares in the third quarter. Over nine months it bought back 4,532,803 common shares for $133.3 million at an average price of $29.41, and $286.6 million remained authorized under its repurchase plan as of September 30.