NEW YORK CITY-Vornado Realty Trust reported a 57% year-over-year drop in quarterly net income for the three months that ended Sept. 30, according to its 10-Q report filed Monday. Losses from the New York City-based office and retail REIT's Toys “R” Us stake and from the sale of its remaining J.C. Penney shares weighed heavily on quarterly results, as did smaller gains from asset sales, although the Wall Street Journal reported that adjusted funds from operations beat analysts' expectations.
Adjusted FFO rose to $1.27 per share from $1.03 a year ago. In a poll by Thomson Reuters, analysts had predicted adjusted FFO of $1 per share on revenues of $665.7 million, according to the WSJ. The REIT's actual quarterly revenues, $683.4 million, showed a smaller decline than analysts had predicted.
Over the course of its three-year investment in Plano, TX-based J.C. Penney, VNO lost $256.2 million, according to an SEC filing Monday. This past September, VNO chairman and CEO Steven Roth resigned from the Penney board and the company sold off its remaining 13.4 million shares at an $18.1-million loss.
GlobeSt.com reported last month that VNO took a $34.1-million loss on its share of Toys “R” Us, which it owns with Bain Capital and KKR. The company is planning to sell its stake in the Wayne, NJ-based toy retailer as soon as possible, according to published reports.
VNO's quarterly profit fell from $241.3 million the year prior to $103.4 million in Q3 of this year. The most recent quarter's results included $16.1 million of gains related to real estate asset sales, off from the $132.2 million of gains from asset sales realized in Q3 2012.
Last week, VNO announced that it had modified its $678-million, 5.743% mortgage loan secured by its Skyline properties in Fairfax, VA. The mortgage loan has been separated into two tranches, a senior $350-million position and a junior $328-million position. Maturity on the loans has been extended from February 2017 to February 2022, with a one-year extension option.
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