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Item 1. Business

2024-02-12 compared with 2023-02-13 · 29 added, 24 removed, 58 unchanged (48% of the section changed)

4 unchanged sentences

We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE:

We have six properties in New York City consisting of:

We have five properties in New York City consisting of:

Operating properties

• 731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan.

The building contains 939,000 and 140,000 of net rentable square feet of office and retail space, respectively.

The building contains 939,000 and 140,000 of rentable square feet of office and retail space, respectively.

Bloomberg L.P.

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• Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63 rd Road in Queens.

The center is anchored by a 112,000 square foot IKEA, a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls.

On December 3, 2022, IKEA closed its store at the property.

IKEA remains obligated under its lease which expires in December 2030.

The lease includes a right to terminate effective no earlier than March 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term;

The center is anchored by a 50,000 square foot Burlington and a 36,000 square foot Marshalls.

On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030.

The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term.

On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024.

Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term;

• Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens.

The center is anchored by a 145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased;

• The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet;

• Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is sub-leased to New World Mall LLC.

• Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is subleased to New World Mall LLC.

The property is ground leased through January 2027 with one 10-year extension option;

Property t o be developed

• Rego Park III, a 140,000 square foot land parcel adjacent to the Rego Park II shopping center in Queens, at the intersection of Junction Boulevard and the Horace Harding Service Road.

• The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.

On May 19, 2023, we sold the Rego Park III land parcel in Queens, New York, for $71,060,000 inclusive of consideration for Brownfield tax benefits and reimbursement of costs for plans, specifications and improvements to date.

Net proceeds from the sale were $67,821,000 after closing costs and the financial statement gain was $53,952,000.

Relationship with Vornado

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Significant Tenant

Bloomberg accounted for revenue of $115,129,000 , $113,140,000 and $109,066,000 in the years ended December 31, 2022, 2021 and 2020, respectively, representing approximately 56%, 5 5% and 55% of our rental revenues in each year, respectively.

Bloomberg accounted for revenue o f $120,351,000, $115,129,000 and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively, representing approximately 54%, 56% an d 55% of our rental revenues in each year, respectively.

No other tenant accounted for more than 10% of our rental revenues.

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We have long believed a focus on environmental sustainability is responsible management of our business and important to our tenants, investors, employees and communities that we serve.

Since we are externally managed by Vornado, Vornado’s Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters at Alexander’s, which includes climate change risk.

Since we are externally managed by Vornado, Vornado’s Corporate Governance and Nominating Committee of its Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters at Alexander’s, which includes climate change risk.

Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with Vornado’s business units.

In the discussion below, when we refer to Vornado’s buildings, it includes our buildings.

Vornado is an industry leader in sustainability, owning and operating more than 27 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing 95% of its office portfolio, with over 23 million square feet at LEED Gold or Platinum.

In 2022, Vornado (i) was selected as a global “Sector Leader” for Diversified Office/Retail REITs in the Global Real Estate Sustainability Benchmark ("GRESB"), ranking first in the United States amongst peers and ranking third among 112 responding listed companies within the Americas, and received the “Green Star” distinction for the tenth consecutive year and GRESB's five star rating, (ii) received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for diversified REITs for the twelfth time, and (iii) was recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated seven years of sustained excellence.

Vornado prioritizes addressing climate change and in 2019 adopted a 10-year plan to make its buildings, including ours, carbon neutral by 2030 (“Vision 2030”).

Vision 2030 is a multi-faceted approach that prioritizes energy efficiency, demand management, and renewable power.

Vornado is an industry leader in sustainability, owning and operating more than 25 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing 95% of its in-service office portfolio, with over 24 million square feet at LEED Gold or Platinum.

In 2023, Vornado (i) ranked #1 in the US Diversified Office/Retail REIT peer group by GRESB, and received the “Green Star” distinction for the eleventh consecutive year and GRESB's five star rating, (ii) received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for diversified REITs for the thirteenth time, and (iii) was recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated eight years of sustained excellence.

Vornado prioritizes addressing climate change and in 2019 adopted a 10-year plan to make its buildings carbon neutral by 2030 (“Vision 2030”).

Vision 2030 is a multi-faceted approach that prioritizes energy reduction, recovery, and renewable power.

Vornado relies on technology, as well as meaningful stakeholder collaboration with its tenants, its employees, and its communities, to achieve this plan.

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Vornado operates its buildings sustainably and efficiently by seeking to establish best practices in energy and water consumption, carbon reduction, resource and waste management and ecologically sensitive procurement.

Vornado’s policies, from 100% green cleaning to energy efficiency, are implemented across its entire portfolio.

Vornado undertakes significant outreach with its tenants, employees and investors regarding its sustainability programs and strategies.

Vornado is committed to transparent reporting of sustainability performance indicators and publishes an annual ESG Report in accordance with the Global Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and recommendations set forth by the Task Force on Climate-related Financial Disclosures.

Vornado’s policies, from 100% green cleaning to procuring 100% renewable electricity certificates to energy efficiency, are implemented across its entire portfolio.

Vornado undertakes significant outreach with its tenants, employees and investors regarding Vornado’s sustainability programs and strategies.

Vornado gathers data to measure progress against its goals, aligns its goals with its tenants, plans for its longer-term projects and engages with its stakeholders in meaningful ways.

Vornado uses carbon accounting software, energy audits and models and building automation software to measure and track its portfolio-wide waste, water and energy reduction strategies, create roadmaps for each building to understand how to achieve carbon neutrality and provide accurate and actionable data for its measurement, verification and reporting requirements.

Vornado’s 2022 and 2023 long-term performance plan awards specifically tie a portion of senior management’s compensation to the achievement of certain ESG targets, including reductions in greenhouse gas emissions, achieving a specified GRESB score and targeting a specified percentage of LEED Gold or Platinum certified square footage in its office portfolio.

Vornado is committed to transparent reporting of sustainability performance indicators and publishes an annual ESG Report in accordance with the Global Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and in 2023 published a report in accordance with the Task Force on Climate-related Financial Disclosures.

Vornado also submits public reports to CDP (formerly, the Carbon Disclosure Project), CSA (the S&P Global Corporate Sustainability Assessment) and EP100 (global initiative led by Climate Group).

Further details on Vornado’s environmental sustainability initiatives and strategy, including Vornado’s Vision 2030 Roadmap, can be found in Vornado’s 2021 ESG Report at (esg.vno.com).

Further details on Vornado’s environmental sustainability initiatives and strategy, including its Vision 2030 Roadmap, can be found in Vornado’s 2022 ESG Report at (vno.com/sustainability).

There can be no assurance that Vornado’s Vision 2030 commitment will be achieved in the planned time frame.

The ESG Report is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K.

We operate in a highly competitive environment.

All of our properties are located in New York City.

We compete with a large number of real estate investors, property owners and developers.

Principal factors of competition are rents charged, attractiveness of location, the quality of the property and the breadth and the quality of services provided.

We operate in a highly competitive environment located in New York City.

We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments.

Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided.

Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels.

Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.

See “Item 1A.

Risk Factors” in this Annual Report on Form 10-K for additional information regarding these factors.

Human Capital Resources

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business