What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-12 compared with 2023-02-13 · 121 added, 120 removed, 476 unchanged (34% of the section changed)

18 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in I nternal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

21 unchanged sentences

• We tested the effectiveness of controls over management’s evaluation of the recoverability of real estate, including controls over management’s determination of the reasonableness of the applicable capitalization rates.

• Inquired with management regarding their determination of the capitalization rates, and evaluating the consistency of the capitalization rates used with evidence obtained in other areas of the audit.

• Inquired with management regarding their determination of the capitalization rates, and evaluated the consistency of the capitalization rates used with evidence obtained in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s estimated capitalization rates by:

3 unchanged sentences

New York, New York

February 13, 2023

Februa ry 12, 2024

We have served as the Company’s auditor since 1969.

17 unchanged sentences

Receivable arising from the straight-lining of rents 124,866 127,497

Deferred lease costs, net, including unamortized leasing fees to Vornado of

Deferred leasing costs, net, including unamortized leasing fees to Vornado of

$ 19,540 and $ 22,174 , respectively

41 unchanged sentences

Total expenses ( 140,449 ) ( 126,349 ) ( 129,951 )

Interest and other income, net 6,769 639 2,667

Interest and other income 22,245 6,769 639

Interest and debt expense ( 58,297 ) ( 28,602 ) ( 19,686 )

17 unchanged sentences

Net income $ 102,413 $ 57,632 $ 132,930

Other comprehensive income (loss):

Other comprehensive (loss) income:

Change in fair value of interest rate derivatives and other ( 9,385 ) 18,092 8,201

22 unchanged sentences

Change in fair value of interest rate derivatives

and other — — — — 18,092 — 18,092

Deferred stock unit grants — — 450 — — — 450

18 unchanged sentences

Depreciation and amortization, including amortization of debt issuance costs 34,605 31,454 34,592

Straight-lining of rents 7,960 9,817 21,102

Write-off of tenant receivables — — 4,122

Stock-based compensation expense 450 450 600

Net gains on sale of real estate (2021 includes $ 2,348 from discontinued operations)

( 53,952 ) — ( 72,298 )

Straight-lining of rents 2,631 7,960 9,817

Stock-based compensation expense 450 450 450

Change in fair value of marketable securities — — ( 3,482 )

Dividends received in stock — — ( 214 )

Interest rate cap premium amortization 7,770 — —

Other non-cash adjustments ( 1,559 ) ( 2,928 ) —

Change in operating assets and liabilities:

Tenant and other receivables, net 1,680 1,731 ( 6,146 )

Tenant and other receivables ( 572 ) 1,680 1,731

Other assets 14,141 2,782 3,099

10 unchanged sentences

Proceeds from sales of real estate 67,821 — 81,871

Purchase of interest rate cap ( 11,258 ) — —

Proceeds from interest rate cap 5,049 — —

Return of short-term investment — — 3,600

Proceeds from sale of marketable securities — — 9,506

Net cash (used in) provided by investing activities ( 279,266 ) 75,457 ( 32,460 )

Net cash provided by (used in) investing activities 321,812 ( 279,266 ) 75,457

CASH FLOWS FROM FINANCING ACTIVITIES

2 unchanged sentences

Debt repayments — — ( 68,000 )

Proceeds from borrowings — — 239,708

Net cash (used in) provided by financing activities ( 92,310 ) ( 160,294 ) 90,294

Net (decrease) increase in cash and cash equivalents and restricted cash ( 269,027 ) 33,628 135,900

Net cash used in financing activities ( 92,424 ) ( 92,310 ) ( 160,294 )

Net increase (decrease) in cash and cash equivalents and restricted cash 338,499 ( 269,027 ) 33,628

Cash and cash equivalents and restricted cash at beginning of year 214,478 483,505 449,877

17 unchanged sentences

NON-CASH TRANSACTIONS

Write-off of fully depreciated assets $ 8,097 $ 23 $ 5,628

Liability for real estate additions, including $ 141 for development fees due to Vornado in 2021

1,969 2,254 1,445

Additional estimated lease liability arising from the recognition of right-of-use asset — 16,099 —

Liability for real estate additions, including $ 141 and $ 489 for development fees due to

Vornado in 2021 and 2020, respectively 2,254 1,445 4,955

Write-off of fully amortized and/or depreciated assets 23 5,628 876

See notes to consolidated financial statements.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Alexander’s, Inc.

ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties.

2 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.

2 unchanged sentences

• 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 to 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.

We have determined that our properties have similar economic characteristics and meet the criteria that permit the properties to be aggregated into one reportable segment (the leasing, management, development and redeveloping of properties in New York City).

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recently Issued Accounting Literature - In March 2020, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2020-04”) establishing Accounting Standards Codification (“ASC”) Topic 848 (“ASC 848”), Reference Rate Reform .

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

Recently Issued Accounting Literature - In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 establishing Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform, and in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) :

Scope (collectively, “ASC 848”).

ASC 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASC 848 is optional and may be elected over time as reference rate reform activities occur.

We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

In December 2022 the FASB issued accounting standard update 2022-06 that defers the sunset of ASC 848 from December 31, 2022 to December 31, 2024.

We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In July 2021, the FASB issued an update ("ASU 2021-05") Lessors - Certain Leases with Variable Lease Payments to ASC Topic 842, Leases ("ASC 842").

ASU 2021-05 provides additional ASC 842 classification guidance as it relates to a lessor's accounting for certain leases with variable lease payments.

ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day-one loss.

ASU 2021-05 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted.

We adopted this update effective January 1, 2022 which did not have an impact on our consolidated financial statements.

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which was issued to defer the sunset date of ASC 848 to December 31, 2024.

ASU 2022-06 is effective immediately for all companies.

As of December 31, 2023, we have transitioned all of our LIBOR-indexed debt and derivatives and, for our derivatives in hedge accounting relationships, utilized the elective relief in ASC 848, allowing for the continuation of hedge accounting through the transition process.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure requirements.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of ASU 2023-07 on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income tax expense and income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of ASU 2023-09 on our consolidated financial statements.

Real Estate – Real estate is carried at cost, net of accumulated depreciation and amortization.

As of December 31, 2022 and 2021, the carrying amount of our real estate, net of accumulated depreciation and amortization, was $ 688,330,000 and $ 698,869,000 , respectively.

As of December 31, 2023 and 2022, the carrying amount of our real estate, net of accumulated depreciation and amortization, was $ 650,717,000 a nd $ 688,330,000 , respectively.

Maintenance and repairs are generally expensed as incurred.

3 unchanged sentences

General and administrative costs are expensed as incurred.

Our properties, including properties to be developed in the future, are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset, including an estimated terminal value calculated using an appropriate capitalization rate.

9 unchanged sentences

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Revenue Recognition – Our rental revenues include revenues from the leasing of space to tenants at our properties and revenues from parking and tenant services.

We have the following revenue recognition policies:

• Lease revenues from the leasing of space to tenants at our properties.

Revenues derived from base rent are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements.

We commence rental revenue recognition when the underlying asset is available for use by the lessee.

In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

Revenue Recognition – Rental revenues include revenues from the leasing of space at our properties to tenants, tenant services and parking garage revenues.We have the following revenue recognition policies:

• Revenues from the leasing of space at our properties to tenants include (i) lease components, including fixed and variable lease payments, and nonlease components which include reimbursement of common area maintenance expenses, and (ii) reimbursement of real estate taxes and insurance expenses.

As lessor, we have elected to combine the lease and nonlease components of our operating lease agreements and account for the components as a single lease component in accordance with ASC Topic 842, Leases (“ASC 842”).

◦ Revenues from fixed lease payments for operating leases are recognized on a straight-line basis over the non-cancelable term of the lease, together with renewal options that are reasonably certain of being exercised.

We commence revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use.

◦ Revenues derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred.

As lessor, we have elected to combine the lease components (base and variable rent), non-lease components (reimbursements of common area maintenance expenses) and reimbursement of real estate taxes and insurance expenses from our operating lease agreements and account for the components as a single lease component in accordance with ASC 842.

• Parking revenue arising from the rental of parking spaces at our properties.

This income is recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

• Tenant services is revenue arising from sub-metered electric, elevator and other services provided to tenants at their request.

This revenue is recognized as the services are transferred in accordance with ASC 606.

Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect substantially all of the future lease payments.

We consider the tenant’s payment history and current credit status when assessing collectability.

When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received.

We recognize changes in the collectability assessment of our operating leases as adjustments to rental revenues.

• Revenues derived from sub-metered electric, elevator, trash removal and other services provided to our tenants at their request are recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606").

• Revenues derived from the operations of our parking facilities, which charge hourly or monthly fees to provide parking services to customers, are recognized as the services are transferred in accordance with ASC 606.

We evaluate on an individual lease basis whether it is probable that we will collect substantially all amounts due from our tenants and recognize changes in the collectability assessment of our operating leases as adjustments to rental revenue.

Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status and publicly available information about the financial condition of the tenant, and other factors.

Tenant receivables, including receivables arising from the straight-lining of rents, are written off when management deems that the collectability of substantially all future lease payments from a specific lease is not probable of collection, at which point, the Company will limit future rental revenues to cash received.

Cash and Cash Equivalents – Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less when purchased and are carried at cost, which approximates fair value, due to their short-term maturities.

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All other deferred charges are amortized on a straight-line basis, which approximates the effective interest rate method, in accordance with the terms of the agreements to which they relate.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Income Taxes – We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856 – 860 of the Internal Revenue Code of 1986, as amended (the “Code”).

1 unchanged sentence

We distribute to our stockholders 100 % of our taxable income and therefore, no provision for Federal income taxes is required.

Dividends distributed for the year ended December 31, 2022 were characterized, for federal income tax purpos es, as 100.0 % ordi nary income.

Dividends distributed for the year ended December 31, 2023 were characterized, for federal income tax purposes, as 41.5 % ordinary income and 58.5 % of long-term capital gain income.

Dividends distributed for the year ended December 31, 2022 were characterized, for federal income tax purposes, as 100 % ordinary income.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Dividends distributed for the year ended December 31, 2021 were characterized, for federal income tax purposes, as 58.3 % ordinary income and 41.7 % of long-term capital gain income.

The estimated taxable income attributable to our common stockholders (unaudited) for the years ended December 31, 2023, 2022 and 2021 was approximately $ 98,555,000 , $ 64,960,000 , and $ 101,184,000 , respectively.

The book to tax differences between net income and estimated taxable income primarily result from differences in the income recognition or deductibility of depreciation and amortization, gains or losses from the sale of real estate and other capital transactions, straight-line rent adjustments, the change in fair value of marketable securities and income from discontinued operations.

As of December 31, 2022, the net basis of our assets and liabilities for tax reporting purposes was approximately $ 137,734,000 lower than the amount reported for financial statement purposes.

As of Dec ember 31, 2023, the net basis of our assets and liabilities for tax reporting purposes was approximately $ 145,246,000 low er than the amount reported for financial statement purposes.

REVENUE RECOGNITION

13 unchanged sentences

REAL ESTATE SALES

On June 4, 2021, we sold a parcel of land in the Bronx, New York (“Bronx Land Parcel”) for $ 10,000,000 .

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 .

On October 4, 2021, we sold 30.3 acres of land located in Paramus, New Jersey (“Paramus Property”) to IKEA Property, Inc., the tenant at the property, for $ 75,000,000 , pursuant to the tenant’s purchase option contained in the lease.

On June 4, 2021, we sold a parcel of land in the Bronx, New York for $ 10,000,000 .

Net proceeds from the sale were $ 9,291,000 after closing costs and the financial statement gain was $ 9,124,000 .

On October 4, 2021, we sold 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc., the tenant at the property, for $ 75,000,000 , pursuant to the tenant’s purchase option contained in the lease.

Net proceeds from the sale were $ 4,580,000 after closing costs and the repayment of the $ 68,000,000 mortgage loan.

The financial statement gain was $ 60,826,000 , which was recognized in the fourth quarter of 2021.

The financial statement gain was $ 60,826,000 .

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS

As of December 31, 2022, Vornado owned 32.4 % of our outstanding common stock.

We are managed by, and our properties are leased and developed by, Vornado, pursuant to the agreements described below, which expire in March of each year and are automatically ren ewable.

As of December 31, 2023, Vornado owne d 32.4 % of our outstanding common stock.

We are managed by, and our properties are leased and developed by, Vornado, pursuant to the agreements described below, which expire in March of each year and are automatically renewable.

Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado.

1 unchanged sentence

Roth, Interstate and its other two general partners, David Mandelbaum and Russell B.

(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.0 % of our outstanding common stock, in addition to the 2.3 % th ey indirectly own through Vornado.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS - continued

(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.0 % of our outstanding common stock, in addition to the 2.3 % they indirectly own through Vornado.

Management and Development Agreements

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In the event third-party real estate brokers are used, the fees to Vornado increase by 1 % and Vornado is responsible for the fees to the third-party real estate brokers.

Vornado is also entitled to a commission upon the sale of any of our assets equal to 3 % of gross proceeds, as defined, for asset sales less than $ 50,000,000 and 1 % of gross proceeds, as defined, for asset sales of $ 50,000,000 or more (the “Sales Agreement”).

Pursuant to the Sales Agreement, we paid a $ 300,000 sales commission to Vornado in the second quarter of 2021 related to the sale of the Bronx Land Parcel.

In addition, we paid a $ 750,000 sales commission to Vornado in the fourth quarter of 2021 related to the Paramus Property sale.

We also have agreements with Building Maintenance Services, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security services at our Lexington Avenue property and (ii) security services at our Rego Park I and Rego Park II properties and The Alexander apartment tower.

The following is a summary of fees to Vornado under the various agreements discussed above.

In addition, we have an agreement with a wholly owned subsidiary of Vornado to manage the parking garages at our Rego Park I and Rego Park II properties.

The following is a summary of fees earned by Vornado under the various agreements discussed above.

Year Ended December 31,

3 unchanged sentences

Leasing fees 1,213 1,378 1,800

Commission on sales of real estate — 1,050 —

Property management, cleaning, engineering

and security fees 5,912 5,540 5,051

Commissions on sales of real estate 711 — 1,050

Property management, cleaning, engineering, parking and security fees 6,005 5,912 5,540

$ 10,729 $ 10,093 $ 11,331

As of December 31, 2023 , the amounts due to Vornado were $ 646,000 for management, property management, cleaning, engineering and security fees and $ 69,000 for leasing fees.

As of December 31, 2021, the amounts due to Vornado were $ 669,000 for management, property management, cleaning, engineering and security fees;

$ 141,000 for development fees;

and $ 69,000 for leasing fees.

MARKETABLE SECURITIES

In December 2021, we sold our 564,612 common shares of The Macerich Company (“Macerich”), realizing cash proceeds of $ 9,506,000 .

These shares were received in connection with the sale of Kings Plaza Regional Shopping Center (“Kings Plaza”) to Macerich in 2012.

The gains and losses resulting from the mark-to-market of these securities during 2021 and 2020 were presented as “change in fair value of marketable securities” on our consolidated statements of income.

DISCONTINUED OPERATIONS

In 2012, when we sold Kings Plaza to Macerich, $ 2,348,000 of the financial statement gain was deferred since a portion of the sales price was received in Macerich common shares.

In December 2021, we recognized the $ 2,348,000 gain upon the disposition of our Macerich common shares.

As the results related to Kings Plaza were previously classified as discontinued operations, we have classified the gain as “income from discontinued operations” on our consolidated statement of income for the year ended December 31, 2021 in accordance with the provisions of ASC Topic 360, Property, Plant and Equipment .

As of December 31, 2022, the amounts due to Vornado were $ 742,000 for management, property management, cleaning, engineering and security fees and $ 59,000 for leasing fees.

MORTGAGES PAYABLE

On June 9, 2023, we exercised our remaining one-year extension option on the $ 500,000,000 interest-only mortgage loan on the office condominium of our 731 Lexington Avenue property.

The interest rate on the loan remained at LIBOR plus 0.90 % through July 15, 2023 and currently bears interest at the Prime Rate ( 8.50 % as of December 31, 2023) through loan maturity on June 11, 2024.

In June 2023, we purchased an interest rate cap for $ 11,258,000 , which capped LIBOR at 6.00 % through July 15, 2023 and caps the Prime Rate at 6.00 % through loan maturity.

ALEXANDER’S, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MORTGAGES PAYABLE

MORTGAGES PAYABLE - continued

The following is a summary of our outstanding mortgages payable.

15 unchanged sentences

$ 1,092,551 $ 1,091,051

(1) Interest rate listed represents the rate in effect as of December 31, 2022 based on LIBOR or SOFR as of contractual reset date plus contractual spread, adjusted for hedging instruments as applicable.

(2) Interest at LIBOR plus 0.90 % (LIBOR capped at a rate of 6.00 % through June 2023).

Maturity date represents the extended maturity based on our as-of right to extend.

(1) Interest at the Prime Rate (capped at 6.00 % through loan maturity).

(2) Interest rate listed represents the rate in effect as of December 31, 2023 based on SOFR as of contractual reset date plus contractual spread, adjusted for hedging instruments as applicable.

(3) Interest at SOFR plus 1.51 % which was swapped to a fixed rate of 1.76 % through May 2025.

(4) Interest at SOFR plus 1.45 % (SOFR is capped at a rate of 4.15 % through November 2024).

All of our debt is secured by mortgages and/or pledges of the stock of the subsidiaries holding the properties.

The net carrying value of real estate collateralizing the debt amounted t o $ 614,245,000 a s of December 31, 2022.

The net carrying value of real estate collateralizing the debt amou nted to $ 594,681,000 as of December 31, 2023.

Our existing financing documents contain covenants that limit our ability to incur additional indebtedness on these properties, and in certain circumstances, provide for lender approval of tenants’ leases and yield maintenance to prepay them.

2 unchanged sentences

Year Ending December 31, Amount

2024 $ 500,000

MARKETABLE SECURITIES

In December 2021, we sold our 564,612 common shares of The Macerich Company (“Macerich”), realizing cash proceeds of $ 9,506,000 .

These shares were received in connection with the sale of Kings Plaza Regional Shopping Center (“Kings Plaza”) to Macerich in 2012.

The gains and losses resulting from the mark-to-market of these securities during 2021 were presented as “change in fair value of marketable securities” on our consolidated statement of income.

DISCONTINUED OPERATIONS

In 2012, when we sold Kings Plaza to Macerich, $ 2,348,000 of the financial statement gain was deferred since a portion of the sales price was received in Macerich common shares.

In December 2021, we recognized the $ 2,348,000 gain upon the disposition of our Macerich common shares.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FAIR VALUE MEASUREMENTS

7 unchanged sentences

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FAIR VALUE MEASUREMENTS - continued

Financial Assets and Liabilities Measured at Fair Value

Financial assets measured at fair value on our consolidated balance sheets as of December 31, 2022 consist of U.S.

Treasury bills (classified as available for-sale) and interest rate derivatives which are presented in the table below based on their level in the fair value hierarchy.

Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2023 consist of interest rate derivatives, which are presented in the table below based on their level in the fair value hierarchy.

There were no financial liabilities measured at fair value as of December 31, 2023.

1 unchanged sentence

(Amounts in thousands) Total Level 1 Level 2 Level 3

Investments in U.S.

Treasury bills (1)

$ 266,963 $ 266,963 $ — $ —

Interest rate derivatives (included in other assets) $ 22,608 $ — $ 22,608 $ —

$ 296,314 $ 266,963 $ 29,351 $ —

(1) During the year ended December 31, 2022, we purchased $ 364,238 in U.S.

Treasury bills with an aggregate par value of $ 370,000 and realized proceeds of $ 100,000 from maturing U.S.

Treasury bills.

As of December 31, 2022 our investments in U.S.

Treasury bills have an aggregate accreted value of $ 267,809 prior to being marked to fair value and have remaining maturities of less than one year.

Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2021 consist of interest rate derivatives which are presented in the table below based on their level in the fair value hierarchy.

Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2022 consist of U.S.

Treasury bills (classified as available for-sale) and interest rate derivatives, which are presented in the table below based on their level in the fair value hierarchy.

There were no financial liabilities measured at fair value as of December 31, 2022.

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(Amounts in thousands) Total Level 1 Level 2 Level 3

Investments in U.S.

Treasury bills $ 266,963 $ 266,963 $ — $ —

Interest rate derivatives (included in other assets) 29,351 — 29,351 —

$ 296,314 $ 266,963 $ 29,351 $ —

Interest Rate Derivatives

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(1) SOFR cap strike rate of 4.15 %.

(2) LIBOR cap strike rate of 6.00 %

(2) In June 2023, we purchased an interest rate cap for $ 11,258 , which capped LIBOR at 6.00 % through July 15, 2023 and caps the Prime Rate ( 8.50 % as of December 31, 2023) at 6.00 % through loan maturity.

See Note 6 - Mortgages Payable for further information.

ALEXANDER’S, INC.

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Retail leases may also provide for the payment by the lessee of additional rents based on a percentage of their sales.

We also lease residential space at The Alexander apartment tower with 1 or 2 year lease terms.

We also lease residential space at The Alexander apartment tower which generally have a 1 or 2 year lease terms.

Future undiscounted cash flows under our contractual non-cancelable operating leases are as follows:

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These amounts do not include reimbursements or additional rents based on a percentage of retail tenants’ sales.

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 %, 55 % and 55 % of our rental revenues in each year, respectively.

Bloomberg accounted for reve nue of $ 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 % and 55 % of our rental revenues in each year, respectively.

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

7 unchanged sentences

We are the lessee under a ground lease at our Flushing property, classified as an operating lease, which expires in 2027 and has one 10 -year extension option.

In January 2022, New World Mall LLC, the sub-tenant at the property, exercised its one remaining 10 -year extension option through January 2037.

As a result of the sub-tenant exercising its extension option, we were required by GAAP to remeasure our ground lease liability based upon an estimate of lease payments to be made during the 10 -year extension period of our ground lease resulting in an incremental right-of-use asset and lease liability of approximately $ 16,000,000 .

In January 2022, New World Mall LLC, the subtenant at the property, exercised its one remaining 10 -year extension option through January 2037.

As a result of the subtenant exercising its extension option, we were required by GAAP to remeasure our ground lease liability based upon an estimate of lease payments to be made during the 10 -year extension period of our ground lease resulting in an incremental right-of-use asset and lease liability of approximately $ 16,000,000 .

The discount rate applied in the remeasurement of the lease liability was based on the incremental borrowing rate (“IBR”) of 5.86 % at the time of the remeasurement.

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Lease liability as of December 31, 2023 $ 20,452

We recognize rent expense as a component of “operating” expenses on our consolidated statements of income on a straight-line basis.

We recognize rent exp ense as a component of “operating” expenses on our consolidated statements of income on a straight-line basis.

Rent expense was $ 2,161,000 , $ 2,161,000 and $ 746,000 in each of the years ended December 31, 2023, 2022 and 2021, respectively.

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COMMITMENTS AND CONTINGENCIES

We maintain general liability insurance with limits of $ 300,000,000 per occurrence and per property, of which the first $ 30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $ 1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.

W e maintain general liability insurance with limits of $ 300,000,000 per occurrence and per property, of which the first $ 30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $ 1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.

Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027.

6 unchanged sentences

We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material.

The principal amounts of our mortgage loans are non-recourse to us and the loans contain customary covenants requiring us to maintain insurance.

Our loans contain customary covenants requiring us to maintain insurance.

Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future.

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Letters of Credit

Approximat ely $ 900,000 of standby letters of credit were issued and outstanding as of December 31, 2022.

Approximately $ 900,000 of standby letters of credit were issued and outstanding as of December 31, 2023.

There are various legal actions brought against us from time-to-time in the ordinary course of business.

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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 8. Financial Statements and Supplementary Data