What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-04 · 54 added, 53 removed, 98 unchanged (52% of the section changed)

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We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and six months ended June 30, 2025 .

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and nine months ended September 30, 2025 .

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Actual results could differ from those estimates.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results for the full year.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year.

Critical Accounting Estimates and Significant Accounting Policies

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Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2024.

For the six months ended June 30, 2025, there were no material changes to these estimates or policies.

For the nine months ended September 30, 2025, there were no material changes to these estimates or policies.

Alexander’s, Inc.

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Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding these and other factors that may materially affect our results.

Three Months Ended June 30, 2025 Financial Results Summary

Net income for the three months ended June 30, 2025 was $6,120,000, or $1.19 per diluted share, compared to $8,380,000 or $1.63 per diluted share in the prior year’s three months.

Funds from operations (“FFO”) (non-GAAP) for the three months ended June 30, 2025 was $14,762,000, or $2.88 per diluted share, compared to $17,009,000, or $3.31 per diluted share in the prior year’s three months.

Six Months Ended June 30, 2025 Financial Results Summary

Net income for the six months ended June 30, 2025 was $18,432,000, or $3.59 per diluted share, compared to $24,489,000 or $4.77 per diluted share in the prior year’s six months.

FFO (non-GAAP) for the six months ended June 30, 2025 was $35,604,000, or $6.93 per diluted share, compared to $42,541,000, or $8.29 per diluted share in the prior year’s six months.

The $300,000,000 mortgage loan on the retail condominium of our 731 Lexington Avenue property was scheduled to mature on August 5, 2025.

Three Months Ended September 30, 2025 Financial Results Summary

Net income for the three months ended September 30, 2025 was $5,968,000, or $1.16 per diluted share, compared to $6,678,000 or $1.30 per diluted share in the prior year’s three months.

Funds from operations (“FFO”) (non-GAAP) for the three months ended September 30, 2025 was $14,920,000, or $2.91 per diluted share, compared to $14,582,000, or $2.84 per diluted share in the prior year’s three months.

Nine Months Ended September 30, 2025 Financial Results Summary

Net income for the nine months ended September 30, 2025 was $24,400,000, or $4.75 per diluted share, compared to $31,167,000 or $6.07 per diluted share in the prior year’s nine months.

FFO (non-GAAP) for the nine months ended September 30, 2025 was $50,524,000, or $9.84 per diluted share, compared to $57,123,000, or $11.13 per diluted share in the prior year’s nine months.

The $300,000,000 non-recourse mortgage loan on the retail condominium of our 731 Lexington Avenue property was scheduled to mature on August 5, 2025.

On August 1, 2025, we entered into a 60-day extension with the lenders.

The interest-only, non-recourse loan continues to bear interest at SOFR plus 1.51% (5.83% as of June 30, 2025) through the extended maturity date of October 3, 2025.

The Company did not repay the loan on the extended maturity date of October 3, 2025.

The Company is in discussions with the lenders regarding a potential loan restructuring.

Square Footage, Occupancy and Leasing Activity

Our portfolio is comprised of five properties aggregating 2,455,000 square feet.

As of June 30, 2025, the commercial occupancy rate was 94.8% and the residential occupancy rate was 98.7%.

As of September 30, 2025, the commercial occupancy rate was 94.9% and the residential occupancy rate was 97.1%.

On January 31, 2025, Home Depot’s 83,000 square foot lease at the retail portion of our 731 Lexington Avenue property expired.

Annual rental revenues from Home Depot were approximately $15,000,000.

In the fourth quarter of 2024, we entered into ten-year leases with Burlington and Marshalls to relocate them to our Rego Park II property in 2025 from our Rego Park I property.

Rego Park I will then be vacant and we are currently exploring sale and development opportunities for the property.

In the fourth quarter of 2024, we entered into ten-year leases with Burlington and Marshalls to relocate them to our Rego Park II property in 2025 from our Rego Park I property which is now vacant.

We are currently exploring sale opportunities for our Rego Park I property and are in advanced negotiations with a potential buyer.

Overview - continued

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Bloomberg L.P.

(“Bloomberg”) accounted for revenue of $64,446,000 and $60,946,000 for the six months ended June 30, 2025 and 2024, respectively, representing approximately 61% and 53% of our rental revenues in each period, respectively.

(“Bloomberg”) accounted for revenue of $96,655,000 and $93,179,000 for the nine months ended September 30, 2025 and 2024, respectively, representing approximately 60% and 55% of our rental revenues in each period, respectively.

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

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In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

Results of Operations – Three Months Ended June 30, 2025, compared to June 30, 2024

Results of Operations – Three Months Ended September 30, 2025, compared to September 30, 2024

Rental Revenues

Rental revenues were $51,589,000 for the three months ended June 30, 2025, compared to $53,392,000 for the prior year’s three months, a decrease of $1,803,000.

This was primarily due to (i) $3,781,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by (ii) $1,213,000 of higher recoveries of operating expenses and capital expenditures, (iii) $696,000 of higher straight-line rental revenue from new tenants at Rego Park II and (iv) $581,000 of higher straight-line rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue.

Rental revenues were $53,424,000 for the three months ended September 30, 2025, compared to $55,675,000 for the prior year’s three months, a decrease of $2,251,000.

This was primarily due to $3,774,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by $1,417,000 of higher rental revenue from new leases at Rego Park II.

Operating Expenses

Operating expenses were $25,934,000 for the three months ended June 30, 2025, compared to $24,991,000 for the prior year’s three months, an increase of $943,000 .

This was primarily due to (i) $983,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance and (ii) $454,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $494,000.

Operating expenses were $26,693,000 for the three months ended September 30, 2025, compared to $26,446,000 for the prior year’s three months, an increase of $247,000 .

This was primarily due to higher operating expenses not subject to recovery.

Depreciation and Amortization

Depreciation and amortization was $8,707,000 for the three months ended June 30, 2025, compared to $8,697,000 for the prior year’s three months, an increase of $10,000.

Depreciation and amortization was $9,018,000 for the three months ended September 30, 2025, compared to $7,972,000 for the prior year’s three months, an increase of $1,046,000.

This was primarily due to higher depreciation and amortization expense on capital costs for new leases at Rego Park II.

General and Administrative Expenses

General and administrative expenses were $1,955,000 for the three months ended June 30, 2025, compared to $2,159,000 for the prior year’s three months, a decrease of $204,000 .

This was primarily due to lower professional fees.

General and administrative expenses were $1,349,000 for the three months ended September 30, 2025, compared to $1,423,000 for the prior year’s three months, a decrease of $74,000 .

Interest and Other Income

Interest and other income was $3,928 ,000 for the three months ended June 30, 2025 , compared to $7,054,000 for the prior year’s three months, a decrease of $3,126,000.

Interest and other income was $3,682 ,000 for the three months ended September 30, 2025 , compared to $6,105,000 for the prior year’s three months, a decrease of $2,423,000.

This was primarily due to a decrease in average interest rates and investment balances.

Interest and Debt Expense

Interest and debt exp ense was $12,801,000 for the three months ended June 30, 2025 , compared to $16,219,000 for the prior year’s three months, a decrease of $3,418,000.

This was primarily due to (i) $2,361,000 of lower interest rate cap premium amortization, (ii) $1,590,000 from the downsize of the 731 Lexington Office loan in September 2024 and (iii) $1,654,000 from lower rates, partially offset by (iv) $1,937,000 from the expiration of the 731 Lexington Retail swap in May 2025 and (v) $250,000 of higher deferred debt issuance cost amortization.

Results of Operations – Six Months Ended June 30, 2025, compared to June 30, 2024

Interest and debt exp ense was $14,078,000 for the three months ended September 30, 2025 , compared to $19,261,000 for the prior year’s three months, a decrease of $5,183,000.

This was due to (i) $4,637,000 from lower rates, (ii) $3,681,000 from the refinancing and downsize of the 731 Lexington Office loan in September 2024, (iii) $578,000 of lower deferred debt issuance cost amortization and (iv) $157,000 of lower interest rate cap premium amortization, partially offset by (v) $3,870,000 from the expiration of the 731 Lexington Retail swap in May 2025.

Results of Operations – Nine Months Ended September 30, 2025, compared to September 30, 2024

Rental Revenues

Rental revenues were $106,504,000 for the six months ended June 30, 2025, compared to $114,789,000 for the prior year’s six months, a decrease of $8,285,000.

This was primarily due to (i) $9,001,000 of lower straight-line rental revenue from IKEA’s lease expiration at Rego Park I and (ii) $6,285,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by (iii) $2,583,000 of higher recoveries of operating expenses and capital expenditures, (iv) $2,321,000 of higher straight-line rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue, (v) $1,705,000 of payments received for tenant receivables that were previously written off and (vi) $1,305,000 of higher straight-line rental revenue from new tenants at Rego Park II.

Rental revenues were $159,928,000 for the nine months ended September 30, 2025, compared to $170,464,000 for the prior year’s nine months, a decrease of $10,536,000.

This was primarily due to (i) $10,059,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, (ii) $9,001,000 of lower rental revenue from IKEA’s lease expiration at Rego Park I and (iii) $1,054,000 of lower lease termination fee income, partially offset by (iv) $3,073,000 of higher recoveries of operating expenses and capital expenditures, (v) $2,722,000 of higher rental revenue from new leases at Rego Park II, (vi) $2,321,000 of higher rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue and (vii) $2,201,000 of payments received for tenant receivables that were previously written off.

Operating Expenses

Operating expenses were $51,498,000 for the six months ended June 30, 2025, compared to $50,254,000 for the prior year’s six months, an increase of $1,244,000 .

This was primarily due to (i) $1,983,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance, (ii) $388,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $1,127,000.

Operating expenses were $78,191,000 for the nine months ended September 30, 2025, compared to $76,700,000 for the prior year’s nine months, an increase of $1,491,000 .

This was due to (i) $2,003,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance, and (ii) $682,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $1,194,000.

Depreciation and Amortization

Depreciation and amortization was $17,306,000 for the six months ended June 30, 2025, compared to $18,174,000 for the prior year’s six months, a decrease of $868,000.

This was primarily due to the accelerated depreciation and amortization related to IKEA’s lease expiration at Rego Park I in the prior year’s six months.

Depreciation and amortization was $26,324,000 for the nine months ended September 30, 2025, compared to $26,146,000 for the prior year’s nine months, an increase of $178,000.

This was primarily due to higher depreciation and amortization expense on capital costs for new leases at Rego Park II, partially offset by the accelerated depreciation and amortization related to IKEA’s lease expiration at Rego Park I in the prior year’s nine months.

General and Administrative Expenses

General and administrative expenses were $3,546,000 for the six months ended June 30, 2025, compared to $3,635,000 for the prior year’s six months, a decrease of $89,000 .

General and administrative expenses were $4,895,000 for the nine months ended September 30, 2025, compared to $5,058,000 for the prior year’s nine months, a decrease of $163,000 .

This was primarily due to lower professional fees.

Interest and Other Income

Interest and other income was $7,873 ,000 for the six months ended June 30, 2025 , compared to $14,216,000 for the prior year’s six months, a decrease of $6,343,000.

Interest and other income was $11,555 ,000 for the nine months ended September 30, 2025 , compared to $20,321,000 for the prior year’s nine months, a decrease of $8,766,000.

This was primarily due to a decrease in average interest rates and investment balances.

Interest and Debt Expense

Interest and debt exp ense was $23,595,000 for the six months ended June 30, 2025 , compared to $32,453,000 for the prior year’s six months, a decrease of $8,858,000.

This was primarily due to (i) $5,586,000 of lower interest rate cap premium amortization, (ii) $3,090,000 from the downsize of the 731 Lexington Office loan in September 2024 and (iii) $2,759,000 from lower rates, partially offset by (iv) $1,937,000 from the expiration of the 731 Lexington Retail swap in May 2025 and (v) $640,000 of higher deferred debt issuance cost amortization.

Interest and debt exp ense was $37,673,000 for the nine months ended September 30, 2025 , compared to $51,714,000 for the prior year’s nine months, a decrease of $14,041,000.

This was primarily due to (i) $7,396,000 from lower rates, (ii) $6,771,000 from the refinancing and downsize of the 731 Lexington Office loan in September 2024 and (iii) $5,743,000 of lower interest rate cap premium amortization, partially offset by (iv) $5,807,000 from the expiration of the 731 Lexington Retail swap in May 2025.

Liquidity and Capital Resources

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The sources of liquidity to fund these cash requirements include rental revenue, which is our primary source of cash flow and is dependent upon the occupancy and rental rates of our properties, as well as our existing cash, proceeds from financings, including mortgage or construction loans secured by our properties and proceeds from asset sales.

As of June 30, 2025, we had $390,305,000 of liquidity comprised of cash and cash equivalents and restricted cash.

As of September 30, 2025, we had $352,258,000 of liquidity comprised of cash and cash equivalents and restricted cash.

The ongoing challenges posed by fluctuations in interest rates and the effects of inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures.

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However, there can be no assurance that additional financing or capital will be available to refinance our debt, or that the terms will be acceptable or advantageous to us.

For the Six Months Ended June 30, 2025

Cash and cash equivalents and restricted cash were $390,305,000 as of June 30, 2025, compared to $393,836,000 as of December 31, 2024, a decr ease of $3,531,000.

For the Nine Months Ended September 30, 2025

Cash and cash equivalents and restricted cash were $352,258,000 as of September 30, 2025, compared to $393,836,000 as of December 31, 2024, a decr ease of $41,578,000.

This decrease resulted from (i) $72,612,000 of net cash used in financing activities and (ii) $18,986,000 of net cash used in investing activities, partially offset by (iii) $50,020,000 of net cash provided by operating activities.

Net cash used in financing activities of $48,185,000 was comprised of (i) $46,202,000 of dividends paid and (ii) $1,983,000 of debt repayments.

Net cash used in investing activities of $14,633,000 was comprised of construction in progress and real estate additions.

Net cash provided by operating activit ies of $59,287,000 was comprised of (i) net income of $18,432,000, (ii) adjustments for non-cash items of $25,958,000 and (iii) the net change in operating assets and liabilities of $14,897,000 .

The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $18,888,000, (ii) other non-cash adjustments of $4,336,000, (iii) straight-lining of rents of $2,018,000, (iv) stock-based compensation expense of $394,000 and (v) interest rate cap premium amortization of $322,000.

For the Six Months Ended June 30, 2024

Cash and cash equivalents and restricted cash were $524,377,000 as of June 30, 2024, compared to $552,977,000 as of December 31, 2023, a decr ease of $28,600,000.

This decrease resulted from (i) $57,308,000 of net cash used in financing activities, partially offset by (ii) $28,327,000 of net cash provided by operating activities and (iii) $381,000 of net cash provided by investing activities.

Net cash used in financing activities of $72,612,000 was comprised of (i) $69,314,000 of dividends paid, (ii) $3,189,000 of debt repayments and (iii) $109,000 of debt issuance costs.

Net cash used in investing activities of $18,986,000 was comprised of construction in progress and real estate additions.

Net cash provided by operating activit ies of $50,020,000 was comprised of (i) net income of $24,400,000 and (ii) adjustments for non-cash items of $38,207,000, partially offset by (iii) the net change in operating assets and liabilities of $12,587,000 .

The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $28,709,000, (ii) other non-cash adjustments of $6,529,000, (iii) straight-lining of rents of $2,105,000, (iv) interest rate cap premium amortization of $470,000 and (v) stock-based compensation expense of $394,000.

For the Nine Months Ended September 30, 2024

Cash and cash equivalents and restricted cash were $397,176,000 as of September 30, 2024, compared to $552,977,000 as of December 31, 2023, a decr ease of $155,801,000.

This decrease resulted from (i) $175,824,000 of net cash used in financing activities and (ii) $3,273,000 of net cash used in investing activities, partially offset by (iii) $23,296,000 of net cash provided by operating activities.

Net cash used in financing activities of $175,824,000 was comprised of (i) $500,000,000 of debt repayments, (ii) $69,277,000 of dividends paid and (iii) $6,547,000 of debt issuance costs, partially offset by (iv) proceeds from borrowing of $400,000,000.

Net cash used in investing activities of $3,273,000 was comprised of $9,836,000 of construction in progress and real estate additions, partially offset by proceeds from an interest rate cap of $6,563,000.

Net cash provided by operating activit ies of $23,296,000 was comprised of (i) net income of $31,167,000 and (ii) adjustments for non-cash items of $45,349,000, partially offset by (iii) the net change in operating assets and liabilities of $53,220,000 .

The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $28,470,000, (ii) straight-lining of rents of $11,880,000, (iii) interest rate cap premium amortization of $6,213,000 and (iv) stock-based compensation expense of $450,000, partially offset by (v) other non-cash adjustments of $1,664,000.

Net cash provided by investing activities of $381,000 was comprised of $6,563,000 of proceeds from an interest rate cap, partially offset by construction in progress and real estate additions of $6,182,000.

Liquidity and Capital Resources - continued

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.

We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, which 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.

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A reconciliation of our net income to FFO is provided below.

FFO (non-GAAP) for the three and six months ended June 30, 2025 and 2024

FFO (non-GAAP) for the three months ended June 30, 2025 was $14,762,000, or $2.88 per diluted share, compared to $17,009,000, or $3.31 per diluted share in the prior year’s three months.

FFO (non-GAAP) for the six months ended June 30, 2025 was $35,604,000, or $6.93 per diluted share, compared to $42,541,000, or $8.29 per diluted share in the prior year’s six months.

FFO (non-GAAP) for the three and nine months ended September 30, 2025 and 2024

FFO (non-GAAP) for the three months ended September 30, 2025 was $14,920,000, or $2.91 per diluted share, compared to $14,582,000, or $2.84 per diluted share in the prior year’s three months.

FFO (non-GAAP) for the nine months ended September 30, 2025 was $50,524,000, or $9.84 per diluted share, compared to $57,123,000, or $11.13 per diluted share in the prior year’s nine months.

The following table reconciles our net income to FFO (non-GAAP):

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

(Amounts in thousands, except share and per share amounts) 2025 2024 2025 2024

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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-Q

Item 2. Management’s Discussion and Analysis