What changed in this filing

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Item 1A. Risk Factors

2026-02-09 compared with 2025-02-10 · 56 added, 51 removed, 327 unchanged (25% of the section changed)

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RISKS RELATED TO OUR BUSINESS AND OPERATIONS

We may be adversely affected by trends in office real estate, including work from home trends.

We may be adversely affected by trends in office real estate.

In 2025, approximate ly 61% of our rental revenues was from Bloomberg, the office tenant at our 731 Lexington Avenue office property.

Work from home, flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing remain prevalent in certain situations, following the COVID-19 pandemic.

Work from home, flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing have become more common in recent years.

Changes in tenant space utilization, including from the continuation of work from home and flexible work arrangement policies, may cause office tenants to reassess their long-term physical space needs, which could have an adverse effect on our business.

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All of our revenues come from properties located in New York City.

Real estate markets are affected by economic downturns and we cannot predict how economic conditions will impact this market in either the short or long term.

Declines in the economy and declines in the New York City real estate market have affected and could affect our financial performance and the value of our properties.

In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in this area include:

Real estate markets are affected by economic downturns and we cannot predict how economic conditions will impact the New York City market in either the short or long term.

Declines in the economy and declines in the New York City real estate market have impacted and could impact our financial performance and the value of our properties.

In addition to the factors affecting national economic conditions generally, the factors affecting economic conditions in this area include:

• financial performance and productivity of the media, advertising, professional services, financial, technology, retail, insurance and real estate industries;

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• changes in diplomatic and trade relationships, as well as potential tariffs;

• the fiscal health of New York State and New York City governments and local transit authorities;

• the fiscal health and policies of New York State and New York City governments and local transit authorities;

• quality of life conditions;

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• increased government regulation and costs of complying with such regulations;

• changes in rates or limitations of the deductibility of state and local taxes.

• changes in rates or limitations on the deductibility of state and local taxes.

It is impossible for us to predict the future effects of trends in the economic and investment climates of the New York City metropolitan region, and more generally of the United States, or the real estate market in this area.

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Certain of our properties are New York City retail properties and thus are affected by the general and New York City retail environments, including the level of consumer spending and consumer confidence, New York City tourism, office and residential occupancy rates, employer remote-working policies, the threat of terrorism or other criminal acts, increasing competition from online retailers and other retail centers and the impact of technological change upon the retail environment generally.

These factors could adversely affect the financial condition of our retail tenants, or result in the bankruptcy of such tenants, and the willingness of retailers to lease space in our retail locations, which could have an adverse effect on the value of our properties, our business and profitability.

These factors could adversely affect the financial condition of our retail tenants, or result in the bankruptcy of such tenants, and the demand for physical space in our retail locations, which could have an adverse effect on the value of our properties, our business and profitability.

Our performance and the value of an investment in us are subject to risks associated with our real estate assets and with the real estate industry.

The value of our real estate and the value of an investment in us fluctuates depending on conditions in the general economy and the real estate business.

These conditions may also adversely affect our revenues and cash flows.

These conditions may also adversely impact our revenues and cash flows.

The factors that affect the value of our real estate assets include, among other things:

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• increased competition from online shopping and its impact on retail tenants and their demand for retail space;

• potential changes in trade relationships, new tariffs and other trade protection measures or barriers that may adversely affect retailers and retail store values;

• potential changes in trade relationships, tariffs and other trade protection measures or barriers that may adversely affect retailers and retail store values;

• the timing and costs associated with property improvements and rentals;

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These factors may cause the value of our real estate assets to decline, which may result in non-cash impairment charges and the impact could be material.

Real estate is a competitive business and that competition may adversely affect us.

Real estate is a competitive business and that competition may adversely impact us.

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.

Substantially all of our properties face competition from similar properties in the same market, which may adversely affect the rents we can charge at those properties and our results of operations.

Substantially all of our properties face competition from similar properties in the same market, which may adversely impact the rents we can charge at those properties and our results of operations.

We may be unable to renew leases, lease vacant space or relet space as leases expire on favorable terms.

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In addition, changes in space utilization by our tenants may impact our ability to renew or relet space without the need to incur substantial costs in renovating or redesigning the internal configuration of the relevant property and/or space.

If we are unable to promptly renew the leases or relet the space at similar rates, lease vacant space, or if we are otherwise not able to maintain occupancy on economically favorable terms, our cash flow and ability to service debt obligations and pay dividends and distributions to stockholders could be adversely affected.

If we are unable to promptly renew leases or relet the space on economically favorable terms, our cash flow and ability to service debt obligations and pay dividends and distributions to stockholders could be adversely affected.

731 Lexington Avenue accounts for a majority of our revenues.

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If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition.

We depend upon anchor tenants to attract shoppers at our Rego Park retail properties and decisions made by these tenants, or adverse developments in the businesses of these tenants, could materially affect our financial condition and results of operations.

Our Rego Park retail properties are anchored by well-known large format retailers and other tenants who generate shopping traffic.

The value of these properties would be adversely affected if our anchor tenants failed to meet their contractual obligations, sought concessions in order to continue operations or ceased their operations, including as a result of bankruptcy.

If the level of sales at stores operating in our properties were to decline significantly due to economic conditions, increased competition from online shopping, closing of anchors or for other reasons, tenants may be unable to pay their minimum rents or expense recovery charges.

We depend upon anchor tenants to attract shoppers at our Rego Park II retail property and decisions made by these tenants, or adverse developments in the businesses of these tenants, could materially affect our financial condition and results of operations.

Our Rego Park II retail property is anchored by well-known large format retailers and other tenants who generate shopping traffic.

The value of this property would be adversely affected if our anchor tenants failed to meet their contractual obligations, sought concessions in order to continue operations or ceased their operations, including as a result of bankruptcy.

If the level of sales at stores operating at this property were to decline significantly due to economic conditions, increased competition from online shopping, closing of anchors or for other reasons, tenants may be unable to pay their minimum rents or expense recovery charges.

In the event of a default by a tenant or anchor, we may experience delays and costs in enforcing our rights as landlord.

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The bankruptcy or insolvency of a major tenant may delay our efforts to collect past-due balances under the relevant leases and could ultimately preclude collection of these amounts altogether.

As a result, the bankruptcy or insolvency of, or nonpayment by, a major tenant could cause us to suffer lower revenues and operational difficulties, including leasing the remainder of the property, which could in turn result in decreased net income and funds available to pay our indebtedness and make distributions to stockholders.

Some of our potential losses may not be covered by insurance.

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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In response to a terrorist attack, the perceived threat of terrorism or other criminal acts, tenants in this area may choose to relocate their businesses to less populated, lower-profile areas of the United States that may be perceived to be less likely targets of future terrorist activity or have lower rates of crime and fewer customers may choose to patronize businesses in this area.

This, in turn, could trigger a decrease in the demand for space in this area, which could increase vacancies in our properties and force us to lease space on less favorable terms .

This, in turn, would trigger a decrease in the demand for space in this area, which could increase vacancies in our properties and force us to lease space on less favorable terms.

Furthermore, we may experience increased costs for security, equipment and personnel.

As a result, the value of our properties and the level of our revenues and cash flows could decline materially.

The effects of climate change and natural disasters could have a concentrated impact on the area where we operate and could adversely affect our results.

The effects of climate change and natural disasters could have a concentrated impact on the area where we operate and could adversely impact our results.

Our properties are located in New York City.

Physical climate change and natural disasters, including earthquakes, storms, storm surges, tornados, floods and hurricanes, could cause significant damage to our properties and the surrounding environment or area.

Potentially adverse consequences of climate change, including rising sea levels and increased temperature fluctuations, could similarly have an impact on our properties and the economies of the metropolitan area in which we operate.

Physical climate change and natural disasters, including earthquakes, storms, storm surges, tornados, floods, hurricanes and rising sea levels, could cause significant damage to our properties and the surrounding environment or area.

Government efforts to combat climate change may impact the cost of operating our properties.

Over time, these conditions could result in declining demand for space in our buildings or the inability of us to operate the buildings at all.

Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy at our properties and requiring us to expend funds as we seek to repair and protect our properties against such risks.

The incurrence of these losses, costs or business interruptions may adversely affect our operating and financial results.

Extreme weather events may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy at our properties and requiring us to expend funds as we seek to repair and protect our properties against such risks.

The incurrence of these losses, costs or business interruptions may adversely impact our operating and financial results.

Our properties are located in an urban area, which means the vitality of our properties is reliant on sound transportation and utility infrastructure systems.

If one of those systems is compromised in any way by an extreme weather event, such a compromise could have an adverse effect on our local economies and populations, as well as on our tenants’ ability to do business in our buildings.

If one of those systems is compromised in any way by an extreme weather event, such a compromise could have an adverse impact on our local economies and populations, as well as on our tenants’ ability to do business in our buildings.

Our properties are subject to transitional risks related to climate-related policy change.

De-carbonization of grid-supplied energy (as has been mandated by the Climate Leadership and Community Protection Act in New York State) could lead to increased energy costs and operating expenses for our buildings.

Retrofitting our building systems to consume less energy could lead to increased capital costs.

Decarbonization of grid-supplied energy (as has been mandated by the Climate Leadership and Community Protection Act (“CLCPA”) in New York State) could lead to increased energy costs and operating expenses for our buildings.

In October 2025, the Albany County Supreme Court ordered the New York Department of Environmental Conservation (“DEC”) to finalize regulations required under the CLCPA.

This ruling compels the DEC to implement a cap-and-invest program to enforce greenhouse gas emission limits, which had been delayed.

Retrofitting our building systems to consume less energy has led to increased capital costs.

In addition, buildings which consume fossil fuel onsite may be subject to penalties in the future.

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We may become subject to costs, taxes or penalties, or increases therein, associated with natural resource or energy usage, such as a “carbon tax” and by local legislation such as New York City’s Local Law 97, which sets limits on carbon emissions in our buildings and imposes penalties if we exceed those limits, and New York City’s Intro 2317, or the “gas ban” bill, which limits any onsite fossil fuel combustion in new construction and major renovations.

These costs, taxes or penalties could increase our operating costs and decrease the cash available to pay our indebtedness and make distributions to our stockholders.

We actively track and assess possible impact from regulations across our buildings and evaluate cost of compliance versus impact on business operations and property valuations in our regular capital cycles.

These costs, taxes or penalties could increase our operating costs and decrease the cash available to pay our obligations and make distributions to our stockholders.

Changes to tax laws could affect REITs generally, the trading of our shares and our results of operations, both positively and negatively, in ways that are difficult to anticipate.

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If such changes occur, we may be required to pay additional taxes on our assets or income and/or be subject to additional restrictions.

These increased tax costs could, among other things, adversely affect the trading price for our common shares, our financial condition, our results of operations and the amount of cash available to pay our indebtedness and make distributions to our stockholders.

Significant inflation and increases in the inflation rate could adversely affect our business and financial results.

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In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit margins.

In addition, our cost of labor and materials could increase, which could have an adverse effect on our business and financial results.

In addition, our cost of labor and materials could increase, which could have an adverse impact on our business and financial results.

Increased inflation could also adversely affect us by increasing costs of construction and renovation.

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We are exposed to risks associated with property development, redevelopment and repositioning that could adversely affect us, including our financial condition and results of operations.

We continue to engage in development, redevelopment and repositioning activities with respect to our properties, and, accordingly are subject to certain risks in connection with development and redevelopment activities, which could adversely affect us, including our financial condition and results of operations.

We continue to engage in development, redevelopment and repositioning activities with respect to our properties, and accordingly, we are subject to certain risks which could adversely affect us, including our financial condition and results of operations.

These risks include, without limitation, (i) the availability and pricing of financing on favorable terms or at all;

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(viii) the inability to complete leasing of a property on schedule or at all, resulting in an increase in carrying or redevelopment costs and (ix) the possibility that properties will be leased at below expected rental rates.

These risks could result in substantial unanticipated delays or expenses and could prevent the initiation or the completion of redevelopment activities or reduce the ultimate rents achieved on new developments.

These outcomes could have an adverse effect on our financial condition, results of operations, cash flow, the market value of our common shares and ability to pay our indebtedness and make distributions to our stockholders.

These risks could result in substantial unanticipated delays or expenses, prevent the initiation or the completion of redevelopment activities or reduce the ultimate rents achieved on new developments.

These outcomes could have an adverse effect on our financial condition, results of operations, cash flow, the market value of our common shares and ability to satisfy our indebtedness and make distributions to our stockholders.

It may be difficult to sell real estate on a timely basis, which may limit our flexibility.

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RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL

Significantly tighter capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the value of an investment in our common stock.

There are many factors that can affect the value of our equity securities, including the state of the capital markets and the economy.

Capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the value of an investment in our common stock.

There are many factors that can affect the value of our common stock, including the state of the capital markets and the economy.

Demand for office and retail space typically declines nationwide due to an economic downturn, bankruptcies, downsizing, layoffs and cost cutting.

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The cost and availability of credit may be adversely affected by illiquid credit markets and wider credit spreads, which may adversely affect our liquidity and financial condition, including our results of operations, and the liquidity and financial condition of our tenants.

Our inability or the inability of our tenants to timely refinance maturing liabilities and access the capital markets and obtain reasonable pricing to meet liquidity needs may materially affect our financial condition and results of operations and the value of our common stock.

We have outstanding debt, and the amount of debt and its cost may continue to increase and refinancing may not be available on acceptable terms, which could affect our future operations.

Our inability or the inability of our tenants to timely refinance maturing liabilities, access the capital markets and obtain reasonable pricing to meet liquidity needs may materially affect our financial condition and results of operations and the value of our common stock.

We have outstanding debt, and the amount of debt and its cost may increase;

refinancing may not be available on acceptable terms and could affect our future operations.

As of December 31, 2025, total mortgages payable, excluding deferred debt issuance costs, was $836,691,000, and our rate of total debt to total enterprise value was 46%.

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Should such events occur, our operations may be adversely affected.

If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be foreclosed upon by the mortgagee resulting in a loss of the property.

If we are unable to obtain additional debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected.

In addition, the volatility in the interest rate environment has led to an increase in interest rates on our variable rate debt, including on new hedging instruments, and an increase in the cost of refinancing our existing debt and entering into new debt, all which have reduced, and could continue to reduce our operating cash flows.

While certain of our debt is fixed by an interest rate swap arrangement, the arrangement expires earlier than the mortgage loan maturity, resulting in future exposure to rising interest rates, which could further reduce our available cash.

If the cost or amount of our indebtedness continues to increase or we cannot refinance our debt in sufficient amounts or on acceptable terms, we are at risk of default on our obligations that could adversely affect our financial condition and results of operations.

If we are unable to obtain debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected.

In addition, the volatility in the interest rate environment in recent years has led to fluctuations in interest rates on our variable rate debt, including new hedging instruments, and the cost of refinancing our existing debt and entering into new debt, all which could reduce our operating cash flows.

If the cost or amount of our indebtedness increases or we cannot refinance our debt in sufficient amounts or on acceptable terms, we potentially could be at risk of default on our obligations that could adversely affect our financial condition and results of operations.

Our existing financing documents contain covenants and restrictions that may restrict our operational and financial flexibility.

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The interest rate hedge instruments we may use to manage some of our exposure to interest rate volatility involve risks, including the risk that counterparties may fail to perform under these arrangements.

If interest rates continue to fall, these arrangements may cause us to pay higher interest on our debt obligations than would otherwise be the case.

If interest rates subsequently fall, these arrangements may cause us to pay higher interest on our debt obligations than would otherwise be the case.

In addition, the use of such instruments may generate income that may not be treated as qualifying REIT income for purposes of the 75% gross income test or 95% gross income test.

Furthermore, there can be no assurance that our hedging arrangements will qualify as “highly effective” cash flow hedges under applicable accounting standards.

If our hedges do not qualify as “highly effective,” the changes in the fair value of these instruments would be reflected in our results of operations and could adversely affect our earnings.

If our hedges do not qualify as “highly effective,” the changes in the fair value of these instruments would be reflected in our results of operations and could adversely impact our earnings.

RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE

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We depend on dividends and distributions from these subsidiaries.

The creditors of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or make distributions to us.

The creditors of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us.

Substantially all of our properties and assets are held through our subsidiaries.

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Roth, Mandelbaum and Wight and Interstate and other security holders.

Roth and Interstate may, in the future, engage in a wide variety of activities in the real estate business which may result in conflicts of interest with respect to matters affecting us, such as, which of these entities or persons, if any, may take advantage of potential business opportunities, the business focus of these entities, the types of properties and geographic locations in which these entities make investments, potential competition between business activities conducted, or sought to be conducted, by us, competition for properties and tenants, possible corporate transactions such as acquisitions, and other strategic decisions affecting the future of these entities.

Roth and Interstate may, in the future, engage in a wide variety of activities in the real estate business which may result in conflicts of interest with respect to matters affecting us, such as, which of these entities or persons, if any, may take advantage of potential business opportunities, the business focus of these entities, the types of properties and geographic locations in which these entities make investments, potential competition between business activities conducted, or sought to be conducted, competition for properties and tenants, possible corporate transactions such as acquisitions, and other strategic decisions affecting the future of these entities.

There may be conflicts of interest between Vornado, its affiliates and us.

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For additional information on our cybersecurity risk management process, see “Item 1C.

Cybersecurity” in this Annual Report on Form 10-K.

Cybersecurity.”

We have begun the use of AI capabilities with the goal of creating additional efficiencies in conducting our business and operations.

While we intend to use AI appropriately and to attempt to mitigate ethical and legal issues presented by its use, we may ultimately be unsuccessful in identifying or resolving issues before they arise.

There can be no assurance that we or our service providers will properly implement AI, and the failure to do so could have an adverse effect on our business and results of operations.

RISKS RELATED TO OUR COMMON STOCK

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RISKS RELATED TO REGULATORY COMPLIANCE

We may fail to qualify or remain qualified as a REIT, and may be required to pay federal income taxes at corporate rates, which could adversely affect the value of our common stock.

We may fail to qualify or remain qualified as a REIT, and may be required to pay federal income taxes at corporate rates, which could adversely impact the value of our common stock.

Although we believe that we will remain organized and will continue to operate so as to qualify as a REIT for federal income tax purposes, we may fail to remain so qualified.

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If such changes occur, we may be required to pay additional taxes on our assets or income.

These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available to pay our indebtedness and make distributions to our stockholders.

These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available to make distributions to our stockholders.

Compliance or failure to comply with the Americans with Disabilities Act (“ADA”) or other safety regulations and requirements could result in substantial costs.

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We could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or related claims arising out of environmental contamination or human exposure to contamination at or from our properties.

Each of our properties has been subjected to varying degrees of environmental assessment.

Each of our properties has been subject to varying degrees of environmental assessment.

To date, these environmental assessments have not revealed any environmental condition material to our 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 1A. Risk Factors