What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-04 compared with 2025-11-03 · 53 added, 70 removed, 82 unchanged (60% of the section changed)

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You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10-Q.

We also note the following forward-looking statements:

estimates of future rents, estimates of future capital expenditures, estimates of dividends on shares of our common stock, the timing of closing the sale of our Rego Park I property and the estimates of financial impact from such sale.

Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict.

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All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

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 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.

We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances occurring 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 months ended March 31, 2026.

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 and disclosure of contingent assets and liabilities at the date of the consolidated 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 nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year.

The results of operations for the three months ended March 31, 2026 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, 2025.

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

For the three months ended March 31, 2026, 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, 2025 for additional information regarding these and other factors that may materially affect our results.

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 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.

Quarter Ended March 31, 2026 Financial Results Summary

Net income for the quarter ended March 31, 2026 was $4,662,000, or $0.91 per diluted share, compared to $12,312,000 or $2.40 per diluted share in the prior year’s quarter.

Funds from operations (“FFO”) (non-GAAP) for the quarter ended March 31, 2026 was $13,364,000, or $2.60 per diluted share, compared to $20,842,000 or $4.06 per diluted share in the prior year’s quarter.

Square Footage, Occupancy and Leasing Activity

Our portfolio is comprised of five properties aggregating 2,446,000 square feet.

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

As of March 31, 2026, the commercial occupancy rate was 94.4% and the residential occupancy rate was 97.4%.

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 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

Significant Tenant

Bloomberg L.P.

(“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.

(“Bloomberg”) leases approximately 947,000 square feet at our 731 Lexington Avenue property and accounted for revenue of $32,471,000 and $32,205,000 for the three months ended March 31, 2026 and 2025, respectively, representing approximately 61% and 59% 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 September 30, 2025, compared to September 30, 2024

Rental Revenues

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 $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 $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 $1,349,000 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 $3,682 ,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 $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

In May 2024, Alexander’s and Bloomberg entered into an agreement to extend Bloomberg’s leases that were scheduled to expire in February 2029 for a term of eleven years to February 2040.

In connection with the lease extension, Bloomberg was entitled to a $113,618,000 tenant fund which is accounted for as a lease incentive under GAAP.

Accordingly, there is a deferred lease incentive asset of $113,618,000, which is amortized as a reduction to rental revenues over the remaining term of the lease, and a corresponding liability.

These amounts are included in “Deferred leasing costs, net” and “Lease incentive liability,” on our consolidated balance sheets.

On March 31, 2026, Alexander’s and Bloomberg entered into a lease amendment providing Bloomberg with a rent abatement of $56,809,000 for the period of April 1, 2026 to December 1, 2026, which reduces the tenant fund by a corresponding amount over that period from $113,618,000 to $56,809,000.

Property Held for Sale

On March 6, 2026, we entered into an agreement to sell our Rego Park I shopping center, located in Queens, New York, for $235,500,000.

The sale, which is subject to customary closing conditions, is expected to be completed by the third quarter of 2026.

The Company expects to receive overall proceeds of approximately $202,000,000, net of estimated costs.

As of March 31, 2026, $20,800,000 of such costs had already been paid.

Therefore, we expect to receive proceeds of approximately $222,800,000 at closing of the sale.

The financial statement gain is expected to be approximately $147,000,000.

Results of Operations – Three Months Ended March 31, 2026, compared to March 31, 2025

Rental Revenues

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.

Rental revenues were $53,412,000 for the three months ended March 31, 2026, compared to $54,915,000 for the prior year’s three months, a decrease of $1,503,000.

This was primarily due to (i) $1,907,000 of lower rental revenue from Home Depot’s lease expiration and other retail tenant expirations at 731 Lexington Avenue, (ii) $1,555,000 of payments received in the prior year’s three months for tenant receivables that were previously written off and (iii) $976,000 of lower rental revenue from lease expirations at Rego Park I, partially offset by (iv) $1,674,000 of higher operating expense recoveries from higher operating expenses and (v) $1,446,000 of higher rental revenue from new leases at Rego Park II.

Operating Expenses

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.

Operating expenses were $28,980,000 for the three months ended March 31, 2026, compared to $25,564,000 for the prior year’s three months, an increase of $3,416,000 .

This was primarily due to (i) $1,686,000 of higher operating expenses subject to recovery, including common area maintenance and real estate taxes, (ii) $899,000 of lower capitalized expenses and (iii) $829,000 of higher operating expenses not subject to recovery.

Depreciation and Amortization

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.

Depreciation and amortization was $8,774,000 for the three months ended March 31, 2026, compared to $8,599,000 for the prior year’s three months, an increase of $175,000.

General and Administrative Expenses

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.

General and administrative expenses were $1,713,000 for the three months ended March 31, 2026, compared to $1,591,000 for the prior year’s three months, an increase of $122,000 .

This was primarily due to higher professional fees .

Interest and Other Income

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 other income was $1,446,000 for the three months ended March 31, 2026 , compared to $3,945,000 for the prior year’s three months, a decrease of $2,499,000 .

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

Interest and Debt Expense

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.

Interest and debt exp ense was $10,729,000 for the three months ended March 31, 2026 , compared to $10,794,000 for the prior year’s three months, a decrease of $65,000 .

This was primarily due to (i) $2,616,000 of lower interest expense from the 731 Lexington Avenue retail loan restructuring in December 2025 and (ii) $501,000 of lower interest expense from the Rego Park II loan refinancing in December 2025, partially offset by (iii) $3,065,000 from the expiration of the 731 Lexington Avenue retail interest rate 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 September 30, 2025, we had $352,258,000 of liquidity comprised of cash and cash equivalents and restricted cash.

As of March 31, 2026, we had $152,051,000 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 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 $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.

For the Three Months Ended March 31, 2026

Cash and cash equivalents and restricted cash were $152,051,000 as of March 31, 2026, compared to $192,225,000 as of December 31, 2025, a decr ease of $40,174,000 .

This decrease resulted from (i) $23,878,000 of net cash used in investing activities and (ii) $23,112,000 of net cash used in financing activities, partially offset by (iii) $6,816,000 of net cash provided by operating activities.

Net cash used in investing activities of $23,878,000 was comprised of (i) $19,316,000 of payments related to the property held for sale and (ii) $4,562,000 of construction in progress and real estate additions.

Net cash used in financing activities of $23,112,000 was comprised of dividends paid.

Net cash provided by operating activit ies of $6,816,000 was comprised of (i) net income of $4,662,000 and (ii) adjustments for non-cash items of $13,893,000, partially offset by (iii) the net change in operating assets and liabilities of $11,739,000 .

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.

The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $9,418,000 , (ii) PIK interest expense of $1,905,000, (iii) amortization of deferred lease incentives of $1,724,000 , (iv) straight-lining of rents of $506,000 and (iv) other non-cash adjustments of $340,000 .

For the Three Months Ended March 31, 2025

Cash and cash equivalents and restricted cash were $377,645,000 as of March 31, 2025, compared to $393,836,000 as of December 31, 2024, a decr ease of $16,191,000.

This decrease resulted from (i) $23,890,000 of net cash used in financing activities and (ii) $8,021,000 of net cash used in investing activities, partially offset by (iii) $15,720,000 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 used in financing activities of $23,890,000 was comprised of $23,101,000 of dividends paid and $789,000 of debt repayments.

Net cash used in investing activities of $8,021,000 was comprised of construction in progress and real estate additions.

Net cash provided by operating activit ies of $15,720,000 was comprised of (i) net income of $12,312,000 and (ii) adjustments for non-cash items of $12,743,000, partially offset by (iii) the net change in operating assets and liabilities of $9,335,000 .

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.

The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $9,389,000, (ii) amortization of deferred lease incentives of $1,818,000, (iii) straight-lining of rents of $1,020,000, (iv) other non-cash adjustments of $340,000 and (iv) interest rate cap premium amortization of $176,000.

Liquidity and Capital Resources - continued

Commitments and Contingencies

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

W e 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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Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC.

For NBCR acts, FNSIC is responsible for a $348,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss.

For NBCR acts, FNSIC is responsible for a deductible of $348,000 and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss.

We are ultimately responsible for any loss incurred by FNSIC.

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

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.

FFO (non-GAAP) for the quarters ended March 31, 2026 and 2025

FFO (non-GAAP) for the quarter ended March 31, 2026 was $13,364,000, or $2.60 per diluted share, compared to $20,842,000 or $4.06 per diluted share in the prior year’s quarter.

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

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

For the Quarter Ended March 31,

(Amounts in thousands, except share and per share amounts) 2026 2025

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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