What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-03 compared with 2026-05-04 · 74 added, 45 removed, 90 unchanged (57% of the section changed)

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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.

estimates of future rents, estimates of future capital expenditures and estimates of dividends on shares of our common stock.

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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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.

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, 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 months ended March 31, 2026 are not necessarily indicative of the operating results for the full year.

The results of operations for the three and six months ended June 30, 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 three months ended March 31, 2026, there were no material changes to these estimates or policies.

For the six months ended June 30, 2026, there were no material changes to these estimates or policies.

Alexander’s, Inc.

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

We hav e five properties in New York City.

We hav e four properties in New York City.

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

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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.

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.

Quarter Ended June 30, 2026 Financial Results Summary

Net income for the quarter ended June 30, 2026 was $155,362,000, or $30.24 per diluted share, compared to $6,120,000 or $1.19 per diluted share in the prior year’s quarter.

Net income for the quarter ended June 30, 2026 included $148,002,000, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property.

Funds from operations (“FFO”) (non-GAAP) for the quarter ended June 30, 2026 was $15,538,000, or $3.02 per diluted share, compared to $14,762,000 or $2.88 per diluted share in the prior year’s quarter.

Six Months Ended June 30, 2026 Financial Results Summary

Net income for the six months ended June 30, 2026 was $160,024,000, or $31.15 per diluted share, compared to $18,432,000 or $3.59 per diluted share in the prior year’s six months.

Net income for the six months ended June 30, 2026 included $148,002,000, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property.

FFO (non-GAAP) for the six months ended June 30, 2026 was $28,902,000, or $5.63 per diluted share, compared to $35,604,000 or $6.93 per diluted share in the prior year’s six months.

Overview - continued

Square Footage, Occupancy and Leasing Activity

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

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

Our portfolio is comprised of four properties aggregating 2,110,000 square feet.

As of June 30, 2026, the commercial occupancy rate was 94.6% and the residential occupancy rate was 97.4%.

On June 26, 2026, we entered into a lease modification agreement with a 135,000 square foot tenant at our Rego Park shopping center providing options for us and the tenant to early terminate the lease in August 2026, subject to a payment of approximately $29,000,000 from the tenant.

Simultaneously, we entered into a 15-year lease, plus renewal options, with Target for that space.

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

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Bloomberg L.P.

(“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.

(“Bloomberg”) leases approximately 952,000 square feet at our 731 Lexington Avenue property and accounted for revenue of $65,229,000 and $64,446,000 for the six months ended June 30, 2026 and 2025, respectively, representing approximately 60% and 61% 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 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.

Accordingly, there was an initial 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

Real Estate Sale

On May 28, 2026, we completed the sale of our Rego Park I property, located in Queens, New York, for $235,500,000, with total proceeds of $202,750,000, net of costs, and a financial statement gain of $148,002,000.

Results of Operations – Three Months Ended June 30, 2026, compared to June 30, 2025

Rental Revenues

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.

Rental revenues w ere $54,711,000 for the three months ended June 30, 2026, compared to $51,589,000 for the prior year’s three months, an increase of $3,122,000.

This was primarily due to (i) $1,699,000 of higher straight-line revenue resulting from a tenant lease modification and $1,501,000 of higher rental revenue from new leases at the Rego Park shopping center, (ii) $1,654,000 of higher operating expense recoveries from higher operating expenses and (iii) $415,000 of higher lease termination fee income, partially offset by (iv) $1,243,000 of lower rental revenue from retail tenant expirations at 731 Lexington Avenue and (v) $1,104,000 of lower rental revenue from lease expirations at Rego Park I.

Operating Expenses

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 .

Operating expenses were $26,743,000 for the three months ended June 30, 2026, compared to $25,934,000 for the prior year’s three months, an increase of $809,000 .

This was primarily due to (i) $786,000 of higher operating expenses subject to recovery, including common area maintenance and real estate taxes and (ii) $696,000 of lower capitalized expenses, partially offset by (iii) $879,000 of lower operating expenses at Rego Park I.

Depreciation and Amortization

Depreciation and amortization was $8,230,000 for the three months ended June 30, 2026, compared to $8,707,000 for the prior year’s three months, a decrease of $477,000.

This was primarily due to the cessation of depreciation at Rego Park I that began in the first quarter of 2026 upon classification of the property as held for sale, partially offset by higher depreciation expense on capital costs for new leases at the Rego Park shopping center.

General and Administrative Expenses

General and administrative expenses were $3,266,000 for the three months ended June 30, 2026, compared to $1,955,000 for the prior year’s three months, an increase of $1,311,000 .

This was primarily due to $1,062,000 of higher professional fees and $263,000 of higher stock-based compensation expense from an increase in the amount of deferred stock units granted to our Board of Directors in the current year’s quarter.

Interest and Other Income

Interest and other income was $1,684,000 for the three months ended June 30, 2026 , compared to $3,928,000 for the prior year’s three months, a decrease of $2,244,000 .

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

Interest and Debt Expense

Interest and debt exp ense was $10,796,000 for the three months ended June 30, 2026 , compared to $12,801,000 for the prior year’s three months, a decrease of $2,005,000 .

This was primarily due to (i) $2,502,000 of lower interest expense from the 731 Lexington Avenue retail loan restructuring in December 2025 and (ii) $441,000 of lower interest expense from the Rego Park shopping center loan refinancing in December 2025, partially offset by (iii) $1,155,000 from the expiration of the 731 Lexington Avenue retail interest rate swap in May 2025.

Net Gain on Sale of Real Estate

Net gain on sale of real estate was $148,002,000 for the three months ended June 30, 2026, resulting from the sale of the Rego Park I property in May 2026.

Results of Operations – Six Months Ended June 30, 2026, compared to June 30, 2025

Rental Revenues

Rental revenues were $108,123,000 for the six months ended June 30, 2026, compared to $106,504,000 for the prior year’s six months, an increase of $1,619,000.

This was primarily due to (i) $2,958,000 of higher rental revenue from new leases and $1,699,000 of higher straight-line revenue resulting from a tenant lease modification at the Rego Park shopping center, (ii) $3,334,000 of higher operating expense recoveries from higher operating expenses and (iii) $433,000 of higher lease termination fee income, partially offset by (iv) $3,360,000 of lower rental revenue from Home Depot’s lease expiration and other retail tenant expirations at 731 Lexington Avenue, (v) $2,064,000 of lower rental revenue from lease expirations at Rego Park I and (vi) $1,551,000 of payments received in the prior year for tenant receivables that were previously written off.

Operating Expenses

Operating expenses were $55,723,000 for the six months ended June 30, 2026, compared to $51,498,000 for the prior year’s six months, an increase of $4,225,000 .

This was primarily due to (i) $1,697,000 of higher operating expenses subject to recovery, including common area maintenance and real estate taxes, (ii) $1,595,000 of lower capitalized expenses and (iii) $931,000 of higher operating expenses not subject to recovery.

Depreciation and Amortization

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.

Depreciation and amortization was $17,004,000 for the six months ended June 30, 2026, compared to $17,306,000 for the prior year’s six months, a decrease of $302,000.

General and Administrative Expenses

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 .

General and administrative expenses were $4,979,000 for the six months ended June 30, 2026, compared to $3,546,000 for the prior year’s six months, an increase of $1,433,000 .

This was primarily due to $1,188,000 of higher professional fees and $263,000 of higher stock-based compensation expense from an increase in the amount of deferred stock units granted to our Board of Directors in the current year.

Interest and Other Income

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 .

Interest and other income was $3,130,000 for the six months ended June 30, 2026 , compared to $7,873,000 for the prior year’s six months, a decrease of $4,743,000 .

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

Interest and Debt Expense

Interest and debt exp ense was $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.

Interest and debt exp ense was $21,525,000 for the six months ended June 30, 2026 , compared to $23,595,000 for the prior year’s six months, a decrease of $2,070,000 .

This was primarily due to (i) $4,979,000 of lower interest expense from the 731 Lexington Avenue retail loan restructuring in December 2025 and (ii) $847,000 of lower interest expense from the Rego Park shopping center loan refinancing in December 2025, partially offset by (iii) $4,220,000 from the expiration of the 731 Lexington Avenue retail interest rate swap in May 2025.

Net Gain on Sale of Real Estate

Net gain on sale of real estate was $148,002,000 for the six months ended June 30, 2026, resulting from the sale of the Rego Park I property in May 2026.

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 March 31, 2026, we had $152,051,000 of liquidity comprised of cash and cash equivalents and restricted cash.

As of June 30, 2026, we had $358,345,000 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 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.

For the Six Months Ended June 30, 2026

Cash and cash equivalents and restricted cash were $358,345,000 as of June 30, 2026, compared to $192,225,000 as of December 31, 2025, an increase of $166,120,000 .

This increase resulted from (i) $199,339,000 of net cash provided by investing activities and (ii) $13,005,000 of net cash provided by operating activities, partially offset by (iii) $46,224,000 of net cash used in financing activities.

Net cash provided by investing activities of $199,339,000 was comprised of (i) $205,819,000 of proceeds from sale of real estate, partially offset by (ii) $6,480,000 of construction in progress and real estate additions.

Net cash used in financing activities of $46,224,000 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 $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.

Net cash provided by operating activit ies of $13,005,000 was comprised of (i) net income of $160,024,000, partially offset by (ii) adjustments for non-cash items of $121,563,000 and (iii) the net change in operating assets and liabilities of $25,456,000 .

The adjustments for non-cash items were comprised of (i) net gain on sale of real estate of $148,002,000 and (ii) straight-lining of rents of $566,000, partially offset by (iii) depreciation and amortization (including amortization of debt issuance costs) of $18,292,000 , (iv) PIK interest expense of $3,832,000, (v) amortization of deferred lease incentives of $3,541,000 , (vi) other non-cash adjustments of $681,000, (vii) stock-based compensation of $656,000 and (viii) interest rate cap premium amortization of $3,000.

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.

This decrease resulted from (i) $48,185,000 of net cash used in financing activities and (ii) $14,633,000 of net cash used in investing activities, partially offset by (iii) $59,287,000 of net cash provided by operating activities.

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 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 $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 $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.

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) amortization of deferred lease incentives of $3,654,000, (iii) straight-lining of rents of $2,018,000, (iv) other non-cash adjustments of $682,000, (v) stock-based compensation expense of $394,000 and (vi) interest rate cap premium amortization of $322,000.

Liquidity and Capital Resources - continued

Commitments and Contingencies

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.

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 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.

FFO (non-GAAP) for the three and six months ended June 30, 2026 and 2025

FFO (non-GAAP) for the three months ended June 30, 2026 was $15,538,000, or $3.02 per diluted share, compared to $14,762,000 or $2.88 per diluted share in the prior year’s three months.

FFO (non-GAAP) for the six months ended June 30, 2026 was $28,902,000, or $5.63 per diluted share, compared to $35,604,000 or $6.93 per diluted share in the prior year’s six months.

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

For the Quarter Ended March 31,

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

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

Net income $ 155,362 $ 6,120 $ 160,024 $ 18,432

Net gain on sale of real estate (148,002) — (148,002) —

Depreciation and amortization of real property 8,178 8,642 16,880 17,172

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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