Vornado Realty Trust looks back on a successful third quarter. Bolstered by brisk letting activity and solid capital market metrics, Funds from Operations (FFO) rose to 126.6 million dollars in the three months to 30 September, compared with 114.5 million dollars in the prior-year period. Total revenue climbed from 453.7 million to 467.6 million dollars over the same period. Owing to scheduled depreciation and write-downs across the overall portfolio, the real estate investment trust, which specialises in office and retail properties, posted a bottom-line net loss of 47.1 million dollars, following a net profit of 11.5 million dollars in the third quarter of 2025.
According to Steven Roth, Chief Executive Officer of Vornado, adjusted like-for-like FFO increased by 14 per cent year on year. In the first nine months of 2026, the company completed leases totalling 1.6 million square feet, with average initial rents for Manhattan office space standing at 113 dollars per square foot. In the third quarter alone, Vornado signed 30 contracts covering 489,000 square feet at an average initial rent of 123 dollars per square foot and a weighted average term of 9.5 years. Like-for-like net operating income in the New York office segment grew by 11.9 per cent.
Bottlenecks in prime segment strengthen landlords' position
Roth explained that company planning pointed to a continuation of this robust performance until at least 2028. The New York office market currently presents itself as the most dynamic in the country. Total letting volume in Manhattan saw an increase of nine per cent year on year, reaching its highest level since 2000. In the third quarter, space take-up amounted to ten million square feet, exceeding both the five- and ten-year averages. In the segment of prime Class A properties, comprising around 180 million square feet, demand is rising alongside dwindling availability, establishing a clear landlord's market.
Milestones at Penn 1 and 350 Park Avenue
Vornado is recording particular progress across key flagship assets. In the 57-storey Penn 1 skyscraper in Midtown, with around 2.5 million square feet of total floor space, ten leases covering 248,000 square feet were finalised during the reporting quarter at an initial rent of 123 dollars per square foot. The office portion of the building is now roughly 96 per cent let. In addition, Vornado secured a 3.3 billion dollar construction loan alongside Citadel's Ken Griffin and Rudin for the 350 Park Avenue tower development. A pre-let agreement covering 1.05 million square feet with Citadel was finalised for the tower during the quarter, with management projecting a total return on project costs in excess of nine per cent.
- —Funds from Operations rose to 126.6 million dollars in the third quarter.
- —Completion of 30 office leases covering 489,000 square feet in the quarter at an average initial rent of 123 dollars per square foot.
- —Successful closing of 3.3 billion dollar construction financing for the 350 Park Avenue project.
Michael Franco, President and Chief Financial Officer of Vornado, pointed to further fundamental parameters. For the full year 2026, management expects a letting volume of 2.4 million square feet in New York, after reaching 3.7 million square feet in 2025. Franco stressed that the company anticipates higher full-year FFO than in 2025 and flagged prospects of additional growth for 2028 and subsequent years.
