Vornado Earnings: Leasing Volumes and NOI Hold Up Relatively Well for Manhattan Office Portfolio

No-moat-rated Vornado Realty reported middling fourth-quarter results as adjusted funds from operations were reported at $123.8 million or $0.63 per share, which was around 11% lower than the $139.0 million or $0.72 per share FFO reported in the fourth quarter of the previous year. The decline in FFO on a year-over-year basis can be attributed to a $4.8 million impact from accrual adjustments recorded in fourth quarter 2022 related to changes in the tax-assessed value of the Mart, $6.4 million from higher development fee pool bonus expense, $6.0 million from higher stock compensation, and a $2.9 million from the impact of properties sold. The important thing to note is that the results from the core business were flat and the entire decrease in FFO on a year-over-year basis was driven by increased general and administrative expenses and lower FFO from sold properties. We think that the current results are decent as the company's core Manhattan office portfolio has been holding up relatively well.