PDF - Vornado Realty Trust

VORNADO REALTY TRUST
FORM
8-K
(Current report filing)
Filed 04/11/14 for the Period Ending 04/11/14
Address
Telephone
CIK
Symbol
SIC Code
Industry
Sector
Fiscal Year
888 SEVENTH AVE
NEW YORK, NY 10019
212-894-7000
0000899689
VNO
6798 - Real Estate Investment Trusts
Real Estate Operations
Services
12/31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 11, 2014
VORNADO REALTY TRUST
(Exact Name of Registrant as Specified in Charter)
Maryland
(State or Other
Jurisdiction of
Incorporation)
No. 001-11954
(Commission
File Number)
No. 22-1657560
(IRS Employer
Identification No.)
VORNADO REALTY L.P.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other
Jurisdiction of
Incorporation)
No. 001-34482
(Commission
File Number)
888 Seventh Avenue
New York, New York
(Address of Principal Executive offices)
No. 13-3925979
(IRS Employer
Identification No.)
10019
(Zip Code)
Registrant’s telephone number, including area code: (212) 894-7000
Former name or former address, if changed since last report: N/A
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2.):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01
Regulation FD Disclosure.
Vornado Realty Trust (“Vornado”) announced on April 11, 2014 that its Board of Trustees has approved a plan to spin off its shopping center business
consisting of 81 strip shopping centers and four malls into a new publicly traded REIT (“SpinCo”). Vornado will retain, for disposition in the near term, 20 small
retail assets which do not fit SpinCo’s strategy. Further, Vornado will retain Beverly Connection and Springfield Town Center, both of which are under contract
for disposition.
The transaction is subject to certain conditions, including the Securities and Exchange Commission declaring that SpinCo’s registration statement on
Form 10 is effective, filing and approval of SpinCo’s listing application, receipt of third party consents, and formal approval and declaration of the distribution by
Vornado’s Board of Trustees. Vornado may, at any time and for any reason until the proposed transaction is complete, abandon the separation or modify or
change its terms.
Vornado will hold a conference call to discuss the transaction at 10:00 a.m. Eastern Time on Monday, April 14, 2014.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. A copy of Vornado’s investor presentation
regarding the spin-off will be available on Vornado’s website at www.vno.com and is being furnished as Exhibit 99.2 to the Current Report on Form 8-K. In
accordance with General Instruction B.2 of Form 8-K, the information incorporated by reference in this Item 7.01 or furnished with the Current Report on Form 8K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Vornado or Vornado Realty L.P., the operating partnership
through which Vornado conducts its business, under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 . Financial Statements and Exhibits.
(d)
Exhibits.
99.1
Press release dated April 11, 2014.
99.2
Investor presentation dated April 11, 2014.
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VORNADO REALTY TRUST
(Registrant)
By:
Name:
Title:
/s/ Stephen W. Theriot
Stephen W. Theriot
Chief Financial Officer, Vornado Realty Trust
Date: April 11, 2014
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VORNADO REALTY L.P.
(Registrant)
By:
VORNADO REALTY TRUST,
Sole General Partner
By:
Name:
Title:
Date: April 11, 2014
2
/s/ Stephen W. Theriot
Stephen W. Theriot
Chief Financial Officer, Vornado Realty Trust
EXHIBIT INDEX
99.1
Press release dated April 11, 2014.
99.2
Investor presentation dated April 11, 2014.
3
Exhibit 99.1
CONTACT:
STEPHEN THERIOT
(201) 587-1000
210 Route 4 East
Paramus, NJ 07652
FOR IMMEDIATE RELEASE — April 11, 2014
Vornado to Spin Off Its Shopping Center Business
Jeffrey S. Olson will be SpinCo’s Chairman and CEO
PARAMUS, NEW JERSEY.........VORNADO REALTY TRUST (NYSE:VNO) (“Vornado”) announced today its Board of Trustees has approved a plan
to spin off its shopping center business consisting of 81 strip shopping centers and four malls into a new publicly traded REIT (“SpinCo”). The strip shopping
centers are primarily located in the densely populated Northeast. The malls consist of the powerful Bergen Town Center in Paramus, New Jersey, Monmouth Mall
in Eatontown, New Jersey and two malls in suburbs of San Juan, Puerto Rico. The 85 retail properties total approximately 16.1 million square feet and had
average occupancy of 95.5% at December 31, 2013. SpinCo’s 2014 net operating income is estimated to be approximately $200 million.
Jeffrey S. Olson, currently Chief Executive Officer of Equity One Inc., will be SpinCo’s Chairman of the Board and Chief Executive Officer. Robert
Minutoli, Executive Vice President of Vornado’s existing Retail Segment, will remain with SpinCo as its Chief Operating Officer. Vornado’s retail management
team and personnel will also remain with SpinCo. Steven Roth, Chairman of the Board and Chief Executive Officer of Vornado, will serve on the Board of
Directors of SpinCo.
Vornado believes that SpinCo’s portfolio will be well positioned to deliver both internal growth through active asset management and redevelopments
and external growth through acquisitions and selective new developments. SpinCo’s demographics are among the highest of its peers having average population
within 3 miles of 149,000 and average household income of $71,000. SpinCo’s average base rent is $18.75 per square foot as compared to the peer median of
$15.66 per square foot.
Vornado will retain, for disposition in the near term, 20 small retail assets which do not fit SpinCo’s strategy, valued at approximately $100 million.
Further, Vornado will retain Beverly Connection and Springfield Town Center, both of which are under contract for disposition. Vornado’s business after these
dispositions and the spin-off will be highly concentrated in New York City and Washington, DC, and be comprised of its high quality office portfolios and the
largest, most valuable portfolio of Manhattan street retail assets.
The pro rata distribution of SpinCo’s shares to Vornado common shareholders and Vornado Realty L.P. common unitholders is intended to be treated as a
tax-free spin-off for U.S. federal income tax purposes. Vornado anticipates that its current annualized dividend of $2.92 per share will be maintained through the
combination of Vornado’s and SpinCo’s dividends.
The initial Form 10 registration statement relating to the spin-off is expected to be filed with the Securities and Exchange Commission (“SEC”) in the
second quarter of 2014, and the distribution is expected to be completed in the fourth quarter of 2014. The transaction is subject to certain conditions, including
the SEC declaring that SpinCo’s registration statement is effective, filing and approval of SpinCo’s listing application, receipt of third party consents, and formal
approval and declaration of the distribution by Vornado’s Board of Trustees. Vornado may, at any time and for any reason until the proposed transaction is
complete, abandon the separation or modify or change its terms.
Goldman, Sachs & Co. and Morgan Stanley are Vornado’s exclusive financial advisors and Sullivan & Cromwell LLP is legal advisor to Vornado in
connection with the proposed transaction.
Conference Call Details
Vornado will hold a conference call to discuss the transaction at 10:00 a.m. Eastern Time on Monday, April 14, 2014. The conference call can be
accessed by dialing 800-708-4539 (toll free) or 847-619-6396 (international) and entering the passcode 37093999.
A telephonic replay of the conference call and an online audio playback will be available until May 5, 2014. The telephonic replay can be accessed by
dialing 888-843-7419 and entering the passcode 37093999 and the online audio playback can be accessed at www.vno.com.
Supplemental Materials and Website
An investor presentation for this transaction is available on Vornado’s website at www.vno.com. The investor presentation and this press release have
also been furnished to the SEC in a current report on Form 8-K.
Vornado Realty Trust is a fully integrated equity real estate investment trust.
Forward-Looking Statements
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions,
plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results, financial condition and business
of Vornado Realty Trust (“Vornado”) and of the planned spin-off entity (“SpinCo”) may differ materially from those expressed in these forward-looking
statements. You can find many of these statements by looking for words such as “approximates”, “believes”, “expects”, “anticipates”, “estimates”, “intends”,
“plans”, “would”, “may” or similar expressions in this press release. We also note the following forward-looking statements: in the case of our development and
redevelopment projects, the estimated completion date, estimated project cost and cost to complete; and estimates of future capital expenditures, dividends to
common and preferred shareholders and operating partnership distributions. Many of the factors that will determine the outcome of these and our other forwardlooking statements are beyond our ability to control or predict. These factors include, among others: uncertainties as to the timing of the spin-off and whether it
will be completed, the possibility that various closing conditions to the spin-off may not be satisfied or waived, the expected tax treatment of the spin-off, the
composition of the spin-off portfolio, the possibility that third-party consents required to transfer certain properties in the spin-off will not be received, the impact
of the spin-off on the businesses of Vornado and SpinCo, the timing of and costs associated with property improvements, financing commitments, and general
competitive factors. For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and uncertainties,
see “Risk Factors” in Vornado’s annual and quarterly periodic reports filed with the SEC. For these statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forwardlooking statements. 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 forwardlooking statements to reflect events or circumstances occurring after the date of this press release.
Non-GAAP Measures
This press release includes forward-looking statements regarding the estimated non-GAAP measure of 2014 net operating income (“NOI”) for SpinCo, based upon
the assets currently expected to be included in SpinCo. NOI is a supplemental non-GAAP measures that aids in the assessment of the unlevered performance of
SpinCo’s properties and portfolio as it relates to the total return on assets. The most directly comparable GAAP financial measure is operating income. NOI is
calculated by adjusting GAAP operating income to add back depreciation and amortization expense, general and administrative expenses, and non-cash ground
rent expense, and deduct non-cash rental income resulting from the straight-lining of rents and amortization of acquired below market leases net of above market
leases. We believe NOI is a meaningful non-GAAP financial measure because real estate acquisitions and dispositions are evaluated based on, among other
considerations, property NOI applied to market capitalization rates. We believe that NOI is helpful to SpinCo investors because it is a widely recognized measure
of the performance of real estate investment trusts in the shopping center sector and provides a relevant basis for comparison among REITs in such sector. NOI
should not be considered a substitute for operating income or net income and may not be comparable to similarly titled measures employed by others.
####
Exhibit 99.2
[LO GO]
Forward L ooking
Statements 2 Certain
sta tements contained
in this investor
presentation
constitute forw ardlooking statements a s
such term is de fined
in Sec tion 27A of the
Securitie s A ct of
1933, as amende d,
and Sec tion 21E of
the Se curities
Exchange A ct of
1934, as amende d.
Forward-looking
sta tements are not
guarantees of
pe rformance . T he y
repre se nt our
inte ntions, plans,
expec tations and
be liefs and a re
subject to numerous
assumpti ons, risks
and unc erta intie s.
Consequently, the
future re sults,
financial condition
and business of
Vornado Real ty T rust
(“Vorna do”) a nd of
the planned spin-off
entity (“Spi nCo”)
may diffe r materially
from those expressed
in these forwardlooking statements.
You ca n find ma ny of
the se sta teme nts by
looking for words
such as
“approximates” ,
“be lieves”, “expe cts”,
“anticipates”,
“estimates”,
“inte nds”, “plans”,
“would”, “may” or
similar expressions in
this presentation. We
also note the
follow ing forw ardlooking statements: in
the c ase of our
de velopme nt and
redevelopment
proje cts, the
estima ted c ompletion
da te, e stimat ed
proje ct cost a nd cost
to comple te; and
estima tes of future
capital expenditure s,
dividends to c ommon
and preferred
shareholders a nd
operating partnership
distributions. Ma ny
of t he factors that will
de termine the
outcome of t hese a nd
our other forwardlooking statements
are beyond our a bilit y
to control or predict.
These fa ctors inc lude,
among others:
uncertainties as to the
timing of the spin-off
and whether i t w ill be
completed, the
possibility that
va rious closing
conditions to the
spin-off may not be
sa tisfied or waived,
the e xpect ed ta x
trea tment of the spinoff, the c omposition
of t he spin-off
portfoli o, the
possibility that thirdpa rty c onsents
required to transfer
certain properties in
the spin-off w ill not
be rece ive d, the
impact of the spin-off
on the busine sse s of
Vornado and SpinCo,
the timing of and
costs associated with
property
improvement s,
financing
commitme nts, and
ge neral competi tive
factors. For furthe r
discussion of fac tors
tha t c ould mate rially
affect the outcome of
our forward-looking
sta tements and other
risks and
uncertainties, see
“Risk Fac tors” in
Vornado’s a nnual and
quarterly periodic
reports filed with the
SEC. For the se
sta tements, we c laim
the protec tion of the
sa fe harbor for
forwa rd-looking
sta tements contained
in the Private
Securitie s L itigation
Re form Act of 1995.
You are cautione d not
to place undue
relia nc e on our
forwa rd-looking
sta tements. All
subsequent written
and oral forwardlooking statements
attributable to us or
any person a cting on
our behalf a re
expressly qua lified in
the ir entire ty by the
cautionary sta teme nts
contained or re ferred
to in this section. We
do not undertake any
obligation to rele ase
publicly a ny re visions
to our forw ardlooking statements t o
reflect events or
circ umstances
oc curring after the
da te of this
presentation.
3 Introduction
SpinCo w ill consist of
85 shopping centers:
81 strip centers
tota ling 12.6MM
square feet
conce ntrated in high
ba rrie r-to-entry,
Northeast markets 4
malls aggregating
3.5MM square feet
with in-line sa les
averaging $472 psf
and underutil ized
land availa ble for
future deve lopment;
inc ludes the powe rful
Outlets at Bergen
Town Ce nte r Jeff
Olson will join a s
SpinCo’s Chai rman
and CEO S pinCo is
positioned for succe ss
Dedicate d
management team
with a strong trac k
rec ord High quality
asset ba se i n supplyconstra ine d markets
with e xc ellent
de mographics
Substantial embe dded
grow th from lea se-up,
redevelopment and
de velopme nt
Liquidity and balance
shee t c apacity for
grow th Ge ne rate d
2013 pro forma
EBIT DA of
approximately
$187M M Inte rim
transitiona l support
pursuant to a
Transition Service s
Agreement SpinCo
Post spin-off,
Vornado will have a
conce ntration of
premier assets and a
focuse d stra tegy of
grow ing its domina nt
positions in N ew
York City and
Wa shington, D.C.
office a nd Ma nhatta n
street retail Vornado
will rec eive all
considera tion from
the disposition of
Be ve rly Connection
and Springfield Town
Ce nte r No change
expec ted t o credit
ratings V orna do
Vornado has
announce d its
inte ntion t o spin-off
its shopping ce nte r
busine ss in a tax-free
transaction Vornado
will ret ain 20 small /
non-stra tegic reta il
assets w orth
approximately
$100M M, which will
be disposed of ne arterm These ac tions,
coupled with previous
and pending
dispositions (Beverly
Conne ction and
Springfield T own
Ce nte r), w ill
complete Vorna do’s
exit from its nonstreet retail segment
Vornado anticipate s
tha t its current
annualize d divide nd
of $2.92 per share
will be maintained
through the
combina tion of
Vornado’s a nd
SpinCo’s dividends
The spin-off is
expec ted t o be
completed in the
fourth quarte r of 2014
Transa ction
Transa ction Rationale
and Investor Benefits
4 Continues
simplifica tion
Enha nc es focus on
NYC and
Wa shington, D.C.
portfoli os, which a re
expec ted t o drive
long-term growth
Efficient execution
with minima l fric tion
costs Cre ates a
focuse d shopping
center c ompany
Acce lera ted growt h
from a de dic ated
management team
and ca pita l a lloc ation
strategy High qua lity
portfoli o (urba n,
supply-constraine d
loc ations with
superior
de mographics)
Vornado Common
Sha reholde rs /
Vornado Real ty L .P.
Common Uni tholders
Wi ll Re ceive Share s
of S pinCo in a 1:2
Distribution(1)
Shopping Ce nte r
RE IT Positioned to
Outperform Pre mie r
Office Buildings a nd
Manhattan Stre et
Re tail Benefits to
Vornado Benefits to
SpinCo We belie ve
the spin-off w ill
enhance shareholder
va lue by c rea ting two
focuse d compa nie s
executing two distinct
busine ss strategies
Improves
transpa rency and
be tter highlights the
attributes of both
companies Separa tes
two non-synergistic
busine sse s E na ble s
investors to invest in
two separate purepla y platforms Note
(1) Every tw o
common Vornado
shares / Vornado
Re alty L.P. common
units will re ceive one
SpinCo share Mutual
Be ne fits
Pro Forma V ornado 5
Manhattan Stre et
Re tail Washington,
D.C. O ther Non-NYC
Re tail NYC Office (1)
Vornado: Stat us Quo
2013 Comparable
EBIT DA ($1.6Bn)
Composition
Vornado: Pro Forma
(2) 2013 Compa rable
EBIT DA ($1.4Bn)
Composition
Manhattan Stre et
Re tail Washington,
D.C. O ther NYC
Office(1) New Y ork
Cit y Washington,
D.C. 67% of
EBIT DA 24% of
EBIT DA N ote s (1)
New Y ork City
Office segme nt
inc ludes hotel a nd
residential assets (2)
Pro Forma for spinoff and disposition of
he ld-for-sa le re tail
assets F ollowing the
spin-off, V orna do
will be predominantly
focuse d on N YC and
Wa shington, D.C.
with ~91% of
EBIT DA generated
by its i rre pla ceable
portfoli os in these
markets Vornado
office busine ss
inc ludes trophy assets
in world-class
markets Manhattan
street retail is some of
the most valuable and
difficult to a cquire
rea l e st ate in the
world; Vornado is the
only RE IT with
significa nt ownership
of M anhattan st reet
reta il
6 SpinCo Overvie w
Inve stment Highlights
7 E xce ptionally high
quality portfolio of 85
shopping c enters
conce ntrated in high
ba rrie r-to-entry
markets throughout
the N orthe ast Densely
popula ted trade areas
with a n average
popula tion of 149,000
within 3 mile s,
amongst the highest
in the REIT shopping
center sec tor Avera ge
ba se rents of $18.75
pe r square foot, the
third highe st in the
RE IT shopping c enter
se ctor Pre mie r New
York metropolitan
are a market loc ations
repre se nt more than
70% of portfolio
va lue L iquidity a nd
ba lanc e she et
capacity for growth
Signific ant grow th
potential from nearterm de ve lopment
and re de ve lopment
opportunities
Superma rket sales
averaging $672 per
square foot, the
highest productivity
reported by any
shopping c enter REIT
High qua lity, proven
management team to
be le d by Jeff Olson,
Chairma n and CEO,
who will c ome from
Equity One, and
industry vete ran Bob
Minutoli, COO, who
is c urrently running
the portfolio Ma jority
of t he sites would be
ne arly impossible to
replica te today due to
land scarcity and
formida ble
entitleme nt hurdles –
many da te ba ck to
Two Guys from
Harrison
SpinCo Portfolio
Sna pshot 8 PA
2.0MM SF NJ
8.7MM SF 2013
EBIT DA by
Geography NY
2.4MM SF Other(4)
1.9MM SF PR
1.0MM SF
Irreplace able
portfoli o of shopping
centers concentra ted
in dense, high barrierto-entry ma rkets with
attra ctive
de mographics N ote s
(1) Figure excludes
JV inte rests and land
and buildings owned
by tenants (2) Figure
repre se nts total
portfoli o; owned S F
oc cupancy of 95.6%
(3) 3 mile represents
non-pow er ce nte rs; 7
mile represe nts pow er
centers. Da ta pe r
DemographicsN ow, a
product of Alteryx,
Inc. (4) Other sta tes
inc lude California ,
Conne cticut,
Maryla nd,
Massac husetts, New
Hampshire , South
Ca rolina and
Virginia. Totals ma y
not sum due to
rounding Portfolio
Summary Number of
Assets 85 Total
Square Footage
(M M) 16.1 T otal
Owned Square
Footage (M M )(1)
14.6 N umber of
States (Inc l. PR) 11
Occupancy % (2)
95.5% 3 Mile
Population(3) 149k 3
Mile M edian
Household Inc ome(3)
$71k 7 Mile
Population(3) 886k 7
Mile M edian
Household Inc ome(3)
$67K 2013 Pro
Forma E BIT DA
($MM s) ~$187
Pue rto Ric o
SpinCo
Demographics 9 We ll
positioned in densely
popula ted a nd high
ba rrie r-to-entry
markets Non-Pow er
Ce nte r Average 3
mile Popula tion (in
000s)(1) N on-Powe r
Ce nte r Me dia n 3 mile
Household Inc ome
(in $000s)(1) Source:
Gre en Street A dvisors
March 2014 Strip
Sector Update.
SpinCo data per
DemographicsN ow, a
product of Alteryx,
Inc. Note (1) Nonpower center includes
all other assets (2)
Pow er ce nte r defined
as 3 or more big
boxes incl uding
supermarke ts Powe r
Ce nte r Average 7
mile Popula tion (in
000s)(2) Powe r
Ce nte r Me dia n 7 mile
Household Inc ome
(in $000s)(2)
10 Strong
de mographic profile
and high barrier-toentry marke t presence
va lidat ed by rents
Sourc e: Compara ble
da ta pe r Green Stree t
Advisors Ma rch 2014
Strip Sector U pdate
2013 Average Base
Re nt PSF SpinCo
Re lative to Pe er
Universe
SpinCo T enant
Profile 11 D ive rse,
high quality reta iler
ba se T op T enants
(% of 2013 Re ntal
Re ve nue) Not es (1)
Re presents top 25
tenants by A BR of
EQY , BRX, KIM,
DDR, WRI, and
FRT. Other peers
do not disclose
required detail for
compari son.
Perc entage s a re
weight ed by A BR.
Sourc e is S EC
filings (2) V ornado
de fines anc hor
tenants as ove r
10,000 square feet
(3) Pee r avera ge
excludes AK R a nd
RP AI due to lac k of
de tail in filings (4)
AKR does not
de fine size of
anchor te na nts, FRT
and ROIC define
anchor te na nts as
spac es over 15,000
square feet. All
other pee rs de fine
anchor te na nts as
spac es over 10,000
square feet 58% of
SpinCo’s top 25
tenants by rental
revenue ha ve
Inve stment Grade
ratings. Compares
to peer average of
52%(1) 61% of
rental reve nue
ge nerated from
anchor(2) tenants.
Compa res to pee r
average of 53% (3)
(4) $15.20 $7.27
$25.09 $8.73
$14.11 $11.77
$9.30 $15.72 $9.14
$10.71 ABR P SF
12 Spi nCo Tenant
Profile Se lect Te na nts
SpinCo H istorical
Operat ing
Performa nc e 13
SpinCo’s port folio
ha s delivered
consistent, sta ble
pe rformance over the
pa st five yea rs
Historical O ccupa nc y
(1) Note (1) F igure s
repre se nt owned
square feet H istorical
Average Base Rent
PSF(1)
SpinCo H istorical
Mark-to-M arket 14
Strong Historic al
Mark-to-M arket on
Expiring L eases Note
(1) BRX exclude d
and ROIC a nd RPAI
shown as t wo year
averages due to lac k
of required disc losure
Three Year Avera ge
Ca sh L easing Spre ads
(1) Source:
Compa rable data per
company SE C filings
and ea rnings call
transcripts
SpinCo L ease
Expiration Sc he dule
15 Low L eve l of
Near-te rm L ease
Expirations SF
Expiring by Y ear(1)
Notes (1) Figures
repre se nt owned
square feet (2)
Include s month-tomonth lea se s (2)
614K 595K 646K
493K 1,293K 1,130K
967K 683K 948K
1,183K 5,238K
Expiring SF
SpinCo M anagement
and Board 16
Industry veteran Jeff
Olson will join a s
Chairma n and CEO
Chief Executive
Officer of E quity One
(E QY) since 2006
Previously served as
President of Kimc o
Re alty Corp’s (KIM )
Eastern a nd Western
Divisions “Mr.
Olson’s eight-year
tenure at Equity O ne
yie lded above average result s as he
transformed the
company’s portfolio
from a focus on
sle epy Southe astern
groc ery anchored
strip c enters to a more
urba n, high-quality
portfoli o.” – Gre en
Stree t A dvisors,
March 19, 2014
SpinCo w ill be a se lfmanaged REIT Jeff
Olson will join a s
CE O to lead
SpinCo’s
management team
Bob Minutoli,
Vornado’s E VPRe tail, will re mai n
with SpinCo a s COO
along with the
existing Vornado
shopping c enter tea m
CF O expec ted to be
ide ntified in the ne ar
future Interim support
pursuant to a
Transition Service s
Agreement Jeff Olson
will also se rve as
SpinCo’s Chai rman
Vornado CEO Steven
Roth will serve as a
Dire ctor of SpinCo
SpinCo Board to
consist of a ma jority
of i ndepende nt
Dire ctors
Management Board
of D irec tors
Anticipated Process
and Ti ming 17 Intend
to file initia l Form 10
registra tion statement
with SE C in the
se cond quarter of
2014 T arget
completion by e nd of
2014 T he distribution
is e xpecte d to be
made on a pro rata
1:2 ba sis to Vornado
common sha reholde rs
and Vornado Re alty
L.P. common
unitholders a s of the
distribution record
da te Following the
distribution, Vornado
common sha reholde rs
will ow n share s in
both V ornado and
SpinCo a nd Vornado
Re alty L.P. common
unitholders w ill hold
both c ommon units of
Vornado Real ty L .P.
and shares of SpinCo
The numbe r of
Vornado common
shares ow ne d by e ach
shareholder and the
number of Vornado
Re alty L.P. common
units he ld by e ach
unitholder will not
change as a result of
this distribution
Decla ration by the
SEC that SpinCo’s
registra tion statement
is e ffe ctive Approval
of S pinCo listing by
NYSE Fina l a pproval
and declaration of the
distribution by
Vornado’s Board of
Trustee s Rec eipt of
third party consents
Other customary
conditions In August
2013, Vornado
initia ted a Private
Lette r Ruli ng proc ess
in anticipation of this
transaction and
rec eive d a Private
Lette r Ruli ng in
March 2014
Distribution is
expec ted t o qua lify as
tax-free to Vornado
shareholders a nd
Vornado Real ty L .P.
unitholders for U.S.
federal inc ome tax
purposes, c onsistent
with the Priva te
Lette r Ruli ng SpinCo
inte nds to ele ct to be
trea ted a s a RE IT for
U.S. federa l inc ome
tax purpose s
Transa ction T iming
Distribution Proce ss
Condit ions Prec edent
SpinCo RE IT Status /
Tax Considera tions
18 Appe ndix I
SpinCo Prope rty L ist
19 No. Prope rty
Name State City %
Ownership We ighted
Average Rent Per
Ce nte r(1) Own. T ype
% Occupancy T ot al
Square Feet(2) Retail
Anchors a nd Major
Tenants New Jersey 1
East Brunswick NJ
East Brunswick 100%
$8.90 Fee 100.0%
428,000 D ick’s
Sporting Goods,
Kohl’s, P.C. Richa rd
& Son, T J M axx, L A
Fitne ss, Lowe ’s 2
North Be rgen
(T onnelle Avenue )
NJ North Be rgen
100% $24.30 Fee
100.0% 410,000 BJ’s
Wholesale Club,
Petsma rt, Staples,
Wa lma rt 3 E ast
Hanover NJ East
Hanover 100%
$19.15 Fee 94.5%
343,000 D ick’s
Sporting Goods,
Home D epot,
Marsha lls 4
Bricktown N J
Bricktown 100%
$18.48 Fee 94.7%
279,000 K ohl’s,
Marsha lls, Old Navy,
ShopRite 5 Union
Plaza N J U nion 100%
$25.26 Fee 99.4%
276,000 L ow e’s,
Office De pot,
Sleepy’s, T oys ‘R’ Us
6 Ha ckensa ck N J
Hackensack 100%
$23.44 Fee 75.4%
275,000 A pplebee ’s,
Home D epot, Petco,
Sleepy’s, S taples 7
Totow a NJ Totowa
100% $19.28 Fee
100.0% 271,000 Bed
Ba th & Beyond,
Home D epot,
Marsha ll’s, Staples 8
Cherry Hill NJ
Cherry Hill 100%
$13.97 Fee 98.6%
263,000 D olla r Tree,
Toys ‘R’ Us,
Wa lma rt 9 Je rsey
Cit y NJ Jerse y City
100% $21.79 Fee
100.0% 236,000
Burger King, L ow e’s,
Party City, P.C.
Ric ha rd & Son,
Sleepy’s 10 Union NJ
Vauxhall 100%
$17.85 Fee 100.0%
232,000 H ome Depot
11 Middletown N J
Middle tow n 100%
$14.88 Fee 96.3%
231,000 Fa mous
Footwe ar, Kohl’s,
Stop & Shop 12
Woodbridge NJ
Woodbridge 100%
$22.35 Fee 84.1%
226,000 D olla r Tree,
Payless, Walmart 13
Marlton NJ M arlton
100% $13.33 Fee
100.0% 213,000
Kohl’s, Pe tsmart,
ShopRite 14 North
Plainfield NJ North
Plainfield 100%
$17.75 Ground 85.0%
212,000 Costco 15
Be rgen Town Ce nte r
East NJ Paramus
100% $36.42 Fee
93.6% 211,000
Lowe’s, RE I 16
Manala pan NJ
Manala pan 100%
$16.58 Fee 99.3%
208,000 A .C. Moore ,
Ba bie s ‘R’ Us, Bed
Ba th & Beyond, Best
Buy, M ode ll’s,
Panera , Pe tsmart 17
East Ruthe rford NJ
East Ruthe rford
100% $34.34 Fee
100.0% 197,000
Chili’s L ow e’s 18
Garfield NJ Garfield
100% $21.47 Fee
100.0% 195,000
Applebee ’s,
Marsha lls,
McD onalds, Wa lmart
19 Morris Plains N J
Morris Pla ins 100%
$20.71 Fee 95.9%
177,000 K ohl’s,
Sleepy’s 20 Dove r NJ
Rockaw ay 100%
$12.02 Fee 96.3%
173,000 A pplebee ’s,
Dollar T ree ,
ShopRite, TJ Maxx
21 Lodi (Route 17)
NJ Lodi 100% $11.57
Fee 100.0% 171,000
National Wholesale
Liquidators 22
Wa tchung NJ
Wa tchung 100%
$25.40 Fee 96.6%
170,000 BJ’s
Wholesale Club,
Buffalo Wild Wings,
Vitamin Shoppe,
Qdoba 23 L awnside
NJ Law nside 100%
$14.11 Fee 100.0%
145,000 H ome Depot,
Petsma rt, Wendy’s 24
Hazle t NJ H azle t
100% $2.64 Fee
100.0% 123,000 Stop
& Shop 25 K earny NJ
Kearny 100% $16.11
Fee 43.5% 104,000
Applebee 's, Burger
King, Ma rshalls 26
Turnersville N J
Turnersville 100%
$6.40 Fee 100.0%
96,000 The Dump 27
Lodi (Washington
St.) NJ Lodi 100%
$19.94 Fee 92.1%
85,000 Aldi, Blink
Fitne ss, Burger King,
Dollar T ree , U SPS
SpinCo Prope rty L ist
(cont’d) 20 N o.
Prope rty Name State
Cit y % Ow nership
We ighted Average
Re nt Pe r Center(1)
Own. T ype %
Occupancy T otal
Square Feet(2) Retail
Anchors a nd Major
Tenants 28 Carlsta dt
NJ Ca rlstadt 100%
$21.80 Ground 95.2%
78,000 Burge r King,
Stop & Shop 29
Para mus NJ Para mus
100% $42.23 Ground
100.0% 63,000 24
Hour F itne ss, Mille r’s
Ale House 30 North
Be rgen (Ke nnedy
Boulevard) N J N orth
Be rgen 100% $26.76
Fee 100.0% 62,000
Food Ba sic s, Pa yle ss
31 South Plainfield
NJ South P lainfield
100% $21.68 Ground
85.9% 56,000 Pa rty
Cit y, Red L obster,
Staples 32
Engle wood NJ
Engle wood 100%
$24.79 Fee 79.7%
41,000 Jos A Bank,
New Y ork Sports
Club 33 Ea tontown
NJ Eatontow n 100%
$28.09 Fee 100.0%
30,000 Petco 34 Ea st
Hanover REI N J E ast
Hanover 100%
$32.00 Fee 94.0%
26,000 RE I 35
Montc lair N J
Montc lair 100%
$23.34 Fee 100.0%
18,000 Whole Foods
New Y ork 36
Bruckner Plaza N Y
Bronx 100% $21.22
Fee 91.3% 501,000
Key Food, K ma rt,
Rit e Aid, T oys ‘R’ U s
37 Buffalo NY
Amherst 100% $8.94
Fee 100.0% 311,000
BJ’s Wholesale Club,
DSW, H ome Goods,
LA Fitness, TJ Maxx,
Toys ‘R’ Us 38 Big H
Shopping Ce nte r NY
Huntington 100%
$14.78 Fee 97.9%
209,000 Burger K ing,
Famous Footwea r,
Kma rt, Ma rshalls,
Old N avy, Outback
Steakhouse, Petco 39
Rochester NY
Rochester 100% - Fee
100.0% 205,000
Wa lma rt 40 M t.
Kisco Commons N Y
Mt. Kisco 100%
$22.20 Fee 100.0%
189,000 A &P,
Applebee ’s, Targe t
41 Fre eport E ast NY
Free port 100%
$18.61 Fee 100.0%
173,000 H ome Depot,
Optimum, Sta ples 42
Rochester NY
Henrie tta 100% $3.81
Ground 96.2%
165,000 K ohl’s,
Lumber Liquidators,
Ollie’s 43 Forest
Plaza N Y Staten
Island 100% $21.63
Fee 96.3% 165,000
Dollar T ree , L umber
Liquidators, Planet
Fitne ss, Western Bee f
44 New H yde Park
NY Ne w Hyde Pa rk
100% $18.73 Spa ce
100.0% 101,000 Stop
& Shop 45 Burnside
Plaza N Y Inwood
100% $20.29 Fee
88.8% 100,000 Stop
& Shop 46 H ubbards
Path Shopping Ce nter
NY West Babylon
100% $17.47 Fee
83.4% 79,000 Be st
Marke t, Rite A id 47
Bronx (Gun Hill
Road) N Y Bronx
100% $32.22 Fee
90.7% 77,000 A ldi,
Dollar T ree , D uane
Re ade, Planet Fitne ss,
TGIF 48 Commack
NY Commack 100%
$21.45 Spa ce 100.0%
47,000 Ace
Hardw are, Pet smart
49 Dew itt NY Dew itt
100% $20.46 Ground
100.0% 46,000 Best
Buy 50 Fre eport We st
NY Fre eport 100%
$20.28 Spa ce 100.0%
44,000 Bob’s
Discount Furniture 51
Ocea nside NY
Ocea nside 100%
$27.83 Fee 100.0%
16,000 Party City
21 Spi nCo Prope rty
List (cont’d) N o.
Prope rty Name State
Cit y % Ow nership
We ighted Average
Re nt Pe r Center(1)
Own. T ype %
Occupancy T otal
Square Feet(2) Retail
Anchors a nd Major
Tenants Pennsylva nia
52 Allentown PA
Allentown 100%
$15.24 Fee 90.3%
627,000 A .C. Moore ,
Burlington Coat
Factory, Dick’s
Sporting Goods,
Giant Foods, T J
Maxx, Pe tco 53
Wi lkes-Barre PA
Wi lkes-Barre 100%
$13.28 Fee 83.2%
329,000 Babies ‘R’
Us, M arshalls, Petc o,
Ross, T arge t, T rac tor
Supply Co. 54
Lancaste r PA
Lancaste r 100%
$15.33 Fee 82.1%
228,000 L ow e’s,
Sleepy’s 55 Bensa lem
PA Bensa lem 100%
$11.50 Fee 98.9%
185,000 K ohl’s,
Petco, Ross, Sta ple s
56 Broomall PA
Broomall 100%
$11.09 Fee 100.0%
169,000 A .C. Moore ,
Giant Food, P etsmart,
Planet Fitness 57
Be thle he m PA
Be thle he m 100%
$7.29 Fee 95.3%
167,000 Fa mily
Dollar, Gia nt Food,
Petco 58 York PA
York 100% $9.06 Fee
100.0% 110,000 Aldi,
Ashle y Furniture
Home Store , Pe tco 59
Glenol den PA
Glenol den 100%
$25.84 Fee 100.0%
102,000 Walmart 60
Wyomissing PA
Wyomissing 100%
$15.56 Ground 93.2%
76,000 LA Fitness,
Petsma rt 61
Springfield PA
Springfield 100%
$20.90 Spa ce 100.0%
41,000 Petsma rt
Ca lifornia 62 Sa n
Francisco CA San
Francisco 100%
$50.34 Spa ce 100.0%
55,000 Be st Buy 63
Signal Hill CA Signal
Hill 100% $24.08 Fee
100.0% 45,000 Best
Buy 64 Valle jo CA
Vallejo 100% $17.51
Ground 100.0%
45,000 Be st Buy 65
Wa lnut Cre ek (South
Main Stre et) CA
Wa lnut Cre ek 100%
$45.11 Fee 100.0%
29,000 Ba rnes &
Noble 66 Wa lnut
Creek (M t. Diablo)
CA Wa lnut Cre ek
95% $70.00 Fee
100.0% 7,000
Anthropologie
Massac husetts 67
Chicopee M A
Chicopee 100% - Fe e
100.0% 224,000
Wa lma rt 68
Springfield M A
Springfield 100%
$16.39 Fee 97.8%
182,000 D olla r Tree,
Wa lma rt 69 M ilford
Plaza M A Milford
100% $8.01 Space
100.0% 83,000
Kohl’s 70 Ca mbridge
MA Cambridge 100%
$21.83 Spa ce 100.0%
48,000 Mode ll’s,
Petsma rt
SpinCo Prope rty
List (cont ’d) N o.
Prope rty Name
State City %
Ownership
We ighted Average
Re nt Pe r Center(1)
Own. T ype %
Occupancy T otal
Square Feet(2)
Re tail Anchors and
Major T enants
Maryla nd 71
Ba ltimore MD
Towson 100%
$16.21 Fee 100.0%
155,000 Corner
Ba ke ry, D XL, HH
Gre gg, Home
Goods, Shoppers
Food, Sta ple s 72
Forest Plaza M D
Annapolis 100%
$8.99 Space
100.0% 128,000
Home D epot 73
Glen Burnie M D
Glen Burnie 100%
$11.67 Fee 90.5%
121,000 G avigan ’s,
Pep Boys 74
Rockville Town
Ce nte r MD
Rockville 100%
$24.61 Fee 100.0%
94,000 Re ga l
Cinemas 75
Whea ton MD
Whea ton 100%
$14.94 Ground
100.0% 66,000 Best
Buy Other 76
Newington CT
Newington 100%
$18.61 Fee 100.0%
188,000 Pa ne ra,
Staples, Wa lmart 77
Wa terbury CT
Wa terbury 100%
$15.19 Fee 97.6%
148,000 ShopRite ,
Sleepy’s 78 Norfolk
VA Norfolk 100%
$6.44 Space
100.0% 114,000
BJ ’s Wholesale
Club 79 Tyson’s
Corner VA T yson’s
Corner 100%
$39.13 Spa ce
100.0% 38,000 Best
Buy 80 Cha rleston
SC Charleston
100% $14.19
Ground 100.0%
45,000 Be st Buy 81
Salem NH Sale m
100% - Ground
100.0% 37,000
Ba bie s ‘R’ Us Total
Strip Cente rs
$17.37 95.6%
12,638,000
SpinCo’s
Ownership Intere st
$17.37 95.6%
12,259,000
23 Spi nCo Prope rty
List (cont’d) N o.
Prope rty Name State
Cit y % Ow nership
We ighted Average
Re nt Pe r Center(1)
Own. T ype %
Occupancy T otal
Square Feet(2) Retail
Anchors a nd Major
Tenants Malls 82
Monmouth Ma ll NJ
Eatontow n 50%
$35.23(3) Fe e 93.9%
1,464,000 Boscov’s,
Mac y’s, JCPenney,
Lord & T aylor,
Loews Thea tre,
Ba rnes & N oble,
Forever 21 83 Be rgen
Town Ce nte r NJ
Para mus 100%
$43.01(3) Fe e 99.5%
951,000
Bloomingda le’s
Ra ck, Century 21,
Home G oods,
Neiman Marcus L ast
Ca ll, Sa ks Off 5th,
Targe t, Whole Foods
84 The Outlets at
Monte hie dra PR San
Juan 100% $38.52(3)
Fee 91.0% 542,000
Home D epot, Kmart,
Marsha lls, Nike,
Romano’s M aca roni
Grill 85 L as Catalinas
Mall PR Cagua s
100% $57.78(3) Fee
93.1% 494,000
Kma rt, Sears, P.F.
Chang’s (c oming)
Total Ma lls $42.13
95.1% 3,451,000
SpinCo’s Ownership
Intere st $43.83 95.4%
2,352,000(4) T otal
Shopping Ce nte r
Spa ce 95.5%
16,089,000 S pinCo’s
Ownership Intere st
95.6% 14,611,000
Total Fee O wned
14,501,000 T otal
Ground Le ased
889,000 T ota l Spa ce
Lea se d 699,000 Total
Shopping Ce nte r
Spa ce 16,089,000
Notes (1) Weighte d
average rent e xc ludes
ground rent, stora ge
rent and garages (2)
Include s squa re
foota ge of a nchors
who own the la nd and
building (3) Weighted
average rent for ma lls
repre se nts in-line
tenants only. Blende d
average base rent for
anchor a nd in-line
mall te na nts is $25.95
(4) Squa re footage
not ow ne d by
Vornado is primarily
at Monmouth M all
24 Appe ndix II T his
investor prese ntati on
contains Ea rnings
Be fore Inte rest,
Taxes, Depre ciation
and Amortiza tion
(“E BITD A”), a nonGAAP measure .
EBIT DA is presented
be fore noncontrolling inte rests,
discontinued
operations, ga ins on
sa le or rea l estate and
non-re curring items.
We consider
EBIT DA a
supple me nta l mea sure
for making de cisions
and assessing the
unlevered
pe rformance of our
se gments as it relate s
to the total ret urn on
assets a s opposed to
the le ve red re turn on
equity. As properties
are bought and sold
ba se d on a multiple of
EBIT DA, we utiliz e
this measure to ma ke
investment dec isions
as well as to c ompare
the performance of
our assets to tha t of
our peers. E BIT DA
should not be
considere d a
substitute for ne t
inc ome. EBITDA
may not be
compara ble to
similarly title d
mea sures employe d
by other companies.
A de sc ription of this
mea sure and a
rec onciliat ion to the
most directly
compara ble GAAP
mea sure is provided
on the follow ing
pa ge.
25 Appe ndix II
(cont’d)
Re conc iliation of Ne t
Income to EBITDA ,
Compa rable E BITD A
and Pro Forma
Compa rable E BITD A
For the Y ear E nde d
Dece mber 31, 2013
$ in thousands Retail
Total Properti es N et
Income 475,971
415,644 Inte rest and
de bt expense 758,781
50,901 Depre ciation
and amortiza tion
732,757 72,161
Income ta x expense
26,371 2,311
EBIT DA 1,993,880
541,017 N oncompara ble items:
Gains on sale of rea l
estate (whollyow ned) (411,593)
(284,081) Ga ins on
sa le of rea l estate
(partia lly-owned)
(465) - Impa irment
losses 43,722 35,656
EBIT DA from
discontinued
operations (35,037)
(25,450) Lea se
termination income
pursuant to settle me nt
agreement with Stop
& Shop (59,599)
(59,599) Other
87,114 (1,877)
Compa rable E BITD A
1,618,022 205,666
Less Compara ble
EBIT DA of SpinCo
(199,594) - L ess
Compa rable E BITD A
of 20 he ld for sa le
properties (6,072)
(6,072) Le ss
estima ted incremental
overhe ad to create a
public company N /A
(13,000) Pro Forma
Compa rable E BITD A
1,412,356 186,594