Vornado Realty Trust’s Q3 Earnings Top Estimates on Robust NYC Leasing

Vornado Realty Trust reported better than expected earnings results for the third quarter of 2025 thanks to strong leasing momentum, particularly in the New York City market. 

Vornado posted funds from operations (FFO) for the third quarter of $114.5 million, or 57 cents per diluted share, compared to the 55 cents analysts polled by Zacks Consensus Estimate had anticipated. 

Revenue for the quarter also came in above expectations. Vornado posted revenue of $453.7 million, above the $443.3 million Zacks had predicted. Both revenue and funds from operations grew on a year-over-year basis. 

“Here at Vordano, our business is good — really good — and growing strong,” CEO Steven Roth said during Tuesday’s quarterly earnings call. “Our performance continues to lead both the national office pack and our New York peers.” 

Vornado attributes a large part of its third-quarter earnings success to the office leasing activity it has seen in New York City. 

“We had a very strong quarter as office demand in New York City remains robust,” Michael Franco, president and chief financial officer at Vornado, said on the call. “New York office occupancy increased this quarter to 88.4 percent from 86.7 percent, primarily due to leasing activity at Penn 2, comprising the 200,000-square-foot headquarters lease with Verizon and new leases signed with FGS Global.”

Vornado expects occupancy at Penn 2 to increase into the low 90s over the next 12 months. 

During the first nine months of 2025, Vornado leased 3.7 million square feet overall, of which 2.8 million square feet was Manhattan office space. Vornado expects its 2025 Manhattan office leasing volume to be its highest in more than a decade, and its second-highest year overall. 

Vornado has some big plans for its retail assets as well, the executives said on the call. 

“It’s time we transform the tired, old, and may I say junky retail on both sides of Seventh Avenue and along 34th Street that we inherited into attractive, modern and exciting retail offerings,” Roth said. “This is the gateway to our Penn District. A transformation here will have a big impact.” 

Outside of New York City, Vornado signed 244,000 square feet of office leases in San Francisco during the quarter. 

“We said two or three years ago that San Francisco would recover, given that it is the capital city of the world’s greatest tech and innovation centers, and that is what’s happening,” Roth said. 

Looking toward 2026, Vornado is expecting its FFO for the year to be “flatish” when compared to 2025 as the company is planning some non-core asset sales, particularly as it relates to the retail development along Seventh Avenue in Manhattan. 

“We’ve got some income that we’re taking offline, as ​​Steve referenced the retail redevelopment on 34th and Seventh.” Franco said. “We’re going to take a little bit of signage offline to rebuild one of the signs, which we think will produce greater returns once that’s back online. It’ll probably affect us for four months next year.”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.