{"id":4526,"date":"2021-11-17T11:46:18","date_gmt":"2021-11-17T17:46:18","guid":{"rendered":"https:\/\/1reason.com\/re\/vornado-announces-third-quarter-2021-financial-results\/4526\/"},"modified":"2021-11-18T05:46:18","modified_gmt":"2021-11-18T11:46:18","slug":"vornado-announces-third-quarter-2021-financial-results","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/vornado-announces-third-quarter-2021-financial-results\/4526\/","title":{"rendered":"Vornado Announces Third Quarter 2021 Financial Results"},"content":{"rendered":"
Adjusting for the items that impact period-to-period comparability listed in the table on the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the quarter ended September 30, 2021 was $25,926,000, or $0.14 per diluted share, and net loss attributable to common shareholders, as adjusted (non-GAAP) for the quarter ended September 30, 2020 was $9,386,000, or $0.05 per diluted share. <\/p>\n

FUNDS FROM OPERATIONS (“FFO”) attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended September 30, 2021 was $158,286,000, or $0.82 per diluted share, compared to $278,507,000, or $1.46 per diluted share, for the prior year’s quarter.Adjusting for the items that impact period-to-period comparability listed in the table on page 3, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarters ended September 30, 2021 and 2020 was $136,213,000 and $116,698,000, or $0.71 and $0.61 per diluted share, respectively.<\/p>\n

Nine Months Ended September 30, 2021 Financial Results<\/u><\/em><\/strong><\/p>\n

NET INCOME attributable to common shareholders for the nine months ended September 30, 2021 was $89,817,000, or $0.47 per diluted share, compared to net loss attributable to common shareholders of$139,617,000, or $0.73 per diluted share, for the nine months ended September 30, 2020. Adjusting for the items that impact period-to-period comparability listed in the table on the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the nine months ended September 30, 2021 and 2020 was $65,176,000 and $18,198,000, or $0.34 and $0.10 per diluted share, respectively.<\/p>\n

FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the nine months ended September 30, 2021 was $430,057,000, or $2.24 per diluted share, compared to $612,123,000, or $3.20 per diluted share, for the nine months ended September 30, 2020. Adjusting for the items that impact period-to-period comparability listed in the table on page 3, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the nine months ended September 30, 2021 and 2020 was $393,733,000 and $370,918,000, or $2.05 and $1.94 per diluted share, respectively.<\/p>\n

The following table reconciles our net income (loss) attributable to common shareholders to net income (loss) attributable to common shareholders, as adjusted (non-GAAP):<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Amounts in thousands, except per share amounts)<\/td>\nFor the Three Months Ended<\/strong>
September 30,<\/strong><\/td>\n		\nFor the Nine Months Ended<\/strong>
September 30,<\/strong><\/td>\n<\/tr>\n
\n2021<\/strong><\/td>\n\n2020<\/strong><\/td>\n\n2021<\/strong><\/td>\n\n2020<\/strong><\/td>\n<\/tr>\n
Net income (loss) attributable to common shareholders<\/td>\n$<\/td>\n37,689<\/td>\n\n\n$<\/td>\n53,170<\/td>\n\n\n$<\/td>\n89,817<\/td>\n\n\n$<\/td>\n(139,617<\/td>\n)<\/td>\n<\/tr>\n
Per diluted share<\/td>\n$<\/td>\n0.20<\/td>\n\n\n$<\/td>\n0.28<\/td>\n\n\n$<\/td>\n0.47<\/td>\n\n\n$<\/td>\n(0.73<\/td>\n)<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
Certain (income) expense items that impact net income (loss) attributable to common shareholders:<\/td>\n\n\n\n\n\n\n<\/tr>\n
Tax benefit recognized by our taxable REIT subsidiaries<\/td>\n$<\/td>\n(27,910<\/td>\n)<\/td>\n\n$<\/td>\n\u2014<\/td>\n\n\n$<\/td>\n(27,910<\/td>\n)<\/td>\n\n$<\/td>\n\u2014<\/td>\n<\/tr>\n
Previously capitalized Series K preferred share issuance costs<\/td>\n9,033<\/td>\n\n\n\u2014<\/td>\n\n\n9,033<\/td>\n\n\n\u2014<\/td>\n<\/tr>\n
After-tax net gain on sale of 220 Central Park South (“220 CPS”) condominium unit(s)<\/td>\n(8,815<\/td>\n)<\/td>\n\n(186,909<\/td>\n)<\/td>\n\n(31,023<\/td>\n)<\/td>\n\n(295,825<\/td>\n)<\/td>\n<\/tr>\n
Real estate impairment losses in connection with the sales of Madison Avenue retail properties<\/td>\n7,880<\/td>\n\n\n\u2014<\/td>\n\n\n7,880<\/td>\n\n\n\u2014<\/td>\n<\/tr>\n
Hotel Pennsylvania loss (permanently closed on April 5, 2021)<\/td>\n6,492<\/td>\n\n\n7,706<\/td>\n\n\n20,474<\/td>\n\n\n25,232<\/td>\n<\/tr>\n
Our share of (income) loss from real estate fund investments<\/td>\n(294<\/td>\n)<\/td>\n\n2,524<\/td>\n\n\n(2,193<\/td>\n)<\/td>\n\n64,771<\/td>\n<\/tr>\n
Non-cash impairment loss on our investment in Fifth Avenue and Times Square JV, reversing a portion of the $2.559 billion gain recognized on the April 2019 transfer to the joint venture attributable to the GAAP required write-up of the retained interest<\/td>\n\u2014<\/td>\n\n\n103,201<\/td>\n\n\n\u2014<\/td>\n\n\n409,060<\/td>\n<\/tr>\n
Severance accrual related to Hotel Pennsylvania closure, net of $3,145 of income tax benefit<\/td>\n\u2014<\/td>\n\n\n6,101<\/td>\n\n\n\u2014<\/td>\n\n\n6,101<\/td>\n<\/tr>\n
608 Fifth Avenue non-cash lease liability extinguishment gain<\/td>\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n(70,260<\/td>\n)<\/td>\n<\/tr>\n
Credit losses on loans receivable resulting from a new GAAP accounting standard effective January 1, 2020<\/td>\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n13,369<\/td>\n<\/tr>\n
Mark-to-market decrease in Pennsylvania Real Estate Investment Trust common shares (sold on January 23, 2020)<\/td>\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n4,938<\/td>\n<\/tr>\n
Other<\/td>\n733<\/td>\n\n\n766<\/td>\n\n\n(2,942<\/td>\n)<\/td>\n\n10,681<\/td>\n<\/tr>\n
\n(12,881<\/td>\n)<\/td>\n\n(66,611<\/td>\n)<\/td>\n\n(26,681<\/td>\n)<\/td>\n\n168,067<\/td>\n<\/tr>\n
Noncontrolling interests’ share of above adjustments<\/td>\n1,118<\/td>\n\n\n4,055<\/td>\n\n\n2,040<\/td>\n\n\n(10,252<\/td>\n)<\/td>\n<\/tr>\n
Total of certain (income) expense items that impact net income (loss) attributable to common shareholders<\/td>\n$<\/td>\n(11,763<\/td>\n)<\/td>\n\n$<\/td>\n(62,556<\/td>\n)<\/td>\n\n$<\/td>\n(24,641<\/td>\n)<\/td>\n\n$<\/td>\n157,815<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n(0.06<\/td>\n)<\/td>\n\n$<\/td>\n(0.33<\/td>\n)<\/td>\n\n$<\/td>\n(0.13<\/td>\n)<\/td>\n\n$<\/td>\n0.83<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
Net income (loss) attributable to common shareholders, as adjusted (non-GAAP)<\/td>\n$<\/td>\n25,926<\/td>\n\n\n$<\/td>\n(9,386<\/td>\n)<\/td>\n\n$<\/td>\n65,176<\/td>\n\n\n$<\/td>\n18,198<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.14<\/td>\n\n\n$<\/td>\n(0.05<\/td>\n)<\/td>\n\n$<\/td>\n0.34<\/td>\n\n\n$<\/td>\n0.10<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/tr>\n<\/table>\n

The following table reconciles our FFO attributable to common shareholders plus assumed conversions (non-GAAP) to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP):<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Amounts in thousands, except per share amounts)<\/td>\nFor the Three Months Ended<\/strong>
September 30,<\/strong><\/td>\n		\nFor the Nine Months Ended<\/strong>
September 30,<\/strong><\/td>\n<\/tr>\n
\n2021<\/strong><\/td>\n\n2020<\/strong><\/td>\n\n2021<\/strong><\/td>\n\n2020<\/strong><\/td>\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(1)<\/strong><\/sup><\/td>\n$<\/td>\n158,286<\/td>\n\n\n$<\/td>\n278,507<\/td>\n\n\n$<\/td>\n430,057<\/td>\n\n\n$<\/td>\n612,123<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.82<\/td>\n\n\n$<\/td>\n1.46<\/td>\n\n\n$<\/td>\n2.24<\/td>\n\n\n$<\/td>\n3.20<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions:<\/td>\n\n\n\n\n\n\n<\/tr>\n
Tax benefit recognized by our taxable REIT subsidiaries<\/td>\n$<\/td>\n(27,910<\/td>\n)<\/td>\n\n$<\/td>\n\u2014<\/td>\n\n\n$<\/td>\n(27,910<\/td>\n)<\/td>\n\n$<\/td>\n\u2014<\/td>\n<\/tr>\n
Previously capitalized Series K preferred share issuance costs<\/td>\n9,033<\/td>\n\n\n\u2014<\/td>\n\n\n9,033<\/td>\n\n\n\u2014<\/td>\n<\/tr>\n
After-tax net gain on sale of 220 CPS condominium unit(s)<\/td>\n(8,815<\/td>\n)<\/td>\n\n(186,909<\/td>\n)<\/td>\n\n(31,023<\/td>\n)<\/td>\n\n(295,825<\/td>\n)<\/td>\n<\/tr>\n
Hotel Pennsylvania loss (permanently closed on April 5, 2021)<\/td>\n3,892<\/td>\n\n\n5,127<\/td>\n\n\n12,331<\/td>\n\n\n17,431<\/td>\n<\/tr>\n
Our share of (income) loss from real estate fund investments<\/td>\n(294<\/td>\n)<\/td>\n\n2,524<\/td>\n\n\n(2,193<\/td>\n)<\/td>\n\n64,771<\/td>\n<\/tr>\n
Severance accrual related to Hotel Pennsylvania closure, net of $3,145 of income tax benefit<\/td>\n\u2014<\/td>\n\n\n6,101<\/td>\n\n\n\u2014<\/td>\n\n\n6,101<\/td>\n<\/tr>\n
608 Fifth Avenue non-cash lease liability extinguishment gain<\/td>\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n(70,260<\/td>\n)<\/td>\n<\/tr>\n
Credit losses on loans receivable resulting from a new GAAP accounting standard effective January 1, 2020<\/td>\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n\u2014<\/td>\n\n\n13,369<\/td>\n<\/tr>\n
Other<\/td>\n451<\/td>\n\n\n381<\/td>\n\n\n1,215<\/td>\n\n\n7,045<\/td>\n<\/tr>\n
\n(23,643<\/td>\n)<\/td>\n\n(172,776<\/td>\n)<\/td>\n\n(38,547<\/td>\n)<\/td>\n\n(257,368<\/td>\n)<\/td>\n<\/tr>\n
Noncontrolling interests’ share of above adjustments<\/td>\n1,570<\/td>\n\n\n10,967<\/td>\n\n\n2,223<\/td>\n\n\n16,163<\/td>\n<\/tr>\n
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net<\/td>\n$<\/td>\n(22,073<\/td>\n)<\/td>\n\n$<\/td>\n(161,809<\/td>\n)<\/td>\n\n$<\/td>\n(36,324<\/td>\n)<\/td>\n\n$<\/td>\n(241,205<\/td>\n)<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n(0.11<\/td>\n)<\/td>\n\n$<\/td>\n(0.85<\/td>\n)<\/td>\n\n$<\/td>\n(0.19<\/td>\n)<\/td>\n\n$<\/td>\n(1.26<\/td>\n)<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP)<\/td>\n$<\/td>\n136,213<\/td>\n\n\n$<\/td>\n116,698<\/td>\n\n\n$<\/td>\n393,733<\/td>\n\n\n$<\/td>\n370,918<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.71<\/td>\n\n\n$<\/td>\n0.61<\/td>\n\n\n$<\/td>\n2.05<\/td>\n\n\n$<\/td>\n1.94<\/td>\n<\/tr>\n<\/table>\n

____________________________________________________________
<\/strong>(1)<\/strong>See page 12 for a reconciliation of our net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and nine months ended September 30, 2021 and 2020.<\/p>\n

FFO, as Adjusted Bridge – Q3 2021 vs. Q3 2020<\/u><\/em><\/strong><\/p>\n

The following table bridges our FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2020 to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2021:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Amounts in millions, except per share amounts)<\/td>\nFFO, as Adjusted<\/strong><\/td>\n<\/tr>\n
\nAmount<\/strong><\/td>\n\nPer Share<\/strong><\/td>\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2020<\/strong><\/td>\n$<\/strong><\/td>\n116.7<\/strong><\/td>\n\n\n$<\/strong><\/td>\n0.61<\/strong><\/td>\n<\/tr>\n
\n\n\n<\/tr>\n
Increase (decrease) in FFO, as adjusted due to:<\/td>\n\n\n<\/tr>\n
Rent commencement and other tenant related items<\/td>\n19.7<\/td>\n\n\n<\/tr>\n
Variable businesses:<\/td>\n\n\n<\/tr>\n
Signage<\/td>\n3.5<\/td>\n\n\n<\/tr>\n
BMS<\/td>\n2.3<\/td>\n\n\n<\/tr>\n
Garages<\/td>\n2.1<\/td>\n\n\n<\/tr>\n
Trade shows<\/td>\n1.3<\/td>\n\n\n<\/tr>\n
\n9.2<\/td>\n\n\n<\/tr>\n
Acquisition of our partner’s 45% ownership interest in One Park Avenue on August 5, 2021<\/td>\n4.8<\/td>\n\n\n<\/tr>\n
General and administrative (primarily due to overhead reduction program announced in December 2020)<\/td>\n3.7<\/td>\n\n\n<\/tr>\n
Increase in real estate tax expense primarily due to a recent increase in the triennial tax-assessed value of theMART<\/td>\n(12.5<\/td>\n)<\/td>\n\n<\/tr>\n
Other, net<\/td>\n(4.3<\/td>\n)<\/td>\n\n<\/tr>\n
\n20.6<\/td>\n\n\n<\/tr>\n
Noncontrolling interests’ share of above items<\/td>\n(1.1<\/td>\n)<\/td>\n\n<\/tr>\n
Net increase<\/td>\n19.5<\/td>\n\n\n0.10<\/td>\n<\/tr>\n
\n\n\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended September 30, 2021<\/strong><\/td>\n$<\/strong><\/td>\n136.2<\/strong><\/td>\n\n\n$<\/strong><\/td>\n0.71<\/strong><\/td>\n<\/tr>\n<\/table>\n

See page 12 for reconciliations of our net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and nine months ended September 30, 2021 and 2020. Reconciliations of FFO attributable to common shareholders plus assumed conversions to FFO attributable to common shareholders plus assumed conversions, as adjusted are provided on page 3 of this press release.<\/p>\n

Acquisition:<\/strong><\/p>\n

One Park Avenue<\/em><\/p>\n

On August 5, 2021, pursuant to a right of first offer, we increased our ownership interest in One Park Avenue, a 943,000 square foot Manhattan office building, to 100.0% by acquiring our joint venture partner’s 45.0% ownership interest in the property. The purchase price values the property at $875,000,000. We paid approximately $158,000,000 in cash and assumed our joint venture partner’s share of the $525,000,000 mortgage loan. We previously accounted for our investment under the equity method and have consolidated the accounts of the property from the date of acquisition of the additional 45% ownership interest.<\/p>\n

On February 26, 2021, the joint venture completed a $525,000,000 refinancing of One Park Avenue. The interest-only loan bears a rate of LIBOR plus 1.11% (1.19% as of September 30, 2021) and matures in March 2026, as fully extended. We realized our $105,000,000 share of net proceeds. The loan replaced the previous $300,000,000 loan that bore interest at LIBOR plus 1.75% and was scheduled to mature in March 2021.<\/p>\n

Dispositions: <\/strong><\/p>\n

220 Central Park South (“220 CPS”)<\/em><\/p>\n

During the three months ended September 30, 2021, we closed on the sale of one condominium unit at 220 CPS for net proceeds of $25,467,000 resulting in a net gain of $10,087,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income. In connection with this sale, $1,272,000 of income tax expense was recognized on our consolidated statements of income. During the nine months ended September 30, 2021, we closed on the sale of four condominium units at 220 CPS for net proceeds of $97,683,000 resulting in a net gain of $35,359,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income. In connection with these sales, $4,336,000 of income tax expense was recognized on our consolidated statements of income. From inception to September 30, 2021, we have closed on the sale of 104 units for net proceeds of $2,967,175,000 resulting in financial statement net gains of $1,102,296,000.<\/p>\n

Alexander\u2019s, Inc. (\u201cAlexander\u2019s\u201d)<\/em><\/p>\n

On June 4, 2021, Alexander’s completed the sale of a parcel of land in the Bronx, New York for $10,000,000. As a result of the sale, we recognized our $2,956,000 share of the net gain and also received a $300,000 sales commission paid by Alexander’s.<\/p>\n

On October 4, 2021, Alexander’s sold its Paramus, New Jersey property to IKEA Property, Inc. (“IKEA”), the tenant at the property, for $75,000,000 pursuant to IKEA’s purchase option contained in the lease. The property was encumbered by a $68,000,000 mortgage loan which was repaid at closing of the sale. As a result of the sale, we will recognize in the fourth quarter of 2021 our approximate $11,600,000 share of the net gain and a $750,000 sales commission paid by Alexander’s to Vornado.<\/p>\n

Alexander’s announced that it does not expect to pay a special dividend related to these transactions.<\/p>\n

SoHo Properties<\/em><\/p>\n

On May 10, 2021, we entered into an agreement to sell two Manhattan retail properties located at 478-482 Broadway and 155 Spring Street for $84,500,000. We expect to close the sale in the first quarter of 2022 and recognize a net gain of approximately $1,500,000.<\/p>\n

Madison Avenue<\/em><\/p>\n

On September 24, 2021, we sold three Manhattan retail properties located at 677-679, 759-771 and 828-850 Madison Avenue in two separate sale transactions for an aggregate sales price of $100,000,000. Net proceeds from the sales were $96,503,000. In connection with the sales, we recorded $7,880,000 of non-cash impairment losses which are included in “(impairment losses, transaction related costs and other) lease liability extinguishment gain” on our consolidated statements of income for the three and nine months ended September 30, 2021.<\/p>\n

Financings<\/strong>:<\/p>\n

PENN 11<\/em><\/p>\n

On March 7, 2021, we entered into an interest rate swap agreement for our $500,000,000 PENN 11 mortgage loan to swap the interest rate on the mortgage loan from LIBOR plus 2.75% (2.83% as of September 30, 2021) to a fixed rate of 3.03% through March 2024.<\/p>\n

909 Third Avenue<\/em><\/p>\n

On March 26, 2021, we completed a $350,000,000 refinancing of 909 Third Avenue, a 1.4million square foot Manhattan office building. The interest-only loan bears a fixed rate of 3.23% and matures in April 2031. The loan replaced the previous $350,000,000 loan that bore interest at a fixed rate of 3.91% and was scheduled to mature in May 2021.<\/p>\n

Financings – continued<\/strong>:<\/p>\n

Unsecured Revolving Credit Facility<\/em><\/p>\n

On April 15, 2021, we extended our $1.25billion unsecured revolving credit facility from January 2023 (as fully extended) to April 2026 (as fully extended). The interest rate on the extended facility was lowered to LIBOR plus 0.90% from LIBOR plus 1.00%. We subsequently qualified for a sustainability margin adjustment by achieving certain KPI metrics, which reduced our interest rate by 0.01% to LIBOR plus 0.89%. The facility fee remains at 20 basis points. Our separate $1.50billion unsecured revolving credit facility matures in March 2024 (as fully extended) and has an interest rate of LIBOR plus 0.90% and a facility fee of 20 basis points.<\/p>\n

555 California Street<\/em><\/p>\n

On May 10, 2021, we completed a $1.2billion refinancing of 555 California Street, a three building 1.8million square foot office campus in San Francisco, in which we own a 70.0% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.93% in years one through five (2.02% as of September 30, 2021), LIBOR plus 2.18% in year six and LIBOR plus 2.43% in year seven. The loan matures in May 2028, as fully extended. We swapped the interest rate on our $840,000,000 share of the loan to a fixed rate of 2.26% through May 2024. The loan replaces the previous $533,000,000 loan that bore interest at a fixed rate of 5.10% and was scheduled to mature in September 2021.<\/p>\n

Senior Unsecured Notes<\/em><\/p>\n

On May 24, 2021, we completed a green bond public offering of $400,000,000 2.15% senior unsecured notes due June 1, 2026 (“2026 Notes”) and $350,000,000 3.40% senior unsecured notes due June 1, 2031 (“2031 Notes”). Interest on the senior unsecured notes will be payable semi-annually on June 1 and December 1, commencing December 1, 2021. The 2026 Notes were sold at 99.86% of their face amount to yield 2.18% and the 2031 Notes were sold at 99.59% of their face amount to yield 3.45%.<\/p>\n

theMART<\/em><\/p>\n

On May 28, 2021, we repaid the $675,000,000 mortgage loan on theMART, a 3.7 million square foot commercial building in Chicago, with proceeds from our senior unsecured notes offering. The loan bore interest at 2.70% and was scheduled to mature in September 2021.<\/p>\n

Preferred Securities<\/em><\/p>\n

On September 22, 2021, Vornado sold 12,000,000 4.45% Series O cumulative redeemable preferred shares at a price of $25.00 per share, pursuant to an effective registration statement. Vornado received aggregate net proceeds of $291,195,000, after underwriters’ discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 12,000,000 4.45% Series O preferred units (with economic terms that mirror those of the Series O preferred shares). Dividends on the Series O preferred shares\/units are cumulative and payable quarterly in arrears. The Series O preferred shares\/units are not convertible into, or exchangeable for, any of our properties or securities. On or after five years from the date of issuance (or sooner under limited circumstances), Vornado may redeem the Series O preferred shares\/units at a redemption price of $25.00 per share\/unit, plus accrued and unpaid dividends\/distributions through the date of redemption. The Series O preferred shares\/units have no maturity date and will remain outstanding indefinitely unless redeemed by Vornado. Vornado used the net proceeds for the redemption of its 5.70% Series K cumulative redeemable preferred shares\/units (see below).<\/p>\n

On September 13, 2021, we called for redemption of all of the outstanding 5.70% Series K cumulative redeemable preferred shares\/units. As a result, as of September 30, 2021, we reclassified the 5.70% Series K preferred shares\/units from shareholders’ equity\/partners’ capital to liabilities on our consolidated balance sheets. On October 13, 2021, we redeemed all of the outstanding 5.70% Series K preferred shares\/units at their redemption price of $25.00 per share\/unit, or $300,000,000 in the aggregate, plus accrued and unpaid dividends\/distributions through the date of redemption. In connection with the redemption, we expensed $9,033,000 of previously capitalized issuance costs in “Series K preferred share\/unit issuance costs” on our consolidated statements of income to arrive at “net income attributable to common shareholders” for the three and nine months ended September 30, 2021.<\/p>\n

Leasing Activity For the Three Months Ended September 30, 2021:<\/strong><\/p>\n