Vornado Realty to Report Q2 Earnings: What's in the Cards?

Vornado Realty Trust VNO is scheduled to report second-quarter 2025 results on Aug. 4, after market close. While the company’s quarterly results are likely to display a year-over-year rise in revenues, funds from operations (FFO) per share might display a decline.

In the last reported quarter, this New York-based real estate investment trust’s (“REIT”) FFO per share, plus assumed conversions, on an adjusted basis of 63 cents, beat the Zacks Consensus Estimate of 52 cents. Results displayed growth in total same-store NOI year over year.

Over the trailing four quarters, Vornado’s FFO per share, plus assumed conversions, on an adjusted basis, beat the Zacks Consensus Estimate on each occasion, the average surprise being 11.6%. This is depicted in the graph below:

Vornado Realty Trust Price and EPS Surprise

Vornado Realty Trust price-eps-surprise | Vornado Realty Trust Quote

U.S. Office Market in Q2 2025

Per a Cushman & Wakefield report, the U.S. office demand is moving toward stabilization despite the overall economic uncertainty.

During the second quarter, though net absorption turned out to be negative, the four-quarter rolling absorption continued to improve. Out of the 92 U.S. markets tracked by Cushman & Wakefield Research, 36 experienced positive absorption, with 19 of them exceeding 100,000 square feet (sf).

Demand for high-quality offices has been accelerating, with Class A absorption turning out to be positive for half of the U.S. markets (48 of 92). Supply pressures are also decelerating due to dwindling new construction activity. The under-construction pipeline for the quarter ended June 2025 was 26.1 MSF, down 40% year over year and 67% below the 2010 average. At the same time, new deliveries in the second quarter were the lowest since the first quarter of 2012 at just 2.3 MSF.

However, the overall U.S. vacancy inched up marginally to 20.8%, up 20 basis points (bps) quarterly and 90 bps year over year. Moreover, sublease activities also moved up slightly by 1.6 MSF against the downtick over the past four quarters but remained 10.4% below its peak in the first quarter of 2024.

Factors to Consider Ahead of VNO’s Results

Vornado’s portfolio of premium office assets strategically situated in a few select high-rent, high-barrier-to-entry markets of New York, Chicago and San Francisco is likely to have witnessed healthy demand during the quarter, aiding leasing activity.

A diversified tenant base, which includes several industry bellwethers, is expected to have led to stable cash flow generation during the quarter.

However, its performance in the to-be-reported quarter is likely to have been affected by the choppy environment in the office real estate market. Further, high interest expenses are expected to have been a spoilsport during the to-be-reported quarter.

VNO’s Projections

The consensus mark for Vornado’s New York revenues is pinned at $376.9 million, indicating a rise from $367.6 million in the prior-year quarter.

The Zacks Consensus Estimate for quarterly revenues is pegged at $455.4 million, implying an increase of 1.1% from the year-ago quarter’s reported figure.

However, the consensus mark for Vornado’s other revenues is pinned at $79.6 million, down from $82.7 million reported in the prior-year quarter.

The Zacks Consensus Estimate for occupancy in the New York office portfolio is pegged at 86.6%, down from 89.3% reported a year ago.

The company’s activities during the to-be-reported quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has increased to 53 cents from a negative 33 cents over the past three months. However, the figure indicates a 7% decline from the prior-year period’s reported number.

What Our Quantitative Model Predicts

Our proven model predicts a likely surprise in terms of FFO per share for Vornado this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.

Vornado has an Earnings ESP of +0.35% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two other stocks from the broader REIT industry — Cousins Properties CUZ and Plymouth Industrial REIT PLYM — that you may want to consider, as our model shows that these, too, have the right combination of elements to report a surprise this quarter.

Cousins Properties is slated to report quarterly numbers on July 31. CUZ has an Earnings ESP of +0.36% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PLYM, scheduled to report quarterly numbers on Aug. 6, currently has an Earnings ESP of +2.33% and a Zacks Rank of 3.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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