The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet and is 94.6% leased as of December 31, 2017.feet.
We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with our legal counsel, the outcome of such matters will not have a material effect on our financial condition, results of operations or cash flows.
In June 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to spacethe 195,000 square foot store that Sears leasesformerly leased at our Rego Park I property alleging that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage. Sears asserted various causes of actions for damages and sought to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a nuisance that Sears claims was a cause of the water intrusions into its premises. In addition to injunctive relief, Sears sought, among other things, damages of not less than $4 million$4,000,000 and future damages it estimated would not be less than $25 million.$25,000,000. In March 2016, Sears withdrew its claim for future damages leaving a remaining claim for property damages, which we estimate to be approximately $650,000 based on information provided by Sears. We intend to defend the remaining claim vigorously. The amount or range of reasonablereasonably possible losses, if any, is not expected to be greater than $650,000. On April 4, 2017,October 15, 2018, Sears closed its store atfiled for Chapter 11 bankruptcy relief resulting in an automatic stay of this case. Both parties have filed motions for summary judgment and in November 2021, the property.parties stipulated to lift the stay to allow the motions to be decided by the court.
Not applicable.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange under the symbol “ALX.” Set forth below are the high and low sales prices for the shares of our common stock for each full quarterly period within the two most recent years and any dividends paid per share during such periods.
Information relating to compensation plans under which our equity securities are authorized for issuance is set forth under Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein.
The following graph is a comparison of the five-year cumulative return of our common stock, the Standard & Poor’s 500 Index (the “S&P 500 Index”) and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index, a peer group index. The graph assumes that $100 was invested on December 31, 20122016 in our common stock, the S&P 500 Index and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions. There can be no assurance that the performance of our stock will continue in line with the same or similar trends depicted in the graph below.
ITEM 6. SELECTED FINANCIAL DATARESERVED
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The following discussion should be read in conjunction with the financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) within this section is focused on the years ended December 31, 2021 and 2020, including year-to-year comparisons between these years. Our MD&A for the year ended December 31, 2019, including year-to-year comparisons between 2020 and 2019, can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Overview
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO). We have sevensix properties in the greater New York City metropolitan area.
We compete with a large number of property owners and developers. Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.
Our business has been adversely affected by the ongoing COVID-19 pandemic. Although substantially all our retail tenants are currently open and operating and previous government restrictions have been lifted, there continue to be economic conditions and other factors that adversely affect the financial health of our retail tenants.
Overview - continued
Year Ended December 31, 20172021 Financial Results Summary
Net income for the year ended December 31, 20172021 was $80,509,000,$132,930,000 or $15.74$25.94 per diluted share, compared to $86,477,000,$41,939,000 or $16.91$8.19 per diluted share for the year ended December 31, 2016. 2020. Net income for the year ended December 31, 2021 included $72,298,000, or $14.11 per diluted share, of income as a result of net gains on the sale of real estate, including $2,348,000, or $0.46 per diluted share, from discontinued operations.
Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 20172021 was $114,908,000,$89,757,000, or $22.46$17.52 per diluted share, compared to $119,780,000,$82,509,000, or $23.42$16.11 per diluted share for the year ended December 31, 2016. Net income for the year ended December 31, 2017 included additional depreciation and amortization of tenant improvements and deferred leasing costs of $2,444,000, or $0.48 per diluted share, resulting from a tenant lease termination at our 731 Lexington Avenue property. Net income and FFO (non-GAAP) for the year ended December 31, 2016 included rental income of $2,257,000, or $0.44 per diluted share, resulting from a tenant lease termination at our Rego Park II property. Net income for the year ended December 31, 2016 also included additional depreciation and amortization of tenant improvements and deferred leasing costs of $1,077,000, or $0.21 per diluted share, related to the tenant lease termination at our Rego Park II property.2020.
Quarter Ended December 31, 2017 Financial Results Summary
Net income for the quarter ended December 31, 2017 was $17,883,000, or $3.50 per diluted share, compared to $21,655,000, or $4.23 per diluted share for the quarter ended December 31, 2016. FFO (non-GAAP) for the quarter ended December 31, 2017 was $28,062,000, or $5.49 per diluted share, compared to $29,582,000, or $5.78 per diluted share for the quarter ended December 31, 2016. Net income for the quarter ended December 31, 2017 included additional depreciation and amortization of tenant improvements and deferred leasing costs of $2,184,000, or $0.43 per diluted share, resulting from a tenant lease termination at our 731 Lexington Avenue property.
Square Footage, Occupancy and Leasing Activity
As of December 31, 20172021, our portfolio was comprised of sevensix properties aggregating 2,437,000 square feet. As2,454,000 square feet, of December 31, 2017, our properties had an occupancy rate of 99.3%.
Tenant Matters
On April 4, 2017, Sears closed its 195,000 square foot store at our Rego Park I property. Annual revenue from Sears is approximately $10,600,000, under a lease which expires2,218,000 square feet was in March 2021. In its 2016 annual report on Form 10-K, Sears indicated that substantial doubt exists related to its ability to continue as a going concern. There are $3,865,000 of receivables arising from the straight-lining of rentservice and $406,000 of unamortized deferred leasing costs on our consolidated balance sheet related to the Sears lease as of December 31, 2017 which we will continue to assess for recoverability.
On September 18, 2017, Toys, which leases 47,000236,000 square feet of retail(primarily the former Century 21 space at our Rego Park II shopping center ($2,600,000property and a portion of annual revenue) filedthe former Sears space at our Rego Park I property) was out of service for Chapter 11 bankruptcy relief. There are $694,000 of tenant improvements, $257,000 of unamortized deferred leasing costs and $544,000 of receivables arising fromredevelopment. Excluding residential, the straight-lining of rent on our consolidated balance sheet related to the Toys leasein service square feet was 96% occupied as of December 31, 2017.2021. The in service residential square feet was 95% occupied as of December 31, 2021.
Real Estate Sales
Overview - continued
On September 19, 2017,June 4, 2021, we sold a parcel of land in the bankruptcy court approvedBronx, New York (“Bronx Land Parcel”) for $10,000,000. Net proceeds from the terms of an order stipulation between Le Cirque, a restaurant operator which leases 13,000 square feet at our 731 Lexington Avenue property (approximately $1,200,000 of annual revenue),sale were $9,291,000 after closing costs, the financial statement gain was $9,124,000 and the Companytax gain was $9,123,000.
On October 4, 2021, we sold our Paramus Property to IKEA, the tenant at the property, for $75,000,000, pursuant to IKEA’s purchase option contained in the lease. Net proceeds from the sale were $4,580,000 after closing costs and the repayment of the $68,000,000 mortgage loan. The financial statement gain was $60,826,000, which terminated the lease on January 5, 2018 (original lease expiration was May 2021). As a result, we began accelerating depreciation and amortization of approximately $2,780,000 of tenant improvements and deferred leasing costs over the new lease term, of which approximately $2,650,000 was recognized in the year endedfourth quarter of 2021, and the tax gain was $63,898,000. Prior to the sale, the Paramus Property had annual rental revenues of $7,200,000, annual operating expenses of $3,200,000 and annual interest and debt expense of $3,300,000.
Marketable Securities
In December 31, 2017 and approximately $130,000 will be recognized in2021, we sold our 564,612 common shares of the quarter ending March 31, 2018.Macerich Company (“Macerich”), realizing cash proceeds of $9,506,000.
Rego Park II Loan Participation
Financing Activity
On July 28, 2017,April 7, 2021, we entered into aused our $50,000,000 participation and servicing agreement with the lender onin our Rego Park II shopping center loan which matures on November 30, 2018. We invested $200,000,000 to participate inreduce the loan and are entitledbalance from $252,544,000 to interest at LIBOR plus 1.60% (3.17% as of December 31, 2017).$202,544,000.
Financing
On June 1, 2017, we completed a $500,000,000 refinancingOctober 4, 2021, our $68,000,0000 Paramus Property mortgage loan was repaid in connection with the sale of the office portion of 731 Lexington Avenue. The interest-only loan is at LIBOR plus 0.90% (2.38% as of December 31, 2017) and matures in June 2020, with four one-year extension options. In connection therewith, we purchased an interest rate cap with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.0%. The property was previously encumbered by a $300,000,000 interest-only mortgage at LIBOR plus 0.95% which was scheduled to mature in March 2021.property.
Significant Tenant
Bloomberg accounted for revenue of $105,224,000, $104,590,000$113,140,000, $109,066,000, and $94,468,000$109,113,000 in the years ended December 31, 2017, 20162021, 2020 and 2015,2019, respectively, representing approximately 46%55%, 46%55% and 45%48% of our totalrental revenues in each year, respectively. No other tenant accounted for more than 10% of our totalrental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.
Critical Accounting Policies and Estimates
Our
In preparing the consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires us to makewe have made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. ActualAccounting estimates are deemed critical if they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results could differ from those estimates. Set forth belowof operations. Below is a summary of ourthe critical accounting policies that we believe are critical toestimates used in the preparation of our consolidated financial statements. This summary should be read in conjunction with a more completeA discussion of our accounting policies is included in Note 2 – - Summary of SignificantAccounting Policies to theour consolidated financial statements in this Annual Report on Form 10-K.
Impairment Analyses for Real Estate
Real estate is carried at cost, net of accumulated depreciation and amortization. As of December 31, 2017 and 2016, the carrying amount of our real estate, net of accumulated depreciation and amortization, was $754,324,000 and $780,814,000, respectively. Maintenance and repairs are expensed as incurred. Depreciation requires an estimate by management of the useful life of each property and improvement as well as an allocation of the costs associated with a property to its various components. If we do not allocate these costs appropriately or incorrectly estimate the useful lives of our real estate, depreciation expense may be misstated. We capitalize all property operating expenses directly associated with and attributable to, the development and construction of a project, including interest expense. The capitalization period begins when development activities are underway and ends when it is determined that the asset is substantially complete and ready for its intended use, which is typically evidenced by the receipt of a temporary certificate of occupancy. General and administrative costs are expensed as incurred.
Critical Accounting Policies and Estimates - continued
Our properties, and related intangible assets, including properties to be developed in the future, are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Estimates of future cash flowsImpairment analyses are based on our current plans, intended holding periods, ability to hold, and available market information at the time the analyses are prepared. For our development properties,Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows also includeor estimated fair value of an asset and could thereby affect the value of our real estate on our consolidated balance sheets as well as any potential impairment losses recognized on our consolidated statements of income.
Collectability Assessments for Revenue Recognition
We evaluate on an individual lease basis whether it is probable that we will collect substantially all future expenditures necessaryamounts due from our tenants and recognize changes in the collectability assessment of our operating leases as adjustments to developrental revenue. Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the asset, including interest payments that will be capitalized as partfinancial condition of the costtenant, the impact of COVID-19 on tenants’ businesses, and other factors. Our assessment of the asset. An impairment loss is recognized only if the carrying amountcollectability of the asset is not recoverable and is measured basedtenant receivables can have a significant impact on the excessrental revenue recognized in our consolidated statements of the property’s carrying amount over its estimated fair value. If our estimatesincome.
Recent Accounting Pronouncements
See Note 2 – Summary of future cash flows, anticipated holding periods, or fair values change, based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be materialSignificant Accounting Policies to our consolidated financial statements. Estimates of future cash flows are subjective and are based,statements in part,this Annual Report on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.Form 10-K for a discussion concerning recent accounting pronouncements.
Allowance for Doubtful Accounts
We periodically evaluate the collectibility of amounts due from tenants, including the receivable arising from the straight-lining of rents, and maintain an allowance for doubtful accounts ($1,501,000 and $1,473,000 as of December 31, 2017 and 2016, respectively) for estimated losses resulting from the inability of tenants to make required payments under the lease agreements. We exercise judgment in establishing these allowances and consider payment history and current credit status in developing these estimates. These estimates may differ from actual results, which could be material to our consolidated financial statements.
Revenue Recognition
We have the following revenue sources and revenue recognition policies:
Base Rent – revenue arising from tenant leases. These rents are recognized over the non-cancelable term of the related leases on a straight-line basis, which includes the effects of rent steps and free rent abatements under the leases. We commence rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease;
Percentage Rent – revenue arising from retail tenant leases that is contingent upon the sales of tenants exceeding defined thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales thresholds have been achieved);
Expense Reimbursements – revenue arising from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective properties. This revenue is recognized in the same periods as the expenses are incurred;
Parking income – revenue arising from the rental of parking space at our properties. This income is recognized as the service is provided.
Before we recognize revenue, we assess, among other things, its collectibility. If our assessment of the collectibility of revenue changes, the impact on our consolidated financial statements could be material.
Income Taxes
We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856 – 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to maintain our qualification as a REIT under the Code, we must distribute at least 90% of our taxable income to stockholders each year. We distribute to our stockholders 100% of our taxable income and therefore, no provision for Federal income taxes is required. If we fail to distribute the required amount of income to our stockholders, or fail to meet other REIT requirements, we may fail to qualify as a REIT, which may result in substantial adverse tax consequences.
Results of Operations – Year EndedDecember 31, 20172021 compared to December 31, 20162020
Property RentalsRental Revenues
Property rentalsRental revenues were $152,857,000$206,148,000 in the year ended December 31, 2017,2021, compared to $151,444,000$199,142,000 in the prior year, an increase of $1,413,000.$7,006,000. This increase was primarily due to (i) $10,837,000 from write-offs in the prior year related to receivables arising from the straight-lining of rents from certain of our retail tenants who were put on a cash basis and (ii) $8,163,000 of higher rental income of $3,730,000revenue from The Alexander apartment tower, which was placed in service in phases beginning July 2015 and leased up to stabilization in September 2016,new tenants, partially offset by income of $2,257,000 in 2016 resulting(iii) $12,905,000 from aretail tenant lease terminationvacancies at our 731 Lexington Avenue and Rego Park II property.properties.
Operating Expenses
Expense Reimbursements
Tenant expense reimbursementsOperating expenses were $77,717,000$91,089,000 in the year ended December 31, 2017,2021, compared to $75,492,000$88,403,000 in the prior year, an increase of $2,225,000.$2,686,000. This increase was primarily due to higher reimbursable real estate taxes and higher reimbursable operating expenses.
Operating Expenses
Operating expenses were $85,127,000 in the year ended December 31, 2017, compared to $82,232,000 in the prior year, an increase of $2,895,000. This increase was primarily due to (i) higher real estate taxes of $3,267,000 and (ii) higher reimbursable operating expenses of $903,000, partially offset by (iii) lower marketing costs for The Alexander apartment tower of $1,098,000subject to recovery, including utilities and (iv) lower bad debt expense of $504,000.
common area maintenance.
Depreciation and Amortization
Depreciation and amortization was $34,925,000$32,938,000 in the year ended December 31, 2017,2021, compared to $33,807,000$32,357,000 in the prior year, an increase of $1,118,000. This increase was primarily due to additional depreciation and amortization of tenant improvements and deferred leasing costs of $2,444,000 related to a tenant lease termination at our 731 Lexington Avenue property in September 2017, partially offset by additional depreciation and amortization of tenant improvements and deferred leasing costs of $1,077,000 in 2016 related to a tenant lease termination at our Rego Park II property.
$581,000.
General and Administrative Expenses
General and administrative expenses were $5,252,000$5,924,000 in the year ended December 31, 2017,2021, compared to $5,436,000$6,307,000 in the prior year, a decrease of $184,000.$383,000. This decrease was primarily due to $232,000 of lower director’sprofessional fees and $150,000 of lower stock-based compensation expense asfrom an initial award granted to a resultnewly appointed member of having one less member on our Board of Directors in 2017.
the prior year.
Interest and Other Income, net
Interest and other income, net was $6,716,000$639,000 in the year ended December 31, 2017,2021, compared to $3,305,000$2,667,000 in the prior year, an increasea decrease of $3,411,000.$2,028,000. This increase was primarily due to higher$1,544,000 of lower interest income of (i) $2,453,000 from the Rego Park II loan participation, (ii) $1,418,000 from an increasedue to a decrease in the average interest rates and (iii) $216,000$499,000 of lower dividend income from an increase in the average investment balances, partially offset by (iv) lower income of $429,000 in connection with bankruptcy recoveries and (v) income of $367,000 in the prior year from a cost reimbursement settlement with a retail tenant at our 731 Lexington Avenue property.
Macerich.
Interest and Debt Expense
Interest and debt expense was $31,474,000$19,686,000 in the year ended December 31, 2017,2021, compared to $22,241,000 in the prior year, an increase of $9,233,000. This increase was primarily due to higher interest expense of (i) $5,289,000 due to an increase in average LIBOR, (ii) $2,658,000 resulting from the refinancing of the office portion of 731 Lexington Avenue on June 1, 2017 for $500,000,000 at LIBOR plus 0.90% (previously a $300,000,000 loan at LIBOR plus 0.95%) and (iii) $1,188,000 of higher amortization of debt issuance costs.
Income Taxes
Income tax expense was $3,000 in the year ended December 31, 2017, compared to $48,000 in the prior year.
Results of Operations – Year EndedDecember 31, 2016 compared to December 31, 2015
Property Rentals
Property rentals were $151,444,000 in the year ended December 31, 2016, compared to $138,688,000 in the prior year, an increase of $12,756,000. This increase was primarily due to (i) rental income of $7,271,000 from The Alexander apartment tower, which was placed in service in phases beginning July 2015 and leased up to stabilization in September 2016, (ii) higher rental income of $3,366,000 from the January 2016 lease amendment with Bloomberg at 731 Lexington Avenue and (iii) income of $2,257,000 resulting from a tenant lease termination at our Rego Park II property in June 2016.
Expense Reimbursements
Tenant expense reimbursements were $75,492,000 in the year ended December 31, 2016, compared to $69,227,000 in the prior year, an increase of $6,265,000. This increase was primarily due to (i) higher recoveries of real estate taxes and operating expenses from Bloomberg at 731 Lexington Avenue as a result of the January 2016 lease amendment, which converted 192,000 square feet from a gross basis to a net rent basis and (ii) higher reimbursable real estate taxes, partially offset by (iii) lower reimbursable operating expenses.
Operating Expenses
Operating expenses were $82,232,000 in the year ended December 31, 2016, compared to $76,218,000 in the prior year, an increase of $6,014,000. This increase was primarily due to (i) higher operating expenses of $2,494,000 related to The Alexander apartment tower, which was placed in service in phases beginning July 2015 and leased up to stabilization in September 2016, (ii) higher reimbursable real estate taxes of $3,703,000 and (iii) higher bad debt expense of $871,000, partially offset by (iv) lower reimbursable operating expenses of $1,068,000.
Depreciation and Amortization
Depreciation and amortization was $33,807,000 in the year ended December 31, 2016, compared to $31,086,000 in the prior year, an increase of $2,721,000. This increase was primarily due to additional depreciation related to The Alexander apartment tower, which was placed in service in phases beginning July 2015.
General and Administrative Expenses
General and administrative expenses were $5,436,000 in the year ended December 31, 2016, compared to $5,406,000 in the prior year, an increase of $30,000.
Interest and Other Income, net
Interest and other income, net was $3,305,000 in the year ended December 31, 2016, compared to $5,949,000$24,204,000 in the prior year, a decrease of $2,644,000.$4,518,000. This decrease was primarily due to $2,141,000 from$5,052,000 of lower interest expense due to a special dividend from our investmentdecrease in common sharesLIBOR.
Change in Fair Value of MacerichMarketable Securities
Change in 2015 and lowerfair value of marketable securities was income of $1,275,000 in connection with bankruptcy recoveries.
Interest and Debt Expense
Interest and debt expense was $22,241,000$3,482,000 in the year ended December 31, 2016,2021, compared to $24,239,000an expense of $8,599,000 in the prior year, a decreasean increase to income of $1,998,000.$12,081,000. This decrease was primarily due to savingsthe change in Macerich’s share price through December 2021, when we sold our Macerich common shares.
Net Gains on Sale of $5,631,000 resulting fromReal Estate
Net gains on the refinancingsale of the retail portion of 731 Lexington Avenue on August 5, 2015 at LIBOR plus 1.40%, or 2.05% as of December 31, 2016 (the prior loan had a fixed rate of 4.93%); partially offset by lower capitalized interest of $1,486,000 as a result of completing the development of The Alexander apartment tower, which was placed in service in phases beginning July 2015 and $2,066,000 due to an increase in average LIBOR.
Income Taxes
Income tax expense was $48,000real estate were $69,950,000 in the year ended December 31, 2016, compared2021. This was due to $8,000$60,826,000 from the sale of our Paramus Property and $9,124,000 from the sale of the Bronx Land Parcel.
Income from Discontinued Operations
Income from discontinued operations was $2,348,000 in the prior year.year ended December 31, 2021. This was due to the recognition of a previously deferred gain on the 2012 sale of Kings Plaza Regional Shopping Center to Macerich. The deferred gain was recognized due to the sale of our Macerich common shares. See Note 7 - Discontinued Operations, to our consolidated financial statements in this Annual Report on Form 10-K.
Related Party Transactions
Vornado
As of December 31, 2021, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by, Vornado, pursuant to various agreements, which expire in March of each year and are automatically renewable. These agreements are described in Note 5 – Related Party Transactions, to our consolidated financial statements in this Annual Report on Form 10-K.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2017,2021, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr. (who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.2%26.0% of our outstanding common stock, in addition to the 2.3% they2.2% they indirectly own through Vornado. Joseph Macnow, our Treasurer, is the Executive Vice President - Chief Financial Officer and Chief Administrative Officer of Vornado. Matthew Iocco, our Chief Financial Officer, is the Executive Vice President - Chief Accounting Officer of Vornado.
As of December 31, 2017, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by, Vornado, pursuant to various agreements, which expire in March of each year and are automatically renewable. These agreements are described in Note 4 – Related Party Transactions, to our consolidated financial statements in this Annual Report on Form 10-K.
Toys
Our affiliate, Vornado, owns 32.5% of Toys. Joseph Macnow, Vornado’s Executive Vice President - Chief Financial Officer and Chief Administrative Officer and Wendy A. Silverstein, a member of our Board of Directors, represent Vornado as members of Toys’ Board of Directors. Toys leases 47,000 square feet of retail space at our Rego Park II shopping center ($2,600,000 of annual revenue). On September 18, 2017, Toys filed for Chapter 11 bankruptcy relief. There are $694,000 of tenant improvements, $257,000 of unamortized deferred leasing costs and $544,000 of receivables arising from the straight-lining of rent on our consolidated balance sheet related to the Toys lease as of December 31, 2017.
Liquidity and Capital Resources
PropertyOur cash requirements include property operating expenses, capital improvements, tenant improvements, debt service, leasing commissions, dividends to stockholders as well as development costs. The sources of liquidity to fund these cash requirements include rental incomerevenue, which is our primary source of cash flow and is dependent on a number of factors includingupon the occupancy level and rental rates of our properties, as well as our tenants’ ability to pay their rents. Our properties provide us with a relatively consistent stream of cash flow that enables us to pay our operating expenses, interest expense, recurring capital expenditures and cash dividends to stockholders. Other sources of liquidity to fund cash requirements include our existing cash, proceeds from financings, including mortgage or construction loans secured by our properties and proceeds from asset sales.
As of December 31, 2021, we had $483,505,000 of liquidity comprised of cash and cash equivalents and restricted cash. We anticipate that cash flows from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt amortization and capital expenditures. We may refinance our maturing debt as it comes due or choose to pay it down. However, there can be no assurance that additional financing or capital will be available to refinance our debt, or that the terms will be acceptable or advantageous to us. The challenges posed by the COVID-19 pandemic and the impact on our business and cash flows continue to evolve and cannot be predicted at this time but that impact could be material.
Cash Flows for the Year Ended December 31, 2021
Cash and cash equivalents and restricted cash were $483,505,000 at December 31, 2021, compared to $449,877,000 at December 31, 2020, an increase of $33,628,000. This resulted from (i) $118,465,000 of net cash provided by operating activities and (ii) $75,457,000 of net cash provided to investing activities, partially offset by (iii) $160,294,000 of net cash used in financing activities.
Net cash provided by operating activities of $118,465,000 was comprised of (i) net income of $132,930,000 and (ii) the net change in operating assets and liabilities of $16,456,000, partially offset by (iii) adjustments for non-cash items of $30,921,000. The adjustments for non-cash items were comprised of (i) net gains on sale of real estate of $72,298,000 (including $2,348,000 from discontinued operations) and (ii) the change in fair value of marketable securities of $3,482,000, partially offset by (iii) depreciation and amortization (including amortization of debt issuance costs) of $34,592,000, (iv) straight-lining of rental income of $9,817,000 and (v) stock-based compensation of $450,000.
Net cash provided by investing activities of $75,457,000 was comprised of (i) proceeds from the sale of real estate of $81,871,000, (ii) proceeds from the sale of marketable securities of $9,506,000 and (iii) the return of short-term investments of $3,600,000, partially offset by (iv) construction in progress and real estate additions of $19,520,000.
Net cash used in financing activities of $160,294,000 was primarily comprised of dividends paid of $92,220,000 and debt repayments of $68,000,000 in connection with the sale of our Paramus Property.
Liquidity and Capital Resources - continued
Cash Flows for the Year Ended December 31, 2020
Cash and cash equivalents and restricted cash were $449,877,000 at December 31, 2020, compared to $313,977,000 at December 31, 2019, an increase of $135,900,000. This resulted from (i) $78,066,000 of net cash provided by operating activities and (ii) $90,294,000 of net cash provided by financing activities, partially offset by (iii) $32,460,000 of net cash used in investing activities.
Net cash provided by operating activities of $78,066,000 was comprised of (i) net income of $41,939,000 and (ii) adjustments for non-cash items of $69,330,000, partially offset by (iii) the net change in operating assets and liabilities of $33,203,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $35,121,000, (ii) straight-lining of rental income of $21,102,000, (iii) the change in fair value of marketable securities of $8,599,000, (iv) write-off of tenant receivables of $4,122,000 and (v) stock-based compensation expense of $600,000, partially offset by (vi) $214,000 of dividends received in stock from Macerich.
Net cash provided by financing activities was primarily comprised of (i) proceeds from the reduction of our participation in our Rego Park II mortgage loan of $145,708,000 and (ii) proceeds from the financing of The Alexander apartment tower of $94,000,000, partially offset by (iii) dividends paid of $92,168,000 and (iv) debt repayments of $50,000,000.
Net cash used in investing activities was comprised of construction in progress and real estate additions of $32,460,000.
Dividends
On January 17, 2018, we increased19, 2022, our Board of Directors declared a regular quarterly dividend to $4.50 per share (a new(an indicated annual rate of $18.00 per share). The new dividend, whenif declared by the Board of Directors at the same rate for all of 2018, will2022, would require us to pay out approximately $92,100,000.$92,200,000 in 2022.
Rego Park II Loan ParticipationDebt
On July 28, 2017,April 7, 2021, we entered into aused our $50,000,000 participation and servicing agreement with the lender onin our Rego Park II shopping center loan which matures on November 30, 2018. We invested $200,000,000 to participate inreduce the loan and are entitledbalance from $252,544,000 to interest at LIBOR plus 1.60% (3.17% as of December 31, 2017).
Financing Activities and Contractual Obligations
$202,544,000.
On June 1, 2017, we completed a $500,000,000 refinancingOctober 4, 2021, our $68,000,000 Paramus Property mortgage loan was repaid in connection with the sale of the office portion of 731 Lexington Avenue. The interest-only loan is at LIBOR plus 0.90% and matures in June 2020, with four one-year extension options. In connection therewith, we purchased an interest rate cap with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.0%. The property was previously encumbered by a $300,000,000 interest-only mortgage at LIBOR plus 0.95% which was scheduled to mature in March 2021.property.
Liquidity and Capital Resources - continued
Below is a summary of our outstanding debt and maturities as of December 31, 2017.2021. We may refinance our maturing debt as it comes due or choose to repay it.
| | | | | | | | | | | | | | | | | | | | |
| | Balance | | Interest Rate | | Maturity |
(Amounts in thousands) | | | |
731 Lexington Avenue, office condominium(1) | | $ | 500,000 | | | 1.01 | % | | Jun. 11, 2024 |
731 Lexington Avenue, retail condominium(2) | | 300,000 | | | 1.72 | % | | Aug. 05, 2025 |
Rego Park II shopping center(3) | | 202,544 | | | 1.45 | % | | Dec. 12, 2025 |
The Alexander apartment tower | | 94,000 | | | 2.63 | % | | Nov. 1, 2027 |
Total | | 1,096,544 | | | | | |
Deferred debt issuance costs, net of accumulated amortization of $14,551 | | (6,931) | | | | | |
Total, net | | $ | 1,089,613 | | | | | |
| | | | | | |
(1) Interest at LIBOR plus 0.90%. Maturity date represents the extended maturity based on our unilateral right to extend. |
(2) Interest at LIBOR plus 1.40% which was swapped to a fixed rate of 1.72%. |
(3) Interest at LIBOR plus 1.35%. |
|
| | | | | | | | | |
| | Balance | | Interest Rate | | Maturity (1) |
(Amounts in thousands) | | | |
Rego Park I shopping center (100% cash collateralized) | | $ | 78,246 |
| | 0.35 | % | | Mar. 2018 |
Paramus | | 68,000 |
| | 2.90 | % | | Oct. 2018 |
Rego Park II shopping center(2) | | 256,194 |
| | 3.42 | % | | Nov. 2018 |
731 Lexington Avenue, retail space(3) | | 350,000 |
| | 2.78 | % | | Aug. 2022 |
731 Lexington Avenue, office space(4) | | 500,000 |
| | 2.38 | % | | Jun. 2024 |
Total | | 1,252,440 |
| | | | |
Deferred debt issuance costs, net of accumulated amortization of $6,315 | | (12,218 | ) | | | | |
Total, net | | $ | 1,240,222 |
| | | | |
| | | | | | |
(1) Represents the extended maturity where we have the unilateral right to extend. |
(2) This loan bears interest at LIBOR plus 1.85%. See page 29 for details of our Rego Park II loan participation. |
(3) This loan bears interest at LIBOR plus 1.40%. |
(4) This loan bears interest at LIBOR plus 0.90%. |
Below is a summary of our contractual obligationsprincipal and commitmentsinterest repayments scheduled as of December 31, 2017.2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Less than | | One to | | Three to | | More than |
(Amounts in thousands) | | Total | | One Year | | Three Years | | Five Years | | Five Years |
| | | | | | | | | | | | |
Long-term debt obligations | | $ | 1,154,325 | | | $ | 15,845 | | | $ | 528,734 | | | $ | 513,651 | | | $ | 96,095 | |
Total principal and interest repayments (1) | | $ | 1,154,325 | | | $ | 15,845 | | | $ | 528,734 | | | $ | 513,651 | | | $ | 96,095 | |
| | | | | | | | | | | | |
(1) Principal repayments based on extended loan maturity dates. Interest on variable rate debt is computed using rates in effect as of December 31, 2021. |
|
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Less than | | One to | | Three to | | More than |
(Amounts in thousands) | | Total | | One Year | | Three Years | | Five Years | | Five Years |
Contractual obligations (principal and interest)(1): | | | | | | | | | | |
| | Long-term debt obligations | | $ | 1,385,231 |
| | $ | 433,997 |
| | $ | 43,921 |
| | $ | 389,861 |
| | $ | 517,452 |
|
| | Operating lease obligations | | 7,267 |
| | 800 |
| | 1,600 |
| | 1,600 |
| | 3,267 |
|
| | | | $ | 1,392,498 |
| | $ | 434,797 |
| | $ | 45,521 |
| | $ | 391,461 |
| | $ | 520,719 |
|
Commitments: | | | | | | | | | | |
|
| | Standby letters of credit | | $ | 1,474 |
| | $ | 1,474 |
| | $ | — |
| | $ | — |
| | $ | — |
|
| | | | | | | | | | | | |
(1) | | Interest on variable rate debt is computed using rates in effect as of December 31, 2017. |
Commitments and Contingencies
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties.
properties and excluding communicable disease coverage.
Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Program Reauthorization Act of 2002, as amended to date and which expires inhas been extended through December 2020.2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $293,000$287,500 deductible ($306,000 effective January 1, 2018) and 17%20% of the balance (18% effective January 1, 2018) of a covered loss, and the Federal government is responsible for the remaining 83% (82% effective January 1, 2018)80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
Liquidity and Capital Resources - continued
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.terrorism or other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material.
OurThe principal amounts of our mortgage loans are non-recourse to us and the loans contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, ifIf lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.
Liquidity and Capital Resources - continued
Rego Park I Litigation
In June 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to spacethe 195,000 square foot store that Sears leasesformerly leased at our Rego Park I property alleging that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage. Sears asserted various causes of actions for damages and sought to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a nuisance that Sears claims was a cause of the water intrusions into its premises. In addition to injunctive relief, Sears sought, among other things, damages of not less than $4 million$4,000,000 and future damages it estimated would not be less than $25 million.$25,000,000. In March 2016, Sears withdrew its claim for future damages leaving a remaining claim for property damages, which we estimate to be approximately $650,000 based on information provided by Sears. We intend to defend the remaining claim vigorously. The amount or range of reasonablereasonably possible losses, if any, is not expected to be greater than $650,000. On October 15, 2018, Sears filed for Chapter 11 bankruptcy relief resulting in an automatic stay of this case. Both parties have filed motions for summary judgment and in November 2021, the parties stipulated to lift the stay to allow the motions to be decided by the court.
Paramus
In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage loan with a fixed rate of 2.90%, which matures on October 5, 2018. The annual triple-net rent is the sum of $700,000 plus the amount of debt service on the mortgage loan. If the purchase option is exercised, we will receive net cash proceeds of approximately $7,000,000 and recognize a gain on sale of land of approximately $60,000,000. If the purchase option is not exercised, the triple-net rent for the last 20 years would include debt service sufficient to fully amortize $68,000,000 over the remaining 20-year lease term.
Letters of Credit
Approximately $1,474,000$960,000 of standby letters of credit were issued and outstanding as of December 31, 2017.2021.
Other
In October 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an additional $22,910,000 of transfer taxes (including interest and penalties as of December 31, 2017) in connection with the sale of Kings Plaza Regional Shopping Center in November 2012. We believe that the NYC DOF’s claim is without merit and intend to vigorously contest this assessment. We have determined that the likelihood of a loss related to this issue is not probable and, after consultation with legal counsel, that the outcome of this assessment is not expected to have a material adverse effect on our financial position, results of operations or cash flows.
We received approximately $396,000, $825,000 and $2,100,000 from bankruptcy recoveries during the years ended December 31, 2017, 2016 and 2015, respectively, which is included as “interest and other income, net” in our consolidated statements of income.
There are various other legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows.
Liquidity and Capital Resources - continued
Cash Flows for the Year Ended December 31, 2017
Cash and cash equivalents and restricted cash were $393,279,000 at December 31, 2017, compared to $374,678,000 at December 31, 2016, an increase of $18,601,000. This increase resulted from (i) $123,426,000 of net cash provided by operating activities, and (ii) $97,146,000 of net cash provided by financing activities, partially offset by (iii) $201,971,000 of net cash used in investing activities.
Net cash provided by operating activities of $123,426,000 was comprised of net income of $80,509,000 and adjustments for non-cash items of $43,372,000, partially offset by the net change in operating assets and liabilities of $455,000. The adjustments for non-cash items were primarily comprised of depreciation and amortization (including amortization of debt issuance costs) of $38,681,000 and straight-lining of rental income of $4,297,000.
Net cash provided by financing activities of $97,146,000 was primarily comprised of (i) $500,000,000 of proceeds from the refinancing of the office portion of 731 Lexington Avenue, partially offset by (ii) debt repayments of $303,707,000 (primarily the repayment of the former loan on the office portion of 731 Lexington Avenue) and (iii) dividends paid of $86,961,000.
Net cash used in investing activities of $201,971,000 was primarily comprised of the Rego Park II loan participation payment of $200,000,000 and construction in progress and real estate additions of $3,434,000.
Cash Flows for the Year Ended December 31, 2016
Cash and cash equivalents and restricted cash were $374,678,000 at December 31, 2016, compared to $344,656,000 at December 31, 2015, an increase of $30,022,000. This increase resulted from (i) $130,820,000 of net cash provided by operating activities, partially offset by (ii) $85,292,000 of net cash used in financing activities and (iii) $15,506,000 of net cash used in investing activities.
Net cash provided by operating activities of $130,820,000 was comprised of net income of $86,477,000, adjustments for non-cash items of $39,171,000, and the net change in operating assets and liabilities of $5,172,000. The adjustments for non-cash items were primarily comprised of depreciation and amortization (including amortization of debt issuance costs) of $36,374,000 and straight-lining of rental income of $2,347,000.
Net cash used in financing activities of $85,292,000 was primarily comprised of dividends paid of $81,822,000.
Net cash used in investing activities of $15,506,000 was comprised of construction in progress and real estate additions of $15,506,000 (primarily related to The Alexander apartment tower), including the payment of a development fee to Vornado of $5,784,000.
Cash Flows for the Year Ended December 31, 2015
Cash and cash equivalents and restricted cash were $344,656,000 at December 31, 2015, compared to $312,417,000 at December 31, 2014, an increase of $32,239,000. This increase resulted from (i) $106,201,000 of net cash provided by operating activities, partially offset by (ii) $48,839,000 of net cash used in financing activities and (iii) $25,123,000 of net cash used in investing activities.
Net cash provided by operating activities of $106,201,000 was comprised of net income of $76,907,000 and adjustments for non-cash items of $32,853,000, partially offset by the net change in operating assets and liabilities of $3,559,000. The adjustments for non-cash items were primarily comprised of depreciation and amortization of $33,671,000, partially offset by straight-lining of rental income of $1,418,000.
Net cash used in financing activities of $48,839,000 was primarily comprised of (i) debt repayments of $323,193,000 (primarily repayment of the prior loan on the retail portion of 731 Lexington Avenue) and (ii) dividends paid of $71,571,000, partially offset by (iii) $350,000,000 of proceeds from the refinancing of the retail portion of 731 Lexington Avenue in August 2015.
Net cash used in investing activities of $25,123,000 was comprised of construction in progress and real estate additions of $50,121,000 (primarily related to The Alexander apartment tower) partially offset by proceeds of $24,998,000 from short-term investments that matured during the second quarter of 2015.
Funds from Operations (“FFO”) (non-GAAP)
FFO is computed in accordance with the definition adopted by the Board of Governors of NAREIT.the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciatedcertain real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. A reconciliation of our net income to FFO is provided below.
FFO (non-GAAP) for the years ended December 31, 2021 and 2020
FFO (non-GAAP) for the year ended December 31, 2021 was $89,757,000, or $17.52 per diluted share, compared to $82,509,000, or $16.11 per diluted share for the year ended December 31, 2020.
The following table reconciles our net income to FFO (non-GAAP):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | For the Year Ended |
(Amounts in thousands, except share and per share amounts) | | | | December 31, |
| | | | 2021 | | 2020 |
Net income | | $ | 132,930 | | | $ | 41,939 | |
Depreciation and amortization of real property | | 32,607 | | | 31,971 | |
Net gains on the sale of real estate (including $2,348 from discontinued operations) | | (72,298) | | | — | |
Change in fair value of marketable securities | | (3,482) | | | 8,599 | |
FFO (non-GAAP) | | $ | 89,757 | | | $ | 82,509 | |
| | | | |
FFO per diluted share (non-GAAP) | | $ | 17.52 | | | $ | 16.11 | |
| | | | |
Weighted average shares used in computing FFO per diluted share | | 5,123,613 | | | 5,120,922 | |
|
| | | | | | | | | | | | | | | | |
| | For the Year Ended | | For the Three Months Ended |
(Amounts in thousands, except share and per share amounts) | | December 31, | | December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
Net income | | $ | 80,509 |
| | $ | 86,477 |
| | $ | 17,883 |
| | $ | 21,655 |
|
Depreciation and amortization of real property | | 34,399 |
| | 33,303 |
| | 10,179 |
| | 7,927 |
|
FFO (non-GAAP) | | $ | 114,908 |
| | $ | 119,780 |
| | $ | 28,062 |
| | $ | 29,582 |
|
| | | | | | | | |
FFO per diluted share (non-GAAP) | | $ | 22.46 |
| | $ | 23.42 |
| | $ | 5.49 |
| | $ | 5.78 |
|
| | | | | | | | |
Weighted average shares used in computing FFO per diluted share | | 5,115,501 |
| | 5,114,084 |
| | 5,115,982 |
| | 5,114,701 |
|
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. Our exposure to a change in interest rates is summarized in the table below.
| | | | 2017 | | 2016 | | | 2021 | | 2020 |
| | December 31, Balance | | Weighted Average Interest Rate | | Effect of 1% Change in Base Rates | | December 31, Balance | | Weighted Average Interest Rate | | | December 31, Balance | | Weighted Average Interest Rate | | Effect of 1% Change in Base Rates | | December 31, Balance | | Weighted Average Interest Rate |
| | | |
(Amounts in thousands, except per share amounts) | | (Amounts in thousands, except per share amounts) | |
Variable rate | | $ | 1,106,194 |
| | 2.75% | | $ | 11,062 |
| | $ | 909,901 |
| | 2.08% | Variable rate | | $ | 702,544 | | | 1.14% | | $ | 7,025 | | | $ | 702,544 | | | 1.19% |
Fixed rate | | 146,246 |
| | 1.54% | | — |
| | 146,246 |
| | 1.54% | Fixed rate | | 394,000 | | | 1.94% | | — | | | 462,000 | | | 2.35% |
| | $ | 1,252,440 |
| | 2.61% | | $ | 11,062 |
| | $ | 1,056,147 |
| | 2.01% | | | $ | 1,096,544 | | | 1.42% | | $ | 7,025 | | | $ | 1,164,544 | | | 1.65% |
| | | | | | | | | | | | | | |
Total effect on diluted earnings per share | | | | | | $ | 2.16 |
| | | | | Total effect on diluted earnings per share | | | | | | $ | 1.37 | | | | | |
As of December 31, 2017 we hadWe have an interest rate cap relating to the mortgage loan on the office condominium of our 731 Lexington Avenue property with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.0%3.0%.
We have an interest rate swap relating to the mortgage loan on the retail condominium of our 731 Lexington Avenue property with a notional amount of $300,000,000 that swaps LIBOR plus 1.40% for a fixed rate of 1.72%.
Fair Value of Debt
The fair value of our consolidated debt is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist. As of December 31, 20172021 and 2016,2020, the estimated fair value of our consolidated debt was $1,239,000,000$1,064,122,000 and $1,045,000,000,$1,130,000,000, respectively. Our fair value estimates, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
| | | | |
| Index to Consolidated Financial Statements | Page Number
|
|
| | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | |
| | |
| Consolidated Balance Sheets as of December 31, 20172021 and 20162020 | |
| | |
| Consolidated Statements of Income for the | |
| Years Ended December 31, 2017, 20162021, 2020 and 20152019 | |
| | |
| Consolidated Statements of Comprehensive Income for the | |
| Years Ended December 31, 2017, 20162021, 2020 and 20152019 | |
| | |
| Consolidated Statements of Changes in Equity for the | |
| Years Ended December 31, 2017, 20162021, 2020 and 20152019 | |
| | |
| Consolidated Statements of Cash Flows for the | |
| Years Ended December 31, 2017, 20162021, 2020 and 20152019 | |
| | |
| Notes to Consolidated Financial Statements | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of
Alexander’s, Inc.
Paramus, New Jersey
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alexander’s, Inc. and subsidiaries (the “Company”"Company") as of December 31, 20172021 and 2016,2020, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2017,2021, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172021 and 2016,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017,2021, in conformity with the accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sCompany's internal control over financial reporting as of December 31, 2017,2021, based on criteria established in Internal Control -— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2018,14, 2022, expressed an unqualified opinion on the Company’sCompany's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on the Company’sCompany's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Real Estate Impairment – Refer to Note 2 to the financial statements
Critical Audit Matter Description
The Company’s real estate assets are individually evaluated for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. The Company’s evaluation of the recoverability of real estate assets consists of the comparison of undiscounted future cash flows expected to be generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount. The Company’s undiscounted future cash flow analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates.
Given the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets is a significant assumption made by management, performing audit procedures to evaluate the reasonableness of management’s undiscounted
future cash flow analyses required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets included the following, among others:
•We tested the effectiveness of controls over management’s evaluation of the recoverability of real estate, including controls over management’s determination of the reasonableness of the applicable capitalization rates.
•Inquired with management regarding their determination of the capitalization rates, and evaluating the consistency of the capitalization rates used with evidence obtained in other areas of the audit.
•With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s estimated capitalization rates by:
•Testing the source information underlying the determination of the capitalization rates by evaluating the reasonableness of the capitalization rates used by management with independent market data, focusing on key factors, including geographical location, tenant composition, and property type.
•Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by management.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New JerseyYork, New York
February 12, 201814, 2022
We have served as the Company’s auditor since 1969.
|
| | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Amounts in thousands, except share and per share amounts) |
| |
| December 31, |
ASSETS | 2017 | | 2016 |
Real estate, at cost: | | | |
|
Land | $ | 44,971 |
| | $ | 44,971 |
|
Buildings and leasehold improvements | 988,846 |
| | 985,800 |
|
Development and construction in progress | 3,551 |
| | 2,780 |
|
Total | 1,037,368 |
| | 1,033,551 |
|
Accumulated depreciation and amortization | (283,044 | ) | | (252,737 | ) |
Real estate, net | 754,324 |
| | 780,814 |
|
Cash and cash equivalents | 307,536 |
| | 288,926 |
|
Restricted cash | 85,743 |
| | 85,752 |
|
Rego Park II loan participation | 198,537 |
| | — |
|
Marketable securities | 35,156 |
| | 37,918 |
|
Tenant and other receivables, net of allowance for doubtful accounts of $1,501 and $1,473, respectively | 2,693 |
| | 3,056 |
|
Receivable arising from the straight-lining of rents | 174,713 |
| | 179,010 |
|
Deferred lease and other property costs, net, including unamortized leasing fees to Vornado of | | | |
$35,152 and $36,960, respectively | 45,790 |
| | 48,387 |
|
Other assets | 27,903 |
| | 27,367 |
|
| $ | 1,632,395 |
| | $ | 1,451,230 |
|
| | | |
LIABILITIES AND EQUITY | | | |
Mortgages payable, net of deferred debt issuance costs | $ | 1,240,222 |
| | $ | 1,052,359 |
|
Amounts due to Vornado | 2,490 |
| | 897 |
|
Accounts payable and accrued expenses | 42,827 |
| | 42,200 |
|
Other liabilities | 2,901 |
| | 2,929 |
|
Total liabilities | 1,288,440 |
| | 1,098,385 |
|
| | | |
Commitments and contingencies |
|
| |
|
|
| | | |
Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares; | | | |
issued and outstanding, none | — |
| | — |
|
Common stock: $1.00 par value per share; authorized, 10,000,000 shares; issued, 5,173,450 shares; | | | |
outstanding, 5,107,290 and 5,106,196 shares, respectively | 5,173 |
| | 5,173 |
|
Additional capital | 31,577 |
| | 31,189 |
|
Retained earnings | 302,543 |
| | 308,995 |
|
Accumulated other comprehensive income | 5,030 |
| | 7,862 |
|
| 344,323 |
| | 353,219 |
|
Treasury stock: 66,160 and 67,254 shares, respectively, at cost | (368 | ) | | (374 | ) |
Total equity | 343,955 |
| | 352,845 |
|
| $ | 1,632,395 |
| | $ | 1,451,230 |
|
| | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Amounts in thousands, except share and per share amounts) |
| |
| December 31, |
ASSETS | 2021 | | 2020 |
Real estate, at cost: | | | |
Land | $ | 33,050 | | | $ | 44,971 | |
Buildings and leasehold improvements | 1,014,525 | | | 1,014,311 | |
Development and construction in progress | 21,851 | | | 11,761 | |
Total | 1,069,426 | | | 1,071,043 | |
Accumulated depreciation and amortization | (370,557) | | | (350,122) | |
Real estate, net | 698,869 | | | 720,921 | |
Cash and cash equivalents | 463,539 | | | 428,710 | |
Restricted cash | 19,966 | | | 21,167 | |
Marketable securities | — | | | 6,024 | |
Tenant and other receivables | 6,385 | | | 8,116 | |
Receivable arising from the straight-lining of rents | 135,457 | | | 145,274 | |
Deferred lease costs, net, including unamortized leasing fees to Vornado of | | | |
$23,943 and $27,851, respectively | 31,312 | | | 36,524 | |
Other assets | 36,437 | | | 37,402 | |
| $ | 1,391,965 | | | $ | 1,404,138 | |
| | | |
LIABILITIES AND EQUITY | | | |
Mortgages payable, net of deferred debt issuance costs | $ | 1,089,613 | | | $ | 1,156,170 | |
Amounts due to Vornado | 879 | | | 1,516 | |
Accounts payable and accrued expenses | 44,681 | | | 35,342 | |
Other liabilities | 4,203 | | | 7,882 | |
Total liabilities | 1,139,376 | | | 1,200,910 | |
| | | |
Commitments and contingencies | 0 | | 0 |
| | | |
Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares; | | | |
issued and outstanding, none | — | | | — | |
Common stock: $1.00 par value per share; authorized, 10,000,000 shares; | | | |
issued, 5,173,450 shares; outstanding, 5,107,290 shares | 5,173 | | | 5,173 | |
Additional capital | 33,415 | | | 32,965 | |
Retained earnings | 206,875 | | | 166,165 | |
Accumulated other comprehensive income (loss) | 7,494 | | | (707) | |
| 252,957 | | | 203,596 | |
Treasury stock: 66,160 shares, at cost | (368) | | | (368) | |
Total equity | 252,589 | | | 203,228 | |
| $ | 1,391,965 | | | $ | 1,404,138 | |
See notes to consolidated financial statements.
|
| | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
(Amounts in thousands, except share and per share amounts) |
| |
| Year Ended December 31, |
| 2017 | | 2016 | | 2015 |
REVENUES | | | |
| | |
Property rentals | $ | 152,857 |
| | $ | 151,444 |
| | $ | 138,688 |
|
Expense reimbursements | 77,717 |
| | 75,492 |
| | 69,227 |
|
Total revenues | 230,574 |
| | 226,936 |
| | 207,915 |
|
EXPENSES | | | | | |
Operating, including fees to Vornado of $4,671, $4,590, and $4,476, respectively | 85,127 |
| | 82,232 |
| | 76,218 |
|
Depreciation and amortization | 34,925 |
| | 33,807 |
| | 31,086 |
|
General and administrative, including management fees to Vornado of $2,380 | | | | | |
in each year | 5,252 |
| | 5,436 |
| | 5,406 |
|
Total expenses | 125,304 |
| | 121,475 |
| | 112,710 |
|
| | | | | |
OPERATING INCOME | 105,270 |
| | 105,461 |
| | 95,205 |
|
| | | | | |
Interest and other income, net | 6,716 |
| | 3,305 |
| | 5,949 |
|
Interest and debt expense | (31,474 | ) | | (22,241 | ) | | (24,239 | ) |
Income before income taxes | 80,512 |
| | 86,525 |
| | 76,915 |
|
Income tax expense | (3 | ) | | (48 | ) | | (8 | ) |
Net income | $ | 80,509 |
| | $ | 86,477 |
| | $ | 76,907 |
|
| | | | | |
Net income per common share - basic and diluted | $ | 15.74 |
| | $ | 16.91 |
| | $ | 15.04 |
|
| | | | | |
Weighted average shares outstanding- basic and diluted | 5,115,501 |
| | 5,114,084 |
| | 5,112,352 |
|
| | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
(Amounts in thousands, except share and per share amounts) |
| |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
REVENUES | | | | | |
Rental revenues | $ | 206,148 | | | $ | 199,142 | | | $ | 226,350 | |
EXPENSES | | | | | |
Operating, including fees to Vornado of $5,952, $5,429 and $5,386, respectively | (91,089) | | | (88,403) | | | (89,738) | |
Depreciation and amortization | (32,938) | | | (32,357) | | | (31,351) | |
General and administrative, including management fees to Vornado of $2,380 | | | | | |
in each year | (5,924) | | | (6,307) | | | (5,772) | |
Total expenses | (129,951) | | | (127,067) | | | (126,861) | |
| | | | | |
Interest and other income, net | 639 | | | 2,667 | | | 8,244 | |
Interest and debt expense | (19,686) | | | (24,204) | | | (38,901) | |
Change in fair value of marketable securities | 3,482 | | | (8,599) | | | (8,757) | |
Net gains on sale of real estate | 69,950 | | | — | | | — | |
Income from continuing operations | 130,582 | | | 41,939 | | | 60,075 | |
Income from discontinued operations (see Note 7) | 2,348 | | | — | | | — | |
Net income | $ | 132,930 | | | $ | 41,939 | | | $ | 60,075 | |
| | | | | |
Income per common share - basic and diluted: | | | | | |
Income from continuing operations | $ | 25.48 | | | $ | 8.19 | | | $ | 11.74 | |
Income from discontinued operations (see Note 7) | 0.46 | | | — | | | — | |
Net income per common share | $ | 25.94 | | | $ | 8.19 | | | $ | 11.74 | |
| | | | | |
Weighted average shares outstanding - basic and diluted | 5,123,613 | | | 5,120,922 | | | 5,118,198 | |
See notes to consolidated financial statements.
|
| | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(Amounts in thousands) |
| |
| Year Ended December 31, |
| 2017 | | 2016 | | 2015 |
Net income | $ | 80,509 |
| | $ | 86,477 |
| | $ | 76,907 |
|
Other comprehensive (loss) income: | | | | | |
Change in unrealized net gain on available-for-sale securities | (2,762 | ) | | (5,273 | ) | | (1,455 | ) |
Change in value of interest rate cap | (70 | ) | | 133 |
| | — |
|
Comprehensive income | $ | 77,677 |
| | $ | 81,337 |
| | $ | 75,452 |
|
| | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(Amounts in thousands) |
| |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
Net income | $ | 132,930 | | | $ | 41,939 | | | $ | 60,075 | |
Other comprehensive income (loss): | | | | | |
Change in fair value of interest rate derivatives | 8,201 | | | (658) | | | 78 | |
Comprehensive income | $ | 141,131 | | | $ | 41,281 | | | $ | 60,153 | |
See notes to consolidated financial statements.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
(Amounts in thousands) |
| | | | | | | | | | | | | |
| | | | | | | | | Accumulated Other Comprehensive Income | | | | |
| Common Stock | | Additional Capital | | Retained Earnings | | | Treasury Stock | | Total Equity |
| Shares | | Amount | | | | | |
Balance, December 31, 2014 | 5,173 |
| | $ | 5,173 |
| | $ | 30,139 |
| | $ | 299,004 |
| | $ | 14,457 |
| | $ | (374 | ) | | $ | 348,399 |
|
Net income | — |
| | — |
| | — |
| | 76,907 |
| | — |
| | — |
| | 76,907 |
|
Dividends paid | — |
| | — |
| | — |
| | (71,571 | ) | | — |
| | — |
| | (71,571 | ) |
Change in unrealized net gain | | | | | | | | | | | | | |
on available-for-sale securities | — |
| | — |
| | — |
| | — |
| | (1,455 | ) | | — |
| | (1,455 | ) |
Deferred stock unit grant | — |
| | — |
| | 600 |
| | — |
| | — |
| | — |
| | 600 |
|
Balance, December 31, 2015 | 5,173 |
|
| 5,173 |
|
| 30,739 |
|
| 304,340 |
|
| 13,002 |
|
| (374 | ) |
| 352,880 |
|
Net income | — |
| | — |
| | — |
| | 86,477 |
| | — |
| | — |
| | 86,477 |
|
Dividends paid | — |
| | — |
| | — |
| | (81,822 | ) | | — |
| | — |
| | (81,822 | ) |
Change in unrealized net gain | | | | | | | | | | | | | |
on available-for-sale securities | — |
| | — |
| | — |
| | — |
| | (5,273 | ) | | — |
| | (5,273 | ) |
Change in value of interest rate cap | — |
| | — |
| | — |
| | — |
| | 133 |
| | | | 133 |
|
Deferred stock unit grant | — |
| | — |
| | 450 |
| | — |
| | — |
| | — |
| | 450 |
|
Balance, December 31, 2016 | 5,173 |
|
| 5,173 |
|
| 31,189 |
|
| 308,995 |
|
| 7,862 |
|
| (374 | ) |
| 352,845 |
|
Net income | — |
| | — |
| | — |
| | 80,509 |
| | — |
| | — |
| | 80,509 |
|
Dividends paid | — |
| | — |
| | — |
| | (86,961 | ) | | — |
| | — |
| | (86,961 | ) |
Change in unrealized net gain | | | | | | | | | | | | | |
on available-for-sale securities | — |
| | — |
| | — |
| | — |
| | (2,762 | ) | | — |
| | (2,762 | ) |
Change in value of interest rate cap | — |
| | — |
| | — |
| | — |
| | (70 | ) | | — |
| | (70 | ) |
Deferred stock unit grant | — |
| | — |
| | 394 |
| | — |
| | — |
| | — |
| | 394 |
|
Other | — |
| | — |
| | (6 | ) | | — |
| | — |
| | 6 |
| | — |
|
Balance, December 31, 2017 | 5,173 |
|
| $ | 5,173 |
|
| $ | 31,577 |
|
| $ | 302,543 |
|
| $ | 5,030 |
|
| $ | (368 | ) |
| $ | 343,955 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
(Amounts in thousands) |
| | | | | | | | | | | | | |
| | | | | | | | | Accumulated Other Comprehensive (Loss) Income | | | | |
| Common Stock | | Additional Capital | | Retained Earnings | | | Treasury Stock | | Total Equity |
| Shares | | Amount | | | | | |
Balance, December 31, 2018 | 5,173 | | | $ | 5,173 | | | $ | 31,971 | | | $ | 248,443 | | | $ | (127) | | | $ | (368) | | | $ | 285,092 | |
Net income | — | | | — | | | — | | | 60,075 | | | — | | | — | | | 60,075 | |
Dividends paid ($18.00 per common share) | — | | | — | | | — | | | (92,124) | | | — | | | — | | | (92,124) | |
Change in fair value of interest rate derivatives | — | | | — | | | — | | | — | | | 78 | | | — | | | 78 | |
Deferred stock unit grants | — | | | — | | | 394 | | | — | | | — | | | — | | | 394 | |
Balance, December 31, 2019 | 5,173 | | | 5,173 | | | 32,365 | | | 216,394 | | | (49) | | | (368) | | | 253,515 | |
Net income | — | | | — | | | — | | | 41,939 | | | — | | | — | | | 41,939 | |
Dividends paid ($18.00 per common share) | — | | | — | | | — | | | (92,168) | | | — | | | — | | | (92,168) | |
Change in fair value of interest rate derivatives | — | | | — | | | — | | | — | | | (658) | | | — | | | (658) | |
Deferred stock unit grants | — | | | — | | | 600 | | | — | | | — | | | — | | | 600 | |
Balance, December 31, 2020 | 5,173 | | | 5,173 | | | 32,965 | | | 166,165 | | | (707) | | | (368) | | | 203,228 | |
Net income | — | | | — | | | — | | | 132,930 | | | — | | | — | | | 132,930 | |
Dividends paid ($18.00 per common share) | — | | | — | | | — | | | (92,220) | | | — | | | — | | | (92,220) | |
Change in fair value of interest rate derivatives | — | | | — | | | — | | | — | | | 8,201 | | | — | | | 8,201 | |
Deferred stock unit grants | — | | | — | | | 450 | | | — | | | — | | | — | | | 450 | |
Balance, December 31, 2021 | 5,173 | | | $ | 5,173 | | | $ | 33,415 | | | $ | 206,875 | | | $ | 7,494 | | | $ | (368) | | | $ | 252,589 | |
See notes to consolidated financial statements.
|
| | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Amounts in thousands) |
| |
| Year Ended December 31, |
| 2017 | | 2016 | | 2015 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | |
|
Net income | $ | 80,509 |
| | $ | 86,477 |
| | $ | 76,907 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization, including amortization of debt issuance costs | 38,681 |
| | 36,374 |
| | 33,671 |
|
Straight-lining of rental income | 4,297 |
| | 2,347 |
| | (1,418 | ) |
Stock-based compensation expense | 394 |
| | 450 |
| | 600 |
|
Change in operating assets and liabilities: | | | | | |
Tenant and other receivables, net | 363 |
| | 958 |
| | (1,801 | ) |
Other assets | (2,627 | ) | | (9,894 | ) | | (4,777 | ) |
Amounts due to Vornado | 1,626 |
| | (1,913 | ) | | 2,228 |
|
Accounts payable and accrued expenses | 211 |
| | 16,049 |
| | 822 |
|
Other liabilities | (28 | ) | | (28 | ) | | (31 | ) |
Net cash provided by operating activities | 123,426 |
| | 130,820 |
| | 106,201 |
|
| | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | |
Construction in progress and real estate additions | (3,434 | ) | | (15,506 | ) | | (50,121 | ) |
Rego Park II loan participation payment | (200,000 | ) | | — |
| | — |
|
Proceeds from maturing short-term investments | — |
| | — |
| | 24,998 |
|
Principal repayment proceeds from Rego Park II loan participation | 1,463 |
| | — |
| | — |
|
Net cash used in investing activities | (201,971 | ) | | (15,506 | ) | | (25,123 | ) |
| | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | |
Debt repayments | (303,707 | ) | | (3,440 | ) | | (323,193 | ) |
Proceeds from borrowing | 500,000 |
| | — |
| | 350,000 |
|
Dividends paid | (86,961 | ) | | (81,822 | ) | | (71,571 | ) |
Debt issuance costs | (12,186 | ) | | (30 | ) | | (4,075 | ) |
Net cash provided by (used in) financing activities | 97,146 |
| | (85,292 | ) | | (48,839 | ) |
| | | | | |
Net increase in cash and cash equivalents and restricted cash | 18,601 |
| | 30,022 |
| | 32,239 |
|
Cash and cash equivalents and restricted cash at beginning of year | 374,678 |
| | 344,656 |
| | 312,417 |
|
Cash and cash equivalents and restricted cash at end of year | $ | 393,279 |
| | $ | 374,678 |
| | $ | 344,656 |
|
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | | | | | |
Cash and cash equivalents at beginning of year | 288,926 |
| | 259,349 |
| | 227,815 |
|
Restricted cash at beginning of year | 85,752 |
| | 85,307 |
| | 84,602 |
|
Cash and cash equivalents and restricted cash at beginning of year | 374,678 |
| | 344,656 |
| | 312,417 |
|
| | | | | |
Cash and cash equivalents at end of year | 307,536 |
| | 288,926 |
| | 259,349 |
|
Restricted cash at end of year | 85,743 |
| | 85,752 |
| | 85,307 |
|
Cash and cash equivalents and restricted cash at end of year | 393,279 |
| | 374,678 |
| | 344,656 |
|
| | | | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | |
Cash payments for interest, excluding capitalized interest of $1,486 in 2015 | $ | 26,994 |
| | $ | 19,517 |
| | $ | 22,354 |
|
| | | | | |
NON-CASH TRANSACTIONS | | | | | |
Liability for real estate additions, including $21, $54 and $5,795 due to Vornado | | | | | |
in 2017, 2016 and 2015, respectively | $ | 705 |
| | $ | 322 |
| | $ | 10,139 |
|
Write-off of fully amortized and/or depreciated assets | 4,265 |
| | 1,691 |
| | 20,786 |
|
Change in unrealized net gain on available-for-sale securities | (2,762 | ) | | (5,273 | ) | | (1,455 | ) |
| | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Amounts in thousands) |
| |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | |
Net income | $ | 132,930 | | | $ | 41,939 | | | $ | 60,075 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization, including amortization of debt issuance costs | 34,592 | | | 35,121 | | | 36,515 | |
Straight-lining of rents | 9,817 | | | 21,102 | | | 2,413 | |
Write-off of tenant receivables | — | | | 4,122 | | | — | |
Stock-based compensation expense | 450 | | | 600 | | | 394 | |
Net gains on sale of real estate (including $2,348 from discontinued operations) | (72,298) | | | — | | | — | |
Change in fair value of marketable securities | (3,482) | | | 8,599 | | | 8,757 | |
Dividends received in stock | — | | | (214) | | | — | |
Change in operating assets and liabilities: | | | | | |
Tenant and other receivables, net | 1,731 | | | (6,146) | | | (2,017) | |
Other assets | 3,099 | | | (28,378) | | | 21,553 | |
Amounts due to Vornado | (211) | | | (402) | | | 789 | |
Accounts payable and accrued expenses | 12,501 | | | 2,361 | | | (1,800) | |
Other liabilities | (664) | | | (638) | | | (609) | |
Net cash provided by operating activities | 118,465 | | | 78,066 | | | 126,070 | |
| | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | |
Construction in progress and real estate additions | (19,520) | | | (32,460) | | | (9,449) | |
Proceeds from sales of real estate | 81,871 | | | — | | | — | |
Return of short-term investment | 3,600 | | | — | | | — | |
Proceeds from sale of marketable securities | 9,506 | | | — | | | — | |
Net cash provided by (used in) investing activities | 75,457 | | | (32,460) | | | (9,449) | |
| | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | |
Dividends paid | (92,220) | | | (92,168) | | | (92,124) | |
Debt issuance costs | (74) | | | (7,246) | | | (15) | |
Debt repayments | (68,000) | | | (50,000) | | | — | |
Proceeds from borrowings | — | | | 239,708 | | | — | |
Net cash (used in) provided by financing activities | (160,294) | | | 90,294 | | | (92,139) | |
| | | | | |
Net increase in cash and cash equivalents and restricted cash | 33,628 | | | 135,900 | | | 24,482 | |
Cash and cash equivalents and restricted cash at beginning of year | 449,877 | | | 313,977 | | | 289,495 | |
Cash and cash equivalents and restricted cash at end of year | $ | 483,505 | | | $ | 449,877 | | | $ | 313,977 | |
| | | | | |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | | | | | |
Cash and cash equivalents at beginning of year | $ | 428,710 | | | $ | 298,063 | | | $ | 283,056 | |
Restricted cash at beginning of year | 21,167 | | | 15,914 | | | 6,439 | |
Cash and cash equivalents and restricted cash at beginning of year | $ | 449,877 | | | $ | 313,977 | | | $ | 289,495 | |
| | | | | |
Cash and cash equivalents at end of year | $ | 463,539 | | | $ | 428,710 | | | $ | 298,063 | |
Restricted cash at end of year | 19,966 | | | 21,167 | | | 15,914 | |
Cash and cash equivalents and restricted cash at end of year | $ | 483,505 | | | $ | 449,877 | | | $ | 313,977 | |
| | | | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | |
Cash payments for interest | $ | 18,568 | | | $ | 22,476 | | | $ | 34,669 | |
| | | | | |
NON-CASH TRANSACTIONS | | | | | |
Liability for real estate additions, including $141, $489 and $18 for development fees due to | | | | | |
Vornado in 2021, 2020 and 2019, respectively | $ | 1,445 | | | $ | 4,955 | | | $ | 3,191 | |
Write-off of fully amortized and/or depreciated assets | 5,628 | | | 876 | | | — | |
Reclassification of prepaid real estate taxes to construction in progress for property in | | | | | |
redevelopment | — | | | — | | | 1,466 | |
Lease liability arising from the recognition of right-of-use asset | — | | | — | | | 5,428 | |
See notes to consolidated financial statements.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO).
We have seven6 properties in the greater New York City metropolitan area consisting of:
Operating properties
| |
• | 731 Lexington Avenue, a 1,311,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan. The building contains 889,000 and 174,000 of net rentable square feet of office and retail space, respectively, which we own, and 248,000 square feet of residential space consisting of 105 condominium units, which we sold. Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet) are the principal retail tenants;•731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan. The building contains 939,000 and 140,000 of net rentable square feet of office and retail space, respectively. Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant; |
| |
• | Rego Park I, a 343,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens. The center is anchored by a 195,000 square foot Sears department store, a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls. On April 4, 2017, Sears closed its store at the property. Annual revenue from Sears is approximately $10,600,000, under a lease which expires in March 2021. In its 2016 annual report on Form 10-K, Sears indicated that substantial doubt exists related to its ability to continue as a going concern;
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•Rego Park I, a 338,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens. The center is anchored by a 112,000 square foot IKEA, a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls;
•Rego Park II, a 609,000615,000 square foot shopping center, adjacent to the Rego Park I shopping center in Queens. The center is anchored by a 145,000 square foot Costco a 135,000 square foot Century 21 and a 133,000 square foot Kohl’s. In addition, 47,000 square feet is leased to Toys “R” Us/Babies “R” Us (“Toys”), a one-third owned affiliate of Vornado. On September 18, 2017, Toys filed for Chapter 11 bankruptcy relief;Kohl’s, which has been subleased;
•The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet and is 94.6% leased as of December 31, 2017;feet;
Paramus, located at the intersection of Routes 4 and 17 in Paramus, New Jersey, consists of 30.3 acres of land that is leased to IKEA Property, Inc.; and
•Flushing, a 167,000 square foot building, located aton Roosevelt Avenue and Main Street in Queens, that is sub-leased to New World Mall LLC for the remainder of our ground lease term.LLC.
Property to be developed
•Rego Park III, a 140,000 square foot land parcel adjacent to the Rego Park II shopping center in Queens, at the intersection of Junction Boulevard and the Horace Harding Service Road.
We have determined that our properties have similar economic characteristics and meet the criteria that permit the properties to be aggregated into one1 reportable segment (the leasing, management, development and redeveloping of properties in the greater New York City metropolitan area). Our chief operating decision-maker assesses and measures segment operating results based on a performance measure referred to as net operating income at the individual operating segment. Net operating income for each property represents net rental revenues less operating expenses.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation – The accompanying consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Certain prior year balances have been reclassified in order to conform to current year presentation.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Recently Issued Accounting Literature – In May 2014,March 2020, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2014-09”2020-04”) establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”)848, Reference Rate Reform. ASU 2014-09,2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as amended by subsequent ASUsreference rate reform activities occur. We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the topic, establishes a single comprehensive model for entitiescorresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to use in accounting for revenue arising from contracts with customers and supersedes mostevaluate the impact of the existing revenue recognition guidance. This standard, which is effective for interimguidance and annual reporting periodsmay apply other elections as applicable as additional changes in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. We adopted this standard effective January 1, 2018 using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. We have completed our evaluation of the standard’s impact on our revenue streams. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.market occur.
In January 2016,July 2021, the FASB issued an update (“ASU 2016-01”2021-05”) Recognition and Measurement of Financial Assets and Financial LiabilitiesLessors - Certain Leases with Variable Lease Payments to ASC Topic 825, Financial Instruments (“842, Leases (“ASC 825”842”). ASU 2016-01 amends2021-05 provides additional ASC 842 classification guidance as it relates to a lessor’s accounting for certain aspects of recognition, measurement, presentation and disclosure of financial instruments.leases with variable lease payments. ASU 2016-012021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day-one loss. ASU 2021-05 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. We adopted this standard effective January 1, 2018 using the modified retrospective approach. While the adoption of this standard requires us to continue to measure “marketable securities” at fair value at each reporting date, the changes in fair value will be recognized in current period earnings as opposed to “other comprehensive (loss) income.” As a result, on January 1, 2018 we recorded an increase to retained earnings of $5,156,000 to recognize the unrealized gains previously recorded within “accumulated other comprehensive income.” Subsequent changes in the fair value of our marketable securities will be recorded to “interest and other income, net.”
In February 2016, the FASB issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating leases. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. We are currently evaluating the overall impact of the adoption of ASU 2016-02 on our consolidated financial statements and believe that the standard will more significantly impact the accounting for leases in which we are a lessee. We will be required to record a right-of-use asset and lease liability for our Flushing property ground lease, equal to the present value of the remaining minimum lease payments, and will continue to recognize expense on a straight-line basis upon adoption of this standard. ASU 2016-02 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2018,2021, with early adoption permitted. We will adoptadopted this standard effectiveupdate on January 1, 2019 using the modified retrospective approach2022 and will elect to use the practical expedients provided by this standard.
In March 2016, the FASB issued an update (“ASU 2016-09”) Improvements to Employee Share-Based Payment Accounting to ASC Topic 718, Compensation - Stock Compensation (“ASC 718”). ASU 2016-09 amends several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 was effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. The adoption of this update as of January 1, 2017it did not have a material impact on our consolidated financial statements.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
In August 2016, the FASB issued an update (“ASU 2016-15”) Classification of Certain Cash Receipts and Cash Payments to ASC Topic 230, Statement of Cash Flows. ASU 2016-15 clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice with respect to (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017, with early adoption permitted. We elected to early adopt ASU 2016-15 effective January 1, 2017. The adoption of this standard did not have a material impact on our consolidated financial statements.
In November 2016, the FASB issued an update (“ASU 2016-18”) Restricted Cash to ASC Topic 230, Statement of Cash Flows. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of period and end of period balances on the statement of cash flows upon adoption of this standard. ASU 2016-18 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017, with early adoption permitted. We elected to early adopt ASU 2016-18 effective January 1, 2017, with retrospective application to our consolidated statements of cash flows. Accordingly, the consolidated statements of cash flows present a reconciliation of the changes in cash and cash equivalents and restricted cash. Restricted cash primarily consists of cash held in a non-interest bearing escrow account in connection with our Rego Park I 100% cash collateralized mortgage, as well as security deposits and other cash escrowed under loan agreements for debt service, real estate taxes, property insurance and capital improvements.
In February 2017, the FASB issued an update (“ASU 2017-05”) Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets to ASC Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets. ASU 2017-05 clarifies the scope of recently established guidance on nonfinancial asset derecognition, as well as the accounting for partial sales of nonfinancial assets. This update conforms the derecognition guidance on nonfinancial assets with the model for transactions in ASC 606. ASU 2017-05 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. The adoption of this standard on January 1, 2018 is not expected to have an impact on our consolidated financial statements.
In August 2017, the FASB issued an update (“ASU 2017-12”) Targeted Improvements to Accounting for Hedging Activities to ASC Topic 815, Derivatives and Hedging (“ASC 815”). ASU 2017-12 amends the hedge accounting recognition and presentation requirements in ASC 815. The update is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting and increase transparency as to the scope and results of hedge programs. ASU 2017-12 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this standard on January 1, 2019 is not expected to have a material impact on our consolidated financial statements.
Real Estate – Real estate is carried at cost, net of accumulated depreciation and amortization. As of December 31, 20172021 and 2016,2020, the carrying amount of our real estate, net of accumulated depreciation and amortization, was $754,324,000$698,869,000 and $780,814,000,$720,921,000, respectively. Maintenance and repairs are generally expensed as incurred. Depreciation requires an estimate by management of the useful life of each property and improvement as well as an allocation of the costs associated with a property to its various components. We capitalize all property operating expenses directly associated with and attributable to, the development and construction of a project, including interest expense. The capitalization period begins when development activities are underway and ends when it is determined that the asset is substantially complete and ready for its intended use, which is typically evidenced by the receipt of a temporary certificate of occupancy. General and administrative costs are expensed as incurred.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Our properties, and related intangible assets, including properties to be developed in the future, are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.asset, including an estimated terminal value calculated using an appropriate capitalization rate. Estimates of future cash flows are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. For our development properties, estimates of future cash flows also include all future expenditures necessary to develop the asset, including interest payments that will be capitalized as part of the cost of the asset. An impairment loss is recognized only if the carrying amount of the asset is not recoverable and is measured based on the excess of the property’s carrying amount over its estimated fair value. If our estimates of future cash flows, anticipated holding periods, or fair values change, based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenue Recognition– Our rental revenues include revenues from the leasing of space to tenants at our properties and revenues from parking and tenant services. We have the following revenue recognition policies:
•Lease revenues from the leasing of space to tenants at our properties. Revenues derived from base rent are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements. We commence rental revenue recognition when the underlying asset is available for use by the lessee. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Revenues derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred. As lessor, we have elected to combine the lease components (base and variable rent), non-lease components (reimbursements of common area maintenance expenses) and reimbursement of real estate taxes and insurance expenses from our operating lease agreements and account for the components as a single lease component in accordance with ASC 842.
• Parking revenue arising from the rental of parking spaces at our properties. This income is recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).
• Tenant services is revenue arising from sub-metered electric, elevator and other services provided to tenants at their request. This revenue is recognized as the services are transferred in accordance with ASC 606.
Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect substantially all of the future lease payments. We consider the tenant’s payment history and current credit status when assessing collectability. When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received. We recognize changes in the collectability assessment of our operating leases as adjustments to rental revenues.
Cash and Cash Equivalents – Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less and are carried at cost, which approximates fair value, due to their short-term maturities. The majority of our cash and cash equivalents consist of (i) deposits at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation limit, (ii) United States Treasury Bills, (iii) money market funds, which invest in United States Treasury Bills and (iv) certificates of deposit placed through an account registry service (“CDARS”). To date we have not experienced any losses on our invested cash.
Short-term Investments – Short-term investments consist of United States Treasury Bills with original maturities greater than three but less than six months. These highly liquid investments are classified as available-for-sale and are presented at fair value on our consolidated balance sheets. Prior to January 1, 2018, unrealized gains and losses resulting from these investments were included in “other comprehensive (loss) income.” Effective January 1, 2018, changes in the fair value of these investments are recognized in current period earnings in accordance with ASC 825.
Restricted Cash–Restricted cash primarily consists of cash held in a non-interest bearing escrow account in connection with our Rego Park I 100% cash collateralized mortgage, as well as security deposits and other cash escrowed under loan agreements, including for debt service, real estate taxes, property insurance and capital improvements.
Marketable Securities – Our marketable securities consist of common shares of The Macerich Company (NYSE: MAC) (“Macerich”), which are classified as available-for-sale. Available-for-sale securities are presented at fair value on our consolidated balance sheets. Prior to January 1, 2018, unrealized gains and losses resulting from the mark-to-market of these securities were included in “other comprehensive (loss) income.” Effective January 1, 2018, changes in the fair value of these securities are recognized in current period earnings in accordance with ASC 825. We evaluate our marketable securities for impairment at the end of each reporting period. If investments have unrealized losses, we evaluate the underlying cause of the decline in value and the estimated recovery period, as well as the severity and duration of the decline. In our evaluation, we consider our ability and intent to hold our investment for a reasonable period of time sufficient for us to recover our cost basis, as well as the near-term prospects for the investment in relation to the severity and duration of the decline.
Allowance for Doubtful Accounts– We periodically evaluate the collectibility of amounts due from tenants, including the receivable arising from the straight-lining of rents, and maintain an allowance for doubtful accounts ($1,501,000 and $1,473,000 as of December 31, 2017 and 2016, respectively) for estimated losses resulting from the inability of tenants to make required payments under the lease agreements. We exercise judgment in establishing these allowances and consider payment history and current credit status in developing these estimates.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Deferred Charges – Direct financing costs are deferred and amortized over the terms of the related agreements as a component of interest and debt expense. Direct costs related to leasing activities are capitalized and amortized on a straight-line basis over the lives of the related leases. All other deferred charges are amortized on a straight-line basis, which approximates the effective interest rate method, in accordance with the terms of the agreements to which they relate.
Revenue Recognition – We have the following revenue sources and revenue recognition policies:
Base Rent – revenue arising from tenant leases. These rents are recognized over the non-cancelable term of the related leases on a straight-line basis, which includes the effects of rent steps and free rent abatements under the leases. We commence rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.
Percentage Rent – revenue arising from retail tenant leases that is contingent upon the sales of tenants exceeding defined thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales thresholds have been achieved).
Expense Reimbursements – revenue arising from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective properties. This revenue is recognized in the same periods as the expenses are incurred.
Parking Income – revenue arising from the rental of parking space at our properties. This income is recognized as the service is provided.
Income Taxes – We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856 – 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to maintain our qualification as a REIT under the Code, we must distribute at least 90% of our taxable income to stockholders each year. We distribute to our stockholders 100% of our taxable income and therefore, no provision for Federal income taxes is required. Dividends distributed for the year ended December 31, 20172021 were characterized, for federal income taxes,tax purposes, as 99.5%58.3% ordinary income and 0.5%41.7% long-term capital gain income. Dividends distributed for the year ended December 31, 20162020 were characterized, for federal income taxes,tax purposes, as 97.7%100% ordinary income and 2.3% long-term capital gain income. Dividends distributed for the year ended December 31, 20152019 were categorized, for federal income tax purposes, as 97.3%99.6% ordinary income and 2.7%0.4% long-term capital gain income.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
The following table reconciles our net income to estimated taxable income attributable to our common stockholders (unaudited) for the years ended December 31, 2017, 20162021, 2020 and 2015.2019 was approximately $101,184,000, $81,375,000, and $74,079,000, respectively. The book to tax differences between net income and estimated taxable income primarily result from differences in the income recognition or deductibility of depreciation and amortization, gains or losses from the sale of real estate and other capital transactions, straight-line rent adjustments, the change in fair value of marketable securities and income from discontinued operations.
|
| | | | | | | | | | | |
(Unaudited and in thousands) | Year Ended December 31, |
| 2017 | | 2016 | | 2015 |
Net income | $ | 80,509 |
| | $ | 86,477 |
| | $ | 76,907 |
|
Straight-line rent adjustments | 4,250 |
| | 2,347 |
| | (1,418 | ) |
Depreciation and amortization timing differences | 3,084 |
| | (14,534 | ) | | 2,477 |
|
Other | (343 | ) | | 2,975 |
| | 751 |
|
Estimated taxable income | $ | 87,500 |
| | $ | 77,265 |
| | $ | 78,717 |
|
As of December 31, 2017,2021, the net basis of our assets and liabilities for tax reporting purposes arewas approximately $199,268,000$144,100,000 lower than the amount reported for financial statement purposes.
3. REVENUE RECOGNITION
The following is a summary of revenue sources for the years ended December 31, 2021, 2020 and 2019.
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
(Amounts in thousands) | | 2021 | | 2020 | | 2019 |
Lease revenues | | $ | 198,109 | | | $ | 191,416 | | | $ | 217,251 | |
Parking revenue | | 4,407 | | | 4,207 | | | 5,608 | |
Tenant services | | 3,632 | | | 3,519 | | | 3,491 | |
Rental revenues | | $ | 206,148 | | | $ | 199,142 | | | $ | 226,350 | |
The components of lease revenues for the years ended December 31, 2021, 2020 and 2019 are as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
(Amounts in thousands) | | 2021 | | 2020 | | 2019 |
Fixed lease revenues | | $ | 129,509 | | | $ | 120,395 | | | $ | 142,679 | |
Variable lease revenues | | 68,600 | | | 71,021 | | | 74,572 | |
Lease revenues | | $ | 198,109 | | | $ | 191,416 | | | $ | 217,251 | |
4. REAL ESTATE SALES
On June 4, 2021, we sold a parcel of land in the Bronx, New York (“Bronx Land Parcel”) for $10,000,000. Net proceeds from the sale were $9,291,000 after closing costs and the financial statement gain was $9,124,000.
On October 4, 2021, we sold 30.3 acres of land located in Paramus, New Jersey (“Paramus 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. Net proceeds from the sale were $4,580,000 after closing costs and the repayment of the $68,000,000 mortgage loan. The financial statement gain was $60,826,000, which was recognized in the fourth quarter of 2021.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. REGO PARK II LOAN PARTICIPATION
On July 28, 2017, we entered into a participation and servicing agreement with the lender on our Rego Park II shopping center loan, which matures on November 30, 2018. We invested $200,000,000 to participate in the loan and are entitled to interest at LIBOR plus 1.60% (3.17% as of December 31, 2017). The investment is presented as “Rego Park II loan participation” on our consolidated balance sheet as of December 31, 2017 and interest earned is recognized as “interest and other income, net” in our consolidated statement of income for the year ended December 31, 2017.
4.5. RELATED PARTY TRANSACTIONS
Vornado
As of December 31, 2017,2021, Vornado ownedowned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by, Vornado, pursuant to the agreements described below, which expire in March of each year and are automatically renewable.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2017,2021, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr. (who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.2%26.0% of our outstanding common stock, in addition to the 2.3% they2.2% they indirectly own through Vornado. Joseph Macnow, our Treasurer, is the Executive Vice President - Chief Financial Officer and Chief Administrative Officer of Vornado. Matthew Iocco, our Chief Financial Officer, is the Executive Vice President - Chief Accounting Officer of Vornado.
Management and Development Agreements
We pay Vornado an annual management fee equal to the sum of (i) $2,800,000, (ii) 2% of gross revenue from the Rego Park II shopping center, (iii) $0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue, and (iv) $306,000,$344,000, escalating at 3% per annum, for managing the common area of 731 Lexington Avenue. Vornado is also entitled to a development fee equal to 6% of development costs, as defined.
Leasing and Other Agreements
Vornado also provides us with leasing services for a fee of 3% of rent for the first ten years of a lease term, 2% of rent for the eleventh through the twentieth year of a lease term, and 1% of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by tenants. In the event third-party real estate brokers are used, the fees to Vornado increase by 1% and Vornado is responsible for the fees to the third-party real estate brokers.
Vornado is also entitled to a commission upon the sale of any of our assets equal to 3% of gross proceeds, as defined, for asset sales less than $50,000,000 and 1% of gross proceeds, as defined, for asset sales of $50,000,000 or more.more (the “Sales Agreement”).
Pursuant to the Sales Agreement, we paid a $300,000 sales commission to Vornado in the second quarter of 2021 related to the sale of the Bronx Land Parcel. In addition, we paid a $750,000 sales commission to Vornado in the fourth quarter of 2021 related to the Paramus Property sale.
We also have agreements with Building Maintenance Services, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security services at our Lexington Avenue property and (ii) security services at our Rego Park I and Rego Park II properties and The Alexander apartment tower.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. RELATED PARTY TRANSACTIONS - continued
The following is a summary of fees to Vornado under the various agreements discussed above.
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
(Amounts in thousands) | 2021 | | 2020 | | 2019 |
Company management fees | $ | 2,800 | | | $ | 2,800 | | | $ | 2,800 | |
Development fees | 141 | | | 489 | | | 29 | |
Leasing fees | 1,800 | | | 276 | | | 4,786 | |
Commission on sales of real estate | 1,050 | | | — | | | — | |
Property management, cleaning, engineering | | | | | |
and security fees | 5,540 | | | 5,051 | | | 5,015 | |
| $ | 11,331 | | | $ | 8,616 | | | $ | 12,630 | |
|
| | | | | | | | | | | |
| Year Ended December 31, |
(Amounts in thousands) | 2017 | | 2016 | | 2015 |
Company management fees | $ | 2,800 |
| | $ | 2,800 |
| | $ | 2,800 |
|
Development fees | 29 |
| | 194 |
| | 2,435 |
|
Leasing fees | 1,829 |
| | 7,401 |
| | 2,950 |
|
Property management, cleaning, engineering | | | | | |
and security fees | 4,114 |
| | 4,033 |
| | 3,614 |
|
| $ | 8,772 |
| | $ | 14,428 |
| | $ | 11,799 |
|
As of December 31, 2017,2021, the amounts due to Vornado were $1,811,000 for leasing fees; $658,000$669,000 for management, property management, cleaning, engineering and security fees; and $21,000$141,000 for development fees; and $69,000 for leasing fees. As of December 31, 2016,2020, the amounts due to Vornado were $428,000$845,000 for management, property management, cleaning, engineering and security fees; $415,000$557,000 for development fees; and $114,000 for leasing fees; and $54,000 for development fees. In January 2016, we paid an $8,916,000 leasing commission related to a lease amendment signed with Bloomberg, of which $7,200,000 was to a third party broker and $1,716,000 was to Vornado. In March 2016, we paid Vornado a development fee of $5,784,000 related to The Alexander apartment tower.
Toys
Our affiliate, Vornado, owns 32.5%
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. MARKETABLE SECURITIES
In December 2021, we sold our 564,612 common shares of Toys. Joseph Macnow, Vornado’s Executive Vice President - Chief Financial Officer and Chief Administrative Officer and Wendy A. Silverstein, a memberThe Macerich Company (“Macerich”), realizing cash proceeds of our Board$9,506,000. These shares were received in connection with the sale of Directors, represent Vornado as membersKings Plaza Regional Shopping Center (“Kings Plaza”) to Macerich in 2012. The fair value of Toys’ Board of Directors. Toys leases 47,000 square feet of retail space at our Rego Park II shopping center ($2,600,000 of annual revenue). On September 18, 2017, Toys filed for Chapter 11 bankruptcy relief. There are $694,000 of tenant improvements, $257,000 of unamortized deferred leasing costs and $544,000 of receivables arising from the straight-lining of rent on our consolidated balance sheet related to the Toys leaseshares as of December 31, 2017.
5. MARKETABLE SECURITIES
As of December 31, 2017 and 2016, we owned 535,265 common shares of Macerich. These shares have an economic cost of $56.05 per share, or $30,000,000 in the aggregate. As of December 31, 2017 and 2016, the fair value of these shares2020 was $35,156,000 and $37,918,000, respectively,$6,024,000 based on Macerich’s closing share price of $65.68$10.67 per share and $70.84 per share, respectively.share. These shares are included inwere presented at fair value as “marketable securities” on our consolidated balance sheetssheet as of December 31, 2020 and are classified as available-for-sale. Available-for-sale securities are presented at fair value on our consolidated balance sheets. Prior to January 1, 2018, unrealizedthe gains and losses resulting from the mark-to-market of these securities were included in “other comprehensive (loss) income.” Effective January 1, 2018, changes in the fair value of these securities are recognized in current period earnings in accordance with ASC 825. Other comprehensive (loss) income includes unrealized losses of $2,762,000, $5,273,000 and $1,455,000 for the years ended December 31, 2017, 2016 and 2015, respectively.earnings.
7. DISCONTINUED OPERATIONS
In October 2015,2012, when we sold Kings Plaza to Macerich, $2,348,000 of the financial statement gain was deferred since a portion of the sales price was received in Macerich common shares. In December 2021, we recognized $2,141,000the $2,348,000 gain upon the disposition of dividend incomeour Macerich common shares.
As the results related to Kings Plaza were previously classified as a result of a special dividend declared by Macerich, which is includeddiscontinued operations, we have classified the gain as a component of “interest and other income, net,” in“income from discontinued operations” on our consolidated statement of income for the year ended December 31, 2015.2021 in accordance with the provisions of ASC Topic 360, Property, Plant and Equipment.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6.8. MORTGAGES PAYABLE
On June 1, 2017, we completed a $500,000,000 refinancing of the office portion of 731 Lexington Avenue. The interest-only loan is at LIBOR plus 0.90% and matures in June 2020, with four one-year extension options. In connection therewith, we purchased an interest rate cap with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.0%. The property was previously encumbered by a $300,000,000 interest-only mortgage at LIBOR plus 0.95% which was scheduled to mature in March 2021.
The following is a summary of our outstanding mortgages payable. We may refinance our maturing debt as it comes due or choose to repay it.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Interest Rate at December 31, 2021 | | Balance at December 31, |
(Amounts in thousands) | Maturity | | | 2021 | | 2020 |
First mortgages secured by: | | | | | | | |
| | 731 Lexington Avenue, office condominium(1) | Jun. 11, 2024 | | 1.01% | | $ | 500,000 | | | $ | 500,000 | |
| | 731 Lexington Avenue, retail condominium(2) | Aug. 05, 2025 | | 1.72% | | 300,000 | | | 300,000 | |
| | Rego Park II shopping center(3) | Dec. 12, 2025 | | 1.45% | | 202,544 | | | 202,544 | |
| | The Alexander apartment tower | Nov. 01, 2027 | | 2.63% | | 94,000 | | | 94,000 | |
| | Paramus(4) | | | | | — | | | 68,000 | |
| | Total | | | | | 1,096,544 | | | 1,164,544 | |
| | Deferred debt issuance costs, net of accumulated | | | | | | | |
| | amortization of $14,551 and $13,034, respectively | | | | | (6,931) | | | (8,374) | |
| | | | | | | $ | 1,089,613 | | | $ | 1,156,170 | |
| | | | | | | | | |
(1) | | Interest at LIBOR plus 0.90%. Maturity date represents the extended maturity based on our unilateral right to extend. |
(2) | | Interest at LIBOR plus 1.40% which was swapped to a fixed rate of 1.72%. |
(3) | | Interest at LIBOR plus 1.35%. The loan balance of $252,544 as of December 31, 2020 is presented net of our participation of $50,000. On April 7, 2021, we used our participation in this loan to reduce the loan balance to $202,544. |
|
(4) | | On October 4, 2021, the mortgage loan was repaid in connection with the sale of the property. See Note 4 - Real Estate Sales for further details. |
|
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
| | | | | | | | | | | | | |
| | | | | Interest Rate at December 31, 2017 | | Balance at December 31, |
(Amounts in thousands) | Maturity(1) | | | 2017 | | 2016 |
First mortgages secured by: | | | | | | | |
| | Rego Park I shopping center (100% cash | Mar. 2018 | | 0.35% | | $ | 78,246 |
| | $ | 78,246 |
|
| | collateralized) | | | | | | | |
| | Paramus | Oct. 2018 | | 2.90% | | 68,000 |
| | 68,000 |
|
| | Rego Park II shopping center(2) | Nov. 2018 | | 3.42% | | 256,194 |
| | 259,901 |
|
| | 731 Lexington Avenue, retail space(3) | Aug. 2022 | | 2.78% | | 350,000 |
| | 350,000 |
|
| | 731 Lexington Avenue, office space(4) | Jun. 2024 | | 2.38% | | 500,000 |
| | 300,000 |
|
| | Total | | | | | 1,252,440 |
| | 1,056,147 |
|
| | Deferred debt issuance costs, net of accumulated | | | | | | | |
| | amortization of $6,315 and $6,824, respectively | | | | | (12,218 | ) | | (3,788 | ) |
| | | | | | | $ | 1,240,222 |
| | $ | 1,052,359 |
|
| | | | | | | | | |
(1) | | Represents the extended maturity where we have the unilateral right to extend. |
(2) | | This loan bears interest at LIBOR plus 1.85%. See page 47 for details of our Rego Park II loan participation. |
(3) | | This loan bears interest at LIBOR plus 1.40%. |
(4) | | This loan bears interest at LIBOR plus 0.90%. | | | | | | | |
8. MORTGAGES PAYABLE - continued
All of our debt is secured by mortgages and/or pledges of the stock of the subsidiaries holding the properties. The net carrying value of real estate collateralizing the debt amounted to $640,025,000$629,134,000 as of December 31, 2017.2021. Our existing financing documents contain covenants that limit our ability to incur additional indebtedness on these properties, and in certain circumstances, provide for lender approval of tenants’ leases and yield maintenance to prepay them. As of December 31, 2017,2021, the principal repayments (based on the extended loan maturity dates) for the next five years and thereafter are as follows:
| | | | | | | | |
(Amounts in thousands) | | |
Year Ending December 31, | | Amount |
2022 | | $ | — | |
2023 | | — | |
2024 | | 500,000 | |
2025 | | 502,544 | |
2026 | | — | |
Thereafter | | 94,000 | |
|
| | | | |
(Amounts in thousands) | | |
Year Ending December 31, | | Amount |
2018 | | $ | 402,440 |
|
2019 | | — |
|
2020 | | — |
|
2021 | | — |
|
2022 | | 350,000 |
|
Thereafter | | 500,000 |
|
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7.9. FAIR VALUE MEASUREMENTS
ASC Topic 820, Fair Value Measurement and Disclosures (“ASC 820”) defines fair value and establishes a framework for measuring fair value.ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.
Financial Assets and Liabilities Measured at Fair Value
Financial assets measured at fair value on our consolidated balance sheets as of December 31, 2017 and 20162021 consist of marketable securities,an interest rate swap which areis presented in the table below based on theirits level in the fair value hierarchy, and an interest rate cap, whichthe fair value of which was insignificant as of December 31, 2017 and 2016.2021. There were no financial liabilities measured at fair value as of December 31, 2017 and 2016.2021.
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2021 |
(Amounts in thousands) | Total | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | |
Interest rate swap (included in other assets) | $ | 7,545 | | | $ | — | | | $ | 7,545 | | | $ | — | |
| | | | | | | |
Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2020 consist of marketable securities, which are presented in the table below based on their level in the fair value hierarchy, and an interest rate cap, which fair value was insignificant as of December 31, 2020. Financial liabilities measured at fair value as of December 31, 2020 consist of an interest rate swap, which is presented in the table below based on its level in the fair value hierarchy. |
|
|
|
| As of December 31, 2020 |
(Amounts in thousands) | Total | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | |
Marketable securities | $ | 6,024 | | | $ | 6,024 | | | $ | — | | | $ | — | |
Liabilities: | | | | | | | |
Interest rate swap (included in other liabilities) | $ | 667 | | | $ | — | | | $ | 667 | | | $ | — | |
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
| | | | | | | | | | | | | |
| As of December 31, 2017 |
(Amounts in thousands) | Total | | Level 1 | | Level 2 | | Level 3 |
Marketable securities | $ | 35,156 |
| | $ | 35,156 |
| | — |
| | — |
|
| | | | | | | |
| As of December 31, 2016 |
(Amounts in thousands) | Total | | Level 1 | | Level 2 | | Level 3 |
Marketable securities | $ | 37,918 |
| | $ | 37,918 |
| | — |
| | — |
|
9. FAIR VALUE MEASUREMENTS - continued
Financial Assets and Liabilities not Measured at Fair Value
Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents the Rego Park II loan participation and mortgages payable. Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities and are classified as Level 1. The fair valuesvalue of the Rego Park II loan participation and our mortgages payable areis calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist, and areis classified as Level 2. The table below summarizes the carrying amount and fair value of these financial instruments as of December 31, 20172021 and 2016.2020.
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2021 | | As of December 31, 2020 |
| Carrying | | Fair | | Carrying | | Fair |
(Amounts in thousands) | Amount | | Value | | Amount | | Value |
Assets: | | | | | | | |
Cash equivalents | $ | 427,601 | | | $ | 427,601 | | | $ | 393,070 | | | $ | 393,070 | |
Liabilities: | | | | | | | |
Mortgages payable (excluding deferred debt issuance costs, net) | $ | 1,096,544 | | | $ | 1,064,122 | | | $ | 1,164,544 | | | $ | 1,130,000 | |
|
| | | | | | | | | | | | | | | |
| As of December 31, 2017 | | As of December 31, 2016 |
| Carrying | | Fair | | Carrying | | Fair |
(Amounts in thousands) | Amount | | Value | | Amount | | Value |
Assets: | | | | | | | |
Cash equivalents | $ | 273,914 |
| | $ | 273,914 |
| | $ | 256,370 |
| | $ | 256,370 |
|
Rego Park II loan participation | 198,537 |
| | 198,000 |
| | — |
| | — |
|
| 472,451 |
| | 471,914 |
| | 256,370 |
| | 256,370 |
|
Liabilities: | | | | | | | |
Mortgages payable (excluding deferred debt issuance costs, net) | $ | 1,252,440 |
| | $ | 1,239,000 |
| | $ | 1,056,147 |
| | $ | 1,045,000 |
|
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8.10. LEASES
As Lessor
We lease space to tenants under operating leases in an office building and in retail centers. The rental terms range from approximately 5 to 25 years. The leases provide for the payment of fixed base rents payable monthly in advance as well as reimbursements of real estate taxes, insurance and maintenance costs. Retail leases may also provide for the payment by the lessee of additional rents based on a percentage of their sales. We also lease residential space at The Alexander apartment tower with 1 or 2 year lease terms.
Future base rental revenueundiscounted cash flows under theseour contractual non-cancelable operating leases isare as follows:
|
| | | | |
(Amounts in thousands) | | |
| | |
Year Ending December 31, | | Amount |
2018 | | $ | 144,712 |
|
2019 | | 138,649 |
|
2020 | | 136,536 |
|
2021 | | 119,962 |
|
2022 | | 111,533 |
|
Thereafter | | 783,019 |
|
| | | | | | | | |
(Amounts in thousands) | | As of December 31, 2021 |
For the year ending December 31, | | |
2022 | | $ | 135,951 | |
2023 | | 132,490 | |
2024 | | 139,897 | |
2025 | | 129,384 | |
2026 | | 126,360 | |
Thereafter | | 389,894 | |
These future minimum amounts do not include reimbursements or additional rents based on a percentage of retail tenants’ sales. These rents were $174,000, $182,000 and $94,000, respectively, for the years ended December 31, 2017, 2016 and 2015.
Bloomberg accounted for revenue of $105,224,000, $104,590,000$113,140,000, $109,066,000, and $94,468,000,$109,113,000 in the years ended December 31, 2017, 20162021, 2020 and 2015,2019, respectively, representing approximately 46%55%, 46%55% and 45%48% of our totalrental revenues in each year, respectively. No other tenant accounted for more than 10% of our totalrental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. LEASES - continued
As Lessee
We are a tenantthe lessee under a long-term ground lease at our Flushing property, classified as an operating lease, which expires in 2027 and has one1 10-year extension option. As of December 31, 2021, the right-of-use asset of $3,394,000 and the lease liability of $3,602,000, are included in “other assets” and “other liabilities,” respectively, on our consolidated balance sheet. The discount rate applied to measure the right-of-use asset and lease liability is based on the incremental borrowing rate (“IBR”) for the property of 4.53%. We considered the general economic environment and factored in various financing and asset specific adjustments so that the IBR was appropriate to the intended use of the underlying lease. As we did not elect to apply hindsight, the lease term assumption determined under ASC Topic 840, Leases was carried forward and applied in calculating our lease liability recorded under ASC 842.
Future lease payments under this operating lease, excluding the extension option, are as follows:
| | | | | | | | |
(Amounts in thousands) | | As of December 31, 2021 |
For the year ending December 31, | | |
2022 | | $ | 800 | |
2023 | | 800 | |
2024 | | 800 | |
2025 | | 800 | |
2026 | | 800 | |
Thereafter | | — | |
Total undiscounted cash flows | | 4,000 | |
Present value discount | | (398) | |
Lease liability as of December 31, 2021 | | $ | 3,602 | |
|
| | | | |
(Amounts in thousands) | | |
| | |
Year Ending December 31, | | Amount |
2018 | | $ | 800 |
|
2019 | | 800 |
|
2020 | | 800 |
|
2021 | | 800 |
|
2022 | | 800 |
|
Thereafter | | 3,267 |
|
We recognize rent expense as a component of “operating” expenses on our consolidated statements of income on a straight-line basis. Rent expense was $746,000 in each of the years ended December 31, 2017, 20162021, 2020 and 2015.
2019, respectively. Cash paid for rent expense was $800,000 in each of the years ended December 31, 2021, 2020 and 2019, respectively.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9.11. STOCK-BASED COMPENSATION
We account for stock-based compensation in accordance with ASC 718.Topic 718, Compensation – Stock Compensation (“ASC 718”). Our 2016 Omnibus Stock Plan (the “Plan”) provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, deferred stock units (“DSUs”) and performance shares, as defined, to the directors, officers and employees of the Company and Vornado.
OnIn May 18, 2017,2021, we granted each of the members of our Board of Directors 183284 DSUs with a market value of $75,000 per grant. The grant date fair value of these awards was $56,250 per grant, or $394,000$450,000 in the aggregate.aggregate, in accordance with ASC 718. The DSUs entitle the holders to receive shares of the Company’s common stock without the payment of any consideration. The DSUs vested immediately and accordingly, were expensed on the date of grant, but the shares of common stock underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Company’s Board of Directors. As of December 31, 2017,2021, there were 8,692 17,188DSUs outstanding and 497,095 488,599shares were available for future grant under the Plan.
10.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. COMMITMENTS AND CONTINGENCIES
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties.
properties and excluding communicable disease coverage.
Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Program Reauthorization Act of 2002, as amended to date and which expires inhas been extended through December 2020.2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $293,000$287,500 deductible ($306,000 effective January 1, 2018) and 17%20% of the balance (18% effective January 1, 2018) of a covered loss, and the Federal government is responsible for the remaining 83% (82% effective January 1, 2018)80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.terrorism or other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material.
OurThe principal amounts of our mortgage loans are non-recourse to us and the loans contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, ifIf lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.
Tenant Matters
On April 4, 2017, Sears closed its 195,000 square foot store at our Rego Park I property. Annual revenue from Sears is approximately $10,600,000, under a lease which expires in March 2021. In its 2016 annual report on Form 10-K, Sears indicated that substantial doubt exists related to its ability to continue as a going concern. There are $3,865,000 of receivables arising from the straight-lining of rent and $406,000 of unamortized deferred leasing costs on our consolidated balance sheet related to the Sears lease as of December 31, 2017 which we will continue to assess for recoverability.
On September 19, 2017, the bankruptcy court approved the terms of an order stipulation between Le Cirque, a restaurant operator which leases 13,000 square feet at our 731 Lexington Avenue property (approximately $1,200,000 of annual revenue), and the Company which terminated the lease on January 5, 2018 (original lease expiration was May 2021). As a result, we began accelerating depreciation and amortization of approximately $2,780,000 of tenant improvements and deferred leasing costs over the new lease term, of which approximately $2,650,000 was recognized in the year ended December 31, 2017 and approximately $130,000 will be recognized in the quarter ending March 31, 2018.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMITMENTS AND CONTINGENCIES - continued
Rego Park I Litigation
In June 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to spacethe 195,000 square foot store that Sears leasesformerly leased at our Rego Park I property alleging that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two2 fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage. Sears asserted various causes of actions for damages and sought to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a nuisance that Sears claims was a cause of the water intrusions into its premises. In addition to injunctive relief, Sears sought, among other things, damages of not less than $4 million$4,000,000 and future damages it estimated would not be less than $25 million.$25,000,000. In March 2016, Sears withdrew its claim for future damages leaving a remaining claim for property damages, which we estimate to be approximately $650,000 based on information provided by Sears. We intend to defend the remaining claim vigorously. The amount or range of reasonably possible losses, if any, is not expected to be greater than $650,000. On October 15, 2018, Sears filed for Chapter 11 bankruptcy relief resulting in an automatic stay of this case. Both parties have filed motions for summary judgment and in November 2021, the parties stipulated to lift the stay to allow the motions to be decided by the court.
Paramus
In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage loan with a fixed rate of 2.90%, which matures on October 5, 2018. The annual triple-net rent is the sum of $700,000 plus the amount of debt service on the mortgage loan. If the purchase option is exercised, we will receive net cash proceeds of approximately $7,000,000 and recognize a gain on sale of land of approximately $60,000,000. If the purchase option is not exercised, the triple-net rent for the last 20 years would include debt service sufficient to fully amortize $68,000,000 over the remaining 20 years lease term.
Letters of Credit
Approximately $1,474,000Approximately $960,000 of standby letters of credit were issued and outstanding as of December 31, 2017.2021.
Other
In October 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an additional $22,910,000 of transfer taxes (including interest and penalties as of December 31, 2017) in connection with the sale of Kings Plaza Regional Shopping Center in November 2012. We believe that the NYC DOF’s claim is without merit and intend to vigorously contest this assessment. We have determined that the likelihood of a loss related to this issue is not probable and, after consultation with legal counsel, that the outcome of this assessment is not expected to have a material adverse effect on our financial position, results of operations or cash flows.
We received approximately $396,000, $825,000 and $2,100,000 from bankruptcy recoveries during the years ended December 31, 2017, 2016 and 2015, respectively, which is included as “interest and other income, net” in our consolidated statements of income.
There are various other legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. MULTIEMPLOYER BENEFIT PLANS
Our subsidiaries make contributions to certain multiemployer defined benefit plans (“Multiemployer Pension Plans”) and health plans (“Multiemployer Health Plans”) for our union represented employees, pursuant to the respective collective bargaining agreements.
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. MULTIEMPLOYER BENEFIT PLANS - continued
Multiemployer Pension Plans
Multiemployer Pension Plans differ from single-employer pension plans in that (i) contributions to multiemployer plans may be used to provide benefits to employees of other participating employers and (ii) if other participating employers fail to make their contributions, each of our subsidiaries may be required to bear their pro rata share of unfunded obligations. If a participating subsidiary withdraws from a plan in which it participates, it may be subject to a withdrawal liability. As of December 31, 2017,2021, our subsidiaries’ participation in these plans were not significant to our consolidated financial statements.
In the years ended December 31, 2017, 20162021, 2020 and 20152019 our subsidiaries contributed $162,000, $147,000 $217,000, $191,000 and $144,000,$172,000, respectively, towards Multiemployer Pension Plans. Our subsidiaries’ contributions did not represent more than 5% of total employer contributions in any of these plans for the years ended December 31, 2017, 20162021, 2020 and 2015.2019.
Multiemployer Health Plans
Multiemployer Health Plans in which our subsidiaries participate provide health benefits to eligible active and retired employees. In the years ended December 31, 2017, 20162021, 2020 and 20152019 our subsidiaries contributed $619,000, $539,000$748,000, $672,000 and $554,000,$686,000, respectively, towards these plans.
12.14. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted income per share, including a reconciliation of net income and the number of shares used in computing basic and diluted income per share. Basic income per share is determined using the weighted average shares of common stock (including DSUs) outstanding during the period. Diluted income per share is determined using the weighted average shares of common stock (including DSUs) outstanding during the period, and assumes all potentially dilutive securities were converted into common shares at the earliest date possible. There were no potentially dilutive securities outstanding during the years ended December 31, 2017, 20162021, 2020 and 2015.2019.
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
(Amounts in thousands, except share and per share amounts) | 2021 | | 2020 | | 2019 |
Income from continuing operations | $ | 130,582 | | | $ | 41,939 | | | $ | 60,075 | |
Income from discontinued operations (see Note 7) | 2,348 | | | — | | | — | |
Net income | $ | 132,930 | | | $ | 41,939 | | | $ | 60,075 | |
| | | | | |
Weighted average shares outstanding – basic and diluted | 5,123,613 | | | 5,120,922 | | | 5,118,198 | |
| | | | | |
Income from continuing operations | $ | 25.48 | | | $ | 8.19 | | | $ | 11.74 | |
Income from discontinued operations (see Note 7) | 0.46 | | | — | | | — | |
Net income per common share – basic and diluted | $ | 25.94 | | | $ | 8.19 | | | $ | 11.74 | |
| | | | | |
| | | | | |
|
| | | | | | | | | | | |
| For the Year Ended December 31, |
(Amounts in thousands, except share and per share amounts) | 2017 | | 2016 | | 2015 |
Net income | $ | 80,509 |
| | $ | 86,477 |
| | $ | 76,907 |
|
| | | | | |
Weighted average shares outstanding – basic and diluted | 5,115,501 |
| | 5,114,084 |
| | 5,112,352 |
|
| | | | | |
Net income per common share – basic and diluted | $ | 15.74 |
| | $ | 16.91 |
| | $ | 15.04 |
|
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
|
| | | | | | | | | | | | | | | | |
| | | | | | Net Income Per Common Share(1) |
| (Amounts in thousands, except per share amounts) | Revenues | | Net Income | | Basic | | Diluted |
| 2017 | | | | | | | |
| December 31 | $ | 58,061 |
| | $ | 17,883 |
| | $ | 3.50 |
| | $ | 3.50 |
|
| September 30 | 58,094 |
| | 20,299 |
| | 3.97 |
| | 3.97 |
|
| June 30 | 57,190 |
| | 20,660 |
| | 4.04 |
| | 4.04 |
|
| March 31 | 57,229 |
| | 21,667 |
| | 4.24 |
| | 4.24 |
|
| | | | | | | | |
| 2016 | | | | | | | |
| December 31 | $ | 57,253 |
| | $ | 21,655 |
| | $ | 4.23 |
| | $ | 4.23 |
|
| September 30 | 57,120 |
| | 21,036 |
| | 4.11 |
| | 4.11 |
|
| June 30 | 57,005 |
| | 21,767 |
| | 4.26 |
| | 4.26 |
|
| March 31 | 55,558 |
| | 22,019 |
| | 4.31 |
| | 4.31 |
|
_______________________ | | | | | | | |
(1) | The total for the year may differ from the sum of the quarters as a result of weighting. |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures – Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.
Internal Control Over Financial Reporting – There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The management of Alexander’s, Inc., together with its consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
As of December 31, 2017,2021, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 20172021 is effective.
The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 20172021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on page 5859 of thisthis Annual Report on Form 10-K, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.2021.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of
Alexander’s, Inc.
Paramus, New Jersey
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Alexander’s, Inc. and subsidiaries (the “Company”) as of December 31, 2017,2021, based on criteria established in Internal Control - — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2021, based on criteria established in Internal Control -— Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2017,2021, of the Company and our report dated February 12, 2018,14, 2022, expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New JerseyYork, New York
February 12, 201814, 2022
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information relating to our directors, including our audit committee and audit committee financial expert, will be contained in a definitive Proxy Statement involving the election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. We will file the Proxy Statement with the Securities and Exchange Commission no later than 120 days after December 31, 2017.2021. Such information is incorporated by reference herein. Also incorporated herein by reference is the information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement.
Executive Officers of the Registrant
The following is a list of the names, ages, principal occupations and positions with us of our executive officers and the positions held by such officers during the past five years.
|
| | | | | | | | | | | | | |
| | | | PRINCIPAL OCCUPATION, POSITION AND OFFICE |
Name | | Age | | (Current and during past five years with the Company unless otherwise stated) |
Steven Roth | | 7680 | | Chairman of the Board since May 2004 and Chief Executive Officer since March 1995; Chairman of the Board of Vornado Realty Trust since May 1989; Chief Executive Officer of Vornado Realty Trust since April 2013 and from May 1989 to May 2009; a Trustee of Vornado Realty Trust since 1979; and Managing General Partner of Interstate Properties. |
Matthew IoccoGary Hansen | | 4744 | | Chief Financial Officer since April 2017; Executive Vice President - Chief Accounting Officer of Vornado Realty Trust since May 2015; andNovember 2021; Senior Vice President - Chief Accounting Officer of Vornado Realty Trust& Controller from January 2018 to October 2021; and Vice President & Controller from May 20122015 to May 2015.December 2017. |
We have a code of business conduct and ethics that applies to, among others, our Chief Executive Officer and Chief Financial Officer. The code is posted on our website at www.alx-inc.com. We intend to satisfy our disclosure obligation regarding amendments and waivers of this code applicable to our Chief Executive Officer and Chief Financial Officer by posting such information on our website.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information relating to security ownership of certain beneficial owners and management and related stockholder matters, except as set forth below, will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
Equity Compensation Plan Information
The following table provides information as of December 31, 2017,2021, regarding our equity compensation.
| | | | | | | | | | | | | | | | | | | | |
Plan Category | | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
Equity compensation plans approved by security holders | | 17,188 | | | $ | — | | | 488,599 | |
Equity compensation plans not approved by security holders | | N/A | | N/A | | N/A |
Total | | 17,188 | | | $ | — | | | 488,599 | |
|
| | | | | | | | | | |
Plan Category | | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
Equity compensation plans approved by security holders | | 8,692 |
| | $ | — |
| | 497,095 |
|
Equity compensation plans not approved by security holders | | N/A |
| | N/A |
| | N/A |
|
Total | | 8,692 |
| | $ | — |
| | 497,095 |
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information relating to certain relationships and related transactions and director independence will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information relating to principal accounting fees and services will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10-K.
1. The consolidated financial statements are set forth in Item 8 of this Annual Report on Form 10-K.
2. The following financial statement schedulesschedule should be read in conjunction with the financial statements included in Item 8 of this Annual Report on Form 10-K.
|
| | | | |
| Pages in this Annual Report
on Form 10-K
|
Schedule II – Valuation and Qualifying Accounts – years ended | |
December 31, 2017, 2016 and 2015 | |
| |
Schedule III – Real Estate and Accumulated Depreciation as of | |
December 31, 2017, 20162021, 2020 and 20152019 | 63-64 |
All other financial statement schedules are omitted because they are not applicable, not required, or the information is included elsewhere in the consolidated financial statements or the notes thereto.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
SCHEDULE III |
REAL ESTATE AND ACCUMULATED DEPRECIATION |
|
December 31, 2021 |
(Amounts in thousands) |
| | | | | | | | | | | | | | | |
COLUMN A | COLUMN B | | COLUMN C | | COLUMN D | | COLUMN E | | COLUMN F | | COLUMN G | | COLUMN H | | COLUMN I |
| | | | | | | Gross Amount at Which | | | | | | | | Life on which Depreciation in Latest Income Statement is Computed |
| | | Initial Cost to Company(1) | | Costs Capitalized Subsequent to Acquisition | | Carried at Close of Period | | Accumulated Depreciation and Amortization | | | | | |
| | | | | Buildings and Leasehold Improvements | | | | | Buildings and Leasehold Improvements | | Development and Construction In Progress | | | | | | | | |
| | | | | | | | | | | | | | Date of Construction | | Date Acquired(1) | |
Description | Encumbrances(2) | | Land | | | | Land | | | | Total(3) | | | | |
Rego Park I | $ | — | | | $ | 1,647 | | | $ | 8,953 | | | $ | 90,499 | | | $ | 1,647 | | | $ | 87,988 | | | $ | 11,464 | | | $ | 101,099 | | | $ | 41,036 | | | 1959 | | 1992 | | 3-39 years |
Rego Park II | 202,544 | | | 3,127 | | | 1,467 | | | 390,067 | | | 3,127 | | | 390,090 | | | 1,444 | | | 394,661 | | | 122,234 | | | 2009 | | 1992 | | 3-40 years |
The Alexander apartment tower | 94,000 | | | — | | | — | | | 119,112 | | | — | | | 119,112 | | | — | | | 119,112 | | | 24,499 | | | 2016 | | 1992 | | 3-39 years |
Rego Park III | — | | | 779 | | | — | | | 8,256 | | | 779 | | | 526 | | | 7,730 | | | 9,035 | | | 361 | | | N/A | | 1992 | | 5-15 years |
Flushing | — | | | — | | | 1,660 | | | (107) | | | — | | | 1,553 | | | — | | | 1,553 | | | 1,205 | | | 1975(4) | | 1992 | | N/A |
Lexington Avenue | 800,000 | | | 14,432 | | | 12,355 | | | 417,179 | | | 27,497 | | | 415,256 | | | 1,213 | | | 443,966 | | | 181,222 | | | 2003 | | 1992 | | 9-39 years |
TOTAL | $ | 1,096,544 | | | $ | 19,985 | | | $ | 24,435 | | | $ | 1,025,006 | | | $ | 33,050 | | | $ | 1,014,525 | | | $ | 21,851 | | | $ | 1,069,426 | | | $ | 370,557 | | | | | | | |
| |
(1) Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations). |
(2) Excludes deferred debt issuance costs, net of $6,931. |
(3) The net basis of the Company’s assets and liabilities for tax purposes is approximately $144,100 lower than the amount reported for financial statement purposes. |
(4) Represents the date the lease was acquired. |
|
| | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
SCHEDULE II |
VALUATION AND QUALIFYING ACCOUNTS |
(Amounts in thousands) |
| | | | | | | | |
Column A | | Column B | | Column C | | Column D | | Column E |
Description | | Balance at Beginning of Year | | Additions: Charged Against Operations | | Deductions: Uncollectible Accounts Written Off | | Balance |
Allowance for doubtful accounts: | | | | | | | | |
Year Ended December 31, 2017 | | $ | 1,473 |
| | $ | 53 |
| | $ | (25 | ) | | $ | 1,501 |
|
| | | | | | | | |
Year Ended December 31, 2016 | | $ | 918 |
| | $ | 557 |
| | $ | (2 | ) | | $ | 1,473 |
|
| | | | | | | | |
Year Ended December 31, 2015 | | $ | 1,544 |
| | $ | (314 | ) | | $ | (312 | ) | | $ | 918 |
|
| | | | | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
SCHEDULE III |
REAL ESTATE AND ACCUMULATED DEPRECIATION |
(Amounts in thousands) |
| | December 31, |
| | 2021 | | 2020 | | 2019 |
REAL ESTATE: | | | | | | |
Balance at beginning of period | | $ | 1,071,043 | | | $ | 1,041,342 | | | $ | 1,027,691 | |
Changes during the period: | | | | | | |
Land | | (11,921) | | | — | | | — | |
Buildings and leasehold improvements | | 5,842 | | | 31,134 | | | 5,579 | |
Development and construction in progress | | 10,090 | | | (557) | | | 8,072 | |
| | 1,075,054 | | | 1,071,919 | | | 1,041,342 | |
Less: Fully depreciated assets | | (5,628) | | | (876) | | | — | |
Balance at end of period | | $ | 1,069,426 | | | $ | 1,071,043 | | | $ | 1,041,342 | |
| | | | | | |
ACCUMULATED DEPRECIATION: | | | | | | |
Balance at beginning of period | | $ | 350,122 | | | $ | 324,499 | | | $ | 297,421 | |
Additions charged to operating expenses | | 26,063 | | | 26,499 | | | 27,078 | |
| | 376,185 | | | 350,998 | | | 324,499 | |
Less: Fully depreciated assets | | (5,628) | | | (876) | | | — | |
Balance at end of period | | $ | 370,557 | | | $ | 350,122 | | | $ | 324,499 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
SCHEDULE III |
REAL ESTATE AND ACCUMULATED DEPRECIATION |
|
December 31, 2017 |
(Amounts in thousands) |
| | | | | | | | | | | | | | | |
COLUMN A | COLUMN B | | COLUMN C | | COLUMN D | | COLUMN E | | COLUMN F | | COLUMN G | | COLUMN H | | COLUMN I |
| | | | | | | Gross Amount at Which | | | | | | | | Life on which Depreciation in Latest Income Statement is Computed |
| | | Initial Cost to Company(2) | | Costs Capitalized Subsequent to Acquisition | | Carried at Close of Period | | Accumulated Depreciation and Amortization | | | | | |
| | | | | Buildings and Leasehold Improvements | | | | | Buildings and Leasehold Improvements | | Development and Construction In Progress | | | | | | | | |
| | | | | | | | | | | | | | Date of Construction | | Date Acquired(2) | |
Description | Encumbrances(1) | | Land | | | | Land | | | | Total(3) | | | | |
New York, NY | | | | | | | | | | | | | | | | | | | | | | | |
Rego Park I | $ | 78,246 |
| | $ | 1,647 |
| | $ | 8,953 |
| | $ | 53,390 |
| | $ | 1,647 |
| | $ | 62,268 |
| | $ | 75 |
| | $ | 63,990 |
| | $ | 33,073 |
| | 1959 | | 1992 | | 3-39 years |
Rego Park II | 256,194 |
| | 3,127 |
| | 1,467 |
| | 388,890 |
| | 3,127 |
| | 390,118 |
| | 239 |
| | 393,484 |
| | 83,963 |
| | 2009 | | 1992 | | 3-40 years |
The Alexander apartment tower | — |
| | — |
| | — |
| | 119,112 |
| | — |
| | 119,112 |
| | — |
| | 119,112 |
| | 9,856 |
| | 2016 | | 1992 | | 3-39 years |
Rego Park III | — |
| | 779 |
| | — |
| | 3,740 |
| | 779 |
| | 503 |
| | 3,237 |
| | 4,519 |
| | 228 |
| | N/A | | 1992 | | 5-15 years |
Flushing | — |
| | — |
| | 1,660 |
| | (107 | ) | | — |
| | 1,553 |
| | — |
| | 1,553 |
| | 968 |
| | 1975(4) | | 1992 | | N/A |
Lexington Avenue | 850,000 |
| | 14,432 |
| | 12,355 |
| | 416,002 |
| | 27,497 |
| | 415,292 |
| | — |
| | 442,789 |
| | 154,956 |
| | 2003 | | 1992 | | 9-39 years |
Paramus, NJ | 68,000 |
| | 1,441 |
| | — |
| | 10,313 |
| | 11,754 |
| | — |
| | — |
| | 11,754 |
| | — |
| | N/A | | 1992 | | N/A |
| | | | | | | | | | | | | | | | | | | | | | | |
Other Properties | — |
| | 167 |
| | 1,804 |
| | (1,804 | ) | | 167 |
| | — |
| | — |
| | 167 |
| | — |
| | N/A | | 1992 | | N/A |
TOTAL | $ | 1,252,440 |
| | $ | 21,593 |
| | $ | 26,239 |
| | $ | 989,536 |
| | $ | 44,971 |
| | $ | 988,846 |
| | $ | 3,551 |
| | $ | 1,037,368 |
| | $ | 283,044 |
| | | | | | |
| |
(1) Excludes deferred debt issuance costs, net of $12,218. |
(2) Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations). |
(3) The net basis of the Company’s assets and liabilities for tax purposes is approximately $199,268 lower than the amount reported for financial statement purposes. |
(4) Represents the date the lease was acquired. |
|
| | | | | | | | | | | | |
ALEXANDER’S, INC. AND SUBSIDIARIES |
SCHEDULE III |
REAL ESTATE AND ACCUMULATED DEPRECIATION |
(Amounts in thousands) |
| | December 31, |
| | 2017 | | 2016 | | 2015 |
REAL ESTATE: | | | | | | |
Balance at beginning of period | | $ | 1,033,551 |
| | $ | 1,029,472 |
| | $ | 993,927 |
|
Changes during the period: | | | | | | |
Land | | — |
| | — |
| | — |
|
Buildings and leasehold improvements | | 3,046 |
| | 12,464 |
| | 112,538 |
|
Development and construction in progress | | 771 |
| | (6,706 | ) | | (65,803 | ) |
| | 1,037,368 |
| | 1,035,230 |
| | 1,040,662 |
|
Less: Fully depreciated assets | | — |
| | (1,679 | ) | | (11,190 | ) |
Balance at end of period | | $ | 1,037,368 |
| | $ | 1,033,551 |
| | $ | 1,029,472 |
|
ACCUMULATED DEPRECIATION: | | | | | | |
Balance at beginning of period | | $ | 252,737 |
| | $ | 225,533 |
| | $ | 210,025 |
|
Additions charged to operating expenses | | 30,307 |
| | 28,883 |
| | 26,698 |
|
| | 283,044 |
| | 254,416 |
| | 236,723 |
|
Less: Fully depreciated assets | | — |
| | (1,679 | ) | | (11,190 | ) |
Balance at end of period | | $ | 283,044 |
| | $ | 252,737 |
| | $ | 225,533 |
|
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES - continued
|
| | | | | | | | | | | | | | | | |
Exhibit No. | | | | | |
| | - | Amended and Restated Certificate of Incorporation. Incorporated herein by reference from Exhibit 3.1 to the registrant’s Registration Statement on Form S-3 filed on September 20, 1995 | * | |
| | | | | |
| | - | By-laws, as amended. Incorporated herein by reference from Exhibit 3(ii) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 | * | |
| | | | | |
10.1 | | - | Description of the Alexander’s, Inc. securities registered pursuant to Section 12 of the Securities Exchange Act | *** | |
| | | | | |
10.1 | | - | Real Estate Retention Agreement dated as of July 20, 1992, between Vornado Realty Trust and Keen Realty Consultants, Inc., each as special real estate consultants, and the Company. Incorporated herein by reference from Exhibit 10(i)(O) to the registrant’s Annual Report on Form 10-K for the fiscal year ended July 25, 1992 | * | |
| | | | | |
| | - | Extension Agreement to the Real Estate Retention Agreement, dated as of February 6, 1995, between the Company and Vornado Realty Trust. Incorporated herein by reference from Exhibit 10(i)(G)(2) to the registrant’s Annual Report on Form 10-K for the year ended December 31, 1994 | * | |
| | | | | |
| | - | Agreement of Lease dated as of April 30, 2001 between Seven Thirty One Limited Partnership, landlord, and Bloomberg L.P., tenant. Incorporated herein by reference from Exhibit 10(v) B to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, filed on August 2, 2001 | * | |
| | | | | |
| | - | Lease dated as of October 2, 2001 by and between ALX of Paramus LLC, as Landlord, and IKEA Property, Inc. as Tenant. Incorporated herein by reference from Exhibit 10(v)(C)(4) to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2001, filed on March 13, 2002 | * | |
| | | | | |
| | - | First Amendment to Real Estate Retention Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc. and Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10(i)(E)(3) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | | | |
| | - | 59th Street Real Estate Retention Agreement, dated as of July 3, 2002, by and between Vornado Realty, L.P., 731 Residential LLC and 731 Commercial LLC. Incorporated herein by reference from Exhibit 10(i)(E)(4) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | | | |
| | - | Amended and Restated Management and Development Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10(i)(F)(1) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | | | |
| | - | Limited Liability Company Operating Agreement of 731 Residential LLC, dated as of July 3, 2002, among 731 Residential Holding LLC, as the sole member, Domenic A. Borriello, as an Independent Manager and Kim Lutthang, as an Independent Manager. Incorporated herein by reference from Exhibit 10(i)(A)(1) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | | | |
| | - | Limited Liability Company Operating Agreement of 731 Commercial LLC, dated as of July 3, 2002, among 731 Commercial Holding LLC, as the sole member, Domenic A. Borriello, as an Independent Manager and Kim Lutthang, as an Independent Manager. Incorporated herein by reference from Exhibit 10(i)(A)(2) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | | | |
| | - | Reimbursement Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc., 731 Commercial LLC, 731 Residential LLC and Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10(i)(C)(8) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | ___________________ | | |
| * | | Incorporated by reference. | | |
| | | | | |
|
| | | | | |
| | | | | |
| | - | First Amendment of Lease, dated as of April 19, 2002, between Seven Thirty One Limited Partnership, landlord and Bloomberg L.P., tenant. Incorporated herein by reference from Exhibit 10(v)(B)(2) to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002, filed on August 7, 2002 | * | |
| | | ___________________ | | |
| * | | Incorporated by reference. | | |
| *** | | Filed herewith. | | |
| | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | |
| | - | Second Amendment to Real Estate Retention Agreement, dated as of January 1, 2007, by and between Alexander’s, Inc. and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.64 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 26, 2007 | * | |
| | | | | |
| | - | Amendment to 59th Street Real Estate Retention agreement, dated as of January 1, 2007, by and among Vornado Realty L.P., 731 Retail One LLC, 731 Restaurant LLC, 731 Office One LLC and 731 Office Two LLC. Incorporated herein by reference from Exhibit 10.65 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 26, 2007 | * | |
| | | | | |
| | - | First Amendment to Amended and Restated Management and Development Agreement, dated as of July 6, 2005, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.52 to the registrant’s Annual Report on Form 10-K, for the year ended December 31, 2007, filed on February 25, 2008 | * | |
| | | | | |
| | - | Second Amendment to Amended and Restated Management and Development Agreement, dated as of December 20, 2007, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.53 to the registrant’s Annual Report on Form 10-K, for the year ended December 31, 2007, filed on February 25, 2008 | * | |
| | | | | |
| | - | Third Amendment to Real Estate Retention Agreement, dated as of December 20, 2007, by and between Alexander’s, Inc., and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.55 to the registrant’s Annual Report on Form 10-K, for the year ended December 31, 2007, filed on February 25, 2008 | * | |
| | | | | |
| | - | Loan Agreement dated as of March 10, 2009 between Alexander’s Rego Park Shopping Center Inc., as Borrower and U.S. Bank National Association, as Lender. Incorporated herein by reference from Exhibit 10.55 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 4, 2009 | * | |
| | | | | |
| | - | Amended and Restated Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rentals by and between Alexander’s Rego Shopping Center, Inc. as Borrower and U.S. Bank National Association as Lender, dated as of March 10, 2009. Incorporated herein by reference from Exhibit 10.56 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 4, 2009 | * | |
| | | | | |
| | - | Amended and Restated Promissory Note dated as of March 10, 2009, by Alexander’s Rego Shopping Center Inc., in favor of U.S. Bank National Association. Incorporated herein by reference from Exhibit 10.57 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 4, 2009 | * | |
| | | | | |
| | - | Cash Pledge Agreement dated as of March 10, 2009, executed by Alexander’s Rego Shopping Center Inc. to and for the benefit of U.S. Bank National Association. Incorporated herein by reference from Exhibit 10.58 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 4, 2009 | * | |
| | | | | |
| | - | Lease dated as of February 7, 2005, by and between 731 Office One LLC, as Landlord, and Citibank, N.A., as Tenant. Incorporated herein by reference from Exhibit 10.59 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 4, 2009 | * | |
| | | | | |
| | - | Assignment and Assumption and Consent Agreement, dated as of March 25, 2009, by and between 731 Office One LLC, as Landlord, Citicorp North America, Inc., as Assignor, and Bloomberg L.P., as Assignee. Incorporated herein by reference from Exhibit 10.60 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 4, 2009 | * | |
| | | __________________ | | |
| * | | Incorporated by reference. | | |
|
| | | | | |
| | | | | |
| | - | Third Amendment to Amended and Restated Management and Development Agreement, dated as of November 30, 2011, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.49 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27, 2012 | * | |
| | | | | |
| | - | Loan and Security Agreement, dated November 30, 2011, by and between Rego II Borrower LLC, as Borrower, and the Lender. Incorporated herein by reference from Exhibit 10.50 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27, 2012 | * | |
| | | | | |
| | - | Consolidated, Amended and Restated Promissory Note, dated November 30, 2011, by and between Rego II Borrower LLC, as Maker, and the Lender. Incorporated herein by reference from Exhibit 10.51 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27, 2012 | * | |
| | | | | |
| | - | Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents and Security Agreement, dated November 30, 2011, by and between Rego II Borrower LLC, as Mortgagor, and the Mortgagee. Incorporated herein by reference from Exhibit 10.52 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27, 2012
| * | |
| | | | | |
| | - | Guarantee of Recourse Carveouts, dated November 30, 2011, by Alexander’s, Inc., as Guarantor, to and for the benefit of the Lender. Incorporated herein by reference from Exhibit 10.53 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27, 2012 | * | |
| | | | | |
| | - | Environmental Indemnity Agreement, dated November 30, 2011, among Rego II Borrower LLC and Alexander’s, Inc., individually or collectively as Indemnitor, in favor of the Lender. Incorporated herein by reference from Exhibit 10.54 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27, 2012 | * | |
| | | | | |
| | - | First Omnibus Loan Modification and Extension Agreement dated March 12, 2012 by and between Alexander’s Rego Shopping Center, Inc., as Borrower and U.S. Bank National Association, as Lender. Incorporated herein by reference from Exhibit 10.55 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 7, 2012 | * | |
| | | | | |
| | - | Mortgage Modification Agreement dated March 12, 2012 by and between Alexander’s Rego Shopping Center, Inc., as Mortgagor and U.S. Bank National Association, as Mortgagee. Incorporated herein by reference from Exhibit 10.56 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 7, 2012 | * | |
| | | | | |
| | - | First Amendment and Modification of Loan and Security Agreement and Other Loan Documents, dated as of June 20, 2012 by and between Rego II Borrower LLC, as Borrower, and the Lender. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed on August 6, 2012 | * | |
| | | | | |
| | - | Fourth Amendment to Amended and Restated Management and Development Agreement, dated as of August 1, 2012, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.2 to the registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed on November 1, 2012 | * | |
| | | | | |
| | - | Contribution Agreement and Joint Escrow Instructions, dated as of October 21, 2012, by and between Alexander’s Kings Plaza LLC, Alexander’s of Kings LLC and Kings Parking LLC, and Brooklyn Kings Plaza LLC. Incorporated herein by reference from Exhibit 10.53 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, filed on February 26, 2013 | * | |
| | | __________________ | | |
| * | | Incorporated by reference. | | |
| | | | | |
| | | | | |
|
| | | | | |
| | - | Fifth Amendment to Amended and Restated Management and Development Agreement, dated as of December 1, 2012, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.54 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, filed on February 26, 2013 | * | |
| | | | | |
| | - | Second Omnibus Loan Modification and Extension Agreement, dated March 8, 2013, by and between Alexander’s Rego Shopping Center, Inc., as Borrower and U.S. Bank National Association, as Lender. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed on May 6, 2013 | * | |
| | | | | |
| | - | Second Mortgage Modification Agreement, dated March 8, 2013, by and between Alexander’s Rego Shopping Center, Inc., as Mortgator and U.S. Bank National Association, as Mortgagee. Incorporated herein by reference from Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed on May 6, 2013 | * | |
| | | | | |
| | - | Second Amendment and Modification of Loan Agreement and Other Loan Documents and Ratification of Guarantor, dated November 15, 2013, by and between Rego II Borrower LLC, as Borrower, and the Lender. Incorporated herein by reference from Exhibit 10.60 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 24, 2014 | * | |
| | | | | |
| | - | Partial Release of Mortgage, dated November 15, 2013, by and between Rego II Borrower LLC, as Mortgagor, and the Mortgagee. Incorporated herein by reference from Exhibit 10.61 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 24, 2014 | * | |
| | | | | |
| | - | Partial Release of Assignment of Leases and Rents, dated November 15, 2013, by and between Rego II Borrower LLC, as Assignor, and the Assignee. Incorporated herein by reference from Exhibit 10.62 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 24, 2014 | * | |
| | | | | |
| | - | Loan Agreement, date as of February 28, 2014, by and between 731 Office One LLC, as Borrower, and German American Capital Corporation, as Lender. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Consolidated, Amended and Restated Promissory Note, dated as of February 28, 2014, by and between 731 Office One LLC, as Borrower, and German American Capital Corporation, as Lender. Incorporated herein by reference from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Amended and Restated Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of February 28, 2014, by and between 731 Office One LLC, as Mortgagor, and German American Capital Corporation, as Mortgagee. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Assignment of Leases and Rents dated as of February 28, 2014, by and between 731 Office One LLC, as Assignor, and German American Capital Corporation, as Assignee. Incorporated herein by reference from Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Guaranty of Recourse Obligations dated as of February 28, 2014, by and between Alexander’s, Inc., as Guarantor, and German American Capital Corporation, as Lender. Incorporated herein by reference from Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Environmental Indemnity Agreement dated as of February 28, 2014, by and between 731 Office One LLC, as Indemnitor, and German American Capital Corporation, as Indemnitee. Incorporated herein by reference from Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | __________________
| | |
| * | | Incorporated by reference. | | |
| | | | | |
|
| | | | | |
| | - | Termination Agreement dated as of February 28, 2014, by and among 731 Office One LLC, Alexander’s Management LLC, Vornado Realty L.P., 731 Office Two LLC, 731 Residential LLC, 731 Commercial LLC, 731 Retail One LLC and 731 Restaurant LLC. Incorporated herein by reference from Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Real Estate Sub-Retention Agreement dated as of February 28, 2014, by and between Alexander’s Management LLC, as Agent, and Vornado Realty L.P., as Sub-Agent. Incorporated herein by reference from Exhibit 10.8 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | __________________ | | |
| * | | Incorporated by reference. | | |
| | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | |
| | - | Sixth Amendment to Amended and Restated Management and Development Agreement, dated as of March 21, 2014, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.9 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Rego Park II Residential Management and Development Agreement, dated as of March 21, 2014 by and between Alexander’s of Rego Residential LLC and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.10 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 5, 2014 | * | |
| | | | | |
| | - | Fourth Amendment to Real Estate Retention Agreement, dated December 22, 2014 by and between Alexander’s, Inc. and Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10.56 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17, 2015 | * | |
| | | | | |
| | - | Second Amendment to 59th Street Real Estate Retention Agreement, dated December 22, 2014 by and between 731 Retail One LLC, 731 Restaurant LLC, 731 Office Two LLC and Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10.57 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17, 2015 | * | |
| | | | | |
| | - | First Amendment to Rego II Real Estate Sub-RententionSub-Retention Agreement, dated December 22, 2014 by and between Alexander’s, Inc. and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.58 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17, 2015 | * | |
| | | | | |
| | - | First Amendment to Real-Estate Sub-Retention Agreement, dated December 22, 2014 by and between Alexander’s Management LLC and Vornado Realty, L.P. Incorporated herein by reference from Exhibit 10.59 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17, 2015 | * | |
| | | | | |
| | - | Third Omnibus Loan Modification and Extension Agreement, dated March 10, 2015, by and between Alexander’s Rego Shopping Center, Inc., as Borrower and U.S. Bank National Association, as Lender. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 4, 2015 | * | |
| | | | | |
| | - | Third Mortgage Modification Agreement, dated March 10, 2015, by and between Alexander’s Rego Shopping Center, Inc., as Mortgator and U. S. Bank National Association, as Mortgagee. Incorporated herein by reference from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 4, 2015 | * | |
| | | | | |
| | - | Loan Agreement, dated as of August 5, 2015, by and between 731 Retail One LLC and 731 Commercial LLC, as Borrower, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Landesbank Baden-Württemberg, New York Branch, as Lenders. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 2, 2015 | * | |
| | | | | |
| + | - | Second Amendment of Lease, dated as of the 12th of January 2016 between 731 Office One LLC and Bloomberg L.P. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 2, 2016 | * | |
| | | __________________ | | |
| * | | Incorporated by reference. | | |
| + | | Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission under Rule 24b-2. The omitted confidential material has been filed separately. The location of the redacted confidential information is indicated in the exhibit as “redacted.” | | |
|
| | | | | |
| ** | - | Four Omnibus Loan Modification and Extension Agreement, dated and made effective as of March 8, 2016, by and between Alexanders Rego Shopping Center and U.S. Bank National Association. Incorporated herein by reference from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 2, 2016 | * | |
| | | | | |
| | - | Fourth Mortgage Modification Agreement, dated and made effective as of March 8, 2016, by and between Alexander’s Rego Shopping Center and U.S. Bank National Association. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 2, 2016 | * | |
| | | | | |
| ** | - | Form of Alexander’s Inc. 2016 Omnibus Stock Plan Deferred Stock Unit Grant Agreement between the Company and certain employees. Incorporated herein by reference from Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed on August 1, 2016 | * | |
| | | | | |
| | - | Loan Agreement, dated as of June 1, 2017, between 731 Office One LLC, as Borrower, and Deutsche Bank AG, New York Branch and Citigroup Global Markets Realty Corp. collectively, as Lender. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on July 31, 2017
| * | |
| | | | | |
| | - | Amended and Restated Loan and Security Agreement, dated and made effective as of December 12, 2018, by and between Rego II Borrower LLC, as Borrower, and Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.55 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019 | * | |
| | | __________________ | | |
| * | | Incorporated by reference. | | |
| ** | | Management contract or compensatory agreement. | | |
| + | | Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission under Rule 24b-2. The omitted confidential material has been filed separately. The location of the redacted confidential information is indicated in the exhibit as “redacted.” | | |
| | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | |
| | - | Second Amended and Restated Promissory Note, dated December 12, 2018, by and between Rego II Borrower LLC, as Maker, and Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.56 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019 | * | |
| | | | | |
| | - | Second Amended and Restated Mortgage, Assignment of Leases and Rents and Security Agreement, dated December 12, 2018, by and between Rego II Borrower LLC, as Mortgagor, and Bank of China, New York Branch, as Mortgagee. Incorporated herein by reference from Exhibit 10.57 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019 | * | |
| | | | | |
| | - | Amended and Restated Guaranty of Recourse Carveouts, dated December 12, 2018, by Alexander’s, Inc., as Guarantor, to and for the benefit of Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.58 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019 | * | |
| | | | | |
| | - | Amended and Restated Environmental Indemnity Agreement, dated December 12, 2018, among Rego II Borrower LLC and Alexander’s, Inc., individually or collectively as Indemnitor, in favor of Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.59 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019 | * | |
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| | - | Amended and Restated Participation and Servicing Agreement for Amended and Restated Loan and Security Agreement, dated July 28, 2017,December 12, 2018, between Bank of China, New York Branch, individually as Lender, Initial A-1 Holder and as the Agent for the Holders, and Alexander’s of Rego Park II Participating Lender LLC, individually as Initial A-2 Holder. Incorporated herein by reference from Exhibit 10.60 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 11, 2019 | * | |
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| | - | Waiver and Amendment No. 1 to Loan Agreement, dated October 10, 2019, by and among 731 Retail One LLC and 731 Commercial LLC, as Borrower, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Landesbank Baden-Württemberg, New York Branch, as Lenders. Incorporated herein by reference from Exhibit 10.61 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 18, 2020 | * | |
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| | - | First Amendment to Amended and Restated Loan and Security Agreement, dated February 14, 2020, by and between Rego II Borrower LLC, as Borrower and Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 4, 2020 | * | |
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| | - | Amendment and Reaffirmation of Guaranty and Environmental Indemnity Agreement, dated February 14, 2020, by and between Alexander’s, Inc., as Guarantor, and Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 4, 2020 | * | |
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| | - | Second Amended and Restated Participation and Servicing Agreement for Amended and Restated Loan and Security Agreement, dated February 14, 2020, between Bank of China, New York Branch, individually as Lender, Initial A-1 Holder and as the Agent for the Holders, and Alexander’s of Rego Park II Participating Lender LLC, individually as Initial A-2 Holder. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 4, 2020 | * | |
| | | | | |
| | - | Omnibus Amendment to Loan Documents and Reaffirmation of Borrower and Guarantor, dated September 14, 2020, by and between 731 Retail One LLC and 731 Commercial LLC as Borrower, Alexander’s, Inc. as Guarantor, JPMorgan Chase Bank, N.A. as Administrative Agent on behalf of the Lenders, and the Lenders. Incorporated herein by reference from Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on November 2, 2020 | * | |
| | | __________________ | | |
| * | | Incorporated by reference. | | |
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| | | | | |
| | | | | | | | | | | | | | | | | |
| | - | Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated September 14, 2020, by and between 731 Retail One LLC and 731 Commercial LLC as mortgagor and JPMorgan Chase Bank, N.A. as mortgagee and as Administrative Agent for the benefit of the Lenders. Incorporated herein by reference from Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017,2020, filed on October 30, 2017
November 2, 2020 | * | |
| | | | | |
| | - | ComputationInterest Guaranty, dated September 14, 2020, made by Alexander’s, Inc. as Guarantor to JPMorgan Chase Bank, N.A. as Administrative Agent for the benefit of Ratiosthe Lenders. Incorporated herein by reference from Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on November 2, 2020 | *** | |
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| | - | Leasing Costs Guaranty, dated September 14, 2020, made by Alexander’s, Inc. as Guarantor to JPMorgan Chase Bank, N.A. as Administrative Agent for the benefit of the Lenders. Incorporated herein by reference from Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on November 2, 2020 | * | |
| | | | | |
| | - | Second Amendment to Amended and Restated Loan and Security Agreement, dated October 23, 2020, by and between Rego II Borrower LLC, as Borrower and Bank of China, New York Branch, as Lender. Incorporated herein by reference from Exhibit 10.53 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on February 16, 2021 | * | |
| | | | | |
| | - | Subsidiaries of Registrant | *** | |
| | | | | |
| | - | Consent of Independent Registered Public Accounting Firm | *** | |
| | | | | |
| | - | Rule 13a-14 (a) Certification of the Chief Executive Officer | *** | |
| | | | | |
| | - | Rule 13a-14 (a) Certification of the Chief Financial Officer | *** | |
| | | | | |
| | - | Section 1350 Certification of the Chief Executive Officer | *** | |
| | | | | |
| | - | Section 1350 Certification of the Chief Financial Officer | *** | |
| | | | | |
101.INS101 | | - | XBRL Instance DocumentThe following financial information from the Alexander’s, Inc. Annual Report on Form 10-K for the year ended December 31, 2021 formatted in Inline Extensible Business Reporting Language (iXBRL) includes: (i) consolidated balance sheets, (ii) consolidated statements of income, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of changes in equity, (v) consolidated statements of cash flows and (vi) the notes to the consolidated financial statements | *** | |
| | | | | |
101.SCH104 | | - | XBRL Taxonomy Extension SchemaThe cover page from the Alexander’s, Inc. Annual Report on Form 10-K for the year ended December 31, 2021, formatted as iXBRL and contained in Exhibit 101 | *** | |
| | | __________________ | | |
101.CAL | * | - | XBRL Taxonomy Extension Calculation Linkbase | *** | |
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101.DEF | | - | XBRL Taxonomy Extension Definition Linkbase | *** | |
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101.LAB | | - | XBRL Taxonomy Extension Label Linkbase | *** | |
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101.PRE | | - | XBRL Taxonomy Extension Presentation Linkbase | *** | |
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| | | __________________ | | |
| * | | Incorporated by reference. | | |
| ** | | Management contract or compensatory agreement. | | |
| *** | | Filed herewith. | | |
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | | | | | | | | | | | | | | | |
| | | ALEXANDER’S, INC. | |
| | | | (Registrant) | |
| | | | | |
| | | | | |
| Date: February 12, 201814, 2022 | By: | | /s/ Matthew IoccoGary Hansen | |
| | | | Matthew Iocco,Gary Hansen, Chief Financial Officer | |
| | | | | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | | | | | |
By: | /s/Steven Roth | | Chairman of the Board of Directors and | | February 14, 2022 |
| | (Steven Roth) | | | Chief Executive Officer | | |
| | | | | (Principal Executive Officer) | | |
| | | | | | | | |
By: | /s/Gary Hansen | | Chief Financial Officer
| | February 14, 2022 |
| | (Gary Hansen) | | | (Principal Financial and Accounting Officer)
| | |
| | | | | | | |
| | | | | | | | |
By: | /s/Thomas R. DiBenedetto | | Director | | February 14, 2022 |
| | (Thomas R. DiBenedetto) | | | | | | |
| | | | | | | | |
By: | /s/David Mandelbaum | | Director | | February 14, 2022 |
| | (David Mandelbaum) | | | | | | |
| | | | | | | | |
By: | Signature/s/Mandakini Puri | | TitleDirector | | DateFebruary 14, 2022 |
| | (Mandakini Puri) | | | | | | |
By: | /s/Steven Roth | | Chairman of the Board of Directors and | | February 12, 2018 | | | |
By: | | (Steven Roth) | | | Chief Executive Officer | | |
| | | | | (Principal Executive Officer) | | |
| | | | | | | | |
By: | /s/Matthew Iocco | | Chief Financial Officer
| | February 12, 2018 |
| | (Matthew Iocco) | | | (Principal Financial and Accounting Officer)
| | |
| | | | | | | |
| | | | | | | | |
By: | /s/Thomas R. DiBenedetto | | Director | | February 12, 2018 |
| | (Thomas R. DiBenedetto) | | | | | | |
| | | | | | | | |
By: | /s/David Mandelbaum | | Director | | February 12, 2018 |
| | (David Mandelbaum) | | | | | | |
| | | | | | | | |
By: | /s/Wendy Silverstein | | Director | | February 12, 201814, 2022 |
| | (Wendy Silverstein) | | | | | | |
| | | | | | | | |
By: | /s/Arthur Sonnenblick | | Director | | February 12, 201814, 2022 |
| | (Arthur Sonnenblick) | | | | | | |
| | | | | | | | |
By: | /s/Richard R. West | | Director | | February 12, 201814, 2022 |
| | (Richard R. West) | | | | | | |
| | | | | | | | |
By: | /s/Russell B. Wight Jr. | | Director | | February 12, 201814, 2022 |
| | (Russell B. Wight Jr)Jr.) | | | | | | |