Vornado & Alexander's: Navigating Inflation & Interest Rates in Q4 2024

As the fourth quarter of 2024 comes to a close, real estate investment trusts (REITs) like Vornado Realty Trust (VNO) and Alexander's, Inc. (ALX) have faced challenges from rising interest rates and inflation. These macroeconomic factors have impacted their financial performance, but both companies have implemented strategies to mitigate these effects.

Vornado Realty Trust, a prominent REIT with a diversified portfolio, has seen its interest expense increase due to higher interest rates. In the Q4 2024 earnings conference call, the company discussed the impact of rising rates on its financial performance. To combat this, Vornado has focused on maintaining a strong balance sheet and diversifying its funding sources. By accessing the equity market for capital raising and optimizing its debt portfolio, Vornado has been able to manage the increased borrowing costs.



Alexander's, Inc., another REIT with a focus on retail properties, has also felt the pressure of inflation. The company reported a decrease in funds from operations (FFO) per diluted share in Q4 2024 compared to the same period in 2023. To mitigate the effects of inflation, Alexander's has implemented rent increases and focused on properties with strong demand and resilient tenants. Additionally, the company has diversified its property portfolio to include sectors less sensitive to inflation, such as healthcare or data centers.



Both Vornado and Alexander's have taken steps to address the challenges posed by rising interest rates and inflation. By diversifying funding sources, maintaining strong balance sheets, and optimizing debt portfolios, Vornado has been able to manage increased borrowing costs. Similarly, Alexander's has implemented rent increases, focused on resilient tenants, and diversified its property portfolio to mitigate the effects of inflation.

In conclusion, REITs like Vornado and Alexander's have faced challenges from rising interest rates and inflation in Q4 2024. However, by employing strategic measures to address these macroeconomic factors, both companies have been able to navigate these challenges and maintain their financial performance. Investors should consider these strategies when evaluating REITs in the current market environment.