Vornado Announces PENN 1 Ground Rent Reset Determination
Rhea-AI Summary
Vornado Realty Trust (NYSE:VNO) has received a determination regarding the ground rent for its PENN 1 land parcel. A panel has set the annual rent at $15 million for the 25-year term starting June 17, 2023. However, ongoing litigation in New York County Supreme Court could impact this determination.
If the fee owner prevails in the litigation, the annual rent would increase to $20.22 million, applied retroactively to June 17, 2023. As a result of the panel's determination, Vornado will reverse approximately $17.2 million of previously accrued rent expense and will continue to accrue based on the $15 million annual rent until the litigation is resolved.
Positive
- Ground rent determined at $15 million annually, lower than the potential $20.22 million
- Company will reverse $17.2 million in previously accrued rent expense
Negative
- Ongoing litigation could increase annual rent to $20.22 million retroactively
- Court denied Vornado's motion to dismiss the legal action
News Market Reaction
On the day this news was published, VNO gained 3.34%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
NEW YORK, April 22, 2025 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE:VNO) announced today that the panel appointed to determine the ground rent payable by Vornado’s subsidiary for the PENN 1 land parcel for the 25-year period beginning June 17, 2023 has determined that the annual rent payable during the current 25-year term will be
Further, litigation is currently pending between the parties in New York County Supreme Court relating to the matter. To date, the court denied the Vornado subsidiary’s motion to dismiss the action and Vornado’s subsidiary has filed a notice of appeal. The panel’s decision provides that if the fee owner prevails in a final judgment in the ongoing litigation, the annual rent for the 25-year term will be
In connection with the panel’s determination, Vornado will reverse approximately
Vornado Realty Trust is a fully-integrated equity real estate investment trust.
CONTACT
Thomas J. Sanelli
(212) 894-7000
Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this press release. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024. Currently, some of the factors are the increased interest rates and inflation on our business, financial condition, results of operations, cash flows, operating performance and the effect that these factors have had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general.
FAQ
What is the new annual ground rent determined for Vornado's PENN 1 property?
How much could VNO's PENN 1 ground rent increase if the fee owner wins the litigation?
What is the financial impact of the PENN 1 ground rent determination on VNO?
What is the duration of the new ground rent term for VNO's PENN 1 property?
