VNO

Vornado is a concentrated New York City landlord — approximately 78% of 2025 NOI from office properties and 88% from the New York metro area, per the 10-K. FY2025 looks dramatically improved on the surface: net income jumped to $905M (+1,185.7%) and diluted EPS to $4.20, against revenue that was essentially flat at $1.81B (+1.3%). That disconnect is the tell — the earnings surge is driven by gains/non-recurring items, not operating growth (operating margin held around 32%). The cleaner signal is operating cash flow of $1.26B (+134.0%) and meaningful deleveraging, with total liabilities down 11.3% and long-term debt down 11.8% to $2.26B.

The structural backdrop is the central risk. Management explicitly flags work-from-home, hybrid schedules and even AI-driven changes in tenant space utilization as headwinds, with tenants becoming more selective toward high-quality, transit-adjacent Class A buildings — exactly the assets that require heavy landlord capex to maintain. The NYC concentration cuts both ways: it is among the strongest-recovering office markets, but it is a single-market bet exposed to the city's economy, tourism and fiscal health.