alx-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from:						to


Commission File Number:			001-06064

ALEXANDERS INC

(Exact name of registrant as specified in its charter)

Delaware

51-0100517

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

210 Route 4 East,

Paramus,

New Jersey

07652

(Address of principal executive offices)

(Zip Code)


(201)			587-8541

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1 par value per share

ALX

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


☐	Large Accelerated Filer	☑	Accelerated Filer
☐	Non-Accelerated Filer	☐	Smaller Reporting Company
		☐	Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of June 30, 2022, there were 5,107,290 shares of common stock, par value $1 per share, outstanding.

ALEXANDER’S, INC.

INDEX


		Page Number
PART I.	Financial Information

Item 1.	Financial Statements:

	Consolidated Balance Sheets (Unaudited) as of June 30, 2022 and December 31, 2021	4

	Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended June 30, 2022 and 2021	5

	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2022 and 2021	6

	Consolidated Statements of Changes in Equity (Unaudited) for the Three and Six Months Ended June 30, 2022 and 2021	7

	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2022 and 2021	8

	Notes to Consolidated Financial Statements (Unaudited)	9

	Report of Independent Registered Public Accounting Firm	14

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22

Item 4.	Controls and Procedures	22

PART II.	Other Information

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Mine Safety Disclosures	23

Item 5.	Other Information	23

Item 6.	Exhibits	23

Exhibit Index		24

Signatures		25

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands, except share and per share amounts)


	As of
ASSETS	June 30, 2022		December 31, 2021
Real estate, at cost:
Land	$	33,050	$	33,050
Buildings and leasehold improvements	1,023,598		1,014,525
Development and construction in progress	16,738		21,851
Total	1,073,386		1,069,426
Accumulated depreciation and amortization	(383,309)		(370,557)
Real estate, net	690,077		698,869
Cash and cash equivalents	310,349		463,539

Restricted cash	19,149		19,966

Investments in U.S. Treasury bills	197,369		—
Tenant and other receivables	4,407		6,385
Receivable arising from the straight-lining of rents	131,509		135,457
Deferred leasing costs, net, including unamortized leasing fees to Vornado of $23,726 and $23,943, respectively	30,573		31,312
Other assets	41,819		36,437
	$	1,425,252	$	1,391,965


LIABILITIES AND EQUITY
Mortgages payable, net of deferred debt issuance costs	$	1,090,360	$	1,089,613
Amounts due to Vornado	981		879
Accounts payable and accrued expenses	63,527		44,681

Other liabilities	20,468		4,203
Total liabilities	1,175,336		1,139,376

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 shares	5,173		5,173
Additional capital	33,865		33,415
Retained earnings	190,101		206,875
Accumulated other comprehensive income	21,145		7,494
	250,284		252,957
Treasury stock: 66,160 shares, at cost	(368)		(368)
Total equity	249,916		252,589
	$	1,425,252	$	1,391,965

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(Amounts in thousands, except share and per share amounts)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
REVENUES
Rental revenues	$	49,824	$	51,388	$	99,039	$	107,541
EXPENSES
Operating, including fees to Vornado of $1,536, $1,489, $2,914 and $3,049, respectively	(21,372)		(23,422)		(42,914)		(47,222)
Depreciation and amortization	(7,413)		(8,132)		(14,764)		(16,674)
General and administrative, including management fees to Vornado of $610, $595, $1,220 and $1,190, respectively	(1,916)		(1,823)		(3,385)		(3,366)
Total expenses	(30,701)		(33,377)		(61,063)		(67,262)

Interest and other income, net	1,173		151		1,267		323
Interest and debt expense	(5,482)		(5,086)		(9,897)		(10,226)
Change in fair value of marketable securities	—		3,698		—		4,280
Net gain on sale of real estate	—		9,124		—		9,124
Net income	$	14,814	$	25,898	$	29,346	$	43,780

Net income per common share - basic and diluted	$	2.89	$	5.05	$	5.73	$	8.55

Weighted average shares outstanding - basic and diluted	5,125,710		5,123,255		5,125,098		5,122,733

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(Amounts in thousands)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	14,814	$	25,898	$	29,346	$	43,780
Other comprehensive income (loss):

Change in fair value of interest rate derivatives and other	1,924		(751)		13,651		4,447
Comprehensive income	$	16,738	$	25,147	$	42,997	$	48,227

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

(Amounts in thousands, except per share amounts)


				Additional Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total Equity
	Common Stock
	Shares	Amount

For the Three Months Ended June 30, 2022
Balance, March 31, 2022	5,173	$	5,173	$	33,415	$	198,347	$	19,221	$	(368)	$	255,788
Net income	—	—		—		14,814		—		—		14,814
Dividends paid ($4.50 per common share)	—	—		—		(23,060)		—		—		(23,060)
Change in fair value of interest rate derivatives and other	—	—		—		—		1,924		—		1,924
Deferred stock unit grants	—	—		450		—		—		—		450
Balance, June 30, 2022	5,173	$	5,173	$	33,865	$	190,101	$	21,145	$	(368)	$	249,916

For the Three Months Ended June 30, 2021
Balance, March 31, 2021	5,173	$	5,173	$	32,965	$	160,997	$	4,491	$	(368)	$	203,258
Net income	—	—		—		25,898		—		—		25,898
Dividends paid ($4.50 per common share)	—	—		—		(23,050)		—		—		(23,050)
Change in fair value of interest rate derivatives	—	—		—		—		(751)		—		(751)
Deferred stock unit grants	—	—		450		—		—		—		450
Balance, June 30, 2021	5,173	$	5,173	$	33,415	$	163,845	$	3,740	$	(368)	$	205,805


				Additional Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Equity
	Common Stock
	Shares	Amount

For the Six Months Ended June 30, 2022
Balance, December 31, 2021	5,173	$	5,173	$	33,415	$	206,875	$	7,494	$	(368)	$	252,589
Net income	—	—		—		29,346		—		—		29,346
Dividends paid ($9.00 per common share)	—	—		—		(46,120)		—		—		(46,120)
Change in fair value of interest rate derivatives and other	—	—		—		—		13,651		—		13,651
Deferred stock unit grants	—	—		450		—		—		—		450
Balance, June 30, 2022	5,173	$	5,173	$	33,865	$	190,101	$	21,145	$	(368)	$	249,916

For the Six Months Ended June 30, 2021
Balance, December 31, 2020	5,173	$	5,173	$	32,965	$	166,165	$	(707)	$	(368)	$	203,228
Net income	—	—		—		43,780		—		—		43,780
Dividends paid ($9.00 per common share)	—	—		—		(46,100)		—		—		(46,100)
Change in fair value of interest rate derivatives	—	—		—		—		4,447		—		4,447
Deferred stock unit grants	—	—		450		—		—		—		450
Balance, June 30, 2021	5,173	$	5,173	$	33,415	$	163,845	$	3,740	$	(368)	$	205,805

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Amounts in thousands)


	For the Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2022		2021
Net income	$	29,346	$	43,780
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amortization of debt issuance costs	15,587		17,503
Net gain on sale of real estate	—		(9,124)
Straight-lining of rental income	3,948		5,019

Stock-based compensation expense	450		450

Change in fair value of marketable securities	—		(4,280)
Other non-cash adjustments	(611)		—
Change in operating assets and liabilities:
Tenant and other receivables, net	1,978		554
Other assets	23,699		(16,917)
Amounts due to Vornado	38		(276)
Accounts payable and accrued expenses	18,727		26,138


Other liabilities	166		(328)
Net cash provided by operating activities	93,328		62,519

CASH FLOWS FROM INVESTING ACTIVITIES
Construction in progress and real estate additions	(3,800)		(10,086)

Proceeds from sale of real estate	—		9,291


Return of short-term investment	—		3,600
Purchase of U.S. Treasury bills	(197,407)		—
Net cash (used in) provided by investing activities	(201,207)		2,805

CASH FLOWS FROM FINANCING ACTIVITIES


Dividends paid	(46,120)		(46,100)
Debt issuance costs	(8)		(45)
Net cash used in financing activities	(46,128)		(46,145)


Net (decrease) increase in cash and cash equivalents	(154,007)		19,179
Cash, cash equivalents and restricted cash at beginning of period	483,505		449,877
Cash, cash equivalents and restricted cash at end of period	$	329,498	$	469,056


RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	463,539	$	428,710
Restricted cash at beginning of period	19,966		21,167
Cash and cash equivalents and restricted cash at beginning of period	$	483,505	$	449,877


Cash and cash equivalents at end of period	$	310,349	$	447,687
Restricted cash at end of period	19,149		21,369
Cash and cash equivalents and restricted cash at end of period	$	329,498	$	469,056

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	8,540	$	9,401


NON-CASH TRANSACTIONS
Liability for real estate additions, including $3 and $79 for development fees due to Vornado in 2022 and 2021, respectively	$	1,426	$	1,776
Write-off of fully depreciated assets	23		5,628

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 six properties in the New York City metropolitan area.

2.Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Alexander’s and its consolidated subsidiaries. All adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.

We 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for the full year.

Our investments in U.S. Treasury bills are accounted for as available-for-sale debt instruments and are recorded at fair value in “investments in U.S. Treasury bills” on our consolidated balance sheet as of June 30, 2022. See Note 8 - Fair Value Measurements for information on our investments in U.S. Treasury bills.

We operate in one reportable segment.

3.Recently Issued Accounting Literature

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 establishing Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform and in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “ASC 848”). ASC 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASC 848 is optional and may be elected over time as reference 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 corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

4.Revenue Recognition

The following is a summary of revenue sources for the three and six months ended June 30, 2022 and 2021.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2022		2021		2022		2021
Lease revenues	$	47,711	$	48,904	$	94,519	$	103,315
Parking revenue	1,165		1,212		2,393		2,008
Tenant services	948		1,272		2,127		2,218
Rental revenues	$	49,824	$	51,388	$	99,039	$	107,541

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4.Revenue Recognition - continued

The components of lease revenues for the three and six months ended June 30, 2022 and 2021 are as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2022		2021		2022		2021
Fixed lease revenues	$	33,418	$	32,233	$	65,621	$	66,043
Variable lease revenues	14,293		16,671		28,898		37,272
Lease revenues	$	47,711	$	48,904	$	94,519	$	103,315

Bloomberg L.P. (“Bloomberg”) accounted for revenue of $55,909,000 and $57,513,000 for the six months ended June 30, 2022 and 2021, respectively, representing approximately 56% and 53% of our total revenues in each period, respectively. No other tenant accounted for more than 10% of our total 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.

5.Related Party Transactions

Vornado

As of June 30, 2022, Vornado owned 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.

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) $354,000, 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.

We also have agreements with Building Maintenance Services LLC, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security services at our 731 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)

(UNAUDITED)

5.Related Party Transactions - continued

The following is a summary of fees incurred to Vornado under the various agreements discussed above.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2022		2021		2022		2021
Company management fees	$	700	$	700	$	1,400	$	1,400
Development fees	—		46		3		79
Leasing fees	—		28		1,318		439
Commission on sale of real estate	—		300

SEC Form 10-Q filed by Alexander's Inc.