Certain statements contained in this Quarterly Report constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future 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 Quarterly Report on Form 10-Q. We also note the following forward-looking statements: estimates of future rents, estimates of future capital expenditures and estimates of dividends on shares of our common stock. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For a further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and six months ended June 30, 2026. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the operating results for the full year.
Critical Accounting Estimates and Significant Accounting Policies
A summary of the critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. For the six months ended June 30, 2026, there were no material changes to these estimates or policies.
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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 four properties in New York City.
We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided. 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, and may continue to be, affected by interest rate fluctuations, the effects of inflation and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding these and other factors that may materially affect our results.
Quarter Ended June 30, 2026 Financial Results Summary
Net income for the quarter ended June 30, 2026 was $155,362,000, or $30.24 per diluted share, compared to $6,120,000 or $1.19 per diluted share in the prior year’s quarter. Net income for the quarter ended June 30, 2026 included $148,002,000, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property.
Funds from operations (“FFO”) (non-GAAP) for the quarter ended June 30, 2026 was $15,538,000, or $3.02 per diluted share, compared to $14,762,000 or $2.88 per diluted share in the prior year’s quarter.
Six Months Ended June 30, 2026 Financial Results Summary
Net income for the six months ended June 30, 2026 was $160,024,000, or $31.15 per diluted share, compared to $18,432,000 or $3.59 per diluted share in the prior year’s six months. Net income for the six months ended June 30, 2026 included $148,002,000, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property.
FFO (non-GAAP) for the six months ended June 30, 2026 was $28,902,000, or $5.63 per diluted share, compared to $35,604,000 or $6.93 per diluted share in the prior year’s six months.
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Overview - continued
Square Footage, Occupancy and Leasing Activity
Our portfolio is comprised of four properties aggregating 2,110,000 square feet. As of June 30, 2026, the commercial occupancy rate was 94.6% and the residential occupancy rate was 97.4%.
On June 26, 2026, we entered into a lease modification agreement with a 135,000 square foot tenant at our Rego Park shopping center providing options for us and the tenant to early terminate the lease in August 2026, subject to a payment of approximately $29,000,000 from the tenant. Simultaneously, we entered into a 15-year lease, plus renewal options, with Target for that space.
On January 31, 2025, Home Depot’s 83,000 square foot lease at the retail portion of our 731 Lexington Avenue property expired. Annual rental revenues from Home Depot were approximately $15,000,000.
Bloomberg L.P. (“Bloomberg”) leases approximately 952,000 square feet at our 731 Lexington Avenue property and accounted for revenue of $65,229,000 and $64,446,000 for the six months ended June 30, 2026 and 2025, respectively, representing approximately 60% and 61% of our rental revenues in each period, respectively. No other tenant accounted for more than 10% of our rental 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.
In May 2024, Alexander’s and Bloomberg entered into an agreement to extend Bloomberg’s leases that were scheduled to expire in February 2029 for a term of eleven years to February 2040. In connection with the lease extension, Bloomberg was entitled to a $113,618,000 tenant fund which is accounted for as a lease incentive under GAAP. Accordingly, there was an initial deferred lease incentive asset of $113,618,000, which is amortized as a reduction to rental revenues over the remaining term of the lease, and a corresponding liability. These amounts are included in “Deferred leasing costs, net” and “Lease incentive liability,” on our consolidated balance sheets. On March 31, 2026, Alexander’s and Bloomberg entered into a lease amendment providing Bloomberg with a rent abatement of $56,809,000 for the period of April 1, 2026 to December 1, 2026, which reduces the tenant fund by a corresponding amount over that period from $113,618,000 to $56,809,000.
Real Estate Sale
On May 28, 2026, we completed the sale of our Rego Park I property, located in Queens, New York, for $235,500,000, with total proceeds of $202,750,000, net of costs, and a financial statement gain of $148,002,000.
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Results of Operations – Three Months Ended June 30, 2026, compared to June 30, 2025
Rental Revenues
Rental revenues were $54,711,000 for the three months ended June 30, 2026, compared to $51,589,000 for the prior year’s three months, an increase of $3,122,000. This was primarily due to (i) $1,699,000 of higher straight-line revenue resulting from a tenant lease modification and $1,501,000 of higher rental revenue from new leases at the Rego Park shopping center, (ii) $1,654,000 of higher operating expense recoveries from higher operating expenses and (iii) $415,000 of higher lease termination fee income, partially offset by (iv) $1,243,000 of lower rental revenue from retail tenant expirations at 731 Lexington Avenue and (v) $1,104,000 of lower rental revenue from lease expirations at Rego Park I.
Operating Expenses
Operating expenses were $26,743,000 for the three months ended June 30, 2026, compared to $25,934,000 for the prior year’s three months, an increase of $809,000. This was primarily due to (i) $786,000 of higher operating expenses subject to recovery, including common area maintenance and real estate taxes and (ii) $696,000 of lower capitalized expenses, partially offset by (iii) $879,000 of lower operating expenses at Rego Park I.
Depreciation and Amortization
Depreciation and amortization was $8,230,000 for the three months ended June 30, 2026, compared to $8,707,000 for the prior year’s three months, a decrease of $477,000. This was primarily due to the cessation of depreciation at Rego Park I that began in the first quarter of 2026 upon classification of the property as held for sale, partially offset by higher depreciation expense on capital costs for new leases at the Rego Park shopping center.
General and Administrative Expenses
General and administrative expenses were $3,266,000 for the three months ended June 30, 2026, compared to $1,955,000 for the prior year’s three months, an increase of $1,311,000. This was primarily due to $1,062,000 of higher professional fees and $263,000 of higher stock-based compensation expense from an increase in the amount of deferred stock units granted to our Board of Directors in the current year’s quarter.
Interest and Other Income
Interest and other income was $1,684,000 for the three months ended June 30, 2026, compared to $3,928,000 for the prior year’s three months, a decrease of $2,244,000. This was primarily due to a decrease in average investment balances and interest rates.
Interest and Debt Expense
Interest and debt expense was $10,796,000 for the three months ended June 30, 2026, compared to $12,801,000 for the prior year’s three months, a decrease of $2,005,000. This was primarily due to (i) $2,502,000 of lower interest expense from the 731 Lexington Avenue retail loan restructuring in December 2025 and (ii) $441,000 of lower interest expense from the Rego Park shopping center loan refinancing in December 2025, partially offset by (iii) $1,155,000 from the expiration of the 731 Lexington Avenue retail interest rate swap in May 2025.
Net Gain on Sale of Real Estate
Net gain on sale of real estate was $148,002,000 for the three months ended June 30, 2026, resulting from the sale of the Rego Park I property in May 2026.
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Results of Operations – Six Months Ended June 30, 2026, compared to June 30, 2025
Rental Revenues
Rental revenues were $108,123,000 for the six months ended June 30, 2026, compared to $106,504,000 for the prior year’s six months, an increase of $1,619,000. This was primarily due to (i) $2,958,000 of higher rental revenue from new leases and $1,699,000 of higher straight-line revenue resulting from a tenant lease modification at the Rego Park shopping center, (ii) $3,334,000 of higher operating expense recoveries from higher operating expenses and (iii) $433,000 of higher lease termination fee income, partially offset by (iv) $3,360,000 of lower rental revenue from Home Depot’s lease expiration and other retail tenant expirations at 731 Lexington Avenue, (v) $2,064,000 of lower rental revenue from lease expirations at Rego Park I and (vi) $1,551,000 of payments received in the prior year for tenant receivables that were previously written off.
Operating Expenses
Operating expenses were $55,723,000 for the six months ended June 30, 2026, compared to $51,498,000 for the prior year’s six months, an increase of $4,225,000. This was primarily due to (i) $1,697,000 of higher operating expenses subject to recovery, including common area maintenance and real estate taxes, (ii) $1,595,000 of lower capitalized expenses and (iii) $931,000 of higher operating expenses not subject to recovery.
Depreciation and Amortization
Depreciation and amortization was $17,004,000 for the six months ended June 30, 2026, compared to $17,306,000 for the prior year’s six months, a decrease of $302,000. This was primarily due to the cessation of depreciation at Rego Park I that began in the first quarter of 2026 upon classification of the property as held for sale, partially offset by higher depreciation expense on capital costs for new leases at the Rego Park shopping center.
General and Administrative Expenses
General and administrative expenses were $4,979,000 for the six months ended June 30, 2026, compared to $3,546,000 for the prior year’s six months, an increase of $1,433,000. This was primarily due to $1,188,000 of higher professional fees and $263,000 of higher stock-based compensation expense from an increase in the amount of deferred stock units granted to our Board of Directors in the current year.
Interest and Other Income
Interest and other income was $3,130,000 for the six months ended June 30, 2026, compared to $7,873,000 for the prior year’s six months, a decrease of $4,743,000. This was primarily due to a decrease in average investment balances and interest rates.
Interest and Debt Expense
Interest and debt expense was $21,525,000 for the six months ended June 30, 2026, compared to $23,595,000 for the prior year’s six months, a decrease of $2,070,000. This was primarily due to (i) $4,979,000 of lower interest expense from the 731 Lexington Avenue retail loan restructuring in December 2025 and (ii) $847,000 of lower interest expense from the Rego Park shopping center loan refinancing in December 2025, partially offset by (iii) $4,220,000 from the expiration of the 731 Lexington Avenue retail interest rate swap in May 2025.
Net Gain on Sale of Real Estate
Net gain on sale of real estate was $148,002,000 for the six months ended June 30, 2026, resulting from the sale of the Rego Park I property in May 2026.
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Liquidity and Capital Resources
Cash Flows
Our 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 revenue, which is our primary source of cash flow and is dependent upon the occupancy and rental rates of our properties, as well as our existing cash, proceeds from financings, including mortgage or construction loans secured by our properties and proceeds from asset sales.
As of June 30, 2026, we had $358,345,000 of liquidity comprised of cash and cash equivalents and restricted cash. The ongoing challenges posed by fluctuations in interest rates and the effects of inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow 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 service 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.
For the Six Months Ended June 30, 2026
Cash and cash equivalents and restricted cash were $358,345,000 as of June 30, 2026, compared to $192,225,000 as of December 31, 2025, an increase of $166,120,000. This increase resulted from (i) $199,339,000 of net cash provided by investing activities and (ii) $13,005,000 of net cash provided by operating activities, partially offset by (iii) $46,224,000 of net cash used in financing activities.
Net cash provided by investing activities of $199,339,000 was comprised of (i) $205,819,000 of proceeds from sale of real estate, partially offset by (ii) $6,480,000 of construction in progress and real estate additions.
Net cash used in financing activities of $46,224,000 was comprised of dividends paid.
Net cash provided by operating activities of $13,005,000 was comprised of (i) net income of $160,024,000, partially offset by (ii) adjustments for non-cash items of $121,563,000 and (iii) the net change in operating assets and liabilities of $25,456,000. The adjustments for non-cash items were comprised of (i) net gain on sale of real estate of $148,002,000 and (ii) straight-lining of rents of $566,000, partially offset by (iii) depreciation and amortization (including amortization of debt issuance costs) of $18,292,000, (iv) PIK interest expense of $3,832,000, (v) amortization of deferred lease incentives of $3,541,000, (vi) other non-cash adjustments of $681,000, (vii) stock-based compensation of $656,000 and (viii) interest rate cap premium amortization of $3,000.
For the Six Months Ended June 30, 2025
Cash and cash equivalents and restricted cash were $390,305,000 as of June 30, 2025, compared to $393,836,000 as of December 31, 2024, a decrease of $3,531,000. This decrease resulted from (i) $48,185,000 of net cash used in financing activities and (ii) $14,633,000 of net cash used in investing activities, partially offset by (iii) $59,287,000 of net cash provided by operating activities.
Net cash used in financing activities of $48,185,000 was comprised of (i) $46,202,000 of dividends paid and (ii) $1,983,000 of debt repayments.
Net cash used in investing activities of $14,633,000 was comprised of construction in progress and real estate additions.
Net cash provided by operating activities of $59,287,000 was comprised of (i) net income of $18,432,000, (ii) adjustments for non-cash items of $25,958,000 and (iii) the net change in operating assets and liabilities of $14,897,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $18,888,000, (ii) amortization of deferred lease incentives of $3,654,000, (iii) straight-lining of rents of $2,018,000, (iv) other non-cash adjustments of $682,000, (v) stock-based compensation expense of $394,000 and (vi) interest rate cap premium amortization of $322,000.
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Liquidity and Capital Resources - continued
Commitments and Contingencies
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, which 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 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 Act of 2002, as amended to date and which has been extended through December 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 deductible of $348,000 and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 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 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.
Our 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. If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.
Other
There are various legal actions brought against us from time-to-time in the ordinary course of business. In our opinion, the outcome of such pending matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows.
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Funds from Operations (“FFO”) (non-GAAP)
FFO is computed in accordance with the definition adopted by the Board of Governors of 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 certain real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures 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 three and six months ended June 30, 2026 and 2025
FFO (non-GAAP) for the three months ended June 30, 2026 was $15,538,000, or $3.02 per diluted share, compared to $14,762,000 or $2.88 per diluted share in the prior year’s three months.
FFO (non-GAAP) for the six months ended June 30, 2026 was $28,902,000, or $5.63 per diluted share, compared to $35,604,000 or $6.93 per diluted share in the prior year’s six months.
The following table reconciles our net income to FFO (non-GAAP):
For the Three Months Ended June 30, For the Six Months Ended June 30,
(Amounts in thousands, except share and per share amounts) 2026 2025 2026 2025
Net income $ 155,362 $ 6,120 $ 160,024 $ 18,432
Net gain on sale of real estate (148,002) — (148,002) —
Depreciation and amortization of real property 8,178 8,642 16,880 17,172
FFO (non-GAAP) $ 15,538 $ 14,762 $ 28,902 $ 35,604
FFO per diluted share (non-GAAP) $ 3.02 $ 2.88 $ 5.63 $ 6.93
Weighted average shares used in computing FFO per diluted share 5,137,549 5,134,599 5,136,757 5,134,069
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