Attached files

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EX-32 - EXHIBIT 32.1 - ALEXANDERS INCexhibit321.htm
EX-15 - EXHIBIT 15.1 - ALEXANDERS INCexhibit151.htm
EX-31 - EXHIBIT 31.2 - ALEXANDERS INCexhibit312.htm
EX-32 - EXHIBIT 32.2 - ALEXANDERS INCexhibit322.htm
EX-10 - EXHIBIT 10.3 - ALEXANDERS INCexhibit103.htm
EX-31 - EXHIBIT 31.1 - ALEXANDERS INCexhibit311.htm
 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

 

x

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

 

 

For the quarterly period ended:  

September 30, 2015

 

 

Or

 

o

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

 

 

ALEXANDER’S, 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)

 

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.  x Yes  o No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  x Yes  o No

 

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

 

xLarge Accelerated Filer

 

o Accelerated Filer

oNon-Accelerated Filer (Do not check if smaller reporting company)

 

o Smaller Reporting Company

 

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

 

 

As of October 30, 2015, there were 5,106,196 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

 

 

 

 

 

 

September 30, 2015 and December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income (Unaudited) for the

 

 

 

 

 

 

Three and Nine Months Ended September 30, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Unaudited) for the

 

 

 

 

 

 

Three and Nine Months Ended September 30, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Changes in Equity (Unaudited) for the

 

 

 

 

 

 

Nine Months Ended September 30, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows (Unaudited) for the

 

 

 

 

 

 

Nine Months Ended September 30, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Report of Independent Registered Public Accounting Firm

15 

 

 

 

 

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of

 

 

 

 

 

 

Financial Condition and Results of Operations

16 

 

 

 

 

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

24 

 

 

 

 

 

 

 

 

 

Item 4.

 

Controls and Procedures

24 

 

 

 

 

 

 

 

 

PART II.

Other Information

 

 

 

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

25 

 

 

 

 

 

 

 

 

 

Item 1A.

 

Risk Factors

25 

 

 

 

 

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

25 

 

 

 

 

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

25 

 

 

 

 

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

25 

 

 

 

 

 

 

 

 

 

Item 5.

 

Other Information

25 

 

 

 

 

 

 

 

 

 

Item 6.

 

Exhibits

25 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signatures

 

 

 

26 

 

 

 

 

 

 

 

 

Exhibit Index

 

 

 

27 

 

2

 


 
 

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)

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

ASSETS

 

2015 

 

 

2014 

Real estate, at cost:

 

 

 

 

 

 

 

 

Land

 

$

 44,971 

 

 

$

 44,971 

 

Buildings and leasehold improvements

 

 

 950,416 

 

 

 

 873,667 

 

Development and construction in progress

 

 

 40,189 

 

 

 

 75,289 

 

 

Total

 

 

 1,035,576 

 

 

 

 993,927 

Accumulated depreciation and amortization

 

 

 (229,498)

 

 

 

 (210,025)

Real estate, net

 

 

 806,078 

 

 

 

 783,902 

Cash and cash equivalents

 

 

 252,866 

 

 

 

 227,815 

Short-term investments

 

 

 -   

 

 

 

 24,998 

Restricted cash

 

 

 84,770 

 

 

 

 84,602 

Marketable securities

 

 

 41,119 

 

 

 

 44,646 

Tenant and other receivables, net of allowance for doubtful accounts of $1,051 and $1,544, respectively

 

 

 2,772 

 

 

 

 2,213 

Receivable arising from the straight-lining of rents

 

 

 181,215 

 

 

 

 179,939 

Deferred lease and other property costs, net, including unamortized leasing fees to Vornado of

 

 

 

 

 

 

 

 

$31,796 and $33,974, respectively

 

 

 43,756 

 

 

 

 46,561 

Deferred debt issuance costs, net of accumulated amortization of $3,626 and $11,295, respectively

 

 6,964 

 

 

 

 4,824 

Other assets

 

 

 37,161 

 

 

 

 23,716 

 

 

 

 

$

 1,456,701 

 

 

$

 1,423,216 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Mortgages payable

 

$

 1,060,408 

 

 

$

 1,032,780 

Amounts due to Vornado

 

 

 5,966 

 

 

 

 3,922 

Accounts payable and accrued expenses

 

 

 42,238 

 

 

 

 35,127 

Other liabilities

 

 

 2,965 

 

 

 

 2,988 

 

 

Total liabilities

 

 

 1,111,577 

 

 

 

 1,074,817 

 

 

 

 

 

 

 

 

 

 

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, 5,106,196 shares

 

 

 5,173 

 

 

 

 5,173 

Additional capital

 

 

 30,739 

 

 

 

 30,139 

Retained earnings

 

 

 298,664 

 

 

 

 299,004 

Accumulated other comprehensive income

 

 

 10,922 

 

 

 

 14,457 

 

 

 

 

 

 345,498 

 

 

 

 348,773 

Treasury stock: 67,254 shares, at cost

 

 

 (374)

 

 

 

 (374)

 

 

Total equity

 

 

 345,124 

 

 

 

 348,399 

 

 

 

 

$

 1,456,701 

 

 

$

 1,423,216 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements (unaudited).

3

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

September 30,

 

September 30,

 

 

 

 

2015 

 

2014 

 

2015 

 

2014 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

Property rentals

 

$

 34,599 

 

$

 33,984 

 

$

 103,654 

 

$

 102,166 

 

Expense reimbursements

 

 

 17,815 

 

 

 16,093 

 

 

 51,442 

 

 

 47,362 

Total revenues

 

 

 52,414 

 

 

 50,077 

 

 

 155,096 

 

 

 149,528 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating, including fees to Vornado of $1,081, $1,223,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$3,298 and $3,369, respectively

 

 

 19,390 

 

 

 17,299 

 

 

 55,985 

 

 

 50,939 

 

Depreciation and amortization

 

 

 8,092 

 

 

 7,271 

 

 

 22,783 

 

 

 21,812 

 

General and administrative, including management fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to Vornado of $595 and $1,785 in each three and nine

 

 

 

 

 

 

 

 

 

 

 

 

 

 

month period, respectively

 

 

 1,091 

 

 

 1,127 

 

 

 4,261 

 

 

 3,872 

Total expenses

 

 

 28,573 

 

 

 25,697 

 

 

 83,029 

 

 

 76,623 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 23,841 

 

 

 24,380 

 

 

 72,067 

 

 

 72,905 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

 427 

 

 

 409 

 

 

 1,237 

 

 

 1,235 

 

Interest and debt expense

 

 

 (6,094)

 

 

 (7,446)

 

 

 (19,963)

 

 

 (24,720)

 

Income before income taxes

 

 

 18,174 

 

 

 17,343 

 

 

 53,341 

 

 

 49,420 

 

Income tax (expense) benefit

 

 

 (2)

 

 

 349 

 

 

 (6)

 

 

 344 

Net income

 

$

 18,172 

 

$

 17,692 

 

$

 53,335 

 

$

 49,764 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share – basic and diluted

 

$

 3.55 

 

$

 3.46 

 

$

 10.43 

 

$

 9.74 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic and diluted

 

 

 5,113,077 

 

 

 5,111,201 

 

 

 5,112,108 

 

 

 5,110,435 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

 

$

 3.50 

 

$

 3.25 

 

$

 10.50 

 

$

 9.75 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements (unaudited).

4

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

September 30,

 

September 30,

 

 

 

 

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 18,172 

 

$

 17,692 

 

$

 53,335 

 

$

 49,764 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized net gain on available-for-sale securities

 

 

 1,188 

 

 

 (1,563)

 

 

 (3,527)

 

 

 2,644 

 

Change in value of interest rate cap

 

 

 2 

 

 

 (30)

 

 

 (8)

 

 

 (183)

Comprehensive income

 

$

 19,362 

 

$

 16,099 

 

$

 49,800 

 

$

 52,225 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements (unaudited).

5

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

Common Stock

 

Additional

 

Retained

 

Comprehensive

 

Treasury

 

Total

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

Income

 

Stock

 

Equity

Balance, December 31, 2013

 5,173 

 

$

 5,173 

 

$

 29,745 

 

$

 297,515 

 

$

 1,522 

 

$

 (374)

 

$

 333,581 

Net income

 -   

 

 

 -   

 

 

 -   

 

 

 49,764 

 

 

 -   

 

 

 -   

 

 

 49,764 

Dividends paid

 -   

 

 

 -   

 

 

 -   

 

 

 (49,825)

 

 

 -   

 

 

 -   

 

 

 (49,825)

Change in unrealized net gain on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

available-for-sale securities

 -   

 

 

 -   

 

 

 -   

 

 

 -   

 

 

 2,644 

 

 

 -   

 

 

 2,644 

Change in value of interest rate cap

 -   

 

 

 -   

 

 

 -   

 

 

 -   

 

 

 (183)

 

 

 -   

 

 

 (183)

Deferred stock unit grants

 -   

 

 

 -   

 

 

 394 

 

 

 -   

 

 

 -   

 

 

 -   

 

 

 394 

Balance, September 30, 2014

 5,173 

 

$

 5,173 

 

$

 30,139 

 

$

 297,454 

 

$

 3,983 

 

$

 (374)

 

$

 336,375 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2014

 5,173 

 

$

 5,173 

 

$

 30,139 

 

$

 299,004 

 

$

 14,457 

 

$

 (374)

 

$

 348,399 

Net income

 -   

 

 

 -   

 

 

 -   

 

 

 53,335 

 

 

 -   

 

 

 -   

 

 

 53,335 

Dividends paid

 -   

 

 

 -   

 

 

 -   

 

 

 (53,675)

 

 

 -   

 

 

 -   

 

 

 (53,675)

Change in unrealized net gain on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

available-for-sale securities

 -   

 

 

 -   

 

 

 -   

 

 

 -   

 

 

 (3,527)

 

 

 -   

 

 

 (3,527)

Change in value of interest rate cap

 -   

 

 

 -   

 

 

 -   

 

 

 -   

 

 

 (8)

 

 

 -   

 

 

 (8)

Deferred stock unit grants

 -   

 

 

 -   

 

 

 600 

 

 

 -   

 

 

 -   

 

 

 -   

 

 

 600 

Balance, September 30, 2015

 5,173 

 

$

 5,173 

 

$

 30,739 

 

$

 298,664 

 

$

 10,922 

 

$

 (374)

 

$

 345,124 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements (unaudited).

6

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

 

2015 

 

2014 

Net income

 

$

 53,335 

 

$

 49,764 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization, including amortization of debt issuance costs

 

 

 24,725 

 

 

 23,838 

 

Straight-lining of rental income

 

 

 (1,276)

 

 

 (1,905)

 

Stock-based compensation expense

 

 

 600 

 

 

 394 

 

Reversal of income tax liability

 

 

 -   

 

 

 (420)

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Tenant and other receivables, net

 

 

 (559)

 

 

 538 

 

Other assets

 

 

 (13,969)

 

 

 (14,345)

 

Amounts due to Vornado

 

 

 (102)

 

 

 872 

 

Accounts payable and accrued expenses

 

 

 9,527 

 

 

 7,686 

 

Other liabilities

 

 

 (23)

 

 

 (13)

Net cash provided by operating activities

 

 

 72,258 

 

 

 66,409 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

Construction in progress and real estate additions

 

 

 (41,919)

 

 

 (39,957)

 

Change in restricted cash

 

 

 (168)

 

 

 5,294 

 

Proceeds from maturing short-term investments

 

 

 24,998 

 

 

 -   

Net cash used in investing activities

 

 

 (17,089)

 

 

 (34,663)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

Debt repayments

 

 

 (322,372)

 

 

 (316,418)

 

Proceeds from borrowing

 

 

 350,000 

 

 

 300,000 

 

Dividends paid

 

 

 (53,675)

 

 

 (49,825)

 

Debt issuance costs

 

 

 (4,071)

 

 

 (4,245)

Net cash used in financing activities

 

 

 (30,118)

 

 

 (70,488)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

 25,051 

 

 

 (38,742)

Cash and cash equivalents at beginning of period

 

 

 227,815 

 

 

 347,718 

Cash and cash equivalents at end of period

 

$

 252,866 

 

$

 308,976 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

Cash payments for interest, excluding capitalized interest of $1,420 and $265, respectively

 

$

 18,065 

 

$

 24,062 

 

 

 

 

 

 

 

 

 

NON-CASH TRANSACTIONS

 

 

 

 

 

 

 

Liability for real estate additions (including $5,540 due to Vornado in 2015)

 

$

 13,259 

 

$

 14,296 

 

Write-off of fully amortized and/or depreciated assets

 

 

 9,600 

 

 

 10,569 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements (unaudited).

7

 


 
 

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).

 

2.             Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Alexander’s and its consolidated subsidiaries.  All intercompany amounts have been eliminated. In our opinion, 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 condensed 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, 2014, 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 nine months ended September 30, 2015 are not necessarily indicative of the operating results for the full year.

 

We currently operate in one business segment.

 

3.             Significant Accounting Policy

Development and Construction in Progress – We are constructing an apartment tower, The Alexander, above our Rego Park II shopping center, containing 312 units aggregating 255,000 square feet. The estimated cost of this project, including initial leasing costs to achieve stabilized occupancy, is approximately $125,000,000, of which $113,000,000 has been incurred as of September 30, 2015. We capitalize all property operating expenses directly associated with and attributable to, the development and construction of a project, including interest expense.  The capitalization period begins when development activities are underway and ends when it is determined that the asset is substantially complete and ready for its intended use, which is typically evidenced by the receipt of a temporary certificate of occupancy (“TCO”). In the third quarter of  2015, we received a TCO for certain floors of the apartment tower where construction has been substantially completed. Accordingly, this portion of the apartment tower has been placed in service.  Construction of the remaining floors is expected to be substantially completed during the fourth quarter of 2015 and we expect to receive the related TCO by December 31, 2015.

 

4.             Recently Issued Accounting Literature

In April 2014, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2014-08”) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to Accounting Standards Codification (“ASC”) Topic 205, Presentation of Financial Statements and ASC Topic 360, Property Plant and Equipment.  Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations qualify as discontinued operations.  In addition, ASU 2014-08 expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations.  ASU 2014-08 was effective for interim and annual reporting periods in fiscal years that begin after December 15, 2014.  The adoption of this update on January 1, 2015 did not have any impact on our consolidated financial statements.

 

8

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

 

4.             Recently Issued Accounting Literature - continued

In May 2014, the FASB issued an update (“ASU 2014-09”) establishing ASC Topic 606 Revenue from Contracts with Customers.  ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance.  ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures.  ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017.  We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements.

 

In April 2015, the FASB issued an update (“ASU 2015-03”) Simplifying the Presentation of Debt Issuance Costs to ASC Topic 835, Interest.  ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability to which they relate, consistent with debt discounts, as opposed to being presented as assets.  ASU 2015-03 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2015.  The adoption of this update on January 1, 2016 will not have a material impact on our consolidated financial statements.

 

5.             Relationship with Vornado

As of September 30, 2015, 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) $280,000, 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 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.  Prior to December 22, 2014, the total of these amounts was payable in annual installments in an amount not to exceed $4,000,000, with interest on the unpaid balance at one-year LIBOR plus 1.0%.  On December 22, 2014, the leasing agreements with Vornado were amended to eliminate the annual installment cap of $4,000,000 and we paid the accrued balance of leasing commissions of $40,353,000 to Vornado. 

 

Other Agreements

We also have agreements with Building Maintenance Services, 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, for an annual fee equal to the cost of such services plus 6%.  

 

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

 

9

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.           Relationship with Vornado - continued

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

September 30,

 

September 30,

 

 

(Amounts in thousands)

 

2015 

 

2014 

 

2015 

 

2014 

 

 

Company management fees

 

$

 700 

 

$

 700 

 

$

 2,100 

 

$

 2,100 

 

 

Development fees

 

 

 517 

 

 

 1,714 

 

 

 2,176 

 

 

 2,463 

 

 

Leasing fees

 

 

 21 

 

 

 911 

 

 

 419 

 

 

 1,275 

 

 

Property management fees and payments for cleaning, engineering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and security services

 

 

 838 

 

 

 1,012 

 

 

 2,621 

 

 

 2,723 

 

 

 

 

 

$

 2,076 

 

$

 4,337 

 

$

 7,316 

 

$

 8,561 

 

 

As of September 30, 2015, the amounts due to Vornado were $5,540,000 for development fees; $411,000 for management, property management, cleaning and security fees; and $15,000 for leasing fees. As of December 31, 2014, the amounts due to Vornado were $3,394,000 for development fees and $528,000 for management, property management and cleaning fees.

 

6.             Marketable Securities

As of September 30, 2015 and December 31, 2014, we owned 535,265 common shares of The Macerich Company (“Macerich”) (NYSE: MAC), which were received in connection with the sale of the Kings Plaza Regional Shopping Center (“Kings Plaza”) to Macerich in November 2012.  These shares have an economic cost of $56.05 per share, or $30,000,000 in the aggregate.  As of September 30, 2015 and December 31, 2014, the fair value of these shares was $41,119,000 and $44,646,000, respectively, based on Macerich’s closing share price of $76.82 per share and $83.41 per share, respectively.  These shares are included in “marketable securities” on our consolidated balance sheets and are classified as available-for-sale.  Available-for-sale securities are presented at fair value and unrealized gains and losses resulting from the mark-to-market of these securities are included in “other comprehensive income.”

 

7.             Significant Tenants

Bloomberg L.P. (“Bloomberg”) accounted for revenue of $70,702,000 and $67,488,000, representing approximately 45% of our total revenues in each of the nine-month periods ended September 30, 2015 and 2014, 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.

 

In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015 covering 188,608 square feet of office space at our 731 Lexington Avenue property for a term of five years.  We are currently in negotiations with Bloomberg to determine the rental rate for the extension period.

 

8.             Stock-Based Compensation

 

We account for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Our Omnibus Stock Plan provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, deferred stock units (“DSUs”) and performance shares, as defined, to the directors, officers and employees of the Company and Vornado.

 

10

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

 

8.             Stock-Based Compensation - continued

 

In May 2015, we granted each of the members of our Board of Directors 176 DSUs with a grant date fair value of $56,250 per grant, or $450,000 in the aggregate. In addition, 468 DSUs, constituting an initial award with a grant date fair value of $150,000, were granted to a newly appointed Director. The DSUs entitle the holders to receive shares of the Company’s common stock without the payment of any consideration. The DSUs vested immediately and accordingly, were expensed on the date of grant, but the shares of common stock underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Company’s Board of Directors.

 

9.             Mortgages Payable

On August 5, 2015, we completed a $350,000,000 refinancing of the retail portion of 731 Lexington Avenue. The interest-only loan is at LIBOR plus 1.40% and matures in August 2020, with two one-year extension options.   

 

The following is a summary of our outstanding mortgages payable as of September 30, 2015 and December 31, 2014.

 

 

 

 

  

   

 

 

 

 

 

Balance at

  

 

 

 

 

 

 

Interest Rate at

 

 

September 30,

 

December 31,

  

(Amounts in thousands)  

Maturity(1)

 

September 30, 2015

 

 

2015 

 

2014 

  

First mortgages secured by:

 

 

 

 

 

 

 

 

 

 

 

  

 

Rego Park I shopping center (100% cash

 

 

 

 

 

 

 

 

 

 

 

 

 

     collateralized)(2)

Mar. 2016

 

0.40 

%

 

 

$

78,246 

 

$

78,246 

  

 

Paramus

Oct. 2018

 

2.90 

%

 

 

 

68,000 

 

 

68,000 

  

 

Rego Park II shopping center(3)

Nov. 2018

 

2.04 

%

 

 

 

264,162 

 

 

266,534 

  

 

731 Lexington Avenue, office space(4)

Mar. 2021

 

1.16 

%

 

 

 

300,000 

 

 

300,000 

  

 

731 Lexington Avenue, retail space

Aug. 2022

 

1.61 

%

 

 

 

350,000 

(5)

 

320,000 

  

 

 

 

  

   

 

 

 

 

 

$

1,060,408 

 

$

1,032,780 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Represents the extended maturity where we have the unilateral right to extend.

  

(2)

Extended for one year from March 10, 2015.

  

(3)

Interest at LIBOR plus 1.85%.

  

(4)

Interest at LIBOR plus 0.95%.

  

(5)

Interest at LIBOR plus 1.40%.

  

 

10.          Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosuresdefines fair value and establishes a framework for measuring fair value.  ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value.

 

Financial Assets and Liabilities Measured at Fair Value

 

Financial assets measured at fair value on our consolidated balance sheets as of September 30, 2015 and December 31, 2014, consist of marketable securities, short-term investments (treasury bills classified as available-for-sale) and an interest rate cap, which are presented in the table below, based on their level in the fair value hierarchy.  There were no financial liabilities measured at fair value as of September 30, 2015 and December 31, 2014.

 

11

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.       Fair Value Measurements - continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2015

 

 

 (Amounts in thousands)

Total

 

Level 1

 

Level 2

 

Level 3

 

 

 

Marketable securities

$

 41,119 

 

$

 41,119 

 

$

 -   

 

$

 -   

 

 

 

 

Total assets

$

 41,119 

 

$

 41,119 

 

$

 -   

 

$

 -   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2014

 

 

 (Amounts in thousands)

Total

 

Level 1

 

Level 2

 

Level 3

 

 

 

Marketable securities

$

 44,646 

 

$

 44,646 

 

$

 -   

 

$

 -   

 

 

 

Short-term investments

 

 24,998 

 

 

 24,998 

 

 

 -   

 

 

 -   

 

 

 

Interest rate cap (included in other assets)

 

 11 

 

 

 -   

 

 

 11 

 

 

 -   

 

 

 

 

Total assets

$

 69,655 

 

$

 69,644 

 

$

 11 

 

$

 -   

 

 

Financial Assets and Liabilities not Measured at Fair Value

 

Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents, mortgages payable and leasing commissions due to Vornado.  Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities.  The fair value of our mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist.  The leasing commissions due to Vornado are carried at cost plus interest at variable rates, which approximate fair value.  The fair value of cash equivalents is classified as Level 1 and the fair values of mortgages payable and leasing commissions due to Vornado are classified as Level 2.  The table below summarizes the carrying amounts and fair value of these financial instruments as of September 30, 2015 and December 31, 2014.

 

 

 

As of September 30, 2015

 

As of December 31, 2014

 

 

Carrying

 

Fair

 

Carrying

 

Fair

(Amounts in thousands)

Amount

 

Value

 

Amount

 

Value

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

 221,539 

 

$

 221,539 

 

$

 111,590 

 

$

 111,590 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages payable

$

 1,060,408 

 

$

 1,054,200 

 

$

 1,032,780 

 

$

 1,025,000 

 

Leasing commissions (included in amounts due to Vornado)

 

 15 

 

 

 15 

 

 

 -   

 

 

 -   

 

 

$

 1,060,423 

 

$

 1,054,215 

 

$

 1,032,780 

 

$

 1,025,000 

 

 

11.          Commitments and Contingencies

Insurance

We maintain general liability insurance with limits of $300,000,000 per occurrence 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.

 

12

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

 

11.          Commitments and Contingencies – continued

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 Program Reauthorization Act, which expires in December 2020.  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 with no exposure to FNSIC.  For NBCR acts, FNSIC is responsible for a $275,000 deductible and 15% of the balance (16% effective January 1, 2016) of a covered loss, and the Federal government is responsible for the remaining 85% (84% effective January 1, 2016) 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.  However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future.  We are responsible for deductibles and losses in excess of our insurance coverage, which could be material.

 

Our mortgage loans are non-recourse to us and 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 our properties.

Rego Park I Litigation

On June 24, 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to space that Sears leases at our Rego Park I property.  Sears alleges that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage.  Sears asserts various causes of actions for damages and seeks to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a nuisance that Sears claims was a cause of the water intrusions into its premises.  In addition to injunctive relief, Sears seeks, among other things, damages of not less than $4 million and future damages it estimates will not be less than $25 million. We intend to defend the claims vigorously. The amount or range of reasonably possible losses, if any, cannot be estimated.

Paramus

      In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage loan with a fixed rate of 2.90%, which matures in October 2018.  The annual triple-net rent is the sum of $700,000 plus the amount of debt service on the mortgage loan. If the purchase option is exercised, we will receive net cash proceeds of approximately $7,000,000 and recognize a gain on sale of land of approximately $60,000,000. If the purchase option is not exercised, the triple-net rent for the last 20 years would include debt service sufficient to fully amortize $68,000,000 over the remaining 20-year lease term.

 

Letters of Credit

Approximately $2,074,000 of standby letters of credit were outstanding as of September 30, 2015.

13

 


 
 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

11.          Commitments and Contingencies – continued

Other

On October 15, 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an additional $20,300,000 of transfer taxes (including interest and penalties) in connection with the sale of Kings Plaza in November 2012.  We believe that the NYC DOF’s claim is without merit and intend to vigorously contest this assessment.  We have determined that the likelihood of a loss related to this issue is not probable and, after consultation with legal counsel, that the outcome of this assessment is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

 

There are various other legal actions against us in the ordinary course of business.  In our opinion, the outcome of such matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows.

 

12.          Earnings Per Share

The following table sets forth the computation of basic and diluted income per share, including a reconciliation of net income and the number of shares used in computing basic and diluted income per share. Basic income per share is determined using the weighted average shares of common stock outstanding during the period. Diluted income per share is determined using the weighted average shares of common stock outstanding during the period, and assumes all potentially dilutive securities were converted into common shares at the earliest date possible.  There were no potentially dilutive securities outstanding during the three and nine months ended September 30, 2015 and 2014.

 

 

 

 

  

 

Three Months Ended

 

Nine Months Ended

 

 

 

  

 

September 30,

 

September 30,

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

 

2015 

 

2014 

 

2015 

 

2014 

 

Net income

 

$

 18,172 

 

$

 17,692 

 

$

 53,335 

 

$

 49,764 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic and diluted  

 

 

 5,113,077 

 

 

 5,111,201 

 

 

 5,112,108 

 

 

 5,110,435 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share – basic and diluted

 

$

 3.55 

 

$

 3.46 

 

$

 10.43 

 

$

 9.74 

 

14

 


 
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

Alexander’s, Inc.

Paramus, New Jersey

 

We have reviewed the accompanying consolidated balance sheet of Alexander’s, Inc. and subsidiaries (the “Company”) as of September 30, 2015, and the related consolidated statements of income and comprehensive income for the three and nine month periods ended September 30, 2015 and 2014, and changes in equity and cash flows for the nine month periods ended September 30, 2015 and 2014.  These interim financial statements are the responsibility of the Company’s management.

 

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

 

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Alexander’s, Inc. and subsidiaries as of December 31, 2014, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended (not presented herein); and in our report dated February 17, 2015, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2014 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

 

 

 

/s/ DELOITTE & TOUCHE LLP

 

Parsippany, New Jersey
November 2, 2015

15

 


 
 

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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 involve risks, uncertainties and assumptions.  Our future results, financial condition, results of operations 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.  These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties.  Many of the factors that will determine these items 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, 2014.  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 the 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 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 nine months ended September 30, 2015 and 2014. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 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 nine months ended September 30, 2015 are not necessarily indicative of the operating results for the full year.

 

Critical Accounting Policies

 

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2014 in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 2 – Summary of Significant Accounting Policies” to the consolidated financial statements included therein.  There have been no significant changes to these policies during 2015.

 

 

16

 


 
 

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 seven properties in the greater New York City metropolitan area.

 

We compete with a large number of property owners and developers.  Our success depends upon, among other factors, trends of the world, 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 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.

 

Quarter Ended September 30, 2015 Financial Results Summary

 

Net income for the quarter ended September 30, 2015 was $18,172,000, or $3.55 per diluted share, compared to $17,692,000, or $3.46 per diluted share for the quarter ended September 30, 2014.  Funds from operations (“FFO”) for the quarter ended September 30, 2015 was $26,140,000, or $5.11 per diluted share, compared to $24,928,000, or $4.88 per diluted share for the quarter ended September 30, 2014.

 

Nine Months Ended September 30, 2015 Financial Results Summary

 

Net income for the nine months ended September 30, 2015 was $53,335,000, or $10.43 per diluted share, compared to $49,764,000, or $9.74 per diluted share for the nine months ended September 30, 2014. FFO for the nine months ended September 30, 2015 was $75,918,000, or $14.85 per diluted share, compared to $71,472,000, or $13.99 per diluted share for the nine months ended September 30, 2014.

 

Square Footage, Occupancy and Leasing Activity

As of September 30, 2015, our portfolio was comprised of seven properties aggregating 2,178,000 square feet that had an occupancy rate of 99.7%. 

 

Financing

On March 10, 2015, we completed a one-year extension of the 100% cash collateralized loan on Rego Park I.  The interest-only loan has a fixed rate of 0.40% and matures in March 2016.

 

On August 5, 2015, we completed a $350,000,000 refinancing of the retail portion of 731 Lexington Avenue. The interest-only loan is at LIBOR plus 1.40% and matures in August 2020, with two one-year extension options. The Company realized net proceeds of approximately $26,000,000 after repaying the existing loan and closing costs. 

 

Significant Tenants

 

Bloomberg, L.P. (“Bloomberg”) accounted for revenue of $70,702,000 and $67,488,000, representing approximately 45% of our total revenues in each of the nine-month periods ended September 30, 2015 and 2014, 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.

 

In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015 covering 188,608 square feet of office space at our 731 Lexington Avenue property for a term of five years.  We are currently in negotiations with Bloomberg to determine the rental rate for the extension period.

 

17

 


 
 

Results of Operations – Three Months Ended September 30, 2015, compared to September 30, 2014

 

Property Rentals

Property rentals were $34,599,000 in the quarter ended September 30, 2015, compared to $33,984,000 in the prior year’s quarter, an increase of $615,000.  This increase is primarily due to higher straight-line rental income of $347,000 resulting from Bloomberg exercising its option to extend leases in October 2014 that were scheduled to expire in December 2015.  In addition, there was higher rental income of $147,000 from a new tenant at our Rego Park II property.

 

Expense Reimbursements

Tenant expense reimbursements were $17,815,000 in the quarter ended September 30, 2015, compared to $16,093,000 in the prior year’s quarter, an increase of $1,722,000. This increase was primarily due to higher reimbursable real estate taxes and reimbursable operating expenses.

 

Operating Expenses

Operating expenses were $19,390,000 in the quarter ended September 30, 2015, compared to $17,299,000 in the prior year’s quarter, an increase of $2,091,000. This increase was primarily comprised of  higher reimbursable real estate taxes of $1,211,000 and higher reimbursable operating expenses of $956,000, partially offset by lower bad debt expense of $76,000.

 

Depreciation and Amortization

Depreciation and amortization was $8,092,000 in the quarter ended September 30, 2015, compared to $7,271,000 in the prior year’s quarter, an increase of $821,000. This increase was primarily due to depreciation related to the portion of The Alexander apartment tower that was placed in service during the current quarter.

 

General and Administrative Expenses

General and administrative expenses were $1,091,000 in the quarter ended September 30, 2015, compared to $1,127,000 in the prior year’s quarter, a decrease of $36,000.

 

Interest and Other Income, net

Interest and other income, net was $427,000 in the quarter ended September 30, 2015, compared to $409,000 in the prior year’s quarter, an increase of $18,000. 

 

Interest and Debt Expense

Interest and debt expense was $6,094,000 in the quarter ended September 30, 2015, compared to $7,446,000 in the prior year’s quarter, a decrease of $1,352,000. This decrease was primarily due to savings of $1,106,000 resulting from the refinancing of the retail portion of 731 Lexington Avenue on August 5, 2015 at LIBOR plus 1.40% (1.61% as of September 30, 2015).  The prior loan had a fixed rate of 4.93%.  In addition, there were higher capitalized interest costs of $223,000 during the current quarter related to the development of The Alexander apartment tower.

 

Income Taxes

Income tax expense was $2,000 in the quarter ended September 30, 2015 compared to an income tax benefit of $349,000 in the prior year’s quarter. The income tax benefit in the prior year’s quarter resulted from a reversal of tax liabilities after the expiration of the applicable statute of limitations.

 

18

 


 
 

Results of Operations – Nine Months Ended September 30, 2015, compared to September 30, 2014

 

Property Rentals

Property rentals were $103,654,000 in the nine months ended September 30, 2015, compared to $102,166,000 in the prior year’s nine months, an increase of $1,488,000.  This increase is primarily due to higher straight-line rental income of $1,015,000 resulting from Bloomberg exercising its option to extend leases in October 2014 that were scheduled to expire in December 2015.  In addition, there was higher rental income of $236,000 from a new tenant at our Rego Park II property and an increase in parking income of $224,000 at our Rego Park I property.

 

Expense Reimbursements

Tenant expense reimbursements were $51,442,000 in the nine months ended September 30, 2015, compared to $47,362,000 in the prior year’s nine months, an increase of $4,080,000. This increase was primarily due to higher reimbursable real estate taxes and higher reimbursable operating expenses.

 

Operating Expenses

Operating expenses were $55,985,000 in the nine months ended September 30, 2015, compared to $50,939,000 in the prior year’s nine months, an increase of $5,046,000.  This increase was primarily due to (i) higher reimbursable real estate taxes of $3,271,000, (ii) $939,000 from the burn off of certain real estate tax benefits at our 731 Lexington Avenue property, and (iii) higher reimbursable operating expenses of $1,453,000, partially offset by (iv) lower bad debt expense of $617,000.

 

Depreciation and Amortization

Depreciation and amortization was $22,783,000 in the nine months ended September 30, 2015, compared to $21,812,000 in the prior year’s nine months, an increase of $971,000.  This increase was primarily due to depreciation related to the portion of The Alexander apartment tower that was placed in service during the third quarter of 2015.

 

General and Administrative Expenses

General and administrative expenses were $4,261,000 in the nine months ended September 30, 2015, compared to $3,872,000 in the prior year’s nine months, an increase of $389,000. This increase was due to higher stock-based compensation expense in connection with the fair value of deferred stock units granted to a newly appointed member of our Board of Directors during the second quarter of 2015, comprised of an initial award of $150,000 and a $56,000 annual award.

 

Interest and Other Income, net

Interest and other income, net was $1,237,000 in the nine months ended September 30, 2015, compared to $1,235,000 in the prior year’s nine months, an increase of $2,000.

 

Interest and Debt Expense

Interest and debt expense was $19,963,000 in the nine months ended September 30, 2015, compared to $24,720,000 in the prior year’s nine months, a decrease of $4,757,000.  This decrease was primarily due to (i) savings of $1,977,000 resulting from the refinancing of the office portion of 731 Lexington Avenue on February 28, 2014 at LIBOR plus 0.95% (1.16% as of September 30, 2015). The prior loan had a fixed rate of 5.33%; (ii) savings of $1,106,000 resulting from the refinancing of the retail portion of 731 Lexington Avenue on August 5, 2015 at LIBOR plus 1.40% (1.61% as of September 30, 2015).  The prior loan had a fixed rate of 4.93%; and (iii) higher capitalized interest costs of $1,155,000 during the current nine-month period related to the development of The Alexander apartment tower.

 

Income Taxes

Income tax expense was $6,000 in the nine months ended September 30, 2015, compared to an income tax benefit of $344,000 in the prior year’s nine months. The income tax benefit in the prior year’s nine months resulted from a reversal of tax liabilities after the expiration of the applicable statute of limitations.

 

19

 


 
 

Liquidity and Capital Resources

 

Cash Flows

 

Property rental income is our primary source of cash flow and is dependent on a number of factors, including the occupancy level and rental rates of our properties, as well as our tenants’ ability to pay their rents.  Our properties provide us with a relatively consistent stream of cash flow that enables us to pay our operating expenses, interest expense, recurring capital expenditures and cash dividends to stockholders.  Other sources of liquidity to fund cash requirements include our existing cash, proceeds from financings, including mortgage or construction loans secured by our properties and proceeds from asset sales.  We anticipate that cash flows 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 amortization, recurring capital expenditures and development expenditures related to The Alexander apartment tower.

 

On August 5, 2015, we completed a $350,000,000 refinancing of the retail portion of 731 Lexington Avenue. The interest-only loan is at LIBOR plus 1.40% and matures in August 2020, with two one-year extension options. The Company realized net proceeds of approximately $26,000,000 after repaying the existing loan and closing costs. 

 

Development Project

We are constructing an apartment tower, The Alexander, above our Rego Park II shopping center, containing 312 units aggregating 255,000 square feet. The estimated cost of this project, including initial leasing costs to achieve stabilized occupancy, is approximately $125,000,000, of which $113,000,000 has been incurred as of September 30, 2015. In the third quarter of 2015, we received a temporary certificate of occupancy (“TCO”) for certain floors of the apartment tower where construction has been substantially completed. Accordingly, this portion of the apartment tower has been placed in service.  Construction of the remaining floors is expected to be substantially completed during the fourth quarter of 2015 and we expect to receive the related TCO by December 31, 2015.

 

Nine Months Ended September 30, 2015

Cash and cash equivalents were $252,866,000 as of September 30, 2015, compared to $227,815,000 as of December 31, 2014, an increase of $25,051,000.  This increase resulted from (i) $72,258,000 of net cash provided by operating activities partially offset by (ii) $30,118,000 of net cash used in financing activities and (iii) $17,089,000 of net cash used in investing activities. 

 

 Net cash provided by operating activities of $72,258,000 was comprised of net income of $53,335,000, adjustments for non-cash items of $24,049,000 and the net change in operating assets and liabilities of $5,126,000.  The adjustments for non-cash items were comprised of depreciation and amortization (including amortization of debt issuance costs) of $24,725,000, stock-based compensation expense of $600,000, partially offset by straight-lining of rental income of $1,276,000.

 

Net cash used in investing activities of $17,089,000 was primarily comprised of construction in progress and real estate additions of $41,919,000 (primarily related to The Alexander apartment tower) partially offset by proceeds of $24,998,000 from short-term investments that matured during the second quarter of 2015.

 

Net cash used in financing activities of $30,118,000 was primarily comprised of (i) debt repayments of $322,372,000  (primarily  due  to  the  repayment of the prior loan on the retail  portion of 731 Lexington Avenue)  and (ii) dividends paid of  $53,675,000, partially offset by (iii) proceeds of $350,000,000 related to the August 2015 refinancing of the retail portion of 731 Lexington Avenue.

 

20

 


 
 

Liquidity and Capital Resources – continued

 

Nine Months Ended September 30, 2014

 

Cash and cash equivalents were $308,976,000 at September 30, 2014, compared to $347,718,000 at December 31, 2013, a decrease of $38,742,000. This decrease resulted from $70,488,000 of net cash used in financing activities and $34,663,000 of net cash used in investing activities, partially offset by $66,409,000 of net cash provided by operating activities.

 

Net cash provided by operating activities of $66,409,000 was comprised of net income of $49,764,000 and adjustments for non-cash items of $21,907,000, partially offset by the net change in operating assets and liabilities of $5,262,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization of $23,838,000 and (ii) stock-based compensation expense of $394,000, partially offset by (iii) straight-lining of rental income of $1,905,000 and (iv) a $420,000 reversal of the liability for income taxes.

 

Net cash used in investing activities of $34,663,000 was comprised of capital expenditures of $39,957,000 (primarily related to The Alexander apartment tower), partially offset by a decrease in restricted cash of $5,294,000.

 

Net cash used in financing activities of $70,488,000 was primarily comprised of (i) debt repayments of $316,418,000 (primarily due to the repayment of the prior loan on the office portion of 731 Lexington Avenue) and (ii) dividends paid of $49,825,000, partially offset by (iii) $300,000,000 of proceeds from the refinancing of the office portion of 731 Lexington Avenue.

 

Commitments and Contingencies

 

Insurance

We maintain general liability insurance with limits of $300,000,000 per occurrence 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.

 

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 Program Reauthorization Act, which expires in December 2020.  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 with no exposure to FNSIC.  For NBCR acts, FNSIC is responsible for a $275,000 deductible and 15% of the balance (16% effective January 1, 2016) of a covered loss, and the Federal government is responsible for the remaining 85% (84% effective January 1, 2016) 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.  However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future.  We are responsible for deductibles and losses in excess of our insurance coverage, which could be material.

 

Our mortgage loans are non-recourse to us and 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 our properties.

 

21

 


 
 

Liquidity and Capital Resources – continued

 

Rego Park I Litigation

On June 24, 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to space that Sears leases at our Rego Park I property.  Sears alleges that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage.  Sears asserts various causes of actions for damages and seeks to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a nuisance that Sears claims was a cause of the water intrusions into its premises.  In addition to injunctive relief, Sears seeks, among other things, damages of not less than $4 million and future damages it estimates will not be less than $25 million.  We intend to defend the claims vigorously. The amount or range of reasonably possible losses, if any, cannot be estimated.

 

Paramus

In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage loan with a fixed rate of 2.90%, which matures in October 2018.  The annual triple-net rent is the sum of $700,000 plus the amount of debt service on the mortgage loan. If the purchase option is exercised, we will receive net cash proceeds of approximately $7,000,000 and recognize a gain on sale of land of approximately $60,000,000. If the purchase option is not exercised, the triple-net rent for the last 20 years would include debt service sufficient to fully amortize $68,000,000 over the remaining 20-year lease term.

 

Letters of Credit

Approximately $2,074,000 of standby letters of credit were outstanding as of September 30, 2015. 

 

Other

     On October 15, 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an additional $20,300,000 of transfer taxes (including interest and penalties) in connection with the sale of Kings Plaza in November 2012.  We believe that the NYC DOF’s claim is without merit and intend to vigorously contest this assessment.  We have determined that the likelihood of a loss related to this issue is not probable and, after consultation with legal counsel, that the outcome of this assessment is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

 

     There are various other legal actions against us in the ordinary course of business.  In our opinion, the outcome of such 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”)

 

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 depreciated real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets, extraordinary items and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries.  FFO and FFO per diluted share are 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 for the Three and Nine Months Ended September 30, 2015 and 2014

 

FFO for the quarter ended September 30, 2015 was $26,140,000, or $5.11 per diluted share, compared to $24,928,000, or $4.88 per diluted share for the prior year’s quarter.

 

FFO for the nine months ended September 30, 2015 was $75,918,000, or $14.85 per diluted share, compared to $71,472,000, or $13.99 per diluted share for the prior year’s nine months.

 

The following table reconciles our net income to FFO:

 

 

 

  

Three Months Ended

 

Nine Months Ended

 

 

 

  

September 30,

 

September 30,

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

2015 

 

2014 

 

2015 

 

2014 

Net income

$

 18,172 

 

$

 17,692 

 

$

 53,335 

 

$

49,764 

Depreciation and amortization of real property

 

 7,968 

 

 

 7,236 

 

 

 22,583 

 

 

21,708 

FFO

$

 26,140 

 

$

 24,928 

 

$

 75,918 

 

$

71,472 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

FFO per diluted share

$

 5.11 

 

$

 4.88 

 

$

 14.85 

 

$

 13.99 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in computing FFO per diluted share  

 

 5,113,077 

 

 

 5,111,201 

 

 

 5,112,108 

 

 

5,110,435 

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Item 3.   Quantitative and Qualitative Disclosures About Market Risk

 

We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control.  Our exposure to a change in interest rates is summarized in the table below.

 

 

 

2015 

 

2014 

 

 

 

 

 

Weighted

 

Effect of 1%

 

 

 

 

Weighted

 

 

September 30,

 

Average

 

Change in

 

December 31,

 

Average

(Amounts in thousands, except per share amounts)

Balance

 

Interest Rate

 

Base Rates

 

Balance

 

Interest Rate

Variable Rate (including $15 and $0,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   respectively, due to Vornado)

$

 914,177 

 

1.59%

 

 

$

 9,142 

 

$

 566,534 

 

1.54%

 

Fixed Rate

 

 146,246 

 

1.56%

 

 

 

 -   

 

 

 466,246 

 

3.87%

 

 

 

$

 1,060,423 

 

 

 

 

$

 9,142 

 

$

 1,032,780 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total effect on diluted earnings per share

 

 

 

 

 

 

$

 1.79 

 

 

 

 

 

 

 

As of September 30, 2015 we have an interest rate cap with a notional amount of $300,000,000 that caps LIBOR at a rate of 6.0%.

 

Fair Value of Debt

The fair value of our consolidated debt is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist.  As of September 30, 2015 and December 31, 2014, the estimated fair value of our consolidated debt was $1,054,215,000 and $1,025,000,000, respectively.  Our fair value estimates, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments.

 

 

Item 4.   Controls and Procedures

 

(a) Disclosure Controls and Procedures:  Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

 

(b) Internal Control Over Financial Reporting:  There have not been any changes in our internal control over financial reporting during the fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.   OTHER INFORMATION

 

 

Item 1.     Legal Proceedings

 

We are from time to time involved in legal actions arising in the ordinary course of business.  In our opinion, the outcome of such matters in the aggregate will not have a material effect on our financial condition, results of operations or cash flows.

 

For a discussion of the litigation concerning our Rego Park I property, see “Part I – Financial Information, Item 1 – Financial Statements, Note 11 – Commitments and Contingencies.”

 

 

 

Item 1A.  Risk Factors

 

There have been no material changes in our “Risk Factors” as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

 

 

 

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

 

None.

 

 

 

Item 3.     Defaults Upon Senior Securities

 

None.

 

 

 

Item 4.     Mine Safety Disclosures

 

Not applicable.

 

 

 

Item 5.     Other Information

 

None.

 

 

 

Item 6.     Exhibits

 

Exhibits required by Item 601 of Regulation S-K are filed herewith and are listed in the attached Exhibit Index.

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

ALEXANDER’S, INC.

 

 

(Registrant)

 

 

 

 

 

 

 

 

 

 

 

 

Date:  November 2, 2015

By:

/s/ Joseph Macnow

 

 

Joseph Macnow, Executive Vice President and
Chief Financial Officer (duly authorized officer and
principal financial and accounting officer)

 

 

26

 


 
 
 

 

 

EXHIBIT INDEX

 

 

Exhibit

 

 

 

 

 

No.

 

 

 

 

 

 

10.1

 

-

Third Omnibus Loan Modification and Extension Agreement, dated March 10, 2015, by and between Alexander’s Rego Shopping Center, Inc., as Borrower and U.S. Bank National Association, as Lender

 

*

 

10.2

 

-

Third Mortgage Modification Agreement, dated March 10, 2015, by and between Alexander’s Rego Shopping Center, Inc., as Mortgator and U. S. Bank National Association, as Mortgagee

 

*

 

10.3

 

-

Loan Agreement, dated as of August 5, 2015, by and between 731 Retail One LLC and 731 Commercial LLC, as Borrower, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Landesbank Baden-Württemberg, New York Branch, as Lenders

 

 

 

15.1

 

-

Letter regarding unaudited interim financial information

 

 

 

 

 

  

 

 

31.1

 

-

Rule 13a-14 (a) Certification of the Chief Executive Officer

 

 

 

 

 

  

 

 

31.2

 

-

Rule 13a-14 (a) Certification of the Chief Financial Officer

 

 

 

 

 

 

 

 

32.1

 

-

Section 1350 Certification of the Chief Executive Officer

 

 

 

 

 

  

 

 

32.2

 

-

Section 1350 Certification of the Chief Financial Officer

 

 

 

 

 

 

 

 

101.INS

 

-

XBRL Instance Document

 

 

 

 

 

  

 

 

101.SCH

 

-

XBRL Taxonomy Extension Schema

 

 

 

 

 

  

 

 

101.CAL

 

-

XBRL Taxonomy Extension Calculation Linkbase

 

 

 

 

 

  

 

 

101.DEF

 

-

XBRL Taxonomy Extension Definition Linkbase

 

 

 

 

 

  

 

 

101.LAB

 

-

XBRL Taxonomy Extension Label Linkbase

 

 

 

 

 

  

 

 

101.PRE

 

-

XBRL Taxonomy Extension Presentation Linkbase

 

 

 

 

 

 

 

 

 

 

         

            

 

 

 

 

 

 

 

 

   _________________

* Incorporated by reference from Form 10-Q filed on May 4, 2015.

                 

 

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