Vornado Realty Trust VNO is scheduled to report second-quarter 2026 results on Aug. 3, after market close. The company’s quarterly results are likely to display a year-over-year rise in revenues as well as funds from operations (FFO) per share.
In the last reported quarter, this New York-based real estate investment trust’s (REIT) FFO per share, plus assumed conversions, on an adjusted basis, was 52 cents, in line with the Zacks Consensus Estimate. Results displayed year-over-year growth in same-store NOI and occupancy for the New York and THE MART portfolios. The company witnessed decent leasing activities in the New York and THE MART portfolios.
Over the trailing four quarters, Vornado’s FFO per share, plus assumed conversions, on an adjusted basis, topped the Zacks Consensus Estimate on three occasions and missed in the remainder, the average surprise being 1.45%. This is depicted in the graph below:
Vornado Realty Trust Price and EPS Surprise
Vornado Realty Trust price-eps-surprise | Vornado Realty Trust Quote
As we approach the release of Vornado's second-quarter 2026 earnings report, it is important to examine how this office REIT is likely to have performed amid the current market conditions.
US Office Market in Q2
Per a Cushman & Wakefield report, the U.S. office market continued to recover in the second quarter of 2026, with AI-driven business expansion emerging as a key catalyst for demand, particularly in major gateway markets. AI companies, along with law firms and other professional-services tenants, increasingly sought high-quality office space to support employee collaboration, productivity and growth.
Although quarterly net absorption was slightly negative at 360,000 square feet, the four-quarter rolling total rose to 14.3 msf — the strongest since 2020 and the seventh consecutive quarter of improvement. Demand was broad-based, with positive annual absorption in 60% of tracked markets.
Vacancy stabilized at 20.1%, while available sublease space fell 15% year over year and 28% from its first-quarter 2024 peak. Class A offices continued to outperform, with vacancy declining 50 bps year over year and four-quarter net absorption reaching 24.5 msf, the highest since mid-2020. This stronger demand also supported premium pricing, with Class A asking rents averaging $44.17 per square foot in second-quarter 2026, well above the $38.38 national average across all office classes.
Supply conditions also remain supportive. Office completions fell to a 14-year low, the construction pipeline stayed below 20 msf, while conversions, demolitions and repositioning surged. These trends should limit oversupply and support further improvement in premium office fundamentals.
Factors to Consider Ahead of VNO’s Q2 Results
In reference to the above U.S. office market environment, strong demand for high-quality office space is likely to have supported leasing activity for Vornado’s strategically located premium portfolio in the second quarter of 2026.
The company entered second-quarter 2026 with more than 1 million square feet of New York office leases under negotiation, while first-quarter 2026 Manhattan leasing generated average starting rents of $103 per square foot and positive cash mark-to-market spreads of 9.7%.
However, second-quarter 2026 may reflect lower rent from the modified 350 Park Avenue master lease, with management indicating that most of this impact would begin in the said period, as well as continued pressure from financing costs despite expectations for interest expense to ease after the June bond repayment.
Projections for VNO
The consensus mark for Vornado’s New York revenues is pinned at $368.7 million, up 2.9% from the prior-year quarter.
The Zacks Consensus Estimate for quarterly revenues is pegged at $472.4 million, implying a 7% year-over-year gain.
The consensus mark for Vornado’s other revenues stands at $84.6 million, up 1.6% from the prior-year quarter.
The Zacks Consensus Estimate for occupancy in the New York office portfolio is pegged at 92%, up from 91.6% reported in the prior quarter.
The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unchanged at 57 cents for more than three months. The figure indicates a 1.79% increase from the prior-year period’s reported number.
What Our Quantitative Model Predicts for VNO
Our proven model does not conclusively predict a surprise in terms of FFO per share for Vornado this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Vornado has an Earnings ESP of -1.56% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — Extra Space Storage EXR and Highwoods Properties HIW— you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.
Extra Space Storage is slated to report quarterly numbers on July 28. EXR has an Earnings ESP of +0.39% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Highwoods Properties is slated to report quarterly numbers on July 28. HIW has an Earnings ESP of +0.47% and a Zacks Rank of 3 at present.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Vornado Realty Trust (VNO): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).