Redeemable Noncontrolling Interests

12 Months Ended

Dec. 31, 2021

Redeemable Noncontrolling Partnership Units

Redeemable noncontrolling partnership units are primarily comprised of Class A Operating Partnership units held by third parties and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unitholder is equal to the quarterly dividend paid to a Vornado common shareholder.

10. Redeemable Noncontrolling Interests - continued

Redeemable Noncontrolling Partnership Units - continued

Below are the details of redeemable noncontrolling partnership units.


(Amounts in thousands, except units and per unit amounts)	Balance as of December 31,						Units Outstanding as of December 31,		Per Unit Liquidation Preference		Preferred or Annual Distribution Rate
Unit Series	2021			2020			2021	2020
Common:
Class A units held by third parties	$	587,440	(1)	$	507,212	(1)	14,033,438	13,583,607	n/a		$	2.12

Perpetual Preferred/Redeemable Preferred:
5.00% D-16 Cumulative Redeemable(2)	$	—		$	1,000		—	1	n/a		n/a
3.25% D-17 Cumulative Redeemable(3)	$	3,535		$	3,535		141,400	141,400	$	25.00	$	0.8125

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(1)Aggregate redemption value was based on Vornado's year-end closing common share price.

(2)Redeemed on October 18, 2021.

(3)Holders may tender units for redemption to the Operating Partnership for cash at their stated redemption amount; Vornado, at its option, may assume that obligation and pay the holders either cash or Vornado preferred shares on a one-for-one basis. These units are redeemable at Vornado's option at any time.

Below is a table summarizing the activity of redeemable noncontrolling partnership units.


(Amounts in thousands)	For the Year Ended December 31,
	2021		2020
Beginning balance	$	511,747	$	888,915
Net income (loss)	7,540		(24,946)
Other comprehensive income (loss)	4,048		(2,914)
Distributions	(29,901)		(32,595)
Redemption of Class A units for Vornado common shares, at redemption value	(14,576)		(9,266)
Redeemable Class A unit measurement adjustment	76,073		(344,043)
Other, net	36,044		36,596
Ending balance	$	590,975	$	511,747

Redeemable noncontrolling partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC Topic 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $49,659,000 and $50,002,000 as of December 31, 2021 and 2020, respectively. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income.

Redeemable Noncontrolling Interest in a Consolidated Subsidiary

A consolidated joint venture in which we own a 95% interest is developing Farley Office and Retail (the "Project"). During 2020, a historic tax credit investor (the "Tax Credit Investor") funded $92,400,000 of capital contributions and is expected to make additional capital contributions in future periods.

The arrangement includes a put option whereby the joint venture may be obligated to purchase the Tax Credit Investor’s ownership interest in the Project at a future date. The put price is calculated based on a pre-determined formula. As exercise of the put option is outside of the joint venture’s control, the Tax Credit Investor’s interest, together with the put option, have been recorded to “redeemable noncontrolling interest in a consolidated subsidiary” on our consolidated balance sheets as of December 31, 2021 and 2020. The redeemable noncontrolling interest is recorded at the greater of the carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. There was no adjustment required for the years ended December 31, 2021 and 2020.

10. Redeemable Noncontrolling Interests - continued

Redeemable Noncontrolling Interest in a Consolidated Subsidiary - continued

Below is a table summarizing the activity of the redeemable noncontrolling interest in a consolidated subsidiary.


	For the Year Ended December 31,
(Amounts in thousands)	2021		2020
Beginning balance	$	94,520	$	—
Net income	3,188		544
Contributions	—		92,400
Other, net	—		1,576
Ending balance	$	97,708	$	94,520