Redeemable Noncontrolling Interests

9 Months Ended

Sep. 30, 2023

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.

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


(Amounts in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Beginning balance	$	410,276	$	412,022	$	348,692	$	590,975
Net income	4,736		606		8,773		6,382
Other comprehensive income	1,634		8,299		26		15,044
Distributions	(29)		(7,579)		(5,658)		(22,740)
Redemption of Class A units for Vornado common shares, at redemption value	(1,615)		(992)		(7,173)		(2,569)
Redeemable Class A unit measurement adjustment	(8,954)		(21,857)		58,159		(215,619)
Other, net	9,127		3,575		12,356		22,601
Ending balance	$	415,175	$	394,074	$	415,175	$	394,074

As of September 30, 2023 and December 31, 2022, the aggregate redemption value of redeemable Class A units of the Operating Partnership, which are those units held by third parties, was $383,907,000 and $300,015,000, respectively, based on Vornado’s quarter-end closing common share price.

On April 26, 2023, Vornado announced the postponement of dividends on its common shares until the end of 2023, at which time, upon finalization of its 2023 taxable income, including the impact of asset sales, it will pay the 2023 dividend in either (i) cash, or (ii) a combination of cash and securities, as determined by its Board of Trustees. Distributions to Class A unitholders of the Operating Partnership will correspondingly be postponed with the postponement of dividends to Vornado common shareholders.

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. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $49,383,000 as of September 30, 2023 and December 31, 2022, 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 hold a 95% interest, developed and owns the Farley Building (the "Farley Project"). During 2020, a historic tax credit investor (the "Tax Credit Investor") funded $92,400,000 of capital contributions to the Farley Project 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 Farley 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. 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 three and nine months ended September 30, 2023 and 2022.

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


(Amounts in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Beginning balance	$	70,020	$	93,987	$	88,040	$	97,708
Net loss	(11,191)		(4,759)		(29,211)		(8,480)


Ending balance	$	58,829	$	89,228	$	58,829	$	89,228