ALEXANDERS INC (ALX)

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 represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10-Q. We also note the following forward-looking statements: estimates of future rents, estimates of future capital expenditures and estimates of dividends on shares of our common stock. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For a further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and six months ended June 30, 2026. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the operating results for the full year.

Critical Accounting Estimates and Significant Accounting Policies

A summary of the critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. For the six months ended June 30, 2026, there were no material changes to these estimates or policies.

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Overview

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO). We have four properties in New York City.

We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.

Our business has been, and may continue to be, affected by interest rate fluctuations, the effects of inflation and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding these and other factors that may materially affect our results.

Quarter Ended June 30, 2026 Financial Results Summary

Net income for the quarter ended June 30, 2026 was $155,362,000, or $30.24 per diluted share, compared to $6,120,000 or $1.19 per diluted share in the prior year’s quarter. Net income for the quarter ended June 30, 2026 included $148,002,000, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property.

Funds from operations (“FFO”) (non-GAAP) for the quarter ended June 30, 2026 was $15,538,000, or $3.02 per diluted share, compared to $14,762,000 or $2.88 per diluted share in the prior year’s quarter.

Six Months Ended June 30, 2026 Financial Results Summary

Net income for the six months ended June 30, 2026 was $160,024,000, or $31.15 per diluted share, compared to $18,432,000 or $3.59 per diluted share in the prior year’s six months. Net income for the six months ended June 30, 2026 included $148,002,000, or $28.81 per diluted share, of income as a result of a net gain from the sale of the Rego Park I property.

FFO (non-GAAP) for the six months ended June 30, 2026 was $28,902,000, or $5.63 per diluted share, compared to $35,604,000 or $6.93 per diluted share in the prior year’s six months.

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Overview - continued

Square Footage, Occupancy and Leasing Activity

Our portfolio is comprised of four properties aggregating 2,110,000 square feet. As of June 30, 2026, the commercial occupancy rate was 94.6% and the residential occupancy rate was 97.4%.

On June 26, 2026, we entered into a lease modification agreement with a 135,000 square foot tenant at our Rego Park shopping center providing options for us and the tenant to early terminate the lease in August 2026, subject to a payment of approximately $29,000,000 from the tenant. Simultaneously, we entered into a 15-year lease, plus renewal options, with Target for that space.

On January 31, 2025, Home Depot’s 83,000 square foot lease at the retail portion of our 731 Lexington Avenue property expired. Annual rental revenues from Home Depot were approximately $15,000,000.

Bloomberg L.P. (“Bloomberg”) leases approximately 952,000 square feet at our 731 Lexington Avenue property and accounted for revenue of $65,229,000 and $64,446,000 for the six months ended June 30, 2026 and 2025, respectively, representing approximately 60% and 61% of our rental revenues in each period, respectively. No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

In May 2024, Alexander’s and Bloomberg entered into an agreement to extend Bloomberg’s leases that were scheduled to expire in February 2029 for a term of eleven years to February 2040. In connection with the lease extension, Bloomberg was entitled to a $113,618,000 tenant fund which is accounted for as a lease incentive under GAAP. Accordingly, there was an initial deferred lease incentive asset of $113,618,000, which is amortized as a reduction to rental revenues over the remaining term of the lease, and a corresponding liability. These amounts are included in “Deferred leasing costs, net” and “Lease incentive liability,” on our consolidated balance sheets. On March 31, 2026, Alexander’s and Bloomberg entered into a lease amendment providing Bloomberg with a rent abatement of $56,809,000 for the period of April 1, 2026 to December 1, 2026, which reduces the tenant fund by a corresponding amount over that period from $113,618,000 to $56,809,000.

Real Estate Sale

On May 28, 2026, we completed the sale of our Rego Park I property, located in Queens, New York, for $235,500,000, with total proceeds of $202,750,000, net of costs, and a financial statement gain of $148,002,000.

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Results of Operations – Three Months Ended June 30, 2026, compared to June 30, 2025

Rental Revenues

Rental revenues were $54,711,000 for the three months ended June 30, 2026, compared to $51,589,000 for the prior year’s three months, an increase of $3,122,000. This was primarily due to (i) $1,699,000 of higher straight-line revenue resulting from a tenant lease modification and $1,501,000 of higher rental revenue from new leases at the Rego Park shopping center, (ii) $1,654,000 of higher operating expense recoveries from higher operating expenses and (iii) $415,000 of higher lease termination fee income, partially offset by (iv) $1,243,000 of lower rental revenue from retail tenant expirations at 731 Lexington Avenue and (v) $1,104,000 of lower rental revenue from lease expirations at Rego Park I.

Operating Expenses

Operating expenses were $26,743,000 for the three months ended June 30, 2026, compared to $25,934,000 for the prior year’s three months, an increase of $809,000. This was primarily due to (i) $786,000 of higher operating expenses subject to recovery, including common area maintenance and real estate taxes and (ii) $696,000 of lower capitalized expenses, partially offset by (iii) $879,000 of lower operating expenses at Rego Park I.

Depreciation and Amortization

Depreciation and amortization was $8,230,000 for the three months ended June 30, 2026, compared to $8,707,000 for the prior year’s three months, a decrease of $477,000. This was primarily due to the cessation of depreciation at Rego Park I that began in the first quarter of 2026 upon classification of the property as held for sale, partially offset by higher depreciation expense on capital costs for new leases at the Rego Park shopping center.

General and Administrative Expenses

General and administrative expenses were $3,266,000 for the three months ended June 30, 2026, compared to $1,955,000 for the prior year’s three months, an increase of $1,311,000. This was primarily due to $1,062,000 of higher professional fees and $263,000 of higher stock-based compensation expense from an increase in the amount of deferred stock units granted to our Board of Directors in the current year’s quarter.

Interest and Other Income

Interest and other income was $1,684,000 for the three months ended June 30, 2026, compared to $3,928,000 for the prior year’s three months, a decrease of $2,244,000. This was primar

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Introduction

The following discussion should be read in conjunction with the consolidated financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is focused on the years ended December 31, 2025 and 2024, including year-to-year comparisons between these years. Our MD&A for the year ended December 31, 2023, including year-to-year comparisons between 2024 and 2023, can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

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 five properties in New York City.

We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due. See “Item 1A. Risk Factors” in this Annual Report on Form 10-K for additional information regarding these factors.

Our business has been, and may continue to be, affected by interest rate fluctuations, the effects of inflation and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows.

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Overview - continued

Year Ended December 31, 2025 Financial Results Summary

Net income for the year ended December 31, 2025 was $28,224,000 or $5.50 per diluted share, compared to $43,444,000 or $8.46 per diluted share for the year ended December 31, 2024.

Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 2025 was $62,995,000, or $12.27 per diluted share, compared to $77,968,000, or $15.19 per diluted share for the year ended December 31, 2024.

Square Footage, Occupancy and Leasing Activity

As of December 31, 2025, our portfolio was comprised of five properties aggregating 2,446,000 square feet. The commercial occupancy rate was 94.6% and the residential occupancy rate was 97.7%.

On January 31, 2025, Home Depot’s 83,000 square foot lease at the retail portion of our 731 Lexington Avenue property expired. Annual rental revenues from Home Depot were approximately $15,000,000.

In the fourth quarter of 2024, we entered into ten-year leases with Burlington and Marshalls to relocate them to our Rego Park II property in 2025 from our Rego Park I property which is now vacant. We are currently exploring sale opportunities for our Rego Park I property and are in advanced negotiations with a potential buyer.

Significant Tenant

Bloomberg accounted for revenue of $129,317,000, $125,349,000 and $120,351,000 in the years ended December 31, 2025, 2024 and 2023, respectively, representing approximately 61%, 55% and 54% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

Financings

On December 5, 2025, we completed a $175,000,000 refinancing of the mortgage loan on our Rego Park II shopping center. The interest-only loan is at SOFR plus 2.00% (5.72% as of December 31, 2025) and matures on December 5, 2030. We paid down by $23,544,000 the previous $198,544,000 loan that bore interest at SOFR plus 1.45% and was scheduled to mature on December 12, 2025.

On December 23, 2025, we entered into an agreement to restructure the $300,000,000 mortgage loan on the retail condominium portion of 731 Lexington Avenue, which previously bore interest at SOFR plus 1.51%. The restructured loan was split into (i) a $132,500,000 senior A-Note that was purchased by a wholly owned subsidiary of Alexander’s, which bears interest at a fixed rate of 7.00% and (ii) a $167,500,000 junior C-Note held by the lenders of the original loan, which accrues PIK interest at 4.55%. In addition, Alexander’s has the right to fund operating shortfalls, interest on the A-Note and capital for re-leasing at the property through a B-Note, which will be junior to the A-Note and senior to the C-Note. The B-Note bears interest at a fixed rate of 13.50%, except for loan amounts above $65,000,000 used to pay interest on the A-Note, which will bear interest at a fixed rate of 7.00%. The restructured loan matures in December 2035.

All future net sales or refinancing proceeds will be distributed through the payment waterfall per the terms of the restructured loan agreement. If such proceeds (or appraised value in such refinancing) are insufficient to cover the C-Note loan balance, any outstanding C-Note indebtedness that remains unpaid shall be forgiven.

Since the debt balances related to the A-Note and B-Note are eliminated in consolidation, the balance presented as mortgages payable for this loan on our consolidated balance sheet as of December 31, 2025 is $167,691,000, which is comprised of the principal balance of the C-Note and the PIK interest due upon maturity.

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Critical Accounting Estimate

In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates are deemed critical if they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Below is the critical accounting estimate used in the preparation of our consolidated financial statements. A discussion of our accounting policies is included in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K.

Impairment Analyses for Real Estate

Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment analyses are based on current plans, intended holding periods, ability to hold and available information at the time the analyses are prepared. Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, capital expenditures, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows or estimated fair value of an asset and could thereby affect the value of our real estate on our consolidated balance sheets as well as any potential impairment losses recognized on our consolidated statements of income.

Recent Accounting Pronouncements

See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements.

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Results of Operations – Year Ended December 31, 2025 compared to December 31, 2024

Rental Revenues

Rental revenues were $213,183,000 in the year ended December 31, 2025, compared to $226,374,000 in the prior year, a decrease of $13,191,000. This was primarily due to (i) $13,831,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue and (ii) $9,001,000 of lower rental revenue from IKEA’s lease expiration at Rego Park I, partially offset by (iii) $4,399,000 of higher rental revenue from new leases at Rego Park II, (iv) $3,403,000 of higher recoveries of operating expenses and capital expenditures and (v) $2,325,000 of higher rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue.

Operating Expenses

Operating expenses were $106,376,000 in the year ended December 31, 2025, compared to $103,240,000 in the prior year, an increase of $3,136,000. This was primarily due to (i) $2,388,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance and (ii) $1,179,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $431,000.

Depreciation and Amortization

Depreciation and amortization was $35,061,000 in the year ended December 31, 2025, compared to $34,782,000 in the prior year, an increase of $279,000. This was primarily due to higher depreciation and amortization expense on capital costs for new leases at Rego Park II, partially offset by the accelerated depreciation and amortization related to IKEA’s lease expiration at Rego Park I in the prior year.

General and Administrative Expenses

General and administrative expenses were $6,555,000 in the year ended December 31, 2025, compared to $6,519,000 in the prior year, an increase of $36,000.

Interest and Other Income

Interest and other income was $14,657,000 in the year ended December 31, 2025, compared to $24,429,000 in the prior year, a decrease of $9,772,000. This was primarily due to a decrease in average interest rates and investment balances.

Interest and Debt Expense

Interest and debt expense was $51,624,000 in the year ended December 31, 2025, compared to $62,818,000 in the prior year, a decrease of $11,194,000. This was primarily due to (i) $8,439,000 from lower rates, (ii) $6,833,000 from the refinancing and downsize of the 731 Lexington Office loan in September 2024 and (iii) $5,883,000 of lower interest rate cap premium amortization, partially offset by (iv) $9,665,000 from the expiration of the 731 Lexington Retail swap in May 2025.

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Related Party Transactions

Vornado

As of December 31, 2025, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by, Vornado, pursuant to various agreements, which expire in March of each year and are automatically renewable. These agreements are described in Note 4 – Related Party Transactions, to our consolidated financial statements in this Annual Report on Form 10-K.

Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. As of December 31, 2025, Mr. Ro

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