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Vornado expects impairments in Q3 results from JBG spinoff, other items

Vornado Realty Trust said its third-quarter financial results will include a $44.5 million noncash impairment loss on its investment in Pennsylvania Real Estate Investment Trust due to a sustained trading stock price below its carrying value.

The results will also include $53.6 million of transaction costs related to its spin-off of JBG SMITH Properties, which took place July 17.

Vornado said it received the Pennsylvania REIT operating partnership units as part of sale proceeds for the Springfield Mall in Springfield, Pa.

Negative mark-to-market fair value adjustments of $7.7 million from Vornado's real estate fund and a $1.8 million net loss from other items will also be included in the financial results.

The company said it expects the above amounts to translate into an aggregate net loss of 51 cents per diluted share in its net income attributable to common shareholders in its third-quarter results, and the net loss will be excluded from adjusted net income attributable to common shareholders.

On a funds from operations basis, a net loss of 47 cents per diluted share is expected, which will be included in the total FFO but excluded from adjusted FFO.