Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

As part of its initiatives to reposition its portfolio and enhance the portfolio mix, Vornado Realty Trust (VNO - Analyst Report) accomplished the purchase of a retail and office property on 655 Fifth Avenue Manhattan. Specifically, Vornado shelled out $278 million for acquiring 92.5% of the property. The rest of the stake is owned by Madison Capital.

As a matter of fact, Vornado is currently focused on improving its core business by making opportunistic buyouts like this Manhattan property. Spanning 57,500 square foot this property is leased through 2028 to Ferragamo for its Manhattan store. We believe this long-term lease deal will shield the company from the short-term headwinds in the market.

Moreover, recently, Vornado disclosed that its joint venture, in collaboration with institutional investors advised by J.P. Morgan Asset Management of JP Morgan Chase & Co. (JPM - Analyst Report), acquired a Class A office tower – 650 Madison Avenue – for $1.295 billion.

On the other hand, the company is making strategic divestitures. During second-quarter 2013, it sold a power strip shopping center – The Plant – in San Jose for $203 million and realized a net gain of approximately $32.2 million. Additionally, the company disposed its 26.2% stake in LNR Property LLC to Starwood Property Trust Inc. (STWD - Snapshot Report) and Starwood Capital Group for $1.05 billion. Vornado reaped approximately $241 million as net proceeds from the sale.

We expect these concerted efforts to add to Vornado’s financial flexibility and aid in profitable investment opportunities. These would help in strengthening its Class A office properties portfolio that is concentrated in select high-rent, high barrier-to-entry geographic markets, which usually fare better amid challenging economic conditions.

Vornado currently has a Zacks Rank #4 (Sell). The other better-performing REIT that is worth a look is Sotherly Hotels Inc. (SOHO), carrying a Zacks Rank #1 (Strong Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
VERTEX ENERG VTNR 8.25 +10.59%
MODINE MANUF MOD 17.12 +8.77%
CLAYTON WILL CWEI 140.03 +7.27%
E*TRADE FINA ETFC 22.67 +5.44%
KNIGHTSBRIDG VLCCF 13.22 +5.42%