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Vornado (VNO) Accomplishes $220M Financing of The Bartlett
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Vornado Realty Trust (VNO - Free Report) recently declared the completion of $220 million financing of the Arlington, VA property – The Bartlett. The move comes in connection with the company’s planned spin-off of the Washington, D.C. business. In fact, the property, along with the $217 million of net proceeds, will be transferred to JBG SMITH – the combined entity which will be formed after the merger of the spin-off Washington, D.C. business with The JBG Companies. The spin-off is slated to take place this quarter.
Situated in Arlington, VA, the property is a 699 unit residential building and has a 39,000 square foot Whole Foods Market at its base. Further, the loan is slated to mature in Jun 2022. It is five-year interest-only at LIBOR plus 1.70%, currently 2.90%.
Notably, Vornado has been subject to criticism for venturing into too many sectors. Prior to deciding for a spin-off of the Washington, D.C. business, the REIT had also completed the spin-off of its shopping center business in 2015 into a publicly traded REIT named Urban Edge Properties (UE - Free Report) . The spin-off was an outcome of Vornado’s decision to separate two businesses, which have been together for legacy reasons but with no real operating synergies.
While such strategic spin-offs and sale outs are likely to help the company in streamlining its business and prepare ground for long-term growth, the earnings dilutive impact from these efforts cannot be bypassed. Additionally, stiff competition and hike in interest rates have added to its woes. Also, in May, Vornado reported lower-than-expected first-quarter 2017 funds from operations (“FFO”) per share, indicating a fall in occupancy in the Washington D.C. portfolio.
Currently, Vornado carries a Zacks Rank #4 (Sell). Moreover, over the past three months, shares of Vornado fell 9.3% and underperformed the Zacks categorized REIT and Equity Trust – Other industry’s gain of 4.3%.
Prologis’ estimates for second-quarter 2017 FFO per share moved 4.0% north to 78 cents, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Vornado (VNO) Accomplishes $220M Financing of The Bartlett
Vornado Realty Trust (VNO - Free Report) recently declared the completion of $220 million financing of the Arlington, VA property – The Bartlett. The move comes in connection with the company’s planned spin-off of the Washington, D.C. business. In fact, the property, along with the $217 million of net proceeds, will be transferred to JBG SMITH – the combined entity which will be formed after the merger of the spin-off Washington, D.C. business with The JBG Companies. The spin-off is slated to take place this quarter.
Situated in Arlington, VA, the property is a 699 unit residential building and has a 39,000 square foot Whole Foods Market at its base. Further, the loan is slated to mature in Jun 2022. It is five-year interest-only at LIBOR plus 1.70%, currently 2.90%.
Notably, Vornado has been subject to criticism for venturing into too many sectors. Prior to deciding for a spin-off of the Washington, D.C. business, the REIT had also completed the spin-off of its shopping center business in 2015 into a publicly traded REIT named Urban Edge Properties (UE - Free Report) . The spin-off was an outcome of Vornado’s decision to separate two businesses, which have been together for legacy reasons but with no real operating synergies.
While such strategic spin-offs and sale outs are likely to help the company in streamlining its business and prepare ground for long-term growth, the earnings dilutive impact from these efforts cannot be bypassed. Additionally, stiff competition and hike in interest rates have added to its woes. Also, in May, Vornado reported lower-than-expected first-quarter 2017 funds from operations (“FFO”) per share, indicating a fall in occupancy in the Washington D.C. portfolio.
Currently, Vornado carries a Zacks Rank #4 (Sell). Moreover, over the past three months, shares of Vornado fell 9.3% and underperformed the Zacks categorized REIT and Equity Trust – Other industry’s gain of 4.3%.
Stock to Consider
A better-ranked stock in the REIT space is Prologis, Inc. (PLD - Free Report) . It carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prologis’ estimates for second-quarter 2017 FFO per share moved 4.0% north to 78 cents, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>