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Vornado Stock Gains 6.7% in a Month: Will the Trend Last?
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Shares of Vornado Realty Trust (VNO - Free Report) have gained 6.7% in a month, outperforming the industry’s growth of 3.4%.
This office real estate investment trust (REIT) owns a concentration of high-quality office properties strategically located in markets of New York, Chicago and San Francisco. It is poised to benefit from tenants’ healthy demand for premier office spaces with class-apart amenities. A healthy balance sheet position supports its growth endeavors.
Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share has been revised two cents upward over the past month to $2.20.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the rise in the stock price.
Vornado's focus on having assets in a few select high-rent, high-barrier-to-entry markets, along with a diversified tenant base that includes several industry bellwethers, is expected to drive steady cash flows and fuel its growth over the long term.
The office-using job growth and the expansion of technology, finance, media and other firms are set to bolster rental revenues in the forthcoming quarters. Moreover, office occupiers remain keen to grow their office footprints in New York. During the first quarter of 2025, the company, in its New York office portfolio, leased 709,000 square feet at an initial rent of $95.53 per square foot.
Rents in the newly constructed or best-in-class redeveloped assets, which offer ample amenities at transit-centric locations, have risen. Hence, the company is well-positioned to benefit from this emerging trend.
Vornado is making opportunistic developments and divestitures in addition to business spin-offs. Strategic sell-outs provide the company with the dry powder to reinvest in opportunistic developments and redevelopments. Moreover, in the first quarter of 2025, Vornado sold two condominium units and ancillary amenities at 220 Central Park South (CPS) for net proceeds of around $24.7 million. Hence, timely portfolio-repositioning initiatives are likely to drive growth over the long term.
Vornado enjoys solid balance sheet strength. As of March 31, 2025, the company had $2.3 billion of liquidity, consisting of $807 million of cash and cash equivalents and restricted cash, and $1.5 billion available under its $2.2 billion revolving credit facilities. Further, apartment sales at 220 CPS are likely to add to its cash balance and enhance financial strength. A flexible financial position will enable it to take advantage of future investment opportunities and fund its development projects.
Risks Likely to Affect VNO’s Positive Trend
With persistent macroeconomic uncertainty and a hybrid working environment, near-term demand for office spaces is expected to remain choppy.
The Zacks Consensus Estimate for CTRE’s 2025 FFO per share is pinned at $1.79, which suggests year-over-year growth of 19.3%.
The Zacks Consensus Estimate for UNIT’s 2025 FFO per share stands at $1.50, which indicates an increase of 11.1% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Vornado Stock Gains 6.7% in a Month: Will the Trend Last?
Shares of Vornado Realty Trust (VNO - Free Report) have gained 6.7% in a month, outperforming the industry’s growth of 3.4%.
This office real estate investment trust (REIT) owns a concentration of high-quality office properties strategically located in markets of New York, Chicago and San Francisco. It is poised to benefit from tenants’ healthy demand for premier office spaces with class-apart amenities. A healthy balance sheet position supports its growth endeavors.
Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share has been revised two cents upward over the past month to $2.20.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the rise in the stock price.
Vornado's focus on having assets in a few select high-rent, high-barrier-to-entry markets, along with a diversified tenant base that includes several industry bellwethers, is expected to drive steady cash flows and fuel its growth over the long term.
The office-using job growth and the expansion of technology, finance, media and other firms are set to bolster rental revenues in the forthcoming quarters. Moreover, office occupiers remain keen to grow their office footprints in New York. During the first quarter of 2025, the company, in its New York office portfolio, leased 709,000 square feet at an initial rent of $95.53 per square foot.
Rents in the newly constructed or best-in-class redeveloped assets, which offer ample amenities at transit-centric locations, have risen. Hence, the company is well-positioned to benefit from this emerging trend.
Vornado is making opportunistic developments and divestitures in addition to business spin-offs. Strategic sell-outs provide the company with the dry powder to reinvest in opportunistic developments and redevelopments. Moreover, in the first quarter of 2025, Vornado sold two condominium units and ancillary amenities at 220 Central Park South (CPS) for net proceeds of around $24.7 million. Hence, timely portfolio-repositioning initiatives are likely to drive growth over the long term.
Vornado enjoys solid balance sheet strength. As of March 31, 2025, the company had $2.3 billion of liquidity, consisting of $807 million of cash and cash equivalents and restricted cash, and $1.5 billion available under its $2.2 billion revolving credit facilities. Further, apartment sales at 220 CPS are likely to add to its cash balance and enhance financial strength. A flexible financial position will enable it to take advantage of future investment opportunities and fund its development projects.
Risks Likely to Affect VNO’s Positive Trend
With persistent macroeconomic uncertainty and a hybrid working environment, near-term demand for office spaces is expected to remain choppy.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are CareTrust REIT (CTRE - Free Report) and Uniti Group (UNIT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CTRE’s 2025 FFO per share is pinned at $1.79, which suggests year-over-year growth of 19.3%.
The Zacks Consensus Estimate for UNIT’s 2025 FFO per share stands at $1.50, which indicates an increase of 11.1% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.