On Dec 27, 2013, we reiterated our long-term Neutral
Vornado Realty Trust
). The decision is based on the company's recent divestitures and
opportunistic acquisitions, third-quarter results and current
Vornado has a diversified tenant base that includes several
industry bellwethers like
Bank of America Corporation
The Home Depot Inc.
). The company also continues to strategically expand its
portfolio with a number of office and retail assets in recent
times in attractive locations like Madison Avenue and Fifth
Avenue in Manhattan, and simultaneously offloaded retail property
in Tampa, Fla.
Furthermore, most recently, Vornado accomplished the sale of a
360,000 square foot office building - 866 United Nations Plaza -
in Manhattan for $200 million. Strategic sell-outs provide the
company the cash reserves to be invested in opportunistic
acquisitions. These factors go a long way in enhancing its
In November, Vornado reported its third-quarter 2013 adjusted
FFO (funds from operations) per share of $1.27, which exceeded
the Zacks Consensus Estimate by 11 cents. Moreover, this compared
favorably with the year-ago figure of $1.03. Results were driven
by a rise in operating income.
Nevertheless, though going forward, its New York portfolio is
expected to grow with office leasing activity progressing well
and retail sales and rental rates improving, the Washington DC
portfolio is anticipated to remain stressed with lower pace of
leasing activity. Moreover, the company faces stiff competition
from commercial property developers. As such, we reaffirm our
Over the last 60 days, the Zacks Consensus Estimate for 2013
FFO per share remained flat at $4.58, but it fell to $4.77 from
$4.80. The stock currently has a Zacks Rank #4 (Sell).
Other Stock to Consider
Investors interested in the REIT Equity Trust - Other industry
may consider another stock -
) - that carries a Zacks Rank #2 (Buy).
FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.
BANK OF AMER CP (BAC): Free Stock Analysis
CUBESMART (CUBE): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
VORNADO RLTY TR (VNO): Free Stock Analysis
To read this article on Zacks.com click here.