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Vornado Sells Washington, DC Office Property for $182M

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Vornado Realty TrustVNO has closed the sale of its office property at 1750 Pennsylvania Avenue in Washington, DC for $182 million. The move will lead to a financial statement gain of around $102 million for third-quarter 2015, and the tax gain will be deferred as part of a like-kind exchange.

The sale of this 278,000-square foot office building is consistent with the real estate investment trust's ("REIT") business streamlining efforts.

In August, Vornado disclosed that it was set to realize a gain of around $33 million in the third quarter from the disposition of its 50% stake in the Monmouth Mall in Eatontown, NJ. The REIT sold its stake to its joint venture partner. The property was valued at approximately $229 million, while Vornado's net proceeds amounted to $38 million.

In the past, Vornado has been subject to criticism for venturing into too many sectors. However, of late, the company has been focused on streamlining its business. Besides disposing its stake and selling assets, last January, the company had successfully spun off majority of its strip shopping centers to form a new entity called Urban Edge Properties ("UE").

Going forward, we believe the company's strategic acquisitions and divestitures including spin-offs, a diversified tenant base and strong New York operations will help maintain its growth momentum. Yet, high competition and an anticipated rise in interest rate remain as concerns.

Currently, Vornado has a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like CoreSite Realty Corporation COR , Ashford Hospitality Trust, Inc. AHT and Ashford Hospitality Prime, Inc. AHP . All three stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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