New York-based Vornado Realty Trust VNO recently closed the acquisition of the 8-story Center Building, located at Northern Boulevard in Long Island City, NY for $142 million. The 437,000 square feet office building is 98% leased and should help Vornado strengthen its business in the New York market, going forward.
Notably, Vornado, a real estate investment trust (“REIT”), is engaged in owning and managing commercial real estate in the U.S., with a portfolio of office, retail, residential, hotels and garages that are concentrated mainly over the New York City and the Washington D.C. areas.
The company was once criticized for venturing into too many sectors, but has now changed its strategy to focus exclusively on core office properties and retail shops in Washington and New York.
In this regard, Vornado closed the spin-off of Urban Edge Properties (“UE”) on Jan 15, 2015. UE had stake in 79 strip shopping centers, 3 malls and one Warehouse Park that previously functioned under Vornado’s ownership (read more: Vornado Closes Urban Edge Properties Spin-Off: Is it a Buy?).
The latest office building acquisition in the high-growth New York market is projected to drive future growth. This is because, the rise in job in the region is expected to propel higher demand for office space. Amid manageable levels of supply, landlords can now enjoy greater market power, commanding more rents and fill up vacant spaces.
Vornado currently carries a Zacks Rank #3 (Hold).
Better-ranked equity REITs include Ryman Hospitality Properties, Inc. RHP, CareTrust REIT, Inc. CTRE and Kilroy Realty Corp. KRC. All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment