Analyzing VNO: Vornado Realty Trust

Vornado Realty Trust is one of the biggest players in New York City Real Estate there is.
Whether we’re talking about office, residential, or retail, they are one of the powerful and
impactful players in the NYC Real Estate game. Between some of their developments, and
purchases, they control some of the most valuable and high-profile properties scattered around
New York City. Led by Steve Roth, the companies are one of the many high profile, high flying
New York Real Estate Behemoths.


A lot of the Vornado Realty Trust portfolio comprises office buildings, or prominent retail
locations. They own a good number of properties within the Penn Station submarket,
surrounding the major transit hub, and in Midtown Manhattan. They recently developed one of
the most successful, and most prominent residential buildings all throughout the world in 220
Central Park South, which is built like an old fashioned, but exquisite modern-day building. On
the southernmost tip of Central Park, with no obstructed park views. It’s built with limestone
and has become one of the most iconic and most luxurious buildings to be built in recent
modern-day Real Estate.

As buyers have flocked to the condominium, it has become one of the most profitable building
sales in the history of the world. Generating profit of over $2 Billion dollars, it has become the
who’s who, and the most iconic building in the city to be developed in recent years, behind its
close neighbor, 15 CPW (Central Park West). With the penthouse, selling for a record-breaking
$263 million, it’s become the highest-profile, and the most sought after building on the market
in New York City.

How Is VNO Faring Today?

VNO has seen its stock price take a big hit since the coronavirus outbreak. At highs of roughly
$67.36 per share in February, it’s declined to $43.48 as of today. That’s a roughly 35% decline in
a 7-week period. For a company that has some of the best assets and pieces of Real Estate in
New York City, it might be a bit of an overblown sell-off. Bottoming out at around $30 a share in
the days after the crazy market volatility, it lost roughly half its market cap, in a matter of a
two-week period.

VNO Outlook

It’s tough to determine, and accurately predict the rents VNO will be able to collect from its
tenants, and if there are any provisions in their leases to protect them. It’s still a bit of an
unknown and a situation without much clarity to it. Each tenant and each situation will
probably vary, depending on the financial status of the company, the senior management, and
the decisions they make. It will be something very important to monitor, as it is the main source
of VNO’s income and the way it can pay its mortgage obligations. There has yet to be clarity on

what the banks and financing lenders will do if landlords cannot pay their mortgage payments.
Whether there will be extra term added on to the end of the mortgages, any forgiveness, or
how exactly things will shake out.
Vornado is one of the companies who own office buildings where the rents are incredibly high
and a large expenditure for most businesses and companies. Moving forward, it’s tough to
predict whether the high-end office market will be strong and similar to what it was a few
months ago. More companies will probably rethink and think twice before renting a high
profile, luxury office space. Their lease payments are probably one of the major expenditures of
any operation and one especially today that is probably going to be in question, as the whole
world works from home.
On a strict Real Estate viewpoint, they have one of the best portfolios of Real Estate in New
York City. The pieces they own are all Class A or Class B level buildings. Real Estate might be one
of the things that’s severely affected going forward, which would make their business tough to
buy. It’s yet to be seen how the aftermath of all this will shake out, and which industries will be
affected. Real Estate is definitely one of them that might be hit the hardest, as the businesses
and companies cannot operate, and are unable to pay their high rent bills. There’s a cloud of
uncertainty surrounding what’s going to happen with tenants, and especially on what the
aftermath of all of this will be. It will be an interesting topic to look at, and something many real
estate analysts will be watching closely.


Vornado is one of the more prominent players with New York City Real Estate. With a vast
portfolio, made up of high profile and institutional level pieces, it has one of the best portfolios
within the city. The company is well run by an experienced level management team, who really
know what they’re doing, and how to operate Real Estate.
As Real Estate has become more and more of a question mark and tenants cannot pay rent or
choose not to, it’s become a tricky industry to be in, and a tricky business to run. It’s become an
interesting standoff between the two sides. With both the tenants looking for breaks on rent
and landlords looking for a break on mortgages. What the Real Estate business has in store for
the coming months, and in the coming years, has yet to be seen.

This is a post by Howie Bick and may or may not reflect the view of The Insiders Fund. You can reach Howie at

Insiders sell stock for many reasons, but they generally buy for just one – to make money. THE INSIDERS FUND invests in companies at or near prices that management has been willing to invest significant amounts of their own money in.  After all, who knows a business better than the people running it?  You’ve always heard the best information is inside information.  This is as close to “insider information” that an ordinary investor is likely to see- and it’s entirely legal.  Officers, directors, and 10% owners are required to inform the public through a Form 4 Filing any transaction, buy, sell, exercise, or any other with 48 hours of doing so. This info is available for free from the SEC’s Web site, Edgar, although we subscribe to the Washington Service as they provide a way to manage and make sense of the vast realms of data.

As a rule, we only look at material amounts of money, $200 thousand or more, as anything less could just be window dressing. The bar is different from selling because the natural state of management is to be sellers. This is because most companies provide significant amounts of management compensation packages as stock. Therefore, with selling, we analyze for unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52-week lows. Another red flag is large planned sale programs that start without warning. Unfortunately, the public information disclosure requirements about these programs referred to as Rule 10b5-1 is horrendously poor.  I also generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and perhaps not the smart money we are trying to read the tea leaves on.

Of course insiders can also be wrong about their Company’s prospects. They can easily be wrong about how much others will value them, and in many cases, maybe most cases have no more idea what the future may hold than  you or I. In short, you can lose money following them.  We have and we curse aloud, what were they thinking!  Needless to say, past good fortune is no guarantee of future success.  We may own positions, long or short, in any of these names and are under no obligation to disclose that. We welcome your comments on our analysis.

This blog is solely for educational purposes and the author’s own amusement.  Investing with The Insiders Fund is for qualified investors and by Prospectus only. Nothing herein should be construed otherwise.  To learn more about our strategy, visit our website. If you would like to hear more about how you can get involved with the Insiders Fund, please schedule some time on my calendar.

Prosperous Trading,

Harvey Sax