The Real Deal New York

REITs reap rewards from keeping it simple

Vornado follows national trend of paring back portfolios to focus on core assets

September 24, 2014 11:00AM

From left: Vornado CEO and chairman Steven Roth, 666 Fifth Avenue and 100 West 33rd Street

From left: Vornado CEO and chairman Steven Roth, 666 Fifth Avenue and 100 West 33rd Street

In April, Vornado Realty Trust announced that it would spin off more than 80 U.S. shopping centers into a separate publicly traded real estate investment trust. The strategy — which has seen the company focus on office and retail property — fits into what has since become a broader trend of REITs slimming down portfolios and setting their sights on core business.

The moves have been welcomed by investors, who see diversity as a liability because different types of property are valued with different models, the Wall Street Journal reported. Investors also see value in a simple, straightforward operating strategy, investors told the newspaper.

Traders sent the share price of Vornado 11 percent higher in the two months following the announcement, though the stock is now trading at just about four percent above the price prior to the spinoff. [WSJ]Tom DiChristopher

  • James Dinan

    down 11% from sept high
    great great buy on this reit pullback

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