Mega-REIT Vornado expects to sell more properties than it buys this year

Steven Roth: 'I can see the fat lady entering the building'
April 16, 2013 09:00AM

Vornado Realty Trust will sell more properties than it acquires this year, chairman Steven Roth said in his annual letter to investors, according to Bloomberg News.

“I can see the bubble on the horizon; the fat lady entering the building,” Roth wrote in the letter, filed with the U.S. Securities and Exchange Commission on Friday. “My belly tells me that prices are now higher than future prospects and therefore, we will buy carefully and likely sell more than we buy.” 

The New York-based real estate investment trust, whose chief executive Michael Fascitelli recently resigned, owns over 100 million square feet of real estate in the country. Since the chairman’s last letter in April 2012, Vornado has sold $2.75 billion worth of assets, Fascitelli said on Feb. 27, resulting in a net gain of $718 million. These sales include Brooklyn’s Kings Plaza shopping center for $751 million and commercial mortgage manager LNR Property for $241 million.

Still, Vornado had a disappointing first quarter of 2013, with performance lagging behind both the national REIT index and the Standard & Poor 500 Stock Index, as The Real Deal  reported.

In the letter, Roth added that he believed interest rates would stay lower for longer than expected. “We are near the tipping point where market participants will start to believe and act as if it’s their God-given right to zero-bound interest rates,” Roth wrote. [Bloomberg News] –Hiten Samtani