Steve Roth
Vornado Realty Trust chairman Steve Roth has told investors the REIT will sell more real estate than it buys this year.
“I can see the bubble on the horizon; the fat lady entering the building,” Roth wrote in his annual letter to investors, filed with the U.S. Securities and Exchange Commission.
“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.”
Vornado owns more than 100 million square feet of property in the US. Since last APril, it has sold $2.75 billion worth of assets, including the Kings Plaza shopping center in Brooklyn and the Green Acres Mall in Valley Stream.
But Roth said top of this year’s “to-do list” in Manhattan is re-leasing and creating value from Vornado’s three flagship locations whose old low-rent leases are expiring shortly, and leasing the retail and signage at the newest marquis site, the Marriott hotel, Times Square.
“We own a best-in-class, 49-property, 2.2 million square foot street retail business in Manhattan,” said the chairman. “This portfolio is laden with opportunity.”
And Vornado’s 6.7 million square feet of Class A office buildings in Penn Plaza is tomorrow’s opportunity.
“We sit at the gateway to Manhattan’s West Side at the northern edge of the Midtown South submarket,” said Roth. “We benefit from spillover from the Chelsea and Park Avenue South submarkets, which are flooded by tech firms and workers who don’t wear ties.
“Interestingly, in 2012, the Penn Plaza District had the city’s highest percentage increase in rental rate and the lowest vacancy rate (6.3%). We have a forever history of being full here, averaging over 96% occupancy over the last ten years. The streets are teeming with people. Hotel Pennsylvania, all our street retail here, Moynihan Station are all opportunities in our future.ˮ
