Vornado Realty Trust (VNO) is a commercial real estate investment trust (REIT) focused on trophy properties in the nation’s key market – New York City – along with premier assets in both Chicago and San Francisco, notes Todd Shaver, editor of BullMarket.com.

The company owns and manages nearly 30 million square feet of office and prime retail space, 65% of which bears green LEED ( Leadership in Energy and Environmental Design) certification.

A real estate leader in sustainability property management practices as well as the overall REIT industry, the company commemorated 50 years on the NYSE in 2012 and received the Energy Star Partner of the Year award in 2017.

Vornado is as close as it gets to being a pure-play New York City real estate company, deriving 89% of its operating profit within some of the scarcest and most valuable submarkets in the world.

The property mix breaks down into high-end retail (30%, 96% occupancy), Fifth Avenue and Times Square (50%, very long-term leases), and Penn Plaza (19%, a central transportation hub primed for a once-in-a-lifetime redevelopment).

Vornado has ventured outside New York City only to bid on the most prestigious properties in the country’s most thriving cities. Vornado owns the prime franchise assets in San Francisco (555 California Street) and Chicago (theMART), which together account for 11% of Vornado net income.


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Now is the time in the cycle when the smart real estate investors sell properties and build up cash. Vornado built cash and sold assets in the most recent quarter, taking the conservative long-term approach we want to see.
They also pushed away from acquisitions at top prices.

They identified another $1 billion of assets to be sold, including the 666 Fifth Avenue venture with Kushner Companies, which Vornado is reportedly negotiating to sell back to its partner for an undisclosed price.

All in all, the company is in great shape for whatever is to come, whether it means weathering a weaker economy or going on offense if opportunities to buy new properties emerge.

The reason to own Vornado is as simple as it gets: The portfolio consists of a unique and unrivaled collection of real estate properties in New York City. Nobody does NYC better than Vornado.

With trophy assets coveted worldwide and a best-in-class management team now focused exclusively on dominating the NYC market, the track record of value creation looks likely to continue. Should market conditions get challenging, a solid balance sheet will protect the company.

And the crown jewel: Net Asset Value (NAV) currently stands at $96. We are getting a bargain discount picking up shares at current levels. Could this stock someday trade at a premium to net asset value? Absolutely!

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