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Stock Strategist

Vornado's Moving On Up

It's streamlining its portfolio and looking to become a premier Manhattan landlord.

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 Vornado Realty Trust (VNO), along with office real estate investment trusts in general, has seen its stock beaten down in recent months despite an improving job market and a streamlined portfolio focused almost exclusively on Manhattan.

We were pleased with rental rates surrounding Penn Plaza, which climbed into the upper $60s per square foot in 2016 and the first half of 2017. We see this positive trend continuing, as half of lease expirations for 2018 are concentrated in One Penn and Two Penn Plaza, so next year serves as a real opportunity to renew leases at higher rates, given the greater appeal for that submarket.

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Brad Schwer does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.