Vornado is also divesting other noncore properties, including 715 Lexington Avenue in New York City. According to
, the 20,400 square foot property could sell for around $50 million.
Fascitelli Moving On
After his departure in late February, Vornado's former CEO, Michael Fascitelli, is weighing his options. In an interview with SNL Financial, Fascitelli denied reports that his departure was the result of a disagreement with current chairman, Steve Roth. Fascitelli said, "It was just time for me to do something else. There is no fight between Steve and I. There's no disagreement."
And Fascitelli was adamant that the company's investment in J.C. Penney, the financially ailing department store, had no impact on his decision. He said, "Zero, Zero. Absolutely zero. No impact."
He went on:
"I don't think any of us are happy with the J.C. Penney investment, or proud of it at the moment. On a personal basis, I've been agitated and disappointed about it. But it didn't play at all in my decision to leave."
The executive said that he may eventually return to the real estate business.
"I had a guy say to me, a friend of mine I went to business school with ..., he said, 'Listen. This is what you're really good at. You're not that good at golf. You're not good at anything else. On a scale of 1 to 10, you're an 11. Take some time off, rejuvenate and come back.' So that's probably the most practical thing, but who knows."
This REIT Is Looking Less Like a Hedge Fund
Hedge Funds buy investments using riskier strategies, and they are lightly regulated. Conversely, REITs are known to invest in safer assets with a more focused dividend policy. Vornado, with a market cap of around $16.08 billion, is beginning to look more like a REIT. With an investment grade (BBB+) rating, the diversified REIT has begun to simplify its model, and that should make shares much less volatile and dividends much more attractive.
In 2008 Vornado shares traded for as much $103.00, but they had fallen by more than 25%, to around $75.00, by November 2012. Shares have traded back up to around $86.02 as Mr. Market begins to view the positive trends towards a simplified investment strategy.
At the time of publication, Thomas had no positions in securities mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.