Vornado Exec Selling Stock

President Mike Fascitelli sells 1.3 million shares for $157 million.
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In yet another sign that commercial real estate valuations might be peaking,

Vornado Realty Trust

(VNO) - Get Report

President Mike Fascitelli cashed out 1.3 million shares of his stock in the company, pocketing around $157 million.

Vornado's stock has been on fire this year as Manhattan office buildings benefit from strong rent growth. In turn, investors have bid up the stock of Vornado, which has a large portfolio of New York City office and retail properties, along with office buildings in Washington, D.C. and other areas.

Vornado's stock is up 41% this year as of Tuesday's close. On Wednesday, shares dropped 1.9% to $115.86 after the news that Fascitelli has sold shares and the company is offering $1 billion of convertible notes.

Vornado said Fascitelli exercised an option that was set to expire Dec. 2. Of course, the big question for Fascitelli is why he didn't purchase the stock and let the ride roll.

Several buy-side investors and analysts continue to say that Vornado is a great stock for the patient investor, because of the unrealized potential at its office and hotel properties surrounding Madison Square Garden in New York.

The city is planning to redevelop the area, and Vornado could stand to profit enormously.

Fascitelli didn't immediately return a phone call seeking comment.

The stock sale comes at a time when property sales are reaching hefty heights in New York City.

Earlier this month, Vornado said it will purchase 350 Park Ave., a 538,000-square-foot Manhattan office building, for about $542 million, or $1,007 per square foot. The building occupies an entire block front on Park Avenue between 51st and 52nd streets and is 100% leased.

Vornado has done a great job of creating value for shareholders. But its management team of Fascitelli and CEO Steven Roth are rewarded heavily for this performance through some of the fattest compensation packages in the REIT industry.

As of the latest proxy filing in May, Fascitelli owned 7.2 million Vornado shares. At the end of this year, Fascitelli will receive another 1.5 million shares of the company's stock.

Last year, Fascitelli took home a $1 million salary, a $1 million bonus, and 1.5 million shares of restricted stock. Vornado also spent $145,000 on Fascitelli's car and driver.

Fascitelli executed the sale in a block trade through Banc of America Securities.