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(This blog post originally appeared on RealMoney Silver on Nov. 7 at 1:47 p.m. EST.

In it, Doug Kass gives his reasons for taking a long shot on Vornado Realty Trust. The stock shot up nearly 4 points after he picked up his shares.Were you on

RealMoney Silver


Going Long VNO

I recently initiated an investment long position in the premiere office REIT extant,

Vornado Realty Trust

(VNO) - Get Vornado Realty Trust Report

, run by the best management team in commercial real estate.

As always, in this economy, I want to stick with quality.

From my perch, the shares at $64 more than incorporate (legitimate) concerns regarding New York City financial service industry layoffs -- that horse is now out of the barn! -- and the resulting impact on office occupancy rates, which management estimates will result in a 15% drop in rents.

The shares, however, do not account for:

  • a superior office portfolio;
  • $1.5 billion in cash, with another $400 million in escrow deposits and restricted cash;
  • a large cushion of $2.5 billion in its outstanding credit line;
  • a light debt rollover schedule;
  • the potential for a stable/improving Washington, D.C., market, reflecting not only the political transition that will occur over the next few months but also from a buildup in government-formed agencies that will be the byproduct of recent policy moves to stabilize the credit and housing markets; and
  • as mentioned previously, a skilled management team.

Moreover, despite the expectation of slippage in New York City rents, the embedded rent portfolio is substantially below current market rates.

Know What You Own:

Vornado operates in the REIT industry, and some of the other stocks in its field include

Simon Property Group

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TheStreet Recommends

(SPG) - Get Simon Property Group Inc. Report


Kimco Realty

(KIM) - Get Kimco Realty Corporation Report


Federal Realty Investment Trust

(FRT) - Get Federal Realty Investment Trust Report


Regency Centers

(REG) - Get Regency Centers Corporation Report


Hospitality Properties Trust



Kite Realty Group

(KRG) - Get Kite Realty Group Trust Report

. These stocks recently closed at $67.95, $21.01, $63.09, $37.68, $9.44 and $5.47, respectively. For more on the value of knowing what you own, visit's



Doug Kass writes daily for

RealMoney Silver

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At the time of publication, Kass and/or his funds were long Vornado Realty Trust, although holdings can change at any time.

Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.