Good news on a coronavirus vaccine has caused many out-of-favor stocks to rally. Investors have been covering shorts in mall real estate investment trusts, office REITs, and other retail REITs.
Vornado ,one of the big REITs with a large concentration in Manhattan office and retail space, has rallied almost 40% in the week and a half since Pfizer announced encouraging data on its coronavirus vaccine. While the company is hopeful that things will return to normal, the present state of Manhattan is rather challenging. Are things about to turn the corner?
Retailers take a bite out of Vornado’s FFO
Vornado recently reported third-quarter adjusted funds from operations (FFO) of $0.59, which was a decrease of 33% from the prior-year’s $0.89 per share. Funds from operations came in at $1.46 per share, but that number included a gain on sale of condo units.
Essentially, adjusted FFO fell by $0.30 from a year ago. Roughly $0.11 of that change came from variable income related to the Hotel Pennsylvania, trade shows, and signage. Another $0.11 came from the JC Penney and Topshop bankruptcies and other retailer write-offs, while the rest came from rental write-offs and other items.
