In an era of rising interest rates prfd stocks are a sure ticket to mediocre total returns. Lessons are about to be learned that have been long forgotten as an entire generation of investors watched net interest rates fall from 1982 thru 2004.
Those that suggested that fixed income turned out well in 2004 despite predictions that rates would rise in 2004 will now see the impact of higher interest rates in 2005. Its all cast in stone now. The dollar can fall another 10-15% before intervention will become absolute necessity.
If I were going to buy a preferred I would go for a higher yield prfd than a VNO prfd. Might as well generate above average income if you are going to park dollars in an investment where near term you will lose capital on paper. Whether an investor has the ability to ride thru entire rate cycles to recover all of their capital has always been a myth. Most cannot stand the pain of losing capital on paper and generally cave in and sell their investment at a loss.