Greenstreet REIT Analysts. CAP rates have not changed much for VNO's markets. With dropping interest rates the CAPS should hold up particulary in the NY market. Alot of the volatity is trading houses working togwther to short the price down. You pften see the stock shoot up when the covering starts. VNO has a very strong blalnace sheet is now takeing asvantage of distressed pricing in other marketa such as in FL.There they are buying AAA residential buildings and apartments.
hogwash! Commercial Property Prices wil be the next domino to fall. They are not insulated from the general deflation of real estate in the US. This REIT will soon trade in the 70's --its PE is too high!
Oh my god, actual financial analysis on a message board! You are entirely correct NAV can go down. For example, what does it cost to carry the Pennsylvania Hotel on the books while management trys to make friends with the NY Landmarks Commission who have no compelling reason to accelerate discussions. Even the stock of competent companies like VNO decline when their industry experiences what may become a protracted downturn, tenants bid lower prices per square foot and owners are forced to compete on price, and investors turn to new areas such as wheat & grain processing, an international market comparatively insensitive to the U.S. economy.
Its not about cap rates for VNO now. Another bad financial cycle with layoffs will translate into lots of empty mid-town space and lower rollover rents.
VNO's NAV is nowhere near $134. That was a function of ETF fantasy bid up of the entire reit sector. Reits are done for this cycle and I doubt VNO will ever see $134 again. It won't reach fair value until the yield is at least 6%.
VNO's price drop is in anticipation of problems in NY midtown rent rates next year.
Your looking backwards... there are new dynamics in the commerical real estate market... IMO, we reached the peak approx. 3 - 6 months ago... decreasing commerical/office demand is evident in multiple markets, as well as lease rate negotiations happening below recent peak levels...
Here's just some New York examples in this article...