Seeking Alpha

Vornado spinning off shopping centers, hires Equity One CEO to run them

  • Vornado's (VNO) shopping center ops, which include 81 strip malls and 4 regular malls, will be spun off into a publicly-traded REIT. A SEC Form 10 filing is expected in Q2, and distribution is expected to finish Q4.
  • The strip malls are mostly in the Northeast, and the regular malls are split between NJ and Puerto Rico. Altogether, the properties contain 16.1M sq. feet and had a 95.5% average occupancy at the end of 2013, and are expected to yield 2014 net op. income of $200M. Average base rent is $18.75/sq. foot, above a peer median of $15.66/sq.foot.
  • Vornado will hold onto 20 small retail assets (valued at ~$100M) and a couple of properties already under contract to be sold. The company plans to maintain its current $2.92/share dividend.
  • Equity One (EQY) CEO Jeffrey Olson will be the spinoff's chairman and CEO.
  • Previous: Vornado considers shopping center spinoff
Comments (3)
  • King Rat
    , contributor
    Comments (713) | Send Message
     
    Spinning off assets paid for with commercial loans with interest rates that will reset in 3 years' time, after interest rates start to rise.

     

    In other words, VNO is cashing out at the top of the retail bull market. Good luck to future long term EQY shareholders.
    11 Apr, 05:09 PM Reply Like
  • osgoodywesum
    , contributor
    Comments (44) | Send Message
     
    so wrong,, Steve is making VNO lean and mean as the analysts have demanded for years. BXP,SLG, are where VNO share price is headed. Steve's a genius and the new spin off will be dynamic too. Go ahead sell....These babies are going way higher.
    11 Apr, 06:41 PM Reply Like
  • tectorgorch
    , contributor
    Comments (2) | Send Message
     
    Another nail in the coffin...just like in "Margin Call"
    11 Apr, 05:38 PM Reply Like
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