Vornado Acquires 623 Fifth Avenue Condominium Office for $218M

Vornado Realty Trust VNO has completed the acquisition of the 623 Fifth Avenue office condominium encompassing 382,500 rentable square feet of space for $218 million.

Situated above the flagship Saks Fifth Avenue department store, this 36-story building is currently 75% vacant.

Vornado plans to completely reposition and redevelop the building into a premier, best-in-class, Class A boutique office building.

VNO: In a Nutshell

The above acquisition aligns with the company’s strategic focus on expanding its market share in the New York City office market.

Office occupiers remain keen to grow their office footprints in New York. In 2024, VNO completed the most premium $100-plus deals in New York in 18 transactions for 1.36 million square feet.

Vornado owns a portfolio of top-quality office properties in a few select high-rent, high-barrier-to-entry markets of New York, Chicago and San Francisco. The combination of office-using job growth and expansion of tech, financial and media companies is likely to aid rental revenue growth in the forthcoming quarters.

Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 6.6% against the industry’s downside of 0.4%.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Plymouth Industrial REIT PLYM and W.P. Carey WPC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for PLYM’s 2025 FFO per share has moved 2 cents northward to $1.88 over the past month.

The Zacks Consensus Estimate for WPC’s 2025 FFO per share has moved a cent upward to $4.87 over the past month.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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