Vornado Stock Gains 8.7% in a Month: Will This Trend Continue?

Shares of Vornado Realty Trust VNO have risen 8.7% in a month, outperforming the industry’s growth of 2.2%.

This office real estate investment trust (REIT) owns a concentration of high-quality office properties strategically located in markets of New York, Chicago and San Francisco. It is poised to benefit from tenants’ healthy demand for premier office spaces with class-apart amenities. Its portfolio-repositioning efforts and healthy balance sheet position also augur well.

In early June, VNO announced that its joint venture (JV), in which it holds a 50.1% stake, has completed a refinancing of $675 million for Independence Plaza, a residential complex comprising 1,328 units located in the Tribeca submarket of Manhattan.

Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share has been revised one cent upward over the past two months to $2.20.

Factors Behind VNO Stock’s Price Surge: Will the Trend Last?

Vornado boasts a concentration of high-quality assets and a strategic focus on expanding its market share in the New York City office market. Its focus on having assets in a few select high-rent, high-barrier-to-entry markets, along with a diversified tenant base that includes several industry bellwethers, is expected to drive steady cash flows and fuel its growth over the long term.

The office-using job growth and the expansion of technology, finance, media and other firms are set to bolster rental revenues in the forthcoming quarters. Moreover, office occupiers remain keen to grow their office footprints in New York. The New York office leasing market maintained strong momentum during the first quarter of 2025, with the strongest quarterly volume since the fourth quarter of 2019.  During the first quarter of 2025, Vornado, in its New York office portfolio, leased 709,000 square feet at an initial rent of $95.53 per square foot, with mark-to-markets of 6.5% cash.

Vornado is making opportunistic developments and divestitures in addition to business spin-offs. Strategic sell-outs provide the company with the dry powder to reinvest in opportunistic developments and redevelopments. In May 2025, VNO announced that its 55% owned JV has entered into an agreement to sell 512 West 22nd Street, a 173,000 square foot Class A office building, for $205 million. Subject to customary closing conditions, the sale is expected to close in the third quarter of 2025. Hence, timely portfolio-repositioning initiatives are likely to drive growth over the long term.

Vornado enjoys solid balance sheet strength. As of March 31, 2025, the company had $2.3 billion of liquidity, consisting of $807 million of cash and cash equivalents and restricted cash, and $1.5 billion available under its $2.2 billion revolving credit facilities. A flexible financial position will enable it to take advantage of future investment opportunities and fund its development projects.

Key Risks for VNO Stock

The choppiness in the office market owing to macroeconimic uncertainty, geographic concentration of assets, and competition from developers and operators are key concerns for Vornado. The elevated interest rate environment adds to its woes.

Stocks to Consider

Some better-ranked stocks from the REIT sector are VICI Properties VICI 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 VICI Properties’ 2025 FFO per share is pegged at $2.35, up 3.98% year over year.

The Zacks Consensus Estimate for W.P. Carey’s2025 FFO per share stands at $4.88, up 3.83% year over year.

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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