This REIT Stock Is Still Down 60% — and One Investor Just Sold Out Completely
Key Points
New York City-based HGI Capital Management reduced its position in Vornado Realty Trust by 88,686 shares during the third quarter.
The estimated net position change was about $3.4 million.
The move marked an exit for HGI, which reported holding no Vornado shares at quarter-end; the position was previously 4.7% of the fund’s AUM.
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New York City-based HGI Capital Management sold out its entire position in Vornado Realty Trust (NYSE:VNO), reducing holdings by 88,686 shares in an estimated $3.4 million change, according to a November 14 SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, HGI Capital Management, LLC exited its stake in Vornado Realty Trust (NYSE:VNO), selling its entire holding of 88,686 shares during the third quarter. The transaction’s value was an estimated $3.4 million. The move occurred as the fund reported a 51% quarter-over-quarter decline in total reportable assets.
What Else to Know
Top holdings after the filing:
- NASDAQ: EQIX: $2.4 million (6.6% of AUM)
- NYSE: CBRE: $2.3 million (6.3% of AUM)
- NYSE: FR: $2 million (5.6% of AUM)
- NYSE: DLR: $2 million (5.5% of AUM)
- NYSE: HD: $2 million (5.5% of AUM)
As of Friday, shares of Vornado Realty Trust were priced at $34.82, down 20% over the past year and far underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $34.82 |
| Market Capitalization | $7.3 billion |
| Revenue (TTM) | $1.8 billion |
| Net Income (TTM) | $905.6 million |
Company Snapshot
- Vornado Realty Trust owns, operates, and manages a portfolio of office and retail properties, primarily in New York City, with additional assets in Chicago and San Francisco; revenue is generated from leasing and property management.
- The company operates as a real estate investment trust (REIT), earning income through long-term leases, property appreciation, and ancillary services focused on high-quality, sustainable office buildings.
- It serves corporate tenants, institutional clients, and retail businesses seeking premium office and retail space in major urban markets.
Vornado Realty Trust is a leading office REIT with a strong presence in New York City, as well as select assets in Chicago and San Francisco. The company differentiates itself through its focus on sustainability, managing about 25 million square feet of LEED-certified buildings. Vornado's strategy centers on attracting high-quality tenants to premier urban locations, leveraging scale and operational expertise to drive long-term value.
Foolish Take
Fund liquidations can signal a reassessment of risk in industries still struggling to regain footing — and Vornado has been under pressure for years. Despite improving fundamentals, including a return to positive net income and stronger year-over-year funds from operations in the third quarter, office REITs remain tied to sluggish leasing demand, elevated financing costs, and uneven recovery across major urban markets. That backdrop makes HGI Capital Management’s full exit notable as the firm sharply reduced its overall assets last quarter.
Vornado’s latest results showed quarterly net income of $11.6 million, reversing a loss from the prior year, and FFO jumped to $117.4 million, or $0.58 per share—up from $0.50 a year earlier. Same-store NOI also improved 7.5% on a GAAP basis, with New York office rents rising materially.
The main takeaway: Vornado’s operational metrics are recovering, but the REIT remains structurally challenged, and smaller funds may prefer to redeploy capital into more resilient sectors. Larger investors willing to ride out volatility may view improving FFO and leasing trends as a sign of early stabilization.
Glossary
13F assets under management (AUM): The total value of securities reported by an institutional investment manager on SEC Form 13F.
Liquidated: Sold off an entire investment position, resulting in zero holdings of that asset.
Quarter-over-quarter: A comparison of financial or operational results from one fiscal quarter to the next.
Real estate investment trust (REIT): A company that owns, operates, or finances income-producing real estate and distributes most income to shareholders.
LEED-certified: Buildings recognized for meeting environmental and energy efficiency standards set by the Leadership in Energy and Environmental Design program.
Ancillary services: Additional services provided alongside a company’s main offerings, such as property management or maintenance.
TTM: The 12-month period ending with the most recent quarterly report.
Assets under management (AUM): The total market value of investments managed by a fund or investment manager.
Filing: An official document submitted to a regulatory authority, often disclosing financial or operational information.
Stake: The ownership interest or investment held in a company by an individual or institution.
Portfolio: A collection of investments held by an individual, fund, or institution.
Premiere urban locations: Highly desirable, central areas in major cities, often commanding higher rents and demand.
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Annie Dean, Chief Strategy Officer at CBRE, is a member of The Motley Fool’s board of directors. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Digital Realty Trust, Equinix, and Home Depot. The Motley Fool has a disclosure policy.
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