The above photo of New York City literally depicts the Vornado Realty Trust (NYSE:VNO) opportunity. As the saying goes, real estate is about three things: location, location, and location. As there is much truth in the saying, discounted prices in the above neighborhood present a truly unique asset opportunity.
Risk/Reward Rating: Positive
Most would agree that the above photo represents some of the most valuable real estate in the world. The Vornado opportunity is courtesy of commercial office space being one of the least attractive real estate sectors today, due to the post-COVID remote working trend. Commercial office space comprises 77% of Vornado’s real estate portfolio with retail space accounting for much of the remainder.
“Never bet against America.” – Warren Buffett
As the negative sector outlook is well known, the question turns to valuation and what is priced into Vornado’s shares. For asset opportunities, the balance sheet is a natural starting point.
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