Vornado writes down Midtown portfolio by $500 million

BY AARON ELSTEIN

Vornado Realty Trust said it will write down the value of its real estate portfolio by $600 million, most of it in Midtown, underscoring the continued challenges for retail and o ce properties.

seven Midtown buildings housed in the venture has declined to $4 billion from $5.6 billion, a nearly 30% drop, after Vornado disclosed the latest write-down late Tuesday.

Piper Sandler analyst Alexander Goldfarb said the news “doesn’t surprise, given the change in valuation fortunes for this former high- ying asset class.” e bulk of the reduction—$480 million—re ects the declining fortunes of Fifth Avenue and Times Square properties that Vornado contributed to a joint venture four years ago with unidenti ed institutional investors. e value of the e a ected properties are located at 640, 655, 666, 689 and 697–703 Fifth Ave., plus 1535 and 1540 Broadway, Vornado said in 2019. ey include approximately e good news now, Sakwa said in a client report, is that investors value Vornado’s retail portfolio for less than the developer does, so the write-down shouldn’t a ect the stock price much. e source of the remaining $120 mil-

489,000 square feet of retail, approximately 327,000 square feet of ofce space, signage at 1540 and 1535 Broadway, the parking garage at 1540 Broadway and the theater at 1535 Broadway housed in the Marriott Marquis hotel.

Evercore ISI analyst Steve Sakwa estimated the buildings collectively generate $200 million to $225 million in net operating income, down from $250 million in 2019.

Vornado described the properties as “among the scarcest and most valuable in the world” when it unveiled the joint venture 11 months before the Covid-19 pandemic hit.