Author Topic: VNO - Vornado Realty Trust  (Read 13760 times)

thepupil

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Re: VNO - Vornado Realty Trust
« Reply #30 on: February 19, 2020, 09:43:53 AM »
the constant use of the word "dilution" by sell side when discussing Vornado is puzzling to me. if a stock trades for $65 and the company says its "worth" $97 and sells assets that imply $97, isn't "dilution" a good thing? if you move tenants out and decrease cash flow for the next couple of years in order to redevelop your asset at good unlevered yields, isn't dilution a good thing? 

I'm continuing my stubborn idiocy here. 220 CPS is 91% sold and the company expects another $1 billion of cash to come in from that. they'll give shareholders what is required by REIT law and pour the rest into their assets.

this delusional shareholder is fine with dilution!

maybe Elliott will come bail me out and increase their 0.9% stake.

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Okay. And then you think about, I mean you were running basically $0.89 of adjusted FFO in third and fourth quarter, right? So annualizing out to 356 for the year relative to the 349 for the full year, arguably the last two quarters should have the dilution from the asset sales certainly on the retail side from the stock investments already a take in to that number and arguably has some of the retail loss as well. So I'm trying to reconcile those two things, where you had been reporting a quarterly number of $0.89, 356 annualized, which should already take into account some of this $0.28 of added dilutions that were talking about for 2020.


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Sure. Okay. And then you updated your NAV Now your stock is trading the 32% discount to it wouldn't a buyback. I know you've talked about in the past.

But wouldn't buy a backup offset some of this dilution and it would have been a lever, or could be a lever for sauce that learning solution going forward.

John look, we recognize we're adding these will discount. The market seems to ignore any (NAV VNO puts out) and the NAV put out by sell side communities And that was something that we have evaluated, we continue to evaluate. It's not the course of, action that repair department embark on today.

We are just as we've done in the past. We consistently look at ways to try to narrow that gap. First of all to grow anything, which is what we're trying to do through our pens issue we developments, but secondly, they have to close that gap and we've shown an ability to execute within the creative transactions and we are continuing to look at that. Obviously, a buyback is one-way a now the significant in terms of we've done the past but not something that we had felt is the appropriate use of capital yet.

I guess what would be the appropriate time to use that? I mean you have free cash flow that is significant new trading in a big discount. You have some earnings dilution, which is near term. I mean if this is not the right time then when what it is?

John say, it's a matter of using that capital for that or other things, and we continue to have significant opportunities to invest in our business. We've outlined the three initial redevelopments from Penn District that are substantially a accretive.

The opportunities behind that where, our capital we want to have available to continue to execute on our redevelopment whole District. We were attacking the first 5 million square feet today, but there's significant amounts to do beyond that. And right now we want to have that capital available for, that or other purposes.

« Last Edit: February 19, 2020, 09:46:39 AM by thepupil »


thepupil

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Re: VNO - Vornado Realty Trust
« Reply #31 on: February 21, 2020, 01:20:44 PM »
the mirage of NAV....


JPM:
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While  we  get  the  impact from  the  “guide,”  the  handholding with  the investment community was  arguably also  lacking.  Management had  a tough  time  bridging a  variety of  items  and  answering questions on numbers. We  don’t think this will be good  enough for investors when combined with its opaque financials, and this is a matter that doesn’t seem to faze the company; by the way, VNO isn’t the only REIT in this bucket. From our vantage point, VNO’s FFO “guide” for 2020 could have just as easily been up $0.23-0.33, and we’re not sure it would matter (beyond perhaps the stock performing better today) because it is all so hard to even trace and model.We believe VNO has strong people in the organization, and the stock is probably below private market value (NAV). But this may matter far less for the stock than one might think; the mirage of NAV and being an “NAV story” is  just that, absent a  takeout. We  think  challenges around NYC office and retail right now will continue (even if VNO’s West Side assets are well positioned where the demand is), but VNO’s financial complexity and communication is not helping and instead seems to just exacerbate those negatives. We maintain our Underweight rating.

Spekulatius

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Re: VNO - Vornado Realty Trust
« Reply #32 on: February 21, 2020, 03:45:02 PM »
the mirage of NAV....


JPM:
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While  we  get  the  impact from  the  “guide,”  the  handholding with  the investment community was  arguably also  lacking.  Management had  a tough  time  bridging a  variety of  items  and  answering questions on numbers. We  don’t think this will be good  enough for investors when combined with its opaque financials, and this is a matter that doesn’t seem to faze the company; by the way, VNO isn’t the only REIT in this bucket. From our vantage point, VNO’s FFO “guide” for 2020 could have just as easily been up $0.23-0.33, and we’re not sure it would matter (beyond perhaps the stock performing better today) because it is all so hard to even trace and model.We believe VNO has strong people in the organization, and the stock is probably below private market value (NAV). But this may matter far less for the stock than one might think; the mirage of NAV and being an “NAV story” is  just that, absent a  takeout. We  think  challenges around NYC office and retail right now will continue (even if VNO’s West Side assets are well positioned where the demand is), but VNO’s financial complexity and communication is not helping and instead seems to just exacerbate those negatives. We maintain our Underweight rating.

Well this happens when management is playing one game (increase NAV) while the analysts expecting another  (increase AFFO). VNO is a developer and owner, similar to HHC, so if you own it, you do need to look at both. I’d tend to side with management here, but I do agree that just pointing out the NAV May not help the stock all they much. The only way that may do something is unlock the value via opportunistic sales and stock purchases, which over time will keep compounding both. SLG has done some of this. VNO has Jv’s some retail and billboard assets in a creative Deal, but they haven’t bought back any stock. I like it, but I own already enough undervalued NYC real estate via stock as is.
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thepupil

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Re: VNO - Vornado Realty Trust
« Reply #33 on: February 26, 2020, 03:15:55 PM »
Making our way to a 7 cap! 

Soon we’ll get to start playing the “what can we mark at $0 and still not lose money” game. So far we’re at retail and 220CPS”

Spekulatius

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Re: VNO - Vornado Realty Trust
« Reply #34 on: February 26, 2020, 05:19:39 PM »
Making our way to a 7 cap! 

Soon we’ll get to start playing the “what can we mark at $0 and still not lose money” game. So far we’re at retail and 220CPS”

The problem with VNO is that the NAV actually hasn’t moved for a couple of years. YE 2018 value was $97.9, YE 2019 value is $96. So if you include the dividends, the total return was probably about 2%.

That’s  the issue with Roth concentrating on NAV. The issue appears to be that the NY real estate market has topped out for the time being.
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thepupil

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Re: VNO - Vornado Realty Trust
« Reply #35 on: February 27, 2020, 05:42:05 AM »
completely agree that NAV growth has been anemic and that prices have topped out (in like 2015).

the only thing I'd point out is that only $24 billion / $30 billion of VNO's assets are real estate w/ earnings power.

You have
$1.8 billion of super safe retail preferreds (like 0-50% LTV)
$1.2 billion of 220CPS future proceeds (remaining units are unencumbered as of 2019,91% sold as of last call)
$0.5 billion of Hotel Pennsylvania (which earning virtually nothing, but we can agree land of that huge footprint directly across from Penn Station is very valuable...eventually, for now its a shitty hotel)
$1.1 billion of construction in progress.

Like GRIF's or HHC's landbank, these are assets that don't earn too much and don't flow into FFO (exept the 4% or whatever coupons on the prefs).

So I generally agree with you that NAV and prices have topped out but 1/4 of the assets (and 63% of the mark to market equity) have little earnings power and little risk, which reduces the risk of impairment in my opinion and reduces growth in one year.

but that's just me being repetitive, no more VNO posts until news comes out or we hit a 4 handle!

Spekulatius

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Re: VNO - Vornado Realty Trust
« Reply #36 on: February 28, 2020, 06:26:18 AM »
So we know that VNO will naturally gravitate towards 50% of its NAV in the most liquid real estate market in the world.

Interesting times..,
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thepupil

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Re: VNO - Vornado Realty Trust
« Reply #37 on: March 02, 2020, 10:46:58 AM »
https://investors.vno.com/Cache/IRCache/ff65ef3e-c2fc-c45e-73d6-086d02a971b7.PDF?O=PDF&T=&Y=&D=&FID=ff65ef3e-c2fc-c45e-73d6-086d02a971b7&iid=103050

As I transition to VNO's un-official IR department head and post yet again, I think their new slide deck is pretty hilarious, namely because of slide 27, which attempts to address the disastrophe that was the last earnings call with a bridge called the "what we didn't know in Q3" section.

What didn’t we know at Q3? Amount Per Share
Street’s estimate of 2020 “FFO, as adjusted”              3.40
Adjustments:
Kmart at PENN 1                                                      (3.4)
Loss of dividend income due to PREIT sale                 (5.2)
Accelerated relocation of tenants from PENN 2           (8.3)
Free rent period for LVMH replacing Coach at 595 Madison Avenue (7.2)
Adjustments coming from our year end budget process:
Lowering Hotel Penn (9.1)
Correction of a straight-line rent error in a joint venture partner’s budget (4.5)
Total (37.7) (0.19)
Vornado 2020 budget “FFO, as adjusted” 3.21

BG2008

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Re: VNO - Vornado Realty Trust
« Reply #38 on: March 02, 2020, 12:27:58 PM »
https://investors.vno.com/Cache/IRCache/ff65ef3e-c2fc-c45e-73d6-086d02a971b7.PDF?O=PDF&T=&Y=&D=&FID=ff65ef3e-c2fc-c45e-73d6-086d02a971b7&iid=103050

As I transition to VNO's un-official IR department head and post yet again, I think their new slide deck is pretty hilarious, namely because of slide 27, which attempts to address the disastrophe that was the last earnings call with a bridge called the "what we didn't know in Q3" section.

What didn’t we know at Q3? Amount Per Share
Street’s estimate of 2020 “FFO, as adjusted”              3.40
Adjustments:
Kmart at PENN 1                                                      (3.4)
Loss of dividend income due to PREIT sale                 (5.2)
Accelerated relocation of tenants from PENN 2           (8.3)
Free rent period for LVMH replacing Coach at 595 Madison Avenue (7.2)
Adjustments coming from our year end budget process:
Lowering Hotel Penn (9.1)
Correction of a straight-line rent error in a joint venture partner’s budget (4.5)
Total (37.7) (0.19)
Vornado 2020 budget “FFO, as adjusted” 3.21

Love the self designation of Unofficial IR Dept of VNO

bizaro86

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Re: VNO - Vornado Realty Trust
« Reply #39 on: March 02, 2020, 02:03:22 PM »
https://investors.vno.com/Cache/IRCache/ff65ef3e-c2fc-c45e-73d6-086d02a971b7.PDF?O=PDF&T=&Y=&D=&FID=ff65ef3e-c2fc-c45e-73d6-086d02a971b7&iid=103050

As I transition to VNO's un-official IR department head and post yet again, I think their new slide deck is pretty hilarious, namely because of slide 27, which attempts to address the disastrophe that was the last earnings call with a bridge called the "what we didn't know in Q3" section.

What didn’t we know at Q3? Amount Per Share
Street’s estimate of 2020 “FFO, as adjusted”              3.40
Adjustments:
Kmart at PENN 1                                                      (3.4)
Loss of dividend income due to PREIT sale                 (5.2)
Accelerated relocation of tenants from PENN 2           (8.3)
Free rent period for LVMH replacing Coach at 595 Madison Avenue (7.2)
Adjustments coming from our year end budget process:
Lowering Hotel Penn (9.1)
Correction of a straight-line rent error in a joint venture partner’s budget (4.5)
Total (37.7) (0.19)
Vornado 2020 budget “FFO, as adjusted” 3.21

Love the self designation of Unofficial IR Dept of VNO

Also two thumbs up for use of "disastrophe"