Vornado Realty Trust Said to Seek $1 Billion for Distressed Real Estate

Discussion in 'Wall St. News' started by ASusilovic, Jul 7, 2009.

  1. July 7 (Bloomberg) -- Vornado Realty Trust, the third- biggest U.S. real estate investment trust by market value, is trying to raise $1 billion to invest in real estate assets, according to a person with knowledge of the fundraising.

    Property investors including REITs are raising money from stock investors and through private funds to take advantage of falling real estate prices as debt financing becomes scarce.

    “People are readying themselves for the buying opportunities that are going to open up,” said Steve Coyle, a fund manager at Cohen & Steers Inc., a New York-based investor in real estate securities. “Private guys are going the public route and then you’ve got public guys raising private funds.”

    Vornado, which owns mainly office and retail properties, is one of about 50 REITs that raised a total of $15.7 billion from equity sales through June 26, according to the National Association of Real Estate Investment Trusts, the trade group based in Washington. Vornado completed a $741.8 million stock sale in April with proceeds earmarked for cutting debt and making acquisitions.

    U.S. commercial real estate values fell almost 23 percent through March 31 from the peak in October 2007 as credit dried up, Moody’s Investors Service said May 18.

    Vornado could face tough competition for investor capital, said David Shulman, managing member of David Shulman LLC and former REIT analyst for Lehman Brothers Holdings Inc.

    “It’s a tough market to sell into,” Shulman said. “A lot of people are overinvested in these vehicles right now. The appeal is Vornado’s track record. That’s what they’re selling on.”

    Roanne Kulakoff, a spokeswoman for Vornado, declined to comment. The fundraising was reported earlier by the Wall Street Journal.


    I thought US real estate is almost "worthless"...:confused:
  2. .....you meant to say "worth less", didn't you. When Swiss hedge fund managers get too bearish on USA real estate, be careful! :cool: