NEW YORK CITY-Although the fourth-quarter and full-year 2012 financials of a major REIT bear watching under any circumstance, Wednesday morning’s webcast and conference call by senior executives of Vornado Realty Trust took on particular significance with the surprise announcement an hour earlier that president and CEO Michael Fascitelli had resigned effective April 15. The call offered few details on the move, beyond chairman Steven Roth and Fascitelli both affirming that the decision to step down was solely Fascitelli’s.
“Vornado has been my consuming passion for the past 16 years,” Fascitelli said during Wednesday’s call, and Roth cited the “unprecedented growth and change” that has occurred since Fascitelli joined as president and trustee in December 1996. Yet Fascitelli described himself as “a firm believer in trying something new,” citing a career path that took him from Bristol Myers to a 12-year stint at Goldman Sachs and, finally, to Vornado. “Now is the right time for me to take a break before trying something new.” He will, however, remain on Vornado’s board and maintain an office at the company’s 888 Seventh Ave. headquarters.
Roth, who will return to the CEO position he held from 1989 to 2009, noted that he and Fascitelli had been business partners in running Vornado since the latter joined the REIT. “As such, the transition will be seamless,” Roth said Wednesday. Later in the call, however, he noted that he didn’t plan to stay in the role “forever.”
Turning to the original topic of the call, Fascitelli and others cited the challenges facing the current market, not least of which is the current impasse between the White House and Congress over sequestration–a conflict that has particular relevance for Vornado, which has significant holdings in Washington, DC and counts Uncle Sam as its largest office tenant. Nonetheless, he said, “We did quite a lot, and I’m quite pleased with our accomplishments despite a difficult leasing environment.”
The REIT, which posted adjusted funds from operations of $228.6 million for Q4 and $964.1 million for the 12 months that ended Dec. 31, was active on the acquisitions/dispositions front as well as in leasing. During ‘12, it paid $61 million for 520 Broadway in Santa Monica, CA and $132 million for 1100 Lincoln Rd. in Miami Beach, FL. Vornado and its affiliate Alexanders Inc. also sold two New York City metro shopping malls, Kings Plaza in Brooklyn and Green Acres Mall in Valley Stream, NY for a combined $1.251 billion.
Given the currently favorable investment sales environment, Roth said to expect more where those came from. “We will continue aggressively to sell assets we no longer want to own,” he said.