NEW YORK CITY—Vornado Realty Trust said in anSEC filing Monday that it expects its shopping centerspinoff to begin trading on the New York Stock by nextmonth, subject to its registration statement being declaredeffective. To be known as Urban Edge Properties,the REIT would separate VNO's shopping center business from itscore office and street retail properties.


Totaling 14.9 million square feet, the UE portfolio consists of79 shopping centers, three malls and a warehouse park. While 71 ofthe spinoff's assets are located along the Boston-to-Washington-DCcorridor, there are also properties in California and PuertoRico.


Shareholders in VNO would receive one share of UE stock forevery two VNO shares in connection with the spinoff, according tothe SEC filing. The filing said that separating “a greatNortheastern shopping center business with strong growth prospects”from VNO's “unique world class Manhattan and Washington businesses”would create “two focused, pure-play REITs.”


The Wall Street Journal reported that VNO had exploredthe possibility of a spinoff for more than a year, retainingGoldman Sachs and Morgan Stanleyas advisors. Along the way, it also considered other options forthe shipping center portfolio, including merger with anothercompany.


In a letter to shareholders this past spring, chairman and CEOSteven Roth estimated the value of the spinoff at$3 billion. However, he wrote that the shopping centers, togetherwith VNO's office and urban retail properties, “have been togetherfor legacy reasons, but have no real operating synergies.” In itsSEC filing, VNO likened UE's portfolio to that of VNO itself circa1993, when it elected to be taxed as a REIT.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.