Vornado Results Underscore Strong REIT Outlook

NEW YORK CITY-Vornado Realty Trust’s financial results for the fourth quarter and full-year 2010, announced Wednesday, marked the latest in a series of strong quarterly showings by major REITs, with LaSalle Hotel Properties and Pennsylvania Real Estate Investment Trust also reporting year-over-year gains on Wednesday. It also provided further evidence of recovery across commercial real estate.

REIT stocks, which cratered in early 2009 following the capital markets collapse, are attracting investors once again thanks to an improving industry outlook as well as high dividend yields and strong quarterly earnings, the Wall Street Journal reported earlier this month. Shares of Vornado, for example, traded in the high $80s on Wednesday, far closer to the $108.15 the shares commanded just before the Wall Street meltdown in September 2008 than to the low of $27.01 six months later. The National Association of Real Estate Investment Trusts says the FTSE NAREIT All REITs Index of US companies posted a 3.64% total return in January, better than the S&P 500 at a 2.37% total return and beating the NASDAQ Composite, which was up only 1.78% for the month.