Vornado Realty Trust (VNO): what the price assumes

boothcheck covers Vornado Realty Trust (VNO) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-28.

Generated: 2026-08-08 · Exported: 2026-08-09 · Source: https://boothcheck.com/report/VNO

Headline

FieldValue
TickerVNO
CompanyVornado Realty Trust
Current price$39.91/sh

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisreit
Price-to-FFO5.8x
FFO yield17.4%

The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 12.6% cost of equity with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.58σ
cohort percentile (of 105 peers)5
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.73x4justifies
Earnings0.59x4justifies
Relative0.39x3justifies
Growth0.73x3justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.8%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$79.010.51xyesFCF base $1.3B, growth -0% (input: historical growth), terminal g 0.5%, WACC 7.8%, 5yr projection
DCF Exit MultipleGrowth$54.870.73xyesExit EV/EBITDA: 17.2x / 19.2x / 21.2x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative——noP/E 23.32x (blended: static sector reference 35x + trailing (TTM) 6x), scenarios: 19.7x / 23.3x / 26.9x (bear / base = reference held flat / bull), EV/EBITDA 20x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$45.330.88xyesBV/sh $31.73, ROE (TTM) 13.2%, ke 9.3%
Two-Stage Excess ReturnAsset$53.700.74xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$25.391.57xyesRev $1.8B, growth -0% (input: historical growth; tapered), Terminal P/S: 3.5x / 4.2x / 4.8x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$103.200.39xyesFFO/share $6.88, growth 15% (input: historical FFO/share growth, 10y median), PEG=0.63 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$55.490.72xyesBV $31.73 + 5yr PV of (ROE (TTM) 13.2% − Kₑ 9.3%) × BV; BV grows 8.6%/yr
Graham NumberAsset$70.080.57xyes√(22.5 × FFO/share $6.88 × BVPS $31.73) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $0.48B × sector EV/EBITDA 20.0x
FCF YieldEarnings$62.420.64xyesFCF $1254.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$60.990.65xyesSBC-adj FCF $1.23B (FCF $1.25B − SBC $0.03B) capitalized at Kₑ
Ben Graham FormulaEarnings$221.990.18xyesFFO/share $6.88 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——noRevenue $1.81B × sector P/S 6.0x
PEG Fair ValueRelative$154.800.26xyesFFO/share $6.88 × (PEG 1.5 × growth 15.0% (input: historical FFO/share growth, 10y median)) → PE 22.5x
Earnings YieldEarnings$74.380.54xyesFFO/share $6.88 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative$96.760.41xyesFFO/share $6.88 × 14.1x P/FFO (route cohort median, n=85); FFO $1.31B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 190M
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
New Yorkoperatingenterprise1.5B reported-currency—withheldunresolved no unit value
Otheroperatingenterprise0.3B reported-currency—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Funds from operations (trailing)$1.3b
Share count CAGR (buyback)-0.3%
Burning cashno

REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.

Bullet Takeaways

Bull Case

Watch what Vornado is doing with its capital, because management is acting like an owner who thinks the assets are mispriced. In Q1 2026 it bought a 49% interest in Park Avenue Plaza, a 1.2 million square foot, 99%-occupied office building, at about $950 a square foot, which it pegs at 65% to 70% below replacement cost, with an 8% GAAP yield and fixed-rate debt below 3% locked through 2031. That deal alone is expected to add roughly $0.10 a share to the full-year run rate. At the same time, the company repurchased about $80 million of its own stock and the board authorized a new $300 million buyback. Buying prime Manhattan real estate well below the cost to build it, and buying back its own shares at roughly six times cash flow, is the clearest possible statement that management sees value the market is not crediting.

The operating story underneath is recovering, not deteriorating. New York office occupancy stood at 90.3%, the company leased 426,000 square feet in the quarter, 311,000 of it in New York, and Manhattan starting rents came in around $103 a foot with positive mark-to-market re-leasing spreads of 11.7% on a GAAP basis. THE MART in Chicago improved 180 basis points year over year. The first-quarter FFO dip to $0.52 from $0.63 was driven by identifiable, largely one-time or financing items, a ground-rent reversal at PENN 1 and higher interest, not by the underlying leasing engine weakening. Management guides comparable FFO to be slightly higher than 2025, with sequential improvement each quarter as new GAAP rents come online and interest expense falls after June bond maturities.

The valuation is the third leg, and it is unusually wide. Leverage, read the way it should be for a REIT against funds from operations, is modest at about 1.3 times net debt to FFO on the cached basis. For an investor who believes Manhattan office has found its floor, the bull case is simple: a concentrated portfolio of irreplaceable trophy assets, run by a management team buying both buildings and its own shares at distressed multiples, trading at roughly six times cash flow.

Bear Case

The sector cycle is the bear case, and office real estate is the part of the cycle that has been slowest to turn. Vornado's fate is tied to Manhattan office demand, an asset class still working through the structural shift to hybrid work, a wave of lease expirations, and a flight to quality that helps the best buildings while leaving older stock to languish. The portfolio is not uniformly recovering: 555 California Street in San Francisco saw occupancy fall 560 basis points year over year, a reminder that even trophy assets are exposed when a local market is weak. A concentrated REIT lives and dies by a handful of buildings in a handful of submarkets, and that concentration cuts hard when a cycle is against you.

The financing cycle compounds it. Q1 FFO fell partly on higher interest expense, and a REIT funded with property-level and corporate debt is acutely sensitive to where rates sit when its maturities come due. Management's guidance for sequential improvement leans explicitly on interest expense falling after June bond maturities, which assumes refinancing terms cooperate. If rates stay higher for longer, the refinancing math gets worse, not better, and the cheap sub-3% debt on the new Park Avenue Plaza acquisition is the exception rather than the rule across an older capital stack. Leverage that looks modest against FFO can still be punishing when the cost of that debt rises and cap rates expand.

There is also a development overhang the bulls tend to underweight. The PENN District redevelopment is Vornado's signature growth project, and the next phase, 350 Park Avenue, depends on Citadel committing as anchor tenant for the venture to proceed, with the demolition already commenced and resolution expected only later in the summer. Large ground-up office development in this environment is a capital-intensive bet that ties up cash for years before it produces income, and a stumble there, or a failure to land the anchor, would weigh on a balance sheet that is already being asked to fund buybacks and acquisitions. The six-times multiple is cheap for a reason: the market is pricing real cyclical, financing and execution risk, not a free lunch.

Valuation

A REIT is valued on its adjusted funds from operations, the cash earnings plus property depreciation minus the recurring capex that keeps buildings leasable, not on an operating multiple. On that basis Vornado trades at roughly six times adjusted funds from operations. That is low enough to be a bound rather than a point estimate: the price sits below what even a 5%-a-year decline in funds from operations would warrant, and in the lower half of the REIT peer group on price to adjusted FFO. In plain terms, the market is pricing in a steady erosion of cash flow that the company is not currently experiencing.

The X-ray is consistent with deep value rather than a stretched price. Leverage read the REIT way, against funds from operations, is modest at about 1.3 times on the cached basis, though it is worth noting that interest expense is not separately reported in those statements, so fixed-charge coverage cannot be computed here and the true property-level leverage is higher than the corporate figure alone suggests.

The honest synthesis is that this is a value-and-asset-supported name where the gap between price and most measures of intrinsic worth is large, and the implied assumption is conservative. The inversion characterizes the priced-in pace as within range, broadly consistent with what the company has delivered, which means the burden of the bear case is not on the entry multiple but on the cycle: whether NYC office demand, rates and the PENN District development cooperate. If the operating recovery the Q1 leasing data hints at continues, six times cash flow is too cheap for trophy Manhattan assets. If the cycle re-deteriorates, the discount can persist for years even though the math says the buildings are worth more.

Catalysts

The recurring catalyst is the New York leasing recovery showing up in funds from operations. Q1 2026 comparable FFO was $0.52 a share, down from $0.63 on a ground-rent reversal at PENN 1 and higher interest, but New York occupancy held at 90.3%, the company leased 426,000 square feet with Manhattan starting rents near $103 a foot, and re-leasing spreads were positive. Management guides comparable FFO slightly higher than 2025 with sequential quarterly gains as new GAAP rents come online and interest expense falls after June bond maturities, so each quarter's occupancy, leasing volume and FFO trajectory is the key checkpoint.

Capital allocation is an active catalyst. Vornado bought a 49% stake in Park Avenue Plaza at 65% to 70% below replacement cost, expected to add about $0.10 a share to the run rate, repurchased roughly $80 million of stock, and authorized a new $300 million buyback. The pace of buybacks at around six times cash flow, and any further accretive acquisitions, are direct drivers.

The PENN District is the swing development catalyst. Demolition for 350 Park Avenue has commenced, but the venture depends on Citadel committing as anchor tenant, with management expecting the next steps to be resolved over the summer. That resolution, one way or the other, is a binary event for the company's largest growth project. The broader swing factor is the rate environment, since refinancing terms on upcoming maturities bear directly on both FFO and the value of the portfolio.

Peer Cohorts (Per Segment, With Filing Citations)

New York / Other (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive VNO report on boothcheck