VNO Vornado Realty Trust : Bullish and Bearish Analyst Opinions

"You're seeing just an extraordinary growth in leasing in New York that I haven't seen in my career... At the end of this year, we expect two thirds of our portfolio to be 98% leased on a weighted average basis." The broader market has heavily discounted office REITs based on the assumption that remote work and AI-driven job losses have permanently impaired office demand. However, on-the-ground data shows a massive "space grab" by law firms, fintechs, and AI companies signing 15-to-20-year leases. As prime Manhattan office buildings fill up, landlords with high-quality, well-located assets will see stronger-than-expected cash flows, forcing a positive re-rating of their heavily shorted or discounted shares. LONG NYC-focused office REITs as fundamental leasing velocity and long-term tenant commitments completely contradict the bearish macro narrative surrounding commercial real estate. Persistently high interest rates could keep debt servicing and refinancing costs elevated; potential NYC property tax hikes to plug municipal budget deficits could eat into operating margins.

Trophy class A in Midtown is 90 bucks a foot, which hasn't moved considerably from early COVID. In trophy in New York City right now, you're seeing like sub-4% vacancy. People are back and they're actually there. The broad narrative that Manhattan office is dead is factually incorrect at the high end. A flight to quality is occurring, meaning REITs that own premium, Class A trophy assets in NYC will maintain pricing power and high occupancy while lower-tier, older buildings suffer. LONG. Premium NYC office REITs are unfairly discounted by the broader commercial real estate panic, despite their specific trophy assets performing exceptionally well. A broader economic downturn could force corporate tenants to downsize even their premium footprints to cut costs.

Kennedy notes "Back to work is here" and tech companies are moving back to offices. He states, "Probably the next one to three years office will perform best." There is a supply constraint (no new buildings for 20 years in key areas) combined with increased demand from AI/Tech companies for physical space with power. The 20-25% repricing in assets has already happened, creating an attractive entry point. Long Office REITs (focusing on high-quality, urban operators) as a contrarian value play against the "death of office" narrative. A recession triggers a new wave of layoffs, reducing demand for square footage.