Vornado Realty Trust (VNO) is a New York-based real estate investment trust (REIT) that acquires, owns, and leases office properties, retail space and temperature-controlled logistics and refrigerated warehouses. The company owns and manages approximately 100 million square feet of real estate (including pro-rata share of partially-owned properties and joint-ventures).

Despite softening market conditions, VNO reported relatively strong 3Q08 results. Overall portfolio occupancy is still high and the company reported strong rental rate increases on new leases at its office and retail properties. Due to strong infill locations in urban areas, VNO is in a better position than most peers to withstand the economic decline in 2009.

It is clear that office and retail fundamentals are getting worse and operations will deteriorate in 2009. We think VNO, at a heavily discounted price, represents good long-term value. The yield, now above 8% appears safe.

In addition, the company has plenty of cash and very limited 2009 debt maturities. We think the company might have some attractive acquisition opportunities from companies that cannot refinance their debt and will be forced to sell.