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Vornado Realty And Simon Property Group: Casting Off Unwanted Assets Is The New Fad

The real estate investment trust (REIT) sector has been doing well of late. A combination of historically low interest rates and baby boomers' increased desire for higher yielding investments as this massive generation crests into retirement has a lot to do with that. Although I think REITs have gotten ahead of themselves, there's another interesting and related trend going on. Major industry players are spinning off assets as new companies, something Vornado Realty Trust (VNO) just did with a collection of strip malls. I'm not sure this trend is such a good thing for most investors.

The urban edge
Urban Edge Properties (UE), the REIT spun off from Vornado, owns 79 strip malls, three malls, and one warehouse park. The properties are spread over 10 states and Puerto Rico, but are concentrated in New Jersey, New York, and Pennsylvania. Those assets didn't fit well with Vornado's big city focus… Read More …