Vornado Suspends Dividends Through End of 2023
By Rebecca Baird-Remba April 27, 2023 1:45 pm
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Vornado Realty Trust (VNO) has opted to delay paying dividends on its common shares through the end of 2023, as it struggles with declines in the value of its commercial properties and the price of its stock.
The real estate investment trust (REIT) announced the move Wednesday evening, which surprised some observers because REITs generally pay earnings to shareholders through dividends throughout the year.
Citing potential property sales that might generate cash this year, Vornado said it would return to paying dividends next year, in cash or a combination of cash and stock. It also announced a $200 million stock buyback program. The firm did release quarterly dividends to its preferred shareholders, which will be payable on July 3.
The landlord, which mostly owns office and retail in Midtown Manhattan and a few properties in Chicago and San Francisco, wrote down the value of its portfolio by $600 million in February, Crain’s New York Business reported at the time.
Vornado’s stock price has tumbled over the past year, from $40 a share in April 2022 to $14.75 a share as of Thursday morning. It was removed from the S&P 500 in January, with the index saying the stock’s performance had become “more representative of the midcap market space.”
The landlord has also put its major Penn Plaza developments on ice amid rising interest rates, lack of demand for office space and uncertainty from the governor’s office, which would have to steer a rezoning of the area. Despite the company’s poor stock performance, Vornado CEO Steven Roth collected a $1.5 million cash bonus this year.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.
