If you own premium Manhattan real estate, these probably aren't the best of times. Vornado Realty Trust (VNO), a prominent REIT with a portfolio entirely focused on Manhattan office and street retail properties, just watched its Growth score crater in market rankings over the past week.
The company owns some seriously high-profile real estate in the borough, including the Penn 1 skyscraper and the iconic 770 Broadway. But that pedigree hasn't insulated it from the harsh realities facing Manhattan's commercial property market.
What's Behind the Collapse?
Growth scores measure how well a company is performing on earnings and revenue growth, looking at both short-term and long-term trends. When that score drops dramatically, it's typically telling you something unflattering about recent quarterly performance.
In Vornado's case, the numbers are stark. The Maryland-based REIT saw its Growth score plunge from 50.16 to 2.75 within a single week. That's not a correction, that's a freefall.
While you might be tempted to blame politics—Democratic Socialist mayor-elect Zohran Mamdani is set to take office on January 1, 2026—the reality is more nuanced. Mamdani's policy proposals, which include rent freezes on regulated apartments, could certainly reshape New York City's real estate landscape. But those measures haven't even taken effect yet, and more importantly, Vornado's portfolio is primarily retail and office space. The company is largely insulated from residential affordability initiatives.
The Real Culprit: Post-Pandemic Structural Shifts
What's actually hurting Vornado? The same thing that's been plaguing Manhattan commercial real estate since 2020: fundamental changes in how people work and shop.
The company has experienced sustained erosion in its funds from operations—the key profitability metric for REITs—since the onset of the COVID-19 pandemic. Its portfolio continues to face pressure from structural changes in New York City's office and retail markets, which simply haven't recovered to their pre-pandemic dynamics.
Remote work has permanently altered office space demand, and e-commerce has continued to chip away at street retail. These aren't temporary headwinds that will blow over once a new mayor settles in. They're the new reality for Manhattan commercial property owners.
Making matters worse, Vornado scores poorly across multiple metrics in market rankings, with unfavorable price trends in the short, medium, and long terms. When your growth metrics collapse and your price action looks bleak across every timeframe, that's a signal worth paying attention to.
The timing with Mamdani's impending inauguration makes for a compelling narrative, but the truth is simpler and more sobering: Vornado's challenges reflect broader struggles in Manhattan's commercial real estate market that have been building for years, not political developments that haven't even happened yet.