Hosking Partners LLP on Vornado Realty Trust
Thesis
Hosking added to Vornado as rising interest rates and AI-led market concentration compressed valuations of overlooked assets. The manager sees high-quality corporate offices in New York as a scarce-resource business because new supply is restricted. That combination of real estate quality and constrained future construction can support returns once investor demand for non-AI opportunities returns. The purchase fits the firm's contrarian process of recycling capital into overlooked areas.
“high-quality corporate office providers in New York (Vornado) and London (Great Portland Estates) appear well placed”
Key risks
- Rising interest rates have already pressured office valuations.
- Office demand and leasing may remain soft despite scarce new construction.
- A prolonged investor preference for AI-driven equities could delay any valuation recovery.