Michael Fascitelli, president & CEO, Wendy Silverstein, executive vice president & co-head of acquisitions and capital markets, and Joseph Macnow, executive vice president finance and administration & CFO, are presenting for Vornado Realty Trust at NAREIT’s REIT Week.

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Below are notes from the session.

3:07: Fascitelli: (In response to a question about the firm’s balance sheet and its positioning for acquisitions.) The idea was to have the liquidity for attractive deals. … The problem is that the acquisitions market is not giving good deals at killer distressed pricing in Washington, D.C. and New York. … If you own $30 billion in those markets, that’s good. … Through the entire crisis our cashflow didn’t go down. We took losses on development and mezz positions. … The stock price was gyrating all over the place, but the cashflow was stable. … We’re looking for returns well above our cost of capital with reasonable underwriting assumptions. … New York has recovered ahead of the underwriting assumptions, quite frankly. And Washington never slowed down. … We continue look for deals we can get in through the back door or some complexity or some seat at the table. We haven’t seen that yet.

3:09: Fascitelli: We’ve identified three other areas we’d go – Boston (in spite of negative press around stopping the Filene’s project) . We are in San Francisco. We’d go to Los Angeles. We aren’t going to go anywhere else for office. … Retail might be slightly more flexible. … But again, we have a very fine screen for where we will invest capital and we don’t intend to change that screen.

3:11: Silverstein: The most significant difference in the last 60 days are that large loans and CMBS are now available. …That coupled with the insurance company market and the bank market makes me feel that the (improvement in the investment sales market) will continue.

3:20: Macnow: One reason why our development may not seem as apparent is because much of our development pipeline is income-producing property today. Crystal City is almost 8 millions square feet of income-producing property. Hotel Pennsylvania is income-producing property. … Much of our development pipeline doesn’t cost us while we wait for it to ripen up.

3:25: Fascitelli: People say that some of our retail investments were off the fairway. We disagree with that. It is a core competency starting back with Alexander’s. Retailers tend to be the target because their real estate is well located. It can be used for other users. … We’ve routinely tracked stocks where the real estate value is above the stock value. … The frustration is that it doesn’t always lead to the real estate. … We’re happy not to liquidate. In general the idea is to identify mispriced real estate and to redirect that to highest and best use. … We think that’s one of our core competencies. I can’t think of deal we’ve made in retail space that didn’t make money. … The activity is focused on where there is great real estate that is undervalued.

Had some connectivity issues this session so missed some comments.

Session ends.

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