Jones Lang LaSalle


Toys R Us to account for 80% of Vornado profits
by Catherine Tymkiw
May 01, 2006

The real estate investment trust said income from the toy retailer would add $52.8 million, or 35 cents a share, to its first-quarter.

Vornado Realty Trust, a real estate investment trust, said income from Toys "R" Us would add $52.8 million, or 35 cents a share, to its first-quarter profit.

Manhattan-based Vornado and private-equity firms Bain Capital and Kohlberg Kravis Roberts & Co. acquired the Wayne, N.J., retailer last year for about $6.6 billion.

Vornado's first-quarter funds from operations - a closely watched measure of a REIT's operating performance - will include $62.3 million, or 36 cents a share, from Toys "R" Us's fiscal fourth quarter, which ended Jan. 28.

Vornado said that Toys "R" Us will account for about 80% of its first-quarter profits, mainly due to robust shopping during the 2005 holiday season.

The REIT has been faring well lately. Just last month Goldman Sachs & Co. analyst Jonathan Haberman upgraded the stock, citing a favorable outlook for office properties and a stable economy. Rents for office space in Manhattan, where Vornado has a heavy focus, are expected to grow 15% a year for two years, according to Mr. Haberman's report.

Vornado's stock is up 11% from the start of the year, trading between $94.55 and $95.64 a share during intraday trading on Monday.