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Vornado takes a stake in Sears

Posted By Barry Ritholtz On November 5, 2004 @ 11:08 am In Uncategorized | Comments Disabled

We’ve talked about variant perception several times before, and now we see how its done by some Pros: Vornado and Sears.

Talk about overlooking the obvious: Even after K-mart has quadrupled in 18 months post bankruptcy, was anyone else even looking at the fundamental value of real estate/property holdings of old line retailers?

Sears has owned most of their real property for decades, and I’ll bet it is understated as an asset on the books of the firm. Indeed, we will now see people reviewing the same for many retailers — JC Penney’s, Target, Home Depot, etc.

With the housing market smokin’, and commercial market a bit more difficult to assess on a comparable basis, Vornado made a bet that the commercial property holdings of Sears was not yet reflecting vastly increased US real estate market.

Kudos to Vornado on a brilliant play so obvious, so right-in-front-of-your-face, that we never even noticied it (even as 3/4 of Amercia drives by a Sears store on the way to work each day).


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