Vornado Realty Trust (VNO) Shares Surge 3.51% on Fitch Upgrade, Push to 3-Year High on Strategic Gains

Vornado Realty Trust (VNO) shares surged 3.51% on Thursday, marking the third consecutive day of gains and pushing the stock to its highest level since September 2025. The intraday rally lifted the stock by 3.71%, with the cumulative rise over three trading days reaching 8.89%. The move reflects renewed investor confidence in the REIT’s strategic and financial trajectory.

The rally follows a positive credit rating upgrade from Fitch Ratings, which revised VNO’s outlook to “positive” from “stable” while affirming its ‘BB+’ issuer default rating. Fitch cited progress in reducing leverage, with the net debt-to-EBITDA ratio projected to fall to 6.6x by Q2 2025. The firm highlighted VNO’s Manhattan-focused portfolio, which accounts for 84% of its net operating income, as a key strength amid post-pandemic office market recovery. Improved leasing activity in prime Manhattan submarkets and access to institutional capital further bolster the company’s competitive positioning.

Recent strategic transactions have reinforced VNO’s market resilience. The REIT acquired the Saks Fifth Avenue Tower in Midtown Manhattan for $218 million in late August, enhancing its portfolio of high-demand assets. Concurrently, VNO completed a $120 million refinancing of its 4 Union Square South property in July and sold the 512 West 22nd Street asset for $205 million in August. These moves optimize capital structure, free up liquidity, and align with Fitch’s emphasis on debt reduction and operational efficiency.

Financial performance has also driven optimism. VNO reported Q2 2025 funds from operations and same-store net operating income that exceeded expectations, signaling strong operational execution. The company maintains a conservative dividend payout ratio of 18.32%, with projections indicating sustainable growth. Additionally, short interest in VNO shares declined by 3.56% in the prior month, suggesting reduced bearish sentiment and potential upward momentum.

Broader market dynamics favor VNO’s recovery. Hybrid work trends have normalized in Manhattan, with in-office occupancy rates surpassing pre-pandemic levels. VNO’s focus on modernized, sustainable properties aligns with tenant demand for premium office spaces. The REIT’s P/E ratio of 10.18, significantly below sector averages, underscores its undervaluation relative to peers. Institutional ownership at 90.02% further reflects confidence in its long-term prospects.