Vornado Realty Trust (VNO), one of the largest real estate investment trusts (REITs) in the U.S., has recently announced the termination of a deal to sell an 8.6 acre parcel of land in the Pentagon City area of Arlington, Virginia.

With the termination of the deal, the purchaser has forfeited depository fees of $27 million. Consequently, Vornado will record a termination income of $27 million in the fourth quarter of 2009. In addition, Vornado will also write down the carrying value of the land to its fair value price, and the value of the land will accordingly reduce from $108 million to $83 million in the fourth quarter.

Vornado is engaged in acquiring, owning and leasing office properties, retail space and temperature-controlled logistics and refrigerated warehouses. Besides its properties, the company also has investments in other REITs, industrial buildings and Toys ‘R’ Us.

Vornado has a strong asset portfolio in two of the best long-term office markets in the US – the New York City and Washington DC. This provides the company a competitive advantage to continually increase rents. The company also has a healthy balance sheet and adequate liquidity. Consequently, Vornado is better placed than most of its peers to withstand the economic decline in 2009.

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