3rd largest REIT raising $1 billion vulture fund

Vulture funds are starting to emerge to take advantage of the current and future drops in commercial real estate

Vornado Realty Trust, the third- biggest U.S. real estate investment trust by market value, is trying to raise $1 billion to invest in real estate assets, according to a person with knowledge of the fundraising.

Property investors including REITs are raising money from stock investors and through private funds to take advantage of falling real estate prices as debt financing becomes scarce.

Vornado, which owns mainly office and retail properties, is one of about 50 REITs that raised a total of $15.7 billion from equity sales through June 26, according to the National Association of Real Estate Investment Trusts, the trade group based in Washington. Vornado completed a $741.8 million stock sale in April with proceeds earmarked for cutting debt and making acquisitions.

U.S. commercial real estate values fell almost 23 percent through March 31 from the peak in October 2007 as credit dried up, Moody’s Investors Service said May 18.

Hey Vornado, I know a few projects in San Francisco you might be interested in (i.e. Turnberry's lot on Lancing Street).

SOURCE: BLOOMBERG