Vornado Realty Trust (VNO ) which owns, leases, and manages various office, retail, and industrial properties, has become more alluring of late. So argue some value investors, who say Vornado might buy the 67% of Alexander's it doesn't already own. Alexander's owns seven properties in Greater New York. But the one Vornado covets, says Peter Doyle of Kinetics Mutual Funds, is the 1.4 million-sq.-ft. property at 59th Street and Lexington Avenue in Manhattan. Construction of a multi-use tower edifice there has begun. Alexander's, whose CEO Steve Roth is also the CEO at Vornado, has obtained a $630 million loan commitment from a German bank. Bloomberg LP, the media-and-financial-data company owned by Mayor Michael Bloomberg, has agreed to lease 700,000 sq. ft. for 25 years. Doyle figures that in five years the property will produce $115 million annually from rents. If Vornado purchases Alexander's even at thrice its market cap of $335 million, "it would still add tremendous value to Vornado," says Doyle, whose fund owns shares. He says Vornado, now 45, could double in a year. Vornado didn't return calls.

By Gene G. Marcial

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