2 Office REITs With Solid Financial Positions
Boston Properties looks fairly valued, and Vornado is cheap today as we relaunch coverage of these no-moat firms.
Brad Schwer: We recently relaunched coverage of office REITs Boston Properties and Vornado with no-moat ratings. Both companies own and operate Class A office and retail space in key markets such as Washington, D.C., San Francisco, and Manhattan. I think its important to highlight three key takeaways.
First, we don't see any structural competitive advantages in either company to support a moat. Substitutes for Class A office space are everywhere, and Boston Properties and Vornado typically have a low- to midsingle-digit market share depending on the location.
Brad Schwer does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.