Three Players

While other public REITs are heavily invested in New York, Schorsch’s company is the only one that exclusively owns buildings in the city. Ninety-six percent of its 3.1 million square feet (288,000 square meters) of real estate is in Manhattan and the rest is in Brooklyn and Queens, according to a March 31 regulatory filing.

The beginning of share trading is “one of the most unusual deals because there’s only been three New York-centric REITs ever listed,” Schorsch said, referring to SL Green Realty Corp. and Empire State Realty Trust Inc., which both own buildings outside the city. “There’s plenty of room in every market for three top players.”

The companies have outperformed the broader U.S. REIT market. Empire State Realty, owner of Manhattan’s iconic Empire State Building, climbed 14 percent since its initial public offering in October 2013. SL Green rose 11 percent in the same period, compared with a 5.4 percent advance for the 141-company Bloomberg REIT Index.

Times Square

Among New York REIT’s $1.8 billion of deals last year was the purchase in December of 1440 Broadway, a 25-story office building near Times Square, for $528.6 million.

In October, it bought a 49 percent stake in Worldwide Plaza for $220 million in a transaction that gave the REIT an option to acquire the remaining share in three years. The 1.8 million- square-foot tower, between West 49th and West 50th streets, is about 91 percent leased to tenants such as Nomura Holding America Inc. and law firm Cravath Swaine & Moore LLP.

New York REIT has overvalued its portfolio, given the location and age of the properties, according to Ian Goltra, a money manager at Forward Management LLC in San Francisco. Investors may have more success buying shares of other REITs that have buildings in New York, such as Boston Properties Inc. and Vornado Realty Trust., he said.

“The stock is fully priced where it trades today,” Goltra said in a telephone interview. “The upside in the New York market can be better captured in SL Green or Boston Properties or Vornado.”

Forward, which has more than $5 billion of assets under management, owns shares in those three companies and none in New York REIT, Goltra said.