One of New York City's largest owners of commercial real estate estimates the value of some of its properties has dropped by more than half a billion dollars.

Vornado Realty Trust disclosed in a regulatory filing Tuesday night that it expects to take a $600M impairment charge on its portfolio, $480M of which is related to its ownership stake in a large portfolio of Times Square and Fifth Avenue retail properties.

The REIT sold a large stake in the seven-property portfolio, which spans 489K SF of retail and 327K SF of office, along with signage, parking and a Broadway theater, to Crown Acquisitions in 2019 for a $2.5B gain. It already took a $409M impairment charge on the joint venture in the third quarter of 2020 soon after the onset of the pandemic, meaning nearly 30% of its properties' value has been erased.

It is unclear what properties represent the other $120M in impairment charges Vornado is estimating. On the company's third-quarter earnings call in November, the REIT's executives expressed optimism at rebounding activity in both office and retail leasing in New York.

"We think retail has bottomed in the city, and that is our view," Vornado Chief Operating Officer Michael Franco said on the Nov. 1 call, according to a SeekingAlpha transcript. "When leases get done right now, they’re going to be reflective of the fact that rents have corrected, depends on the submarket, could be one-third, could be a half from where they were in peak."

Vornado has shifted its focus in recent years to the redevelopment of the area around Penn Station, which it has dubbed the Penn District. It struck a deal with the state to build several office towers around a rebuilt station funded with the buildings' revenue, but Vornado CEO Steven Roth said in November that "headwinds in the current environment are not at all conducive to ground-up development."

The company reports its fourth quarter earnings Feb. 13.

Vornado wasn't the only large office owner to disclose a significant write-down of a New York City investment this week. Boston Properties took a nearly $51M impairment charge on its Dock 72 office building, which it developed in a 50/50 joint venture with Rudin Management. It reported its net equity in the building, which is 25% occupied, at negative $19.9M.