Vornado’s edifice complex by Richard McGill Murphy @FortuneMagazine October 10, 2012, 9:03 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons FORTUNE — When real estate legend Steven Roth launched Vornado Realty Trust VNO in 1980, he was an obscure developer, owner, and operator of New Jersey strip malls. Three decades later Roth’s company is one of the biggest players in the Manhattan real estate market, with plans for revamping rundown Penn Station and a new Madison Square Garden. How did Roth get to where he is today? Focus. Vornado makes most of its money by acquiring, redeveloping, and leasing desirable properties in top markets. And though Vornado’s stock has been treading water for the past couple of years, the company has impressive management (CEO Michael Fascitelli was poached from Goldman Sachs GS ), around $2.5 billion in immediate liquidity, and lots of investment possibilities. “We have lost some luster, and we are going to fight to get it back,” Fascitelli said last year. Headquarters: New York City Employees: 4,800 What It Does Vornado owns and manages more than 100 million square feet of office and retail space across the country and generates nearly $3 billion in annual revenue. About 80% of Vornado’s earnings come from properties in Washington, D.C., and New York City. Trophy properties include the New York Stock Exchange headquarters, the Crystal City office complex near the Pentagon, and 555 California Street, a San Francisco skyscraper. Its roving eye Vornado makes frequent plays outside its wheelhouse of prestige office and retail leasing, which is unusual for a real estate investment trust (REIT). The company holds large stakes in Toys ‘R’ Us and J.C. Penney JCP . “It’s almost like a hedge fund in a REIT structure,” says one investor. Weathering risks ahead The federal government’s fiscal woes have helped drive down Vornado’s occupancy rates and earnings in the nation’s capital, a trend likely to continue. Yet New York City real estate is rebounding, and Washington remains a desirable market with a limited supply of prime office and retail space. “If you’re going to be highly concentrated, you want to be in the best markets, and I think they are,” says Todd Lukasik, an analyst at Morningstar. This story is from the October 8, 2012 issue of Fortune.