The financial crisis has hurt the sector’s exchange traded funds (ETFs), but there’s another victim: the New York City REIT.

Two prominent New York office REITs have been hit hard by the potential Bank of America (BAC)/Merrill Lynch (MER) acquisition, Lehman’s (LEH) bankruptcy and trouble at insurer AIG (AIG).

Vornado Realty Trust (VNO) and S.L. Green (SLG) both fell sharply in trading yesterday, reports the Barron’s Blog. Vornado says it’s one of the largest owners and managers of real estate in the United States, with more than 100 million square feet worth of properties in both New York and Washington, D.C.

Most importantly, Vornado owns 20 Broad Street, home of the New York Stock Exchange.

S.L. Green owns 68 properties in Manhattan, Brooklyn, Westchester County and Connecticut. Merrill Lynch is one of the tentants at the C.L. Green-owned 717 Fifth Avenue.

ETFs that could be affected:

• iShares FTSE NAREIT Industrial/Office (FIO): down 3.2% year-to-date; SLG is 7.3%
• DJ Wilshire REIT (RWR): down 2.4% year-to-date; Vornado is 5.7%; SLG is 2%
• First Trust S&P REIT (FRI): down 3.1% year-to-date; Vornado is 4.7%; SLG is 1.8%
• Vanguard REIT (VNQ): down 2.3% year-to-date; Vornado is 4.4%

Tags: FIO, FRI, Green ETFs, Real Estate, REITs, RWR, Sector ETFs, VNQ