Mortgage REITs Are Bad Long-Term Investments

The average annualized NAV return since inception for 15 residential mortgage REITs is 3.5% The average annualized NAV return since inception for 10 commercial mortgage REITs is 2.7% Mortgage REITs have complexity, volatility, and high overhead, but many fail to  outperform unlevered bond portfolios. Large discounts may provide opportunities for short-term outperformance New Residential, AGNC, … Continue reading Mortgage REITs Are Bad Long-Term Investments

NYMT: Long

Update 5/27: NYMT released 1Q results on 5/22 so the estimates in this post are no longer relevant.  The company sold all of its first loss positions in Freddie Mac K-Series securitizations so the current portfolio has lower risk and also lower current earnings power than I expected.  Management said it hopes to announce resumption … Continue reading NYMT: Long

Artis REIT: High Rent Collection, Valuable Industrial Assets, And Low Price

Artis 5/12 unit price is a 51% discount to IFRS Net Asset Value of $15.52/unit Artis trades at 6X 2020 FFO, well below the 12X average for all Canadian REITs Artis price has underperformed the sector since 2/28 despite an improved business mix and strong rent collections The company's Strategic Review concluded without a transaction, … Continue reading Artis REIT: High Rent Collection, Valuable Industrial Assets, And Low Price

H&R REIT: This Blue Chip Canadian REIT Has Never Been Cheaper

Unit price has fallen 47% since 2/28, much worse than peers Trading at a 60% discount to its IFRS Net Asset Value ($25.79) and  7.3 X 2020 AFFO (C$1.40) estimated prior to the impact of the coronavirus Diversified business model is unpopular with investors, but includes high quality assets that should sustain their value through … Continue reading H&R REIT: This Blue Chip Canadian REIT Has Never Been Cheaper

Artis REIT: Safe and Cheap

Artis units have fallen sharply since my 3/5 article (Artis REIT: Liquidation Sale?).  A financial market crash and an economic recession make it unlikely that the company or significant parts of it can be sold in the near-term, but the strategic initiatives executed over the past year leave Artis well positioned to weather the storm and … Continue reading Artis REIT: Safe and Cheap

Ladder Capital: Well Positioned For A Distressed Market

Ladder is a commercial mortgage REIT with a diversified portfolio designed to preserve capital and flexibility to take advantage of period market disruptions.  A few weeks ago CEO Brian Harris said (4Q19 conference call transcript): Having just raised $750 million a few weeks ago, we have plenty of dry powder and we were deploying it … Continue reading Ladder Capital: Well Positioned For A Distressed Market

Colony Credit: Hoping the End Is Near

Colony Credit reported non-disastrous 4Q19 results with $0.37 Core EPS and undepreciated book value of $17.81/share Colony Capital announced that it intends to sell its agreement to manage Colony Credit Colony Credit hired brokers to sell The Row NYC Hotel CEO Kevin Traenkle resigned 4Q19 results (press release and conference call) came with no major … Continue reading Colony Credit: Hoping the End Is Near

Artis REIT: Liquidation Sale?

Artis 3/3 unit price is a 16% discount to IFRS Net Asset Value of $15.56/unit Artis trades at 8X 2020 FFO, well below the 15X average for all Canadian REITs The strategic initiatives announced in November 2018 have been aggressively implemented and the benefits are fully reflected in the unit price The share price now … Continue reading Artis REIT: Liquidation Sale?

Recent Bond Issues Make Chinese Property Stocks Look Cheap

A range of Chinese property developers have been able to issue US dollar bonds in recent weeks at reasonable yields and with longer maturities than were previously possible.  The longer duration reduces liquidity risk and should support higher equity valuations. Shares of Yuzhou, Logan, and KWG appear especially attractive relative to their bonds.  Assets of … Continue reading Recent Bond Issues Make Chinese Property Stocks Look Cheap