Colony Credit Needs More Time To Reach Targets

Target level of leverage and earnings now expected in 2H19 Asset level performance is satisfactory with unlevered yields in line with expectations Portfolio return below peers due to lower yielding non core assets (real estate and Private equity) and low leverage The company remains under-owned (held by only 6 ETFs) and undervalued (12% discount to … Continue reading Colony Credit Needs More Time To Reach Targets

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Northstar Realty Europe: Rising Asset Value and Falling Expenses

Net Asset Value rose 32% since 12/31/16 to $20.95/share at 6/30/18 Property Operating Expense declined from 24% of revenue in 2016 to 21% of revenue in 1H18 Overhead Expense declined from 6.0% of Net Assets in 2016 to 3.4% of Net Assets in 1H18 Discount to NAV of 37% for NRE compared to an average … Continue reading Northstar Realty Europe: Rising Asset Value and Falling Expenses

Colony Capital Bottom Seekers – How Big Is The Cushion?

Colony Capital has fallen 62% since the January 2017 Northstar merger The stock trades at 8 times forecast 2018 FFO, one of the lowest multiples in the sector Management has made slow progress at simplifying the business Tangible assets are worth about $0.3Bn less than carrying value, Healthcare overvaluation partially offset by Industrial and Hotels … Continue reading Colony Capital Bottom Seekers – How Big Is The Cushion?

Colony Northstar Credit: Underowned & Undervalued

Recently launched Commercial Mortgage REIT should reach earnings potential of $0.54/quarter by year-end Low institutional ownership will rise as the REIT gets new analyst coverage and is added to indices/ETFs Undervalued at a discount of 20% to NAV compared to average premium of 18% for large cap peers (Starwood, Blackstone, Apollo) Potential total return over … Continue reading Colony Northstar Credit: Underowned & Undervalued

Northstar Realty Europe: Rising Asset Value and Falling Expenses

Northstar Realty Europe is delivering an attractive shareholder return from a portfolio of prime assets in strong European markets. Net Asset Value rose 27% since 12/31/16 to $20.50/share at 3/31/18 Property Operating Expense declined from 24% of revenue in 2016 to 20% of revenue in 1Q18 Overhead Expense declined from 6.0% of Net Assets in … Continue reading Northstar Realty Europe: Rising Asset Value and Falling Expenses

CLNS 1Q18 Initial Reaction

Colony Northstar 1Q18 results (press release and supplement).  A few points: $279mm shares repurchased (average price of $5.79).  I estimate accretion of $0.33 to adjusted equity per share (after removal of Northstar goodwill).  This is bigger than earnings. Industrial and Hospitality results look like they are below the pace of guidance and weaker than peers.  … Continue reading CLNS 1Q18 Initial Reaction

Colony Collapse Disorder: Will CLNS 1Q Results Provide A Cure?

Colony Northstar shares fell sharply over the past 6 months due to poor operating results and an unclear strategy for improvement 1Q18 earnings are unlikely to hold any surprises.  Healthcare peers have been weak, Industrial and Hospitality have been strong.  "Unallocated" corporate costs are the biggest uncertainty. With little conviction I estimate $0.74/share of FFO … Continue reading Colony Collapse Disorder: Will CLNS 1Q Results Provide A Cure?

Colony Northstar Credit Real Estate Might Not Be A Disaster

Several things could go right for Colony Northstar Credit Real Estate (CLNC) in coming months: Release of year-end results and conference call will provide an opportunity for the company to introduce itself to investors. $300mm share repurchase plan can begin after results are out.  At a price of $20/share, the plan could acquire over 18% … Continue reading Colony Northstar Credit Real Estate Might Not Be A Disaster

Colony Northstar Merger Math 2+2+2=3

The merger of Colony Capital, Northstar Realty, and Northstar Asset Management combined 3 companies with a market cap of about $2Bn into one company whose market cap has fallen to $3Bn. Operating performance has fallen far short of expectations and far short of the partners premerger earnings. Most of the acquired Northstar assets have been … Continue reading Colony Northstar Merger Math 2+2+2=3

Colony Northstar Is Becoming Simpler And More Valuable

Near-term earnings are a bit weaker than expected and it will take years to realize the expected benefits of the merger The stock trades at one of the lowest valuations in the sector because the balance sheet and income statement remain difficult to analyze The market may have overlooked the benefits of the recently announced … Continue reading Colony Northstar Is Becoming Simpler And More Valuable