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

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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?

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 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 Delivered a 50% Return. What’s Next?

Colony Northstar (CLNS) management did an admirable job of bringing their 3-way merger to completion.  Northstar Asset Management (NSAM) shareholders have earned a total return over 50% since I wrote last July that shares had potential for a 60% return (LINK).  What next? CLNS has not updated its future guidance since the initial merger presentation … Continue reading Colony Northstar Delivered a 50% Return. What’s Next?

Northstar Realty Europe – Activist Sees Opportunity in Advisor’s Change of Control

, UPDATE May 31 2017: Activist Bow Street Capital sold all of its Northstar Realty Europe shares to Colony Northstar on May 12 (link to SEC filing) and withdrew its acquisition offer. Bow Street LLC has offered to buy Northstar Realty Europe for $13/share (LINK): "We firmly believe that NRE’s true value will never be … Continue reading Northstar Realty Europe – Activist Sees Opportunity in Advisor’s Change of Control

No Real Excitement for Northstar Realty Europe

The pending Colony Northstar merger (described in prior articles) did not address the future of Northstar Realty Europe (NRE).  NRE claims to be undervalued for reasons similar to Northstar Realty Finance (NRF) (see NRE presentation): Share price ($9.86 on 10/27) is well below Net Asset Value independently assessed at $16.64 at 6/30/16. Quarterly dividend of … Continue reading No Real Excitement for Northstar Realty Europe