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Cdn. Yield: Corps, Trusts, GICs, Pref. Shares
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Re: Know your History - winners, losers, and suckers?Know your History or be damned to repeat it. Some may remember the Slate/FAM property swap that Huntington dreamed up. Well enough time has passed so lets have a look at the results. ------------------------------------------------------------------------ Unitholders were definitely the losers on that deal. OTOH, if history is written by the winners, what would the story be? The results looked at from Slate's perspective (i.e. the manager of the REIT) are outstanding: And about a year and a half later, October 2014, Slate sells the portfolio to SOT.UN: SOT.UN takes out $144 million in mortgages (76% LTV), matching Slate's purchase price and paying them out in cash. The remaining $46 million represents a 32% gain in 18-20 months for Slate. Two things that make the return even more impressive (from the "winners" perspective): Altus, September 1, 2014 : Cushman & Wakefield, April 1, 2014: Falling 10% in five months and financing with 76% loan-to-value... let alone 76% LTV in 2014 would have been 100% LTV in 2013 - and there's no NOI growth to support the higher value. 2) Rental revenue and NOI was down/flat for their ~18 month holding period: (If you factor in that one column is for 7.5 months and the other is 9 months, property revenue is down and NOI is about flat for 2014 versus 2013.) It's hard to say that making suckers out of FAM unitholders is impressive, and it was easy for Slate to do. There's a lot of relatively new REITs with significant holders, external mgmt contracts, and related party dealings- it will happen again and again. Maybe it's not so much history repeating itself or rhyming, but a fundamental law of the investment universe: "there's a sucker born every minute." |
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Msg # | Subject | Author | Recs | Date Posted |
84985 | Re: Know your History - winners, losers, and suckers? | Factrbest | 1 | 8/4/2015 8:27:01 AM |