tag:blogger.com,1999:blog-2080506270244832638.post2139724445301988485..comments2024-03-28T07:17:13.573-05:00Comments on Clark Street Value: BRT Apartments: Another Sunbelt Multi-Family REIT with Governance IssuesMDChttp://www.blogger.com/profile/10679835609782815537noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-2080506270244832638.post-8022777356330784472022-05-10T10:28:41.154-05:002022-05-10T10:28:41.154-05:00Any thoughts here as the environment shifts?Any thoughts here as the environment shifts?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-78248528543363227512022-02-10T16:27:36.335-06:002022-02-10T16:27:36.335-06:00https://finance.yahoo.com/news/brt-apartments-corp...https://finance.yahoo.com/news/brt-apartments-corp-sells-multi-211500309.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-12767236899653716032022-01-24T12:01:19.276-06:002022-01-24T12:01:19.276-06:00BREIT is relentless!BREIT is relentless!MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-13683988276040900182022-01-24T11:19:57.409-06:002022-01-24T11:19:57.409-06:00https://www.bloomberg.com/news/articles/2022-01-24...https://www.bloomberg.com/news/articles/2022-01-24/blackstone-to-buy-resource-reit-in-3-7-billion-apartment-dealAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-10989900443651248602022-01-06T14:33:27.675-06:002022-01-06T14:33:27.675-06:00I'm still trying to figure this out too, but I...I'm still trying to figure this out too, but I think since management is rolling their OP units into the spin, we can't use a 1:1 spin ratio, public shareholders are going to own 35% of BHOM to start. So its basically 27.7m/0.35 = 79m'ish fully diluted shares/op units? But how did they get to the 35/65 split, that's where D&P's valuation might come in and where they might be incentivized to keep the value low to get more of the spinco.<br /><br />I'm guessing they'll run a similar strategy here, issue preferred through their broker/dealer that's convertible to common, but might act better then they did originally with BRG (really only became major shareholders with the internalization).MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-89422811315258395232022-01-06T13:50:58.551-06:002022-01-06T13:50:58.551-06:00Definitely on the watch list as I agree with the i...Definitely on the watch list as I agree with the incentives, which might make it worth holding nose (again) on management. A micro-cap, externally managed REIT spin will also hopefully get ignored by the wider market.<br /><br />I am waiting for the Form 10 to spend real time on this but as of Q3 2021 their operational SFR portfolio was acquired for $176.4m or $138.4m at BRG share, they own just under 80% on average, largely in 2021. Supplemental has $35.4m of debt against the WA properties, $32.6m at BRG share. The SFR Loan / Pref portfolio had a balance of $36.4m at Q3 2021 and $32.3m left to fund. <br /><br />Those components alone look to be worth $3.75 per share (assuming 1:1 spin and 27.7m shares / OP units) and they have acquired more since then based on the press release citing 3,400 homes.<br /><br />The plan of merger doc also cites ~$186m of cash at SpinCo at the time of the spin, which would be ~$5.00 per share?<br /><br />Obviously there must be some gaps that I am not seeing, hope the Form 10 will shed some light on how Duff and Phelps got to $5.60...RAVhttps://www.blogger.com/profile/16017979503195445169noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-22432775728845695692022-01-06T10:04:08.892-06:002022-01-06T10:04:08.892-06:00Thanks - Yes, that's the question, do the Goul...Thanks - Yes, that's the question, do the Goulds ring the cash register? They should, but who knows.<br /><br />Separately, have you looked at BHOM (the BRG spinco)? Incentives would suggest that Bluerock management would undervalue the spin since they're rolling over their OP units into the spin, they're the best situated to know the true value there, might have understated it with a $5.60/share value.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-55652354480054346132022-01-05T17:01:52.679-06:002022-01-05T17:01:52.679-06:00BRG was a great call. I almost missed out due to m...BRG was a great call. I almost missed out due to management ick factor. My instinct is to avoid this as well but your logic makes sense and while very binary (do the Goulds want to sell or not) the ~4:1 upside / downside on the calls feels like a decent line.<br /><br />I don't think its worth spending a ton of time to narrow in on the valuation of the assets because (I get to ~$33 per share using slightly higher cap rates) but my working on the Nashville deal is much higher on a price / unit basis ($27.86m for 41.9% interest implies equity value of $66.49m along with construction loan of $47.04m results in $113.5m for the asset / $282k per unit). Where am I wrong in my math? Looking over the portfolio, it looks to me like that asset is probably their best quality one - newest, highest rents / unit, good metro...<br /><br />Two other data points backing up your valuation are the two dispositions of ~25 year old JV assets in FL and GA in July for ~$200k per unit. These were ~95% occupied at YE 2020 with rents of $1,100 - $1,200 per unit so about average for the portfolio overall. Better metros than average though - Orlando and Atlanta.<br /><br />The Houston sale in May provides a view of the bottom end of the portfolio in terms of quality, sold for $90k per unit - ~40 year old asset, 92.1% occupancy, rents of $834 per month.<br /><br />Now the only question that matters - will the Gould's ring the cash register?RAVhttps://www.blogger.com/profile/16017979503195445169noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-9564579354928930772021-12-30T16:56:51.511-06:002021-12-30T16:56:51.511-06:00I did look at AIV when it was spun, kicking myself...I did look at AIV when it was spun, kicking myself for not buying it then, I'll take another look again.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-87757788788071471632021-12-29T13:25:58.544-06:002021-12-29T13:25:58.544-06:00Have you looked at AIV and APTS? They are also che...Have you looked at AIV and APTS? They are also cheap vs the bigger pureplay MF reits.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-47385358094654692572021-12-29T10:19:18.519-06:002021-12-29T10:19:18.519-06:00It's a small speculative position on my part, ...It's a small speculative position on my part, sized it smaller than my original BRG speculation, there were at least had the news leak they were considering a sale.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-87413993621726952612021-12-29T10:18:25.461-06:002021-12-29T10:18:25.461-06:00Maybe, it probably limits the pool of buyers, but ...Maybe, it probably limits the pool of buyers, but the big PE shops like BX have essentially permanent capital, can parse through the unlock the value there over time.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-74096471754556774962021-12-29T09:59:30.064-06:002021-12-29T09:59:30.064-06:00I also wonder whether the fact that a lot of the v...I also wonder whether the fact that a lot of the value resides in JVs would deter potential buyers. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-16886374842500652312021-12-29T08:59:46.343-06:002021-12-29T08:59:46.343-06:00Dunno, it was just 5500 shares, the day I posted t...Dunno, it was just 5500 shares, the day I posted this, who knows, but sure, seeds a little doubt.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-16461718861241220112021-12-28T22:05:05.275-06:002021-12-28T22:05:05.275-06:00WHy is Mitchel Gould a consistent and recent selle...WHy is Mitchel Gould a consistent and recent seller of stock if it's so cheap (and I agree it's at a large discount to peers)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-33050383904428829362021-12-28T16:04:50.614-06:002021-12-28T16:04:50.614-06:00I'm not pulling them from anywhere, just going...I'm not pulling them from anywhere, just going off of what private market transactions like BRG are being quoted at. If you look at some of the larger sunbelt REITs, they're trading below a 4% cap rate so it doesn't seem too out of line.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-4179310972005410292021-12-28T15:12:18.837-06:002021-12-28T15:12:18.837-06:00Hi -
Thank you for the post. How do you get the ...Hi - <br /><br />Thank you for the post. How do you get the cap rates normally? is that an average of the cap rate of the properties? Houmanhttps://www.blogger.com/profile/09691069724009145462noreply@blogger.com