tag:blogger.com,1999:blog-2080506270244832638.post427817585504887402..comments2024-03-28T07:17:13.573-05:00Comments on Clark Street Value: Spirit MTA REIT: Form 10 NotesMDChttp://www.blogger.com/profile/10679835609782815537noreply@blogger.comBlogger113125tag:blogger.com,1999:blog-2080506270244832638.post-942682741587924552019-01-16T09:26:30.989-06:002019-01-16T09:26:30.989-06:00The note is a "senior secured" obligatio...The note is a "senior secured" obligation of "Shopko". Here's hoping there is a recovery greater than $0.Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-62669355347502374712019-01-16T09:00:58.985-06:002019-01-16T09:00:58.985-06:00Right, SRC earned their keep with that transaction...Right, SRC earned their keep with that transaction, although it probably cost the $34MM term loan in the process as well.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-74933729628640632872019-01-16T08:56:55.430-06:002019-01-16T08:56:55.430-06:00would be an uncomfortable place without the non-re...would be an uncomfortable place without the non-recourse Shopko financing in place. Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-89799278274266544042019-01-16T08:41:10.360-06:002019-01-16T08:41:10.360-06:00Its good news, let's wrap it up quick, glad to...Its good news, let's wrap it up quick, glad to hear they're likely going to just mail back the keys on the ShopKo properties, I bought a little more today.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-20168110704184885112019-01-16T08:35:49.293-06:002019-01-16T08:35:49.293-06:00welp. wasted no time...welp. wasted no time...Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-37962418450121476402019-01-15T08:44:16.405-06:002019-01-15T08:44:16.405-06:00I saw that too, in the comment section it sounded ...I saw that too, in the comment section it sounded like it was more a paraphrased conversations than a direct quote from Jackson Hsieh, but seems like the right path as soon as Shopko is resolved one way or another (could declare bankruptcy as soon as today from what I've seen).MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-84837669578062693742019-01-15T08:34:17.479-06:002019-01-15T08:34:17.479-06:00I found this interesting. here is a quote attribu...I found this interesting. here is a quote attributed to Jackson Hsieh of SRC according to a Seeking Alpha write up long SRC posted yesterday: Link to SA write up: https://seekingalpha.com/article/4233154-keep-buying-shares-spirit-realty-capital-interview-company-ceo-jackson-hsieh?v=1547501702&comments=show<br /><br />Question: From our due diligence, your company looks very similar to Realty Income. Can you comment on that?<br /><br />Answer (Jackson Hsieh): Yes, we are very identical. It wasn’t the case 12 months ago. We had Shopko, we had some of this master trust, but you know we spun off about $3 billion worth of properties. We raised a bunch of debt before we spun off so we could deleverage our balance sheet here at Spirit.<br /><br />The one difference is that we generate about $42 million from the spin-off in terms of managing it and preferred investment; but to be honest with you, from my perspective, I would like that relationship to end sooner than later. Because the sooner it ends, the faster I can get investors to focus on “Spirit looks just like Realty Income”. You know Realty Income does not manage any external company, they are just a simple company running their own assets. And at Spirit, if we were to chop off just the spin-off arrangement, we would be very similar. So the sooner we can do that, the better it would be for us. That is the last 20%.<br /><br />We are working with the board of spin-co to say “hey guys, this is not a permanent arrangement, you guys should hire a banker, because at the end, we don’t want to do this forever, we want to get our termination fee and our preferred back to go our way.” That is my objective as the CEO of SRC.Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-81363702207862871072018-12-29T08:03:39.540-06:002018-12-29T08:03:39.540-06:00It was the regular and special dividend ex-dividen...It was the regular and special dividend ex-dividend date, $1.33 in total, payable in January.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-58435141087292070902018-12-29T03:25:57.981-06:002018-12-29T03:25:57.981-06:00Any idea what the large move was about 2 days ago?...Any idea what the large move was about 2 days ago? Thinking of topping up. Thanks!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-15959554542438741562018-12-07T12:10:20.248-06:002018-12-07T12:10:20.248-06:00Given the financing and shopko developments, proba...Given the financing and shopko developments, probably a good time to update valuation. The loss of cash flow from shopko assets due to the high cost of borrowing I think caps some potential upside. But certainly very nice to have done this so soon after the spinoff and put a floorAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-6902267948838437492018-12-07T05:46:03.675-06:002018-12-07T05:46:03.675-06:00Hard to say, probably lower than that if Shopko is...Hard to say, probably lower than that if Shopko is bankrupt, might end up just getting the $165MM mortgage they took out. The MTA is performing as expected, minus a management fee/carry, probably gets you somewhere in the mid-teens.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-19204474166707437392018-12-07T04:27:40.072-06:002018-12-07T04:27:40.072-06:00SMTA has been trading down for the last month or s...SMTA has been trading down for the last month or so, how much of the weakness do you think is Shopko driven? Has your view on the thesis changed much? Thanks! I still have a ~$20/share of market NAV thesis in mind... but haven't been on top of it well enough.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-86562665894747737372018-12-05T21:32:53.505-06:002018-12-05T21:32:53.505-06:00http://investors.spiritmastertrust.com/file/Index?...http://investors.spiritmastertrust.com/file/Index?KeyFile=396005751<br /><br />$1 special dividend announced, plus a $50MM repurchase plan initiated.<br /><br />If Shopko does file, SMTA could just put the keys in the mail and that would essentially resolve the Shopko assets quickly and the SMTA structure's purpose would be done, speeds up the time from 3+ years to maybe 12-18 months. Who knows how it could trade on the news.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-63203384866519708472018-12-05T10:54:17.495-06:002018-12-05T10:54:17.495-06:00These appear to be the old Pamida stores that rebr...These appear to be the old Pamida stores that rebranded to Shopko Hometown after the two merged in 2012, pre-dating the original Shopko/Spirit lease from 2006.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-70855798877718052712018-12-05T10:50:52.617-06:002018-12-05T10:50:52.617-06:00Based on a quick review of spin docs, it appears o...Based on a quick review of spin docs, it appears only two SMTA-owned Shopko are slated for closure: Spokane, WA and Albany MODave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-81844008109366671442018-12-05T10:37:52.551-06:002018-12-05T10:37:52.551-06:00Just bumping it up against the list provided in th...Just bumping it up against the list provided in the Form 10, looks very few of these are SMTA owned, but I could be wrong if the towns don't exactly match up between the two.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-5766275057066315352018-12-05T10:32:21.651-06:002018-12-05T10:32:21.651-06:00Thanks - Debtwire reported that Shopko is consider...Thanks - Debtwire reported that Shopko is considering Chapter 11:<br />https://www.retaildive.com/news/debtwire-shopko-explores-restructuring/543527/<br /><br />It does make the financing transaction look smart in hindsight and the market isn't giving much if any value to these assets, no real reaction to the stock yesterday. My position is relatively modest today, but would look to add if the stock price really fell steeply on this news.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-33374306776250090002018-12-05T10:06:03.040-06:002018-12-05T10:06:03.040-06:00Shopko has announced plans to close 39 stores acro...Shopko has announced plans to close 39 stores across the country, including one in Wisconsin.<br /><br /><br />https://www.wbay.com/content/news/Shopko-closing-39-stores-after-liquidation-sale-501978241.html<br /><br />I dropped a note to company to ask how many are SMTA owned. Will report back if I hear from them.Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-26547095329463013602018-11-12T15:52:53.933-06:002018-11-12T15:52:53.933-06:00It seems smart to do this ahead of the holiday sho...It seems smart to do this ahead of the holiday shopping season, last year there was a lot of worry in the market whether Shopko would survive after the holidays, this news gets ahead of that concern this time around. It's not cheap financing by any means, but it eliminates the idea the Shopko boxes are worth nothing.<br /><br />I assume it'll go into the MTA, that's the playbook management laid out at the spin, monetize the Shopko/other portfolio and lean into the MTA until it's all one portfolio.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-81614679462274330612018-11-12T10:48:04.483-06:002018-11-12T10:48:04.483-06:00Sorry, I meant put into MTA and leveraged (not SMT...Sorry, I meant put into MTA and leveraged (not SMTA).Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-79418382229331330862018-11-12T10:47:33.968-06:002018-11-12T10:47:33.968-06:00MDC - what is your take on the recent Shopko finan...MDC - what is your take on the recent Shopko financing at SMTA? I am curious as to what they will do with proceeds. Can a portion be put into SMTA and leveraged? Will they distribute some? I did not hear a lot of clues in the recorded update from SMTA.Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-37644364205102622342018-08-30T14:38:15.152-05:002018-08-30T14:38:15.152-05:00SRC pro forma yield at 6.0% currently (assuming 75...SRC pro forma yield at 6.0% currently (assuming 75% payout ratio of AFFO:$0.67). Average of yields for O, NNN and STOR is 4.3%. SRC at 4.8% or 50bps higher than "peer" average would imply $10.27 SRC price. 100 bps delta puts SRC @ $9.45Dave Ahttps://www.blogger.com/profile/06197754376138046678noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-84103026212056501832018-08-14T15:15:40.798-05:002018-08-14T15:15:40.798-05:00Probably best directed towards investor relations,...Probably best directed towards investor relations, but I believe SMTA is a taxable distribution/dividend that will then reduce your cost basis in SRC by an equal amount. But if others know for sure, please speak up, or if you ask and hear back from IR with a definitive answer please let me know.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-36392147786672165432018-08-14T13:26:43.631-05:002018-08-14T13:26:43.631-05:00Hi MDC,
Do you know the tax implication for buyin...Hi MDC,<br /><br />Do you know the tax implication for buying SRC pre-spinoff? I am holding SMTA right now and i am wondering if its treated as return on capital, dividend (from earnings and accumulated earning), or both? <br /><br />Thank you Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-61951624700058511852018-08-02T13:06:22.823-05:002018-08-02T13:06:22.823-05:00I don't have anything additional on the AFFO, ...I don't have anything additional on the AFFO, but the management fee is for SMTA has a whole, you're right that they're double dipping a bit by also charging at the Master Trust level. So while the management fee wouldn't fall off automatically, I think there's an argument to be made that SMTA doesn't need to exist once the workout assets are sold, either management should be internalized or the entity should be sold.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.com