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Associated Estates Realty Corporation Message Board

  • JREwingInc JREwingInc Nov 12, 1998 9:59 PM Flag

    Associated Realty

    I am the President of the Woodmere Youth Group,
    in Woodmere Village, Ohio.
    The President of AEC,
    Jeffrey I. Friedman, owns a reasonably sized lot in the
    village, on which he previously had a bowling alley and
    Big Boy's restaurant. Those establishments were
    demolished about two years ago, and nothing has come of the
    land since.
    The youth group acquired a large amount
    of money recently, and when inquiring about
    purchasing the land, I got an uncooperative response.
    Allegedly, President Friedman has directly or indirectly
    owned the land for the last 25 years, and is ABSOLUTELY
    UNWILLING to sell the land.


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    • what are you in 2nd grade?

    • I don't think any aquisition would clearly be at
      a higher ffo/share than the stock is now. The main
      question I have is'What are the ffo earnings growth
      potential of the porfolio if properly managed." This is
      waht anyone buying the REIT would look at. I spent the
      day walking a 216 unit apt I own in a secondary
      market with limited rent growth. Is this the type of
      property that AEC owns, or are the untis they own they
      undermanaged compared to the competition?

      looking at the 10K's the properties seem to be as occuped
      as the competition, and similar rents, however G&A
      needs to be cut, perhaps significantly based upon ALex
      Brown research I have been studying.

      I don't
      understand why there have not been mgt. efficiencies after
      the aquisions. It appears it may be the opposite. I
      don't think I will be a buyer until I understand why

    • 1. but this 10% rule would not go into effect if
      another REIT staged a hostile bid for AEC, would

      2. i agree, with the kind of results this mgmt gets
      for its investment efforts, the shareholders, and the
      company, is better off paying out 100% of the cashflow

    • if ownership is held in excess of 10% by a single
      entity then the co may not qualify as an REIT and will
      be taxed as a "C" corp. This co has wide ownership
      despite stong ownership form two or more groups that have
      self dealing. The biggest problem holding the stock
      back is FFO/share has not only not grown-but actually
      retreated from 1997 or earlier years. Negative ffo does not
      make institutions want to buy the co-these buyers move
      the market not people reading post boards.
      would say that mgt. should reduce the dividend. I don't
      know. In the case of this co. they may be better off
      having the shareholders get the money rather than having
      mgt. retain cash and investing it with results like
      the past.
      I also don't like the fact thaat fund
      long term investments with short term funding lines.
      If rates go down and they refiance this could >
      earnings but I don't thinlk that the shareholders are in
      to speculate on rates.

    • We also sold TCT at 18. But then bought it back at $14. Have you?

    • geneglo says there are questionable dealings with
      insiders; i agree; there are; though not as outrageous as
      many other REITS have, even those sweet dealings
      should be stopped; it gives the company a rancid smell;
      god knows this company has to smell like roses if it
      wants to see its stock go up

    • "to max 10% REIT ownership requirements"

      please explain I may have missed something

    • TCT spends about $600 per unit per year to keep
      up the units. They DO NOT CAPITALIZE THAT EXPENSE
      (it is all booked as a cost of doing

      We're organizing a drive-buy of the properties now.

    • A tender offer for an REIT is difficult since the
      ownership is so widely disbursed due to max 10% REIT
      ownership requirements. I don't think an inadequate tender
      is something to worry about.

      A bigger
      concern is that mgt seems to have little ability to raise
      FFO or meet its own projections. Thus no confidence
      from analysts. No analyst comfort no recs. No recs no
      or few buyers. Result--- stock in the tank. Mgt is
      probably rightfully scared to go on a road show supporting
      the stock due to their own record of broken
      promises.This would be akin to asking your teacher to give you
      an "A" after turning in your homework late. This
      problem will take many quarters of stable or meeting
      projections to change, and will not happen overnite. Those
      that want a quick turnaround or short term return in
      excess of the dividend may be disappointed & probably
      shouldn't own it.

      Mgt also appears to have one of
      the highest G&A ratios of expenses to revenues in the
      business- at over 5%. IF this was cout down to the industry
      norm of 3% income would FFO and ROE would go way up.
      The stock is cheap relative to existing FOO but the
      market)(stock pushers) wants earnings growth-not purchasing of
      discounted earnings.The market(analysts) want earnings
      growth rasther than buying existing earnings at a
      discount.This company has done a poor job here.

      I am an
      apt investor/dev. and don't own any stock as of
      today.This is my opinion only and is not intended as
      investment advice.

    • I know of two REITs selling for less today than
      when they went public in 1994: CWN and AEC. Whether
      you think they are CLOWNS, DRONES or THIEVES,
      investing with these people is a mistake, and no amount of
      discount is enough. Be prepared to protect your interest
      if the control group makes a tender offer.

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