I don't know about you folks but this guidance was exactly what I expected.
BTW, Ferdie, I'm curious if you were expecting anything different.
My observations and certianly not a comprehensive list include:
1. Sears Tower is an automatic. So we negotiate with Met, get some Insurance then add about $.06 in FFO for '03. The future there is long term.
2. The payout $.80 and ratio are realistic, sustainable and offers potential for growth. It would be imprudent to establish any other kind of dividend policy.
3. Debt Coverage in '03 is beautiful at 2.5 x and being thoughtfully managed. $300 million liquid or $2 per share is fine. Can we put this to rest now please!
4. 2003 should be a bottoming out year. We have to go through some difficult tenant negotiations. Fork over some significant concessions. Suck up and kiss ass with the friggin' something for nothing brokers. Grind out some deals. Bend over, pucker up whatever.
5. The positioning is for 2004 and beyond. It's a value play. You have tremendous upside in leasing value and a normalized dividend structure.
6. There is no panic in the retail and entertainment sector.
7. You got to get past 2003 first. Given that scenario I would love to see this drop into the $8 range. Any lower would certainly be a gift. We'll obviously have time to accumulate in 2003.
8. The beauty is you can sit on a nearly 9% yield in the process. Hell, I'm tempted to borrow a quarter million at 4.25% and double that in income. Sure there are risks!
9. There's value in dem der properties but you probably won't get your hands on it till the economy turns. Was anybody really expecting anything else?
10. I believe TRZ has good people and can pull off this turnaround.
We'll that 10 points, looks like I've reached my limit. Good luck everyone! It never hurts to have a little.
I cannot agree with you on the coverages. Interest coverage ratio of 2.0 is well below office sector average.
There will be no acquisitions in 03 based upon what we see now. There will be no developmt in 03 although I don't think TRZ was developer-oriented.
TRZ's 3 core TX markets may have major uncertanties going forward related to energy businesses.
How much has to be refinanced in 03? I don't think the negotiations are going to be pretty. I look for a forced prfd offering. Now that is something I could get into very quickly.
As far as guidance I mentioned before the cc that I thought the sustainable dividend could be as high as 88 cents. They came in w/much lower guidance than I had expencted to be honest with you and of course the dividend came in at 80 cents.
There are too many uncertainties and there are too many disappointments. I am waiting for Lehman's explanation of their $9 NAV. They have a target of $7 on TRZ. Scrap that nav number ladies and germs. If the banks don't believe it you could have a royal mess here next year. Don't think the bankers and other lenders are not aware of the Lehman report. Also, MLynch is dialing down the nav they believe to somewhere between $12/$13.
NAV is just too liquid here to get a handle around and presume that real value exists.
Its true that if TRZ can get to 04 but I think some of this pricing includes the uncertainties that can result from an unfavorable banking/financing climate that it appears TRZ will have to face.
I see a big prfd offering coming in 03 which will of course be more dilutive to ffo.