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Agree Realty Corp. Message Board

  • gtw999 gtw999 Mar 4, 2010 12:21 PM Flag

    risk of tenant bk?

    I was looking at this stock, and it was looking real good at first look, until I noticed that they have a large portion of their leases to Kmart and Borders. I think Sears/Kmart might go bk, but probably most leases would be confirmed. About Borders I have to wonder. I have to think there is a high risk of their going bk, and their leases are over 20% of ADC's leases. I think if Bordes goes bk that you have a lot of empty boxes after that.

    So what do holders of the stock think about this. Risk of Borders bk? What would it mean to ADC.?

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    • I have not looked at the ADC message board for 2 years, sold all my ADC 2 years or more ago. But with Borders in the news more now lately, my interest was peaked. Back then I was worried about Borders going BK eventually, which it probably will. Plus there was the nepotisim; a public company should not be run like a family business with the CEO sticking his son in at an executive level. Plus they had turned down three successively higher takeover bids in the $30s. There were better investments then, and I suspect that there are better investments now. Good luck.

    • My take is that Borders will last at least another year and ADC mgmt has proven they know how to deal with any individual store's closing when Borders trims the unprofitable location.

      For managing the risk, I keep a trailing stop, rather than sell today.

    • I sold all my ADC this morning. They have too much Borders, RiteAid,Sears/k-mart for me. I consider myself lucky to get out with some modest gains.

    • Yeah, I wrote an earlier post regarding the same concern. I was mostly concerned about Borders as they comprise such a substantial percentage of ADC's leases. I even wrote a question to ADC's investor relations link on their website asking what would be their contingency if Borders were to go bankrupt. I never got a response. I do hold a substantial position in ADC and just keep my fingers crossed in the meantime.

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