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Apollo Commercial Real Estate Finance, Inc. Message Board

  • dreyfuss_beillis dreyfuss_beillis Aug 11, 2002 10:04 AM Flag

    ARI and NHL - learn from both

    The weakness in NHL - the largest landowner in LA area - is the strength of ARI. It is tougher and tougher to get any sort of zoning approval (entitlement) to build . ARI, as the owner of a class A portfolio will face far less competition in the next upswing than landlords in less restrictive urban environments - DC, Chi, Houston, etc. And, as opposed to NYC where there is a very high barrier to entry in the CBD, the LA area is impossible to build in anywhere -
    The next upswing in demand for space in LA, Orange, and SD counties will push FFO to 4.50 - 5.00 per share; the resultant price gain, to 35 -40, will surpass most other office reits which always can be challenged by new construction.

    Unless one believes that the end of the world is near and office buildings will empty out tomorrow morning, ARI at 24 is a compelling, quite safe buy wit nominal downside, a solid, supported dividend, and significant upside potential.

    These price dips in real estate create the type of opportunities that are the precursor to long-term wealth accumulation

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