...is also completely stupid, IMO. $500 is almost 10% of the shares... IMO share price would have been helped a lot more by increasing div 10%, which would have cost a fraction of that total, and sent a better message to the street. Especially when current div is only 70% of FFO.
IMO this is the second best use of cash in our current situation. The first is buying more buildings to lease out at attractive cap rates, if that can't happen then retiring shares that are undervalued serves the share holders by placing a floor under the stock and decreasing the payout of dividends going forward so they can reinvest or raise dividends going forward.
The whole point of the business is to use debt to pay ourselves as much as we can. Be conservative with your primary residence but aggressive with a stock that grants you limited liability.
Increasing the dividend would serve no tax benefit. You'd be giving the shareholder a Return of Capital. They are doing share buybacks to juice the FFO/share up since ops isn't doing well. Remember the execs have stock options set on share prices. They want to juice the price of the stock as best they can.
That's my point, I bet the stock price would respond a lot better to a 10% div increase -- at cost of $60 million/yr -- than a $500 million buyback. That would push the yield to 7% and get a lot more people's attention. And they wouldn't have to do it with borrowed money either, so the balance sheet would be stronger. There's no tax benefit to buying back shares either.