Alindallas2. I said I was wrong. Didnt know the mkt was going to flip. You did! Good work. This did give me an opportunity to price average down in my IRA from $20.23 to$17.40. Feel good about the special divvy and the future if!!! FFO after the sale of the props is @$1,40 or better.When special divvy is paid we will drop pps proportionatly but hope it will recover shortly thereafter to 7% divvy which would give us a pps of about $16..
Did you see the new Friedman, Billings report? It echos the concerns I've raised. They reduced their rating to market perform and the price target to 18. They cite the smaller than projected special dividend, the fact that LXP is reducing its balance sheet less than originally projected and a concern that the restructured portfolio will not be able to support the current dividend.
The ultimate driving force as to where we end up is going to be what they actually are able to sell in the next 120 days from the long list of properties listed for sale and how much that generates in total special dividends. In less than a month they've gone from projecting a special dividend of 4.50-5.25 to 1.60-3.20. That doesn't look like they have much of a handle on how much of the restructuing they are likely to achieve. I assume the 1.60 was based on sales already completed. So the question is, how much more (if anything) they have closed in the last 10 days. The second question is, what is going to happen with the rest of the properties they planned on selling? Are they likely to get them sold in Q1 of 08? Are they having to scale back the planned restucturing? Will there be another special dividend in Q1 or is this the end of it? If there is going to be another special, how much will it be? And the final, ultimate question: When are we going to get some accurate guidance?
As I said several months ago, I continue to believe the credit market turmoil is making it difficult for buyers to get financing to close deals with LXP on terms that allow the buyers to pay something near the projected sales prices. If I'm correct, either the sales prices will be dropped to close the deal or the restucturing will be abandoned in mid-stream. Neither bodes well for the pps. I don't see a turnaround in the credit markets for deals like LXP is trying to pull off, so I expect we will end up keeping a lot of the properties they planned on selling.
Perhaps we'll get lucky and they'll tell us more on Monday as to what is going on. If they don't, there will undoubtedly be more selling pressure.
I don't know if the properties they plan on selling to the new jv are included on their list for what they have for sale on their website and I don't know how up-to-date that list is, but it doesn't appear from the two lists on the website that they have sold that much so far. If we end up only getting the low end of the most recent projection ($1.60), I suspect the stock will drop proportionately and not begin to move up until the future ebcomes clearer. But at least the regular and special dividends should give us $2=/- in cash in the next 30 days.