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NorthStar Realty Finance Corp. Message Board

  • dar200 dar200 Jun 6, 2013 12:13 PM Flag

    NAREIT presentation

    Replay is available on nrf website. Could not hear questions from audience. Just direct presentation and answers. Some tidbits and takeaways:

    Started off by we are NOT NOT NOT a mortgage reit .......obviously to stop selling off like NLY, AGNC, ARR.....all pure mreits, almost all agency.

    Emphasized sources of cad.....43% equity reit, 16% management fees. Repeated OVER 40 million of management fees this year. Seems to me with 7 months to go they think 40 million is in the bag.

    Revealed (I think) name of seller of mfg housing deals.....RHP (I think). Never heard of them.

    Revealed....pace of capital raising of April and May (100 million each)...continues into June. Remember, prospectus supplement # 4 on Income 1 was thru 5/24. Only 7 business days from 5/24, but nice to hear.

    Repeated....Income 2 to start selling as soon as Income 1 is sold out.

    In answer to question, said book value is meaningful measure only for about 1/3 of business. Next to no book value is generating management fees. No book value is attributable to broker-dealer (with 50 employees) because cost of building was charged to expense. Book value has owned real estate at depreciated cost.
    Book value a valid metric for lending business only.

    Aim ( an intention, not a fact or promise) on dividend is to increase amount while at the same time reducing payout ratio. This means to me that without a prior announcement of a change, we continue to get a penny per quarter increase even if cad grows by more than the increase (thus reducing payout ratio).

    Did not hear last question, but it was about NOT being a merit and it got quite a laugh.

    Others should listen and post impressions and takeaways here. Maybe I heard something wrong or different from what somebody else may hear.

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    • or use the NSA website...they have all the data....and inside info

    • Finally got around to listening to the presentation. Your notes are spot on. I did not catch the last question - wish they had repeated each posed question before responding. Overall very positive. I got the impression that the projected CAD for 2013 does not reflect contributions from some of the investments they have made in Q1 and Q2 so it could be headed higher. The target distribution appears to be 80% of CAD.

      Interesting how they think about the management fees as "free" money that is going straight to the bottom line. There is obviously a carrying cost for the broker-dealer network. Are these folks employees of NRF? What are they doing when they are not selling private REITs?

      The one cautionary note is that their charter seems to be to go anywhere they see a deal. Two risks - overextending themselves and getting into areas where they do not have the domain expertise

      Debt purchased at a discount in the last few years seems to be doing very well.

      If the PS stays depressed relative to the underlying value, I fully expect them to take action to unlock the value. This management team seems to be on the ball and the interests are aligned with the common holders.

      Sentiment: Strong Buy

    • gs.mou.007 Jun 6, 2013 5:01 PM Flag

      As long as this stock keeps on going up, I don't care what the company does. I have almost 100k shares now

      Sentiment: Strong Buy

    • one thing i got (hinted at both tuesday and today) was managements continued displeasure with stock price- that they are willing to explore breakup/spinoff opportunities to unlock value that they feel isnt being accounted for by the markets valuation of nrf. this was the first i remember hearing management openly discuss this. if yield doesnt drop by future price increase i'm curious to see if they follow through with this line of play, similar to what NCT just did, to provide a spark.

      • 1 Reply to octopusink
      • At Deutche, talk of separating high multiple business was in response to a question and the time frame was a couple of years (like 2015 with 100 million of mgt fees). Today, it was mentioned as part of opening presentation. Also mentioned at both conferences another house is planning an ipo of its broker dealer. Anybody know who this is so I can research?

        Yup, they are thinking about how to unlock value from the market perception that nrf is a merit.

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