From the stock price you would think we were doomed.
Ferdie is FOS.
This poster ran the numbers to prove he was wrong and he continued to post wrong debt/capital ratios.
Just b/c the price is down does not make the market right.
I believe the market has overly discounted this reit.
Short it freddie.
>>Greenstreet needs to get themselves updated on this company. They talk about management. The management that made the mess is long gone.<<
Hello everyone. This is my first post on the board. I'm long TRZ and have been steadily accumulating for a couple of months. While I normally give Greenstreet a lot of credence, I'm inclined to agree with pcmsearch's post on the change in management and am willing to give it a chance. While I rate TRZ a buy, it's not a stock where I'm planning on making quick money, as it will take some time to turn TRZ (and the economy) around. Five years from now I think TRZ investors will be pretty happy. I'm willing to wait.
Re: <<GreenStreet Advisors puts value of TRZ at no more than $9 so it should sell closer to $7 on a discout to value in this market.>>
Ferdie, your negative bias toward TRZ has caused you to double dip . . er, doubly discount the Greenstreet NAV. To quote the Forbes article, "On the other hand, office REIT Trizec Properties (NYSE:TRZ - News) changes hands for almost exactly its Green Street intrinsic value of $9, and far below its NAV of $13." In other words, Greenstreet says the stock is appropriately discounted at $9, versus NAV of $13. But Greenstreet's 30%+ discount is also overdone, IMO.
Also, you keep harping on the debt ratio, but your 72% is wrong. The 12/31 balance sheet shows Total Liabilites of $3.698 bil. vs Total Assets of $5.579, a ratio of 66%. On a market value basis, liabilities to assets is more like 59%. Times interest earned for 2002 is 2.2 times.
Besides, I am not sure how Greenstreet derived their NAV. An update of my previous NAV calculation (msg #386) puts the NAV at about $17.
(Data Source: 4Q/2002 Financial & Supplemental Information at the Trizec website.) ($ in millions, except per share.)
Fourth Quarter Property Operating Income = 120
Normalized and Annualized = 500
Property Value (@ 9% cap rate) = 5,555
Value of Property on books = 4,823
Excess: Market over Book = 732
Excess: Market over Book (JV property interest) = (69)
Total Assets - Total Liabilities = 5,579 - 3,698 = 1,881
Net Asset Value = 1,881 + 732 - 69 = 2,544
Number of Shares = 150 (mil.)
NAV per share = $16.96
Using a 10% cap rate would give a NAV of about$13, but this is probably a great understatement in view of currently depressed operating results and a bouyant market for office buildings at present.
Please explain to me the 72% leverage ratio. I comeup with a lower number.
Greenstreet needs to get themselves updated on this company. They talk about management. The management that made the mess is long gone.
The balance sheet is stengthening. Locked in rates of around 2.5% on 500 Mil worth of floating debt.
Most of the problem properties have been sold, except 2.
This company does not have office buildings in Denver.
The bank renewed their credit line. The bank renewed their credit line.
Callahan knows what he is doing.
$9 nav I don't buy that one. .98 AFFO supports a higher valuation.
Its not the signing of leases that is the key. Its what the reit will net from the leases assuming amortization of any TI/commissions over a 5 year period against the anticipated rents. What you need to find out is what is that number.
PP disclosed on Denver rollovers that after amortization of TI/commissions they would make only $4/ft after directs. They felt that was good because Denver is actually a zero market right now meaning you are lucky to sign leases at breakeven taking into account this amortization..... therefore you should leave the space unoccupied and wait for better times.
TRZ's problem is 72% leverage and the need to fill space.
GreenStreet Advisors puts value of TRZ at no more than $9 so it should sell closer to $7 on a discout to value in this market.
The big problem is TRZ keeps having to go downward on its estimates by much more than the peer group.
Fairly good CC.
Better than I expected.Thought the stock would pop more.
$1.76 FFO and .98 AFFO
Renewed credit facility and paid down $180 mil of revovler in Q4. Over $300 mil debt paid down in last 7 months.
Sears tower have not made decision if they will keep.
Desert passage actually showing some improvement already. Seemed a bit optimistic looking out for this property, was surprised.
The stock is underpriced and am impressed with Callahan, more so than I initially thought.
This is a buy here, strong buy.
thing is that the prospects for office reits isn't that bad at all; the only thing that needs to be done is to lower "immediate expectations" not long-term expectations.
any business is cyclical; office reits have a soft spot when business slacks; otherwise, there would be constant demand which would drive excess construction which still would outstrip constant demand
the market for office properties is stronger now than it ever has been; low interest rates allow for positive cash flows on new deals; expectations for returns are lower when compared to other investments; and the whole world knows that there is no business that doesn't need a bit of retrench
the buyer of trz @ 8.80 will get a 9% return based on projected div of 80 cents; he will be paying under 5x ffo for a pretty decent portfolio of office props, primarily in high barrier markets. in a flat operating environment, the div can be increased 7 - 10 percent a year for an effective 9.5 percent return
in a recovery, the div can grow 12 - 15 percent a year