Since my investment horizon is my grandchildren's retirement, I really like the ALL acquisition. Shiffman found a way to pay too high a price for diamond quality properties without killing the current dividend. Yup, he paid a big premium for premium properties, but manufactured housing is a "get rich slowly" business.
I really like the dominance of age-restricted and Florida as the retiring baby boomers make that a very safe bet.
I also like the additional geographic diversification away from the rust belt. This deal also makes the percentage of ffo from transient RV rentals much, much smaller. When the next recession hits and transient rv rentals drop like a rock, it will have a much smaller impact on sui's bottom line
Since I view SUI as a partially tax sheltered annuity, I really like this deal.
SUI under contract to buy the American Land Lease portfolio of mostly age-restricted mfg hsg communities for 1.32 billion, a price at which sui has to work undisclosed noi enhancements to get the cap rate to 6%, meaning to me a going-in cap rate in the low 5s........a very high price for diamond properties.
I suspect Hamo was at the table on this deal and walked over price......just could not make the numbers work with 1.5% of equity going to nsam.
Well, if you read and understood NRF's disclosure in the 10-Q on the effects of a 100 basis point increase in interest rates on net interest income, your opinion would be different. Since you have this opinion, you simply expose your ignorance and/or laziness.
Try something else to improve your short position.
I doubt we will see Healthcare or Manufactured Housing spun off for a long time. One of the requirements to get a tax free spinoff is you must hold a purchased business for at least 5 years. That rules out manufactured housing for another three years or so. I don't know how this rule works with components of the same business (healthcare properties). NRF has owned healthcare properties for as long as I can remember, which is more than 5 years. Yet they just bought a billion worth in May. I just don't know how the 5 yr rule works in such circumstances.
If the 5 year rule is a problem with the equity reit assets, the way to solve the problem is to spin off the mortgage reit business, leaving NRF nothing but an equity reit.
BTW, the management business did not have the 5 yr problem because it was not a purchased business. NRF started it from scratch, so it's exempt from the 5 yr rule.
One of the "we want the tax money NOW" arguments against c corps deducting dividends is too large a percentage go to tax exempt organizations......pension plans, 401(k)s, IRAs.....the tax gets deferred until paid out to the retiree.......plus the foundations never pay tax....that portion is lost forever. Gotta get a bite of the apple before it goes to tax exempt organizations.
You have not heard him YET. Wait till AT&T and Verizon announce spinning their real estate assets into a reit.
And it won't be an outright ban on reits. Just prohibit operating companies from separating their real estate assets into reits. It's just so smart it's unpatriotic.
My scientific research on divididiots reveals they hibernate when the yield is below 4%, awaken at 4% and swarm quarterly when the yield exceeds 5%. Looks to me like another year or two of hibernation.
FTR got a nice pop this morning on the WIN news. It's a no-brainer to do the same thing.
It's really running the same company by two different tax structures.... a C corp running the communications business paying qualifying dividends after corporate taxes and a REIT leasing the real estate assets to the operating company. The form diverts the cash flow supporting real estate to stockholders via a reit which does not pay corporate taxes provided it follows the rules. The downside is the reit dividend does not qualify for lower tax rates on qualified dividends. However, for even the highest bracket taxpayer the single reit system tax is lower than a combined C corp-qualifying dividend tax structure.
Next comes the socialist pig calling for legislation to outlaw this tax saving structure, just like inversions.
It just ain't patriotic to avoid taxes legally. After that speech comes the next golf game and fundraising tour.
Nope. Not playing so far today.
As to Aug calls.....remember, it goes ex div 50 cents before expiration and I think we will also get a follow-on before ex div.
Clip from article:
"The amount includes a $58 million senior construction loan from Chicago-based BMO Harris Bank. NorthStar Realty Finance of New York provided $17.8 million in mezzanine financing.
Other equity partners in addition to Giarratana’s SoBro Development Co. (an affiliate formed in 2008 when Giarratana bought the land) include Wanxiang America Real Estate Group and Magellan Development. The trio comprises WMG Realty Holding Co. LLC and has about $12 million in equity in the project, which will carry a $90.8 million price tag. The partnership is getting from Metro about $3 million in tax increment financing related to parking for the addition of 150 public parking spaces."
Pretty thin deal with only 12 million equity on 90.8 million project. I'm sure NRF is getting a pound of flesh for taking this risk, albeit a small one.
Not sure which loan you are referring to. Income 2 recently made a 17.5 million loan to an apartment developer in Atlanta.
This too small for NRF to issue 8-K or press release.
Well, the 6/30 pre-split/spin of 25.2 million became 12.6 million short of each. The July 15 settlement date has a 7/10 trade date cutoff.
So, between 7/1 and 7/10, nsam had a net cover of 7.1 million, huge indeed, and likely a substantial support to the price. The next report may show if the current weakness in nsam is due to a net short instead of a net cover.
As to nrf, 12.6 to 14.4 is a 1.8 million increase, a 14.3% increase. NRF must have a sweet smell.....like the Venus fly trap has. Suck 'em in and eat 'em up.
Collected thru 7/23.....158.2 million vs 154.3 thru 7/21.....3.9 million in 2 days, an average of 1.950 per day.
Wish they could do this pace for the rest of the year.
Supplement was filed to report a subordinate loan to an apartment developer......14% interest with 13% paid currently. Hey, Tony, nice loan.
Short sales of nsam were 280K today out of reported volume of 433K....an astounding 64.6%.
Total volume today, including non-reporting exchanges, was 656K......so 280 (at a minimum) / 656 = 42.7% of total volume today was sold short.
This is incredible. Despite a massive short effort, nsam closed up 3 cents today. Put another way, imagine what the increase would have been but for the massive short effort.
This kind of shorting cannot last too long. Today won't show in tomorrow's short interest report, the first with nsam as a stand-alone.
Speak of the devil:
NEW YORK, July 23, 2014 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) today announced that it will host a conference call to discuss second quarter 2014 financial results on Thursday, August 7, 2014 at 9:00 a.m. Eastern.
Boring day in nrf/nsam, as yesterday. Less than 1% between hod and lod for nrf.......1.28% for nsam, very low for nsam. Can't make flip and dinner money without volatility. Very low volumes.....looks like most are settled in waiting for next news.
Speaking of next news, if we don't get an announcement very soon of an 8/1 earnings release date, my thinking will change to 8/8. If so, no surprise as the 6/30 closing is important to get the nsam spin as precise as possible. Extra work = more time needed and number of hands and heads involved is finite.
Don't hold your breath, Wilson Silence = no deal. You will only get an "update" if a deal is made. Hamo walked.
He is not the type to engage in endless negotiations. Fish or cut bait. Agree on dealbreakers first. No need to waste time on the finer points when the big ones have not been agreed upon. That possible deal is long in the past.
I checked my accounts at Fidelity and treatment of dividends is unchanged. I drip in the small IRAs and take cash in the big accounts.
Both securities are new additions to your accounts.....nrf because it is a new cusip. Old nrf merged into nrfc sub-reit which then changed its name to the same as the old nrf. So the nrf you just got in exchange for old nrf is a new addition to your account, as is nsam.
When you change the treatment of a dividend, you have an additional option at the bottom of the page to instruct Fidelity on all future new positions in the account. This sets a default. It appears your default on new positions is set to cash even though you were dripping old nrf.
Collected 154.3 million thru 7/21 vs 144.8 thru 7/8......so, 9.5 million in 13 days, an average of .731 per day.
Only fair.....maybe entering the summer doldrums. People on vacation ain't sitting with registered reps peddling nontraded reits.