Xds, most of the shares are the new ones issued by IRT and sold by Deutchebank. Unlike an IPO, new shares issued as a capital raise will show up as trading volume.
It will take a year or two, possibly more if anything goes wrong. While deals are lined up it will take some time to close. when they close they are often unlevered making the immediate retrun 6-7% for a while. The cheap debt gets the return up to over 10%. They are able to get some economies of scale by managing so many units. Then, They are raising rents and that often initially decreases occupancy a bit, but if they are able to do as they claim, the numbers will be very attractive in the near future. If they can raise rents 5% two years in a row, while expenses remain relatively stable.......the cash flow is amazing. Model the numbers:-). And, Muck, you are totally right 7% is very nice while we see if their simple plan can work.
But, Davis, if RAS owed that mortgage debt to 3rd party outsiders rather than to Rait 1 and Rait 2, while at the same time they sold off the Rait 1 and Rait 2 bonds to third parties the balance sheet would be adjusted as follows: Liabilities would increase by about $1 billion and book equity would increase by $500 million. Ah, the fun of GAAP!!!! This will not happen, but it is a realistic, alternative way of looking at the balance sheet for RAS. It is certainly as realistic as the adjusted book value that RAS presents.
BK value. RAS owns $500 million of Rait 1 and Rait 2 debt in various tranches that disappears when consolidated because of GAAP accounting. It will not happen, but if they were to sell that debt off, so that others owned it rather than the RAS holding company book value would increase by $6.25 per share. These large amounts of owned debt is a big reason for RAS being able to throw off so much CAD. This is an easy example of why BK value and NAV can be very misleading metrics.
Oh, so that would be restricted cash goes down by about $65 million and unrestricted goes up by about $30 million.........$35 million is used by FL3.
Plus, they mentioned that they sold off another $100 million of conduit in Q4, which would reduce at least $25 million of restricted cash and increase unrestricted by the same amount...........plus the $3 million profit.
Any more we know of?
Looks like lots of room to maneuver......................................
That was as of 6/30......and maybe I was wrong.
So, the two adjustments I am aware of after 9/30..... FL3 only required 18% capital, so assuming they were using the Citi line to warehouse the bridge loans, 35% is required (25% for conduit)......so RAS would get back somewhere around $30 million to build again. Also, RAS has accrued for the $21.5 million SEC, but not yet paid!!!!
Oh, SMED plans to make more money. Got it. Very different plan than all those other companies that planed to lose money. Good plan!
My guess is that RAS is selling a chunk of shares at a discount to an institutional investor. It's a bit over 8% money but RAS can put it to good use.................
spin out as far as it can go?............no, they should repay the notes and recycle the collateral in FL4, so for the same capital they can finance another $100 million of loans.
Yes, at first glance the money looks expensive, but in reality it was a steal (some pun intended).
I can see how the headline could be read as sarcasm, but it was not ment that way.
But Q3 probably included the two MI retail properties purchased, one with100% occupancy and the other with 96% occupancy.
That would make the 6% change "worth nothing."
It could be that the properties RAS owns are inferior. All real estate is local, so it is very hard for us to tell based on the basic information provided by RAS.