Pure Industrial Real Estate Trust T.AAR.UN

Sept qtr AFFO

[mjh9413]

With recent price decline I revisited Q3 possibility. I still believe that AFFO itself should increase but only about 7%.  Very roughly, they have the stabilization and rent revenue increases from May 1 ($9MM wy), and they will save money on the repayment of that RBC loan (use of part proceeds from the unit issue) of about $690K/qtr. So, taking these on a proportionate basis (they had part benefits in Q2) they might make about $19.2MM AFFO (up from $17.9MM Q2) and that equates to 8.8c per unit, a very slight decrease and hence slightly depleted payout ratio, based on 218MM average units o/s. Their (bank loan) debt is down $74MM and they have the rest of the net proceeds as cash, and they do indicate in Prospectus they have no really defined used for these even though the NR referred to property expansions. I also have to wonder if they are feeling much pain in Alberta to affect the results significantly but, taken together I still do not see that new unit issue was a good thing. I actually sold out at these levels (and also my other REIT) shortly after the unit issue and went into TNT.U, so I am not long AAR, but good luck. AMHO.