Post by
incomedreamer11 on Oct 24, 2023 11:06am
TD comments
Office (-0.4%): CBRE’s Q3/23 office market statistics showed signs of stabilization (link), with the pace of q/q national vacancy increases slowing to just 10bps (past three quarters: +40bps/+60bps/+70bps). National Downtown Class A was particularly strong, with vacancy -20bps q/q to 16.3% and in Toronto, we saw Downtown utilization vs. pre-pandemic reach a new full-week high of 54% (69% for Wednesdays) as of October 1.
We expect near-term investor sentiment to remain cautious, given the anticipated delivery of 3.4mmsf of new supply in Q4/23 (61.3% pre-leased), lengthy leasing cycles, and concerns of more tenant downsizing.
Our flat AFFO/unit growth forecast for the sector is driven by modest growth at Allied.Our $22.00 target price is based on a 10.5x-11.0x multiple to our 2024E AFFO/unit and a 39% discount to our $36.30 NAV/unit estimate.
For Dream Office, our increased leasing cost assumptionspushed our Q3/23 AFFO/unit estimate down 24% y/y.Our $10.00 target price is based on a 12.0x-12.5x multiple on our 2024E AFFO and represents a 55% discount to our NAV/unit estimate.
Comment by
rustyblades on Oct 24, 2023 2:25pm
In the bold comment on Allied in the original post, TD mentions modest AFFO/unit growth for Allied. In a table further down in the report they estimate Year over Year AFFO/ unit growth of 3% for Allied. We'll find out tomorrow after market close. I added more today.
Comment by
rustyblades on Oct 24, 2023 2:32pm
Sorry I made a mistake. TD estimates FFO Y/Y growth of 3% and AFFO/unit Y/Y growth of 5%
Comment by
Frankie10 on Oct 25, 2023 4:18pm
"39% discount to our $36.30 NAV/unit estimate. ...55% discount to our NAV/unit estimate. Why even bother determining NAV? These are not serious people...