Nexus Industrial REIT T.NXR.UN

Short Term Pain coming tomorrow

[hawk35]

We have hit the jackpot with the $359 million in new industrial acquisitions.  Industrial NOI will now climb to 80% (previous target was 75%).  And they are going to put some of their retail holdings up for sale this fall that will truly make this a pure industrial play.

The acquisitions are highly acdretive so I would not be surprised to see a dividend increase once they all close. (since the share price will climb well above the $13.25 target price.)

There will be some short term pain tomorrow.  They issued stock at $11.30.  We will gap down tomorrow.  But this offering will close very quickly since it is one of the best deals available on the market today.  Don't sell.  Buy more if it gaps down.  I'm planning to buy more tomorrow.

This company has access to many off market transactions.  It means they don't get involved in competitive bidding for industrial projects that drive up the cost.  This is just the beginning.  2022 is looking better and better.

[apollojetic]

I was fortunate to get in on the TD offering. Not expecting much. Maybe 10-20% allotment. Your most important point is this.....They have great business relationships. This company has access to many off market transactions.  It means they don't get involved in competitive bidding for industrial projects that drive up the cost.  

[CanSiamCyp]

Hawk: Good points and I am a long term holder with an ACB less than $8. However, I am really mystified why they issued units at a 10% discount to the market close (before the halt market order was issued). I don't recall every seeing a new offering at such a huge discount - normally the new offerings run at about a 3-5% discount level. The brokerages are really, really getting a sweet deal on

[bcsc]

Yes a big discount to the closing price last friday, but what was the weigjted average selling price last week? Started the week at jjust over $11.

[bychoice]

For those of us who bought at $12.01 last week and watched share price rise to $12.50+, this is a real kick in the pants. Something stinks when an offering can be reopened and extended to brokerage houses at a discount of 10%. Shame!!

[apollojetic]

The offering was upsized due to demand. Happens all the time. They also take the weighted average as has been mentioned, not the $12.50 as the baseline. Price was probably already agreed upon and then came more upgrades which sent the price higher. There are very few reits out there on the tsx with this ongoing positive story line. Management have outperfomed on their own vision for 2021 and

[hawk35]

Hey Apollojetic.  I could not agree more.  This huge acquisition will reset the price much higher.  Management is smart and they know how to forge important business relationships.  They know how to plan for growth but most importantly they know how to execute on the plan.  By upsizing the share issue, they now have extra cash to do future acquisitions. The best part is

[CanSiamCyp]

Hey Hawk! Okay - so I guess I will have to surrender on the issue of a 10% discount applied to the secondary offering. It does seem that the stars are aligning for all industrial REITs and will continue to do so for some time. And the fact that Nexus is now gaining recognition for transitioning to a pure-play industrilal REIT gives them a tremendous tailwind! I have owned (for several years) 13

[hawk35]

Hey CanSiamCyp.  The price discount was probably necessary because Nexus is not well known in the market.  Less than a year ago they traded on the Venture exchange and had only two minor analysts covering them.  The move to TSX and BMO coverage helped but their average daily volume was still only around 50,000 a day.  Recent developments should provide the visibility Nexus

[hawk35]

One more point about the offered price.  Nexus offered 4.2 million shares on Feb 10 2021.  It took 22 days to fill the full order. They are now offering more than double the number of shares and the price is much higher so they probably felt a discount was needed to close the offering in a reasonable period of time.

[diceslinger]

I missed out on adding today but I am a long time holder at average 1.77 which would be $7.08 and I've dripped every penny....not gonna cry over it but it's my second largest holding so looking forward to next six months