True North Commercial REIT T.TNT.UN

Alternate Symbol(s): TUERF

True North Commercial Real Estate Investment Trust (the REIT) is a Canada-based unincorporated, open-ended real estate investment trust. The REIT is primarily focused on creating value for unitholders through the investment in and ownership of commercial properties in Canada. The REIT’s primary objective is to maximize total returns to its unitholders. Its returns include a stable, reliable, and tax-efficient monthly cash distribution as well as long-term appreciation in the value of its units through the effective management of a portfolio of commercial properties. The REIT owns and operates a portfolio of about 40 properties consisting of approximately 4.6 million square feet in urban and select strategic secondary markets across Canada focusing on long-term leases with government and credit-rated tenants. Its properties include 36 and 38 Solutions Drive, 500 Beaverbrook Court, 61 Bill Leathem Drive, 675 Cochrane Drive, and 1112 Fort Street, among others.

TSX:TNT.UN - Post by User

True North Commercial REIT > Debt

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Comment by flamingogoldon Jul 28, 2024 4:55pm

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Post# 36151869

RE:RE:RE:RE:RE:Debt

"The stock didn't drop because the distribution was cut."

What you argue is not incorrect except for your first line. Income investors want to get paid, that's what they care about first. Even when a company's payout ratio is above 100% and not sustainable, the stock will remain elevated as long as the payout continues. Cut that payout or worse, suspend it, and the stock will plummet. It happened here and the reverse will occur once a distribution gets re-instated.

luscar99 wrote: The stock didn't drop because the distribution was cut. It dropped because the distribution cut was a (late) admission by the management the distribution was unsustainable and the business has deteriorating at an accelerated pace.

The clear and undeniable relation between debt ratios and valuatios is shown in every comparative report. The REITs with lower debt ratio enjoy higher P/B and P/AFFO valuations.

Only debt reduction would help TNT's share price.
Reinstating a distribution while the business continues to deteriorate (AFFO has been going down, debt ratio has been going up in the last report) would worry market participants. That's one of the reasons the institutional investors are refraining from investing in TNT.