True North Commercial REIT T.TNT.UN

19.1 MILLION NET PROCEEDS

[garyreins]

Can cancel a solid 2m shares.  FEAST!

[Jkcoco]

They are going to pay down their credit facility loan with that money. 

[ckwong]

If they continue the buy back and pay down the debt, all good actions. May be there is light at the end of this long long tunnel.

[BlueJay2020]

Very bullish confirmation of NAV values across multiple properties. Also yet another indication of a thawing market in real estate transactions. A jittery market may mean SP movement is not as pronounced as it deserves (i.e. double digit)

[EstevanOutsider]

NAV's that have already been crushed by CAP RATE EXPANSION. TNT selling multiple properties, including a few crappy looking ones, for above the price paid in 2018.

[BlueJay2020]

And rewarded by a measly 6 cents increase in the SP in the minutes after open.  Freakin' unbelievable!

[flamingogold]

Retail investors have left the building. They have priced the whole sector at zero and will only come back once it has run up. At that point they will be overpaying because that's what most investors do, sell when it's low and buy high.

[cooper90]

One of the most exciting parts of this announcement other than the NET proceeds, debt reduction, above NAV building sales achievements etc etc etc......which is all good!!  Is...........TNT specifically indicated that they continue to buy-back shares using the NCIB at a rate equal to $1.70 annually (alternative to the past distribution) which is equal to 20% previous (divi) annual rate. 

[luscar99]

The AFFO/share will probably decrease due to asset sales, higher mortgage interest costs and other inflationary costs. The share count reduction will help, but I'm pretty sure it won't make up for those 3 factors.

[cooper90]

But mortgage interest costs should be midigated by higher rental resets, also the AFFO hit would be short term where as the 19,000,000 million in debt reduction would more than offset on a per share basis over the longer term which is very positive.  Especially going into a rate cut environment over the next 6x months to a year in Canada.  I remain bullish and purchased more units

[luscar99]

I agree with you that TNT.UN shares are good value under $9. But: - rate cuts in the next 6 months is unwarranted speculation. - the meager higher rental resets (if any) have been dwarfed so far by the operating costs increases. - mortgage interest increase is substantial, like 50% higher than what they were. - the AFFO hit cannot "be short term" while they no longer have these 100

[BlueJay2020]

The way I read the release, debt will be reduced by over $61M.  $19M is the surplus after the related debt is repaid. if these sales are representative of the whole portfolio (and you could argue non-core is worth less) debt repayment is not really an issue. There wiould be significant excess capital to be recycled or distributed to shareholders on liquidation. 

[luscar99]

You're probably right about the debt reduction.  But probably wrong on the 2nd assumption. They sold what they could sell more easily. Mostly fully occupied small buildings. The larger buildings are a much tougher sell. If those could be have been sold at or near IFRS values (implying $29 NAV) the share price wouldn't have craterred 80%.  That's actually the crux of the

[EstevanOutsider]

agree large (9 figure) buildings are tough to sell but TNT's are very very well situated for the most part. i actually think the 81 white hall property in markham will be an easy sell, it'll be vacated by year end unless tnt found new tenants. probably at a premium to price paid given valuations in that area. the other easy to sell property is the calgary industrial park one which the

[matt2018]

Absolutely correct that the $61.4M is going towards the total debt. That is going to bring debt down to appr $763M. Thats 7.5% of the total debt going to be paid off by selling less than 4% (186k sq/ft) of the portfolio. Those 4 recent sales were at an avg of $330/ft. Even if you apply a conservative $285/ft to the appr 4.6M sq/ft of remaining assets (after all the deals close), thats an implied

[BlueJay2020]

I inow the wuestion was rhetorical but unless my arithmetical accuracy is awry, NAV would be just north of $35 per share. Therefore 75 per cent off at these prices. 

[matt2018]

due to this buyback strategy, the many retail investors who mostly support Reits wont buy this one. The main reason investors buy Reits is for the monthly income/distribution. So I dont see this one going up much until the distribution is reinstated. That is great for the buybacks.  Buy alot more for less. NAV keeps going higher everyday those buyback shares get taken out. Personally I would

[giovinco]

This post has been removed in accordance with Community Policy

[luscar99]

The NAV was calculated by the company in their Q4 presentation. (Assets as per IFRS- liabilities)/ number of units A and B. $28.39. However, TD's estimated NAVs for the office REITS sector are on average about 50% of the NAVs calculated by the REITs themselves. TD doesn't have an estimate for TNT.UN because they don't bother with this smallish REIT. They only do AP.UN, D.UN and SOT

[BlueJay2020]

TDs @@@extrapolated estimate@ is completely irrelevant.

[luscar99]

Of course. Your estimate is what really matters.

[matt2018]

Your $15 NAVPS estimate makes little sense (based on the recent 4 asset sales). That would imply the total value of the remaining assets at appr $990M or $215 /ft. The 4 assets just sold (appr 186,000 sq ft), fetched a total of $61.4M (avg $330 /ft combined and above IFRS value from Q4 report). The assets book value are based on evaluations that are derived from recent office sales data specific

[luscar99]

I know TD's estimates "make little sense". That's why the investment world is so lucky to have you. And I'm pretty sure you have solid proof for the assertion "Reits have already written down values to reflect current market conditions." TNT had to make fair value adjustments of $42 million in 2022 and $75 million in 2023. That's surely proof we could always

[BlueJay2020]

Er... they have just sold  4 properties ABOVE NAV.  Pretty solid evidence that NAV is much closer to IFRS value than $14.  It is obvious to many of us here that the stock is massively mispriced. It looks like you are a bear on this stock although you don't actually come out and say so.

[matt2018]

I am quoting real numbers. Actual numbers from the recent asset sales, mortgage debt balance, etc. Your quote on the estimated NAV per share is based on what exactly? What some banker (whom you admitted has not even looked at TNT), might think it's worth? Frivolous nonsense.