Whiterock Real Estate Investment Trust T.WRK.DB.K

RE: Dennis Mitchell on WRK.UN.......

[baudelaire]

The unit price at the time of the sale process was probably a bit ahead of itself. The manufacturer's suggested retail NAV in the Supplemental is ridiculous, and I'm pretty sure management knows that. ($14.40 to $15.77 NAV range based on cap rates of 7% to 6.7%) The nervousness may be due to the high debt level coupled with a very small size. IIRC, during the sale process, RBC stated that Whiterock had the highest leverage in the entire REIT sector. It is a bit worrisome that one 28,000 sf lease at the Bay St. property adds $0.11 unit. WRK has to grow fast, before the next recession comes along. Ideally, WRK continues its high-quality-long-term-lease-with-matching-debt approach as it accretively accumulates assets and moves forward with the deleveraging strategy.