Chartwell Retirement Residences T.CSH.UN

Fair Value for CSH.un

[gilbert3]

This from Q3 Report: Funds from Operations ("FFO") were $16.2 million ($0.16 per diluted Unit) and $40.9 million ($0.44 per diluted Unit) in the third quarter and first nine months of 2007 respectively, compared to $17.7 million ($0.25 per diluted Unit) and $46.7 million ($0.74 per diluted Unit) respectively, in the same periods last year. FFO and FFO per Unit in 2007 have been impacted by a number of factors in 2007, including: - Unrealized foreign exchange losses of approximately $4.9 million ($0.05 per Unit) and approximately $10.8 million ($0.12 per Unit) for the three and nine months ended September 30, 2007 respectively, primarily related to cross-border US dollar denominated loans used to finance the REIT's US operations. - Straight line adjustments of lease expenses of approximately $1.9 million ($0.02 per Unit) in the quarter and approximately $6.3 million ($0.07 per Unit) in the first nine months of 2007. "Excluding the impact of the above items, Q3 2007 FFO per Unit would have been approximately $0.23 per Unit, an increase of 21% from the prior quarter," commented Vlad Volodarski, CFO of the REIT. If you are to believe this then factor $0.23 x 4 = $0.92 FFO / year. $0.92 x 90% payout ratio ( for a Reit) = $0.83 / (10 yr. Cdn. Bond 4.16% + 2.84% inflation) = 7% which gives you a unit price of $11.85. Look for distribution cut from $1.07 to $0.83 / year. I think the market has factor this in, but people who want to bail out may take it lower than $9.54. Please do your own d.d. Happy Trading.