RE:RE:RE:RE:RE:All inmnztr wrote: There are some harsh realities in this business though.
Becasue their fixed costs are difficult to change, a 25% drop in revenues in Alberta will result in almost a 20% drop in net earnings. So I think this is what the market is worried about. They cannot dispose of the buildings, the mortgages and interest will stay the same, it will represent a complete loss in the bottom line.
Pokerchamp wrote:
Advanced, you are correct the $24 NAV is without inclucing Alberta properties in the calculation. Including Alberta properties, which currently contribute $117 million annualized, the NAV is $33/unit.
Blatantly false. You seem to confuse net revenues with NOI.
Alberta contributes $111M to NOI (incl. Edmonton which is less affected), but far more in revenues. A 25% drop in revenues (basically, 30% vacancy rate!!!) would result in a $10-15M NOI drop and a 101-102% distribution payout, something that is very manageable (RMM.UN paid 140-160% for YEARS).
Also, only 4% of their calgary properties expire in 2016 and 2017. Half of that was already renewed at HIGHER RATES than what they were.
Your point is moot.