RE:Options for Dream Office's Managementdsark wrote: Well doing something like a knee jerk reaction is never good but they have to close the gap between NBV & the stock price.
I see really two options the company can do.
Option 1: AFFO is forecast to be approximately $2.10 by 2017, so cut the dividend so there is an 80% payout ratio. Dividend drops from $2.24 to $1.68, which can then be fully paid for by AFFO. Eliminate the DRIP to stop the dilution & start disposing of the Alberta portfolio so it makes up no more than 7-10% of NOI. Use the proceeds to buy back every share they can find. The share count is 107M, set share targets 80M shares OS by 2017 (for example). Effectively, you are bringing the yield into line, reducing your Alberta exposure (which I think the fear is overblown), stopping the share dilution via DRIP, and reducing the share float by selling unwanted properties. You are left with a smaller, leaner, meaner & healtier REIT. If Jane & Co. did this, their share price would skyrocket. I'm aware AFFO would shrink if they sold a good portion of their AB portfolio but the buybacks would keep the AFFO per share constant.
Option 2: Sell the entire Alberta portfolio & pay a special cash dividend to shareholders for the entire amount. The shorts would burn.
-dsark
Option 3: Do nothing and keep paying the dividend.