Sold at 1.2B valuation with Option to Repurchase for 700MBrilliant deal by stripping the lease from the underlying asset.
They eliminated the customer and property concentration risk in one deal.
I would have preferred to keep the building, but this is a business and any unnecessary risk or perception thereof undermines valuation.
All three parties benefit from the deal, great cash flow stream for all involved. H&R however being the only party with additional upside from potential inflation over the next 17 years. Hard to see whatever entity that holds this right 17 years from now not exercising the option.
Admittedly, the reduction of FFO is the only downside to this deal. But this is one deal in potentially a series of moves with the intent to unlock value.
I've been buying since $10 and will continue to buy cheap units as the discount closes. Looking forward to the call tomorrow.