RE:RE:RE:RE:RE:Sam...The following story was given to me by a fellow TWC shareholder. He pointed out that the real estate roll up story is gaining traction at Parkit.
The investment dealers like it because they are raising money.
The institutions like it because it is a growth story.
They are using the private holdings of the main holders as a growth pipeline.
For MPC, they could roll up all the minority held positions in the portfolio.
MPC as a growth story beyond the discount to nav could lead to much higher share prices.
I have bought additional today at $5.5
My belief, if you can't beat them, join them at prices less than they paid.
Parkit is a real estate operating company that recently underwent a change in management and board, refocusing the firm on the acquisition, development and operation of industrial real estate in Canada. The company currently owns five properties in the GTA and Ottawa, with a sixth closing in September 2021. Our investment thesis on Parkit is as follows: 1. Canadian industrial real estate is an attractive investment. The industrial real estate market benefits from secular tailwinds, including growth in e-commerce, population growth, and the resilience of the asset class. Industrial real estate is a relatively low human and financial capital intensity business, with little government intervention. Low vacancy underscores rising rents across Canada, and Parkit’s target markets in particular, which are among the most mispriced and thus poised for significant rent growth, in our view. 2. Parkit is optimally structured with a proven and aligned management team. The company will use accelerated depreciation and $20 MM in tax losses to shelter income from tax. It is structured as a corporation and not a trust, therefore has no shareholder distribution requirements. This creates an optimal capital structure whereby internally generated cash flow allocated to growth is maximized. In addition, Management & Directors own approximately 34% of the company, are proven value creators, and own 2 MM sq ft of industrial assets privately. This provides a captive growth pipeline and a minimally dilutive source of funding because the company can issue equity in exchange for cash flowing assets. Last, unlike its REIT peers, Parkit is not encumbered by a significant dividend yield on new issues. 3. The stock is currently trading at a discount to intrinsic value. Our five-year model and DCF analysis finds an intrinsic value of $1.82 per share. This represents a 19.2% total return from today's share price, or a 9.6% IRR over a five-year investment horizon.