Tricon Residential Inc T.TCN.DB

Primary Symbol: T.TCN

Tricon Residential Inc. is an owner, operator, and developer of a portfolio of approximately 38,000 single-family rental homes in the United States Sun Belt and multi-family apartments in Canada. The Company provides rental housing options for families across the United States and Canada through its technology-enabled operating platform and on-the-ground operating teams. The Company's segments include Single-Family Rental, Adjacent Businesses, and Strategic Capital. The Single-Family Rental business includes owning and operating single-family rental homes primarily within major cities in the United States Sun Belt. Its Adjacent Businesses include multi-family rental and residential development. Its multi-family rental business segment includes one Class A high-rise property in downtown Toronto known as The Selby. Through its Strategic Capital business, the Company provides asset management, property management and development management services.

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Tricon Residential Inc

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Post by retiredcfon Jun 16, 2022 8:59am

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Post# 34760738

RBC Notes

Portfolio Value – TCN

We estimate that TCN trades at a 33% discount to its portfolio value, and more with upside from ancillary/fee businesses

We estimate a value of $7.2 billion for TCN’s single-family portfolio, and $8.0 billion including cash/JVs/land/CIP/multi-family
This implies that TCN’s enterprise value is currently trading at a 33% discount to the value of the portfolio
TCN currently has roughly $600 million in book value allocated to multi-family assets and development, and we expect that these values could be conservative
The company has discussed $500+ million in additional potential upside versus IFRS values, which would move the discount to 37%
While we expect the market does not give full credit for ancillary upside, we also think that the fee business is increasingly being

capitalized, and that the true discount is likely in the mid 30% range

Regional Appreciation – TCN
We estimate that TCN’s overall portfolio value was up 1.5% in May

For the first time in recent memory, several of TCN’s markets did not see double-digit annualized appreciation
The strongest markets were geographically mixed
Among TCN’s focus markets, appreciation was led by Southeast Florida (+3.3%), Raleigh (+2.2%) and Orlando (+2.1%) The weakest appreciation was seen in Reno (-1.1%), Southern California (0.5%) and San Antonio (+0.9%)

Underlying Assumptions Are Conservative

We think the underlying home value should be the floor value for SFH businesses

Assumptions

Paid market price for portfolio

Appreciation in line with the market average

No value for scale

No value for operating platform

No value for ancillary services

No value for AMH/TCN development expertise