TSX:NWH.DB.G - Post by User
Post by
SNAKEYBOYon Jul 09, 2023 11:06pm
212 Views
Post# 35533071
Higher rates
Higher ratesIts clear for a few reits like artis and NWH higher rates was simply not baked into their business model. Huge load of floating debt. Sure it padded outsized levered returns but management didn't really seem to have a plan for when things shifted. The only option they have is hope FMV of the assets can be fetched and sell; OR, cut dividend and try to survive for a few years. Since it appears CAP rates haven't substantially deteriorated, other than office, they basically need to reverse the acqusitions they did over the years.
Doesnt seem easy to manage a REIT as your strategy needs to change depending on where rates go....but at the very least, always having a strong balance sheet (45% debt to book)) and proper interest rate hedges seemed like a no brainer. Mgmt in some reits like this just don't seem in hindsight like they were "On the ball".
HR and Riocan, for example, were always balance sheet focused even during good times. Thats how you run a reit