Artis Real Estate Investment Pref Shs Series E T.AX.PR.E

RE:RE:RE:Iris Prefs

[Reece1986b]

I gave you and babybunny both a 'Like'. I'm not sufficiently knowledgeable on the topic to add anything of value other than my agreement that it is completely unacceptable that management will not answer such a question.

My investment in Artis assumes the prefs are good but the equity be worth zero. I've never understood why the prefs weren't being redeemed seeing as 18% is quite a ridiculous interest rate and is above what even junk rated debt would pay. I previously though there was some sort of agreement (obviously not shared with us) that Artis/Koch/etc prefs wouldn't get redeemed kind of like how sometimes private equity pays themselves generous special distributions out of a company like Cominar. But maybe my assumption is incorrect and things are actually so bad that there is no choice but to not redeem the prefs. Artis pref interest is being paid in additional pref units which seems like a rather preposterous financial decision on the part of Iris/Cominar unless the intent is to bleed Cominar or things are far worse than we perhaps assumed.

Frankie10 wrote:

it really calls into question the financial literacy of those on this board... the response is truly a spit in the face of unitholders. Im baffled you are the only one to respond to what I posted. As I said, I'm not done asking the question.

it really doesn't mean much to me because I have been writing-off the Iris equity for 3 quarters now in my personal analysis... FMV adjustment for my asset-based valuation keeps getting smaller as the NAV/equity value per the financials continues to shrink quarter after quarter after quarter.

babybunny wrote: Kudos for trying, Frankie.  It is dismaying to receive a response, rather than an answer, to an important question.  Lacking this information, we are forced to do our best to triangulate disparate facts to model the IRIS capital structure.

As I read the numbers (huge losses for IRIS, quarter after quarter), it appears a shitload of preferreds must have been issued to Koch Industries - enough to render the common equity of IRIS pretty much worthless.  The thing I find unfathomable is that if true, this was obviously a bad deal for Artis right out of the gate, which argues against it since Manji is heavily invested in Artis, and seems a bright fellow.   Not to mention that his reputation as an astute real estate investor is staked to the outcome of the Cominar play. 

So with the numbers pointing to one scenario and common sense suggesting otherwise, I am not quite sure of the facts.  I fear I may have missed something entirely, perhaps something even more rotten.