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

Alternate Symbol(s): ARESF | T.AX.UN | T.AX.PR.I

Real Estate REIT - Diversified

Artis Real Estate Investment Trust is an unincorporated closed-end REIT based in Canada. Artis REIT's portfolio comprises properties located in Central and Western Canada and select markets throughout the United States, including regions such as Alberta, British Columbia, Manitoba, Ontario, Saskatchewan, Arizona, Minnesota, Colorado, New York, and Wisconsin. The properties are divided into three categories: office, retail, and industrial. The industrial properties account for most of the portfolio, followed by the office properties and the retail properties.

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Artis Real Estate Investment Pref Shs Series E > Thoughts on Debt and Valuation

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Comment by Frankie10on Oct 17, 2023 7:32pm

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Post# 35688122

RE:RE:RE:Thoughts on Debt and Valuation

Respectfully disagree. I believe value is simply the present value of future cash flows.

All else being equal, if one REIT has debt locked in at 2% for 5 years and an other REIT has debt locked in at 5% for 5 years, the REIT with lower interest will be worth more. This is because the fair value of the 2% debt is lower than the 5% debt - therefore lower liabilities = high equity value.

You cannot simply dismiss present value by claiming the debt will be held to maturity and therefore face value is appropriate. This line of thinking has taken down banks recently.

I greatly appreciate the thoughtful reply and wish you all the best.

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