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.

TSX:AX.PR.E - Post by User

Artis Real Estate Investment Pref Shs Series E > Seeking ALpha headline

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Comment by Frankie10on Dec 27, 2023 5:57pm

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Post# 35801879

RE:RE:RE:RE:Seeking ALpha headline

I disagree that the common distribution is at risk.

Current normalized free cash flow (AFFO) is give or take equal to total distributions paid (common + pref; or ~100% AFFO payout). At the margin, as Artis sells assets, Artis loses the NOI return ( or capitalization rate) ranging from 5%-7%. The proceeds from asset sales can then be deployed to: 1) debt reduction (7%+ interest rate); 2) buyback pref units (10%+ effective cost); and, 3) common units (8%+ AFFO return / distribution yield).

All three options are accretive to Artis' free cashflow.

This dosn't even address the fact that Artis will benefit meaningfully should rates continue to fall.

We all have to allocate capital and manage risk based on the information we have available to us. All the best.

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