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

Bought More

[Frankie10]

Artis is BY FAR my most complex model to calculate implied cap rate... that said, please take the following with a cube of salt: I calculate the implied cap rate to be between 8.5% and 9% (writting-off Iris equity, and too many other adjustments to note).

I agree with this board. I would love for Mr. Manji to continue to monetize assets to pay down the credit facilities.

As stated many times, I believe Q2 will be very positive, hence the recent buys. The majority of that confidence stems from the YTD sales activity announced with potentially more sales to be announced with earnings - both Artis and Cominar.

That said, CADUSD FX will be a headwind for Q2 operating earnings/AFFO/FFO, as well as FMV adjustment on investment properties.

I am cautiously optimistic and I continue to buy below the Q2 NCIB avg cost base of $7.10 (per my calc).

[Frankie10]

Assuming I'm correct about Q2 - this would be the most oppertune time for Mr. Manji to run a SIB by using $100M from Q2 cash inflows [operating income, pref cash interest (unconfirmed - near certain), distributions from Dream and FCR, cash from pref redemtions (unconfirmed - likely), the Dream Office SIB proceeds, FCR sales, sales of investment properties, and finance proceeds]. This would

[InvestSmarter]

If Trudeau gets his way and taxes Buybacks (Including REITs, which is the plan), its best AX does these buybacks now.

[SNAKEYBOY]

Good part of d tender is tax bill.... guess they got time to worry about it. If they were to do A SIB what price is manji waiting for? 6.50?

[InvestSmarter]

  SIB @ $8.00. But I believe Manji needs to focus on paying down short term debt and buying Debentures before buying back commons.

[jmkOttawa]

For every dollar he spends buying back shares, he saves paying the distrubution ( 8 percent more or less) and increases NAV significantly. I think Frankie is right.

[InvestSmarter]

Yes. But the same thing can be said for buying back Debentures (resetting soon to a higher rate) and variable debt. One of Artis' focus was to improve the debt to asset ratio as well. A SIB wont help the debt to asset ratio. Getting short term debt and debt about to be reset at a higher rate under control will be a priority right now. The only way a SIB makes sense at this time, is if asset

[Frankie10]

It's not binary. I agree and have beat the debt issue to death - the credit that costs us prime + 0.7% should be the focus. That said, assuming you were about to finally clean up the balance sheet (dear baby Jesus, let me be right) and the oppertunity to buyback our units with an implied cap rate of say 8.7% (per my calc at $8 per unit) was about to vanish forever... one would want to

[SNAKEYBOY]

I'm not so sure Frankie... they have 2 mil ncib units they can get for lower.  Then could readdress a SIB in fall if more asset sales are closed.   He would only go for SIB now if he thought he made tremendous financial progress and that Artis may rip higher after q2. If that was the case he also probably would have bought 100k more shares for a quick buck potentially 

[InvestSmarter]

I dont think Samir is in for a "quick buck". Change your mindset to long term. He also couldn't buy on insider knowledge of a SIB until after its publically announced and after the Q2 earnings blackout period.

[SNAKEYBOY]

He could have bought when it was just an idea in his head before discussing with board. 

[EstevanOutsider]

It isn't really about a quick buck. It is also maximizing value as the REIT is trading distressed along with several other names in the sector. A SIB would be a value enhancer. Look at Dream, they were able to sell DIR near full NAV to buy D.UN at a huge discount during out of favor. Sets them up for when the cycle terms and REITs/office are more in favor and they can sell assets to buyback

[Frankie10]

"He would only go for SIB now if he thought he made tremendous financial progress and that Artis may rip higher after q2." This is literally what I said, minus the alleged insider trading at the end of your post, lol.   

[EstevanOutsider]

Have to think he plans to retire the looming debenture with either the disposition proceeds or the refinancing noted in Q2. If you mean the prefs he is buying them back but is limited to how many people are willing to sell them below face value. Would love to see a SIB at $8 if asset sales are going well. Would be killer for my Artis calls!  

[jmkOttawa]

Bought more despite one member moaning and groaning about Samir and concocting one conspiracy theory after another :).  Thank you Frankie for teaching me how to use the mute function..!!