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

Net Asset Value Discussions

[garyreins]

I would like to bring in light some discussions regarding offices listed for sale. 

"Looks like a 9.5% cap rate on the Arizona office"

"Artis is selling Iverness for $21 million ($50 million less than 2016 purchase price?). That's only $80 psf! Seems quite low"

Does their $16.20 NAV reflect these marked down prices? Probably not.  What about the BELL buildings, and other less-than-stellar office properties? Is Artis management acknowledging their NAV is artificially inflated, and now determined to have a liquidation strategy with the goal to come out with $12/13 a share in the near-term? It may appear so.

p.s. This is NOT snakeyboy. Please do not associate me with that vile creature! 

-gary

[Reece1986b]

Artis NAV is based on what are in my opinion stale appraisals which do not take into account these discounted prices on office properties. I think almost everyone here agrees that appraised values are fairly reasonable for retail and industrial properties but are wildly inaccurate as to what prices are necessary to move office properties in any reasonable timeframe. We will hopefully see more

[jmkOttawa]

Agree totally Reece. Industrial and retail are likely correctly valued and office is anyone's guess depending on a number of factors specific to the individual property as well as the office market in general. It's probably safe to say that the value of the REIT if it was sold fairly carefully in pieces would be less than 16 dollars and more than 12. And once there is more visibility on

[babybunny]

Agreed jmk.  Artis seems to be treated as an office play, when in fact the amount of office we own is not enough to move the fair value needle a ton.  Twelve bucks assumes a truly savage discount on the office component.     I have been checking the couch cushions and pay phone coin returns for every dime I can plough into distressed Artis units.  Every trading day

[garyreins]

Not sure we can assume retail/industrial is an easy "FULL nav" situation...if it were, why would Dream Industrial, FCR, and Riocan, and PMZ - all pure plays, be trading at also steep discounts.  FCR is about 60% of NAV, much more desirable toronto real estate....PMZ is same thing and very little debt.   Maybe they could transact at NAV and have been so far, but the market

[Catchtherally]

I think a discount needs to be applied to retail. The retail is not in the most desirable cities in Canada. That being said they are over 90% leased so most likely needed in their towns. Industrial close to correct. Office who knows. I think it's closer to a 10-12 nav at todays interest rates. 

[DZtrader]

Wow Bunny, that is nothing shy of a desk pounding endorsement of this company. I commend your zest and enthusiasm. Correct me if I am wrong though, last I checked office at least revenue wise is our largest component, no? Given that still being the case, I can't quite get to the level you are at. That combined with some of the short comings of this managment group keeps me a little more in

[jmkOttawa]

I am wholeheartedly in the same camp babybunny. I broke the piggy bank and added this past week. We will not see these prices again once the dispostions begin. And whatever is decided with the strategic review, I cannot imagine a scenario that does not include some dispostions, with reduced debt and interest cost.

[Catchtherally]

I do believe he will try and sell or dispose of all assets but I am not as confident that there will be buyers at this time. Sounds like Brookfield is sweating https://financialpost.com/real-estate/property-post/brookfield-property-junk-status-maturing-debt/wcm/2acfa5e8-c337-4435-96c5-dc9c30067e4c/amp/