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

One week today is EARNINGS

[garyreins]

Lets be real. Be prepared to be historically, epically disappointed. Cant recall artis ever going up after a earnings CC.  Always down.  Even at announcement of strategic review it just traded flat, and would have tanked otherwise on their 100% payout ratio in Q2.   

Brutal man.   If you're some investors here that think arits is a fantastic deal and steal, find some cash cause you may be buying it in the $5's soon, god forbid 4s!!!!!!!!!!!!!!!!!!!!!!!!! 

DISGUSTING MAN.

[spacegimp]

I think for sure a 50% divy cut but it may not drop much regardless . I am just curious how much noi was lost on all those property sales , must be significant for the prices they fetched were healthy 

[EstevanOutsider]

Don't agree at all. The amount of interest killed by the retail sales in Q4 offsets the NOI loss based on my estimates. Say $14 million of NOI lost against at least $15 million of interest killed, assuming $80 million went to a 7% mortgage and $140 million went to variable rate. Now if Manji runs a SIB to retire 5% of Artis units at $7 he can save $3.7 million more in future distribution

[Frankie10]

NOI return as a % = cap rate; implied cap rate based on disposition price > marginal cost of borrowing. Therefore dispositions are accretive to AFFO, FFO, and NAV per unit.

[ScroogeMcDuck1]

What sort of drama is going to take place?  Is there a resious risk of a dividend cut?  I thought the payout ratio was artificially high due to floating rate debt that was left on assets for sale.   I would like to be prepared for any likely scenarios. 

[DZtrader]

You should and do need to be prepared. You should long ago have already positioned yourself. If the distribution gets a 50 percent haircut you can no longer service your over leveraged margin account. With the distribution cut comes the margin call. They don't give you official warning of neither of these incidents. Panicking never makes for sound judgement, what will you do? Think now, plan

[jmkOttawa]

Distribution cut does not bring a margin call. Unless the unit price drops sufficiently to alter the amount that is available for margin. A potential distribution cut would only reduce the cash flow available to service margin interest. Which could be managed by limited sale of units to cover the difference. It is safe to say that most are expecting a major recovery of Artis unit price by end 2024

[DZtrader]

Hey J, thank you for your input. While I understand what you are saying, the point I was trying to drive home was preparedness.  I also believe the positions in question were established at considerably higher value. As I have never and will never trade on margin (as I just don't have to nor want to) my knowledge on the topic is admittedly general. Given the already steap decline in

[Frankie10]

Distribution cut > negative monthly cash flow after interest > slow bleed (personal debt spiral) > need to capitalize margin account with earned income > lose job and GG

[Frankie10]

Brilliant post DZ. I have my levered cashflow modelled out and have a variable cell that accounts for how many interest rate hikes I can endure before I begin to breakeven on a monthly basis. I've never played with distribution cuts but the model is very simple and robust... just cut the Artis distribution in half and I'm still cashflowing a couple hundo a month... cut Artis to zero and I&

[Frankie10]

Almost all of the debt has already rolled at higher rates. As we dispose of properties for reasonable cap rates (sub 7%) and use those proceeds on dispositions to buyback prefs, commons or pay down debt, all with an effective yield greater than 7%... then the distribution per unit becomes more stable. Also, if less than 50% of the proceeds on disposition are used to buyback commons, the business