BSR Real Estate Investment 5 00 convertible unsecured subordinated debentures T.HOM.DB.U

Discount to NAV

[DanielDarden]

 

Valuation: HOM units are currently trading down ~18% YTD vs. the XRE down ~13%. Currently, BSR trades at a deep ~42% discount to consensus NAV, below both its historical discount of ~14% and significantly below its Canadian domestic peers at an ~18% discount. While we recognize the current mark-to-market opportunity between the U.S. and Canadian markets has narrowed, we point towards the fact that HOM operates in rapidly growing cities with favourable inter-state immigration trends not subject to rent controls, compared to the more regulated Canadian markets, which itself could warrant a higher valuation premium over time. We believe that concerns about new supply flooding the REIT’s Texas markets have caused an underperformance, in stark contrast to the operating fundamentals that underpin the more affordable rental stock BSR owns and manages—a disconnect that we believe should close as the new supply is absorbed and the new leases revert back to a positive spread. (CIBC)

My Take: Once new supply is absorbed the balance sheet allows for expansion and growth in their markets without rent controls.

[50centdollars]

At the rate it's going down, this will be trading at $0 per share in a half a year.  Stunning to see. Oh well, even though I'm down about 15% on my position, this is a comfortable, though somewhat bewildering, hold.  The current market valuation makes little sense, IMO.  Hopefully management are continuing to use some of their excess cash flow to opportunistically buy back

[incomedreamer11]

Most multifamily REITs increased distribution ,especially with low AFFO payout, Hom.un increased just once in last year. only with purpose to make issue units