H&R Real Estate Investment Trust T.HR.UN

OUCH for HR

[garyreins]

$13 to $8.50.  Surely its twin PMZ has faired much better, $13 to $12.44.  Is Alex Avery and the PMZ team more competent than HR management? I dont think HR has significant amount of office anymore to be worried about, 18% and its solid with something like 7 year WALT.

Trading at 8.5x AFFO and 7x FFO.   

These multiples on the reit sector are getting pretty insane, even factoring in interest rate expense increases its still 10x which is historically cheap. Arent REITS supposed to be 12-16x multiples on average

[TheeRook]

H&R is selling off its office space probably at a loss.  H & R plans to sell its office and retail properties as market conditions permit. H & R's target is to be a leading owner, operator and developer of residential and industrial properties, creating value through redevelopment and greenfield development in prime locations

[garyreins]

Yes we're aware of that....they still have a good office portfolio and its something like only 18% of NOI.  I think they will be fine, taking a loss on office and retail to pay down debt and fund a NCIB may still work out as a net-neutral strategy

[rad10]

I thought they were getting good money for the office properties.  The Ottawa sale was above book NAV.  Hopefully proceeds are paying down debt rather than new developments. Results out soon.

[Frankie10]

I don't worry about capital allocation here - similarly as I do not with Riocan or Allied. H&R is run incredibly well - like a very boring real estate company - contrary to stock price volatility. That said, they made some not-so-boring deals where they added long-term call options to buyback more than $1B of real estate assets roughly a decade into the future. In my opinion, H&R is

[Frankie10]

Define "at a loss" from the percpective of an investor. My ACB is not NAV. Current year office sales were in-line with NAV. A realized loss at the REIT level while my ACB is ~60% of NAV is a gain for me based on the valuation I paid for the portfolio (allocating the discount proportionately across the board), while reduces the capital gains income needed to flow to me come year end,