Tricon Residential Inc T.TCN

Alternate Symbol(s): TCN

Tricon Residential Inc. is an owner, operator, and developer of a portfolio of approximately 38,000 single-family rental homes in the United States Sun Belt and multi-family apartments in Canada. The Company provides rental housing options for families across the United States and Canada through its technology-enabled operating platform and on-the-ground operating teams. The Company's segments include Single-Family Rental, Adjacent Businesses, and Strategic Capital. The Single-Family Rental business includes owning and operating single-family rental homes primarily within major cities in the United States Sun Belt. Its Adjacent Businesses include multi-family rental and residential development. Its multi-family rental business segment includes one Class A high-rise property in downtown Toronto known as The Selby. Through its Strategic Capital business, the Company provides asset management, property management and development management services.

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Tricon Residential Inc

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Post by retiredcfon Aug 15, 2022 7:25am

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Post# 34895909

RBC Notes

Portfolio Value – TCN

We estimate that TCN trades at a 29% discount to its portfolio value, and more with upside from ancillary/fee businesses

We estimate a value of $7.6 billion for TCN’s single-family portfolio, and $8.2 billion including cash/JVs/land/CIP/multi-family
This implies that TCN’s enterprise value is currently trading at a 29% discount to the value of the portfolio
TCN currently has roughly $600 million in book value allocated to multi-family assets and development, and we expect that these values could be conservative
The company has discussed $400+ million in additional potential upside versus IFRS values, which would move the discount to 32%
While we expect the market does not give full credit for ancillary upside, we also think that the fee business is increasingly being capitalized, and that the true discount is likely in the low 30% range

Regional Appreciation – TCN

We estimate that TCN’s overall portfolio value was down 0.6% in July

Most of TCN’s Southeast markets continued to perform relatively well, but Western U.S. markets continued to see outright declines, and select markets in the remainder of the U.S. joined as well

Among TCN’s focus markets, appreciation was led by Southeast Florida (+1.5%), Columbia (+1.1%) and Tampa (+0.6%) The largest depreciation was seen in Reno (-3.4%), Phoenix (-2.8%), NorCal (-2.5%) and Raleigh (-2.5%)