True North Commercial REIT T.TNT.UN

Those of you who think we should be paying down debt

[lancebryant]

I can't really express just how wrong you are.

The debt is extremely well covered by property values.  Property values are still very high and they are not going down how people feared. It's been a full year since the big drops and its been even longer since the last high when they raised equity to significantly expand the business.  They raised at 7 dollars, the equivalent of 42 dollars a share in todays value. They are buying it back at 9.  Good grief how can you not understand how powerful that is lol.

The share price remains arbitrarily low because half the share holder base has no idea how to invest, run a business, or even has a clue how a REIT actually runs.  What they see is a flat business; not a business that legit has gold in the walls and all it has to do is move that gold during a down period.

Every dang week we see huge moves in the REIT space; companies like ARTIS and others are buying out massive swaths of different REITS because they see it differently, and they know that the most of folks doing the selling are people who are desperate, broke and hoping to not lose it all. 

The idea that we are not thinking long term because we want share buybacks is frankly just foolish.  Repeat after me, carefully, a REIT at a 50% debt to equity ratio is NOT high, not even close.  This is a bearish narrative being made by people who want you to think something different then reality.  It is VERY difficult for bad things to occur to a company on a 50% debt equity ratio.  Paying down debt will not yield capital at the rate the reduction of shares will.  

In 2-3 years when the price goes back to 30 or more a share; they can raise all of those shares back into existance and payback billions in debt with a single move.  While so doing they can expand the portfolio and establish a strong dividend chain that will last another 10-15 years just like the previous boom did from 09 through 2022.  

Even if the share price does not go back there arbitrarily; all the company has to due is utter some magical words. "We declare a dividend of 16/cents/share/month.  Stock price moves to 25 overnight, and then 35 by the following month.  They then can raise at that price and pay down your debt and they got it for effectively free; from silly people; like you; who think that paying down debt is going to get the job done.

Even if cost of capital goes up another 2 percent, the rental indexation will also move with it; but at a slower rate naturally.  TNT has many fixed rate long term mortgages and much of the book does not expire until 2026.  

By 2026 at the rate we are going the total shares could be reduced by another 20% if not further.. and this is a conservative estimate, with enough property sales and flipping they can easily make another 35% of the shares disapear from here.

The share price remains arbitrarily low because half the share holder base has no idea how to invest, run a business, or even has a clue how a REIT actually runs.  What they see is a flat business; not a business that legit has gold in the walls and all it has to do is move that gold during a down period.

Relax, what the 20% share holder become a 25% share holder over a few months and realize that he has more to lose then anybody; and frankly you have no right to even speak about what you think you know... because frankly you just dont.  He does.

[luscar99]

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[SIGG1]

luscar, don't you think that management knows how to run their business?  I agree 100% with what lancebryant said, this is in line with what management has been doing.  If you don't like it, sell and move your money somewhere else. Otherwise please stop your whining. 

[BlueJay2020]

The SP is assuming the debt levels are the worst in the sector..  They are not - in any case, absolute levels are more imoortant than relative levels.  I agree with Lance that the debt levels are manageable. In any case, we will eventually get to a part in the cycle where leverage is a plus.

[luscar99]

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