10 REITs At Mega Discounts To NAV

seekingalpha05-16

These REITs have a price-to-NAV range of 0.27x to 0.59x.There may be upside of more than 200% to the NAV estimate, which will probably decline over time. The estimates may be terrible. That's not my ...

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That's not my ...</p>\n\n<a href=\"https://seekingalpha.com/article/4693629-10-reits-at-mega-discounts-to-nav\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>10 REITs At Mega Discounts To NAV</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n10 REITs At Mega Discounts To NAV\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-16 05:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4693629-10-reits-at-mega-discounts-to-nav><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>These REITs have a price-to-NAV range of 0.27x to 0.59x.There may be upside of more than 200% to the NAV estimate, which will probably decline over time. The estimates may be terrible. That's not my ...</p>\n\n<a href=\"https://seekingalpha.com/article/4693629-10-reits-at-mega-discounts-to-nav\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4566","symbol_name":"资本集团","start_time":0,"source_url":"https://seekingalpha.com/article/4693629-10-reits-at-mega-discounts-to-nav","article_id":"2435693579","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/172763949/image_172763949.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2435693579","pubTimestamp":1715808932,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Because that’s how the tool works. Don’t blame me. I promised a quick article with a bunch of charts. That’s it. It’s probably a fun article, though. I don’t know. I’m just here to post charts and make a few jokes. Orion Office REIT Inc.  TIKR ONL comes first. Huge discount to NAV. Is the NAV figure reliable?Notice that NAV for hotel REITs can be pretty volatile. TIKR This kept bugging me, so I went to figure it out. The problem here is that the NAV updates from 1/28/2021 to 3/11/2021. When you look at the chart, you see the line trending from one point to the other. However, that was actually a jump. So what we really have is a problem with the line sloping upwards where it really should’ve been flat at $4.67 starting 1/28/2021 and then jumped to $7.05 on 3/11/2021. Now, you might argue that such a wild swing in NAV is stupid and reflects poorly on the analyst. Moving on…City Office REIT, Inc.  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The estimates may be terrible. That's not my fault.You'll probably have a better time reading this, than reading my competitor's articles.You can probably guess the most common kind of REIT listed here. You won't be too far OFF.  I'm kidding. This isn't a sale. Just enjoy the article. maiteali/E+ via Getty Images This article will briefly cover several real estate investment trusts, or REITs, with huge discounts to consensus NAV. I’m weeding out REITs where the market cap is already tiny (under $100 million). Price-to-consensus NAV ranges 0.27x to 0.59x for this list. However, I’m not requiring the NAV estimates to be reliable. It just has to be a consensus NAV estimate. In this case, one estimate can also be a consensus. Why? Because that’s how the tool works. Don’t blame me. I promised a quick article with a bunch of charts. That’s it. It’s probably a fun article, though. I don’t know. I’m just here to post charts and make a few jokes. Orion Office REIT Inc. (ONL) TIKR ONL comes first. Huge discount to NAV. Is the NAV figure reliable? No. LOL. Does it look reliable? Industrial Logistics Properties Trust (ILPT) ILPT has the honor of being managed by RMR. That was sarcastic. They are managed by RMR, but I wouldn’t consider it an honor. External management is not a benefit. Industrial real estate took a hit, but ILPT dove vastly harder than other “industrial” REITs. There was a buyout involved and far too much debt. Then interest rates ripped higher. Bad then turned to worse. TIKR Hudson Pacific Properties, Inc. (HPP) Oh look, another office REIT. I wonder how many of those we will be seeing. Spoiler: Many. There are tons of office REITs in this category. I expect consensus NAV figures for office REITs will continue to fall. TIKR Braemar Hotel & Resorts Inc. (BHR) BHR shifts us from office REITs to hotel REITs. Once again, we can see that the price collapsed. We can see that NAV fell dramatically. The price to NAV has generally been low. It averaged only 0.69x. It’s a bit strange that the price to NAV appears to rip higher in early 2021, but the price (blue line) barely crosses the NAV (black line). Perhaps a bug in the data? Notice that NAV for hotel REITs can be pretty volatile. TIKR This kept bugging me, so I went to figure it out. The problem here is that the NAV updates from 1/28/2021 to 3/11/2021. When you look at the chart, you see the line trending from one point to the other. However, that was actually a jump. So what we really have is a problem with the line sloping upwards where it really should’ve been flat at $4.67 starting 1/28/2021 and then jumped to $7.05 on 3/11/2021. Now, you might argue that such a wild swing in NAV is stupid and reflects poorly on the analyst. Moving on… City Office REIT, Inc. (CIO) I bashed on CIO before the pandemic, and the share price got hammered pretty hard. As you can guess from the name, it’s another office REIT. They eventually disposed of some property at attractive values and that sent NAV estimates substantially higher. For a while. Then it gradually went back down. Office real estate stinks. Toss in leverage and it gets worse. The best thing for office REITs would be if cities became far more willing to accept office to apartment conversions with zero restrictions. What would zero restrictions look like? The developer says they want to switch to apartments. The city raises an objection (because they always do). The developer reminds them that their opinion is not needed and proceeds to create value for society. TIKR Piedmont Office Realty Trust, Inc. (PDM) Say hello to another office REIT. As I was saying, we need to see office to apartment conversions. It isn’t viable to convert all to apartment buildings, but at least 10% to 20% would be eligible for conversion if regulations were removed. That doesn’t mean removing safety regulations. We’re not trying to put people in a death trap. But no other restrictions. If someone wants to convert a 20-story office building into an apartment building with only 20 apartments, that’s fine. Leave that up to the developer. It probably won’t happen much because it wouldn’t be a great use of capital. Think that’s horrible for the city? It isn’t. The landlord still pays property taxes and that building will consume almost zero services. It subsidizes the other property around it. Decent tax revenue, minimal expense. It’s great for the city. TIKR Brandywine Realty Trust (BDN) How about another office REIT? Did you expect anything else? Once again, we can see that shares regularly trade discounted to NAV. However, that discount is finally narrowing as the NAV comes down towards the share price. So what happens if you build 400 apartments where an office building stood previously. Does that make traffic worse? Not really. The people who are most likely to live there are people who were previously commuting into the city. Good. I don’t like being stuck in traffic. For the guy who claims “you are traffic,” I drive under 2,000 miles per year. My ratio of taxes paid to miles driven must easily be in the 1 percentile. So no, I’m not “traffic.” If my ratio became the new normal, the government would be running at a surplus and the roads would be empty. TIKR Global Net Lease, Inc. (GNL) Finally, we get a net lease REIT instead of an office REIT. I mean, they do still own office, but it’s a smaller portion of their portfolio. GNL offers investors all the benefits of external management with the something or other. TIKR Look, the best way to explain GNL is probably to say that they are a net lease REIT with this dividend history:   Seeking Alpha The current rate of $.28 per quarter is worth slightly more than half of the pre-pandemic rate of $.18 per month ($.54 per quarter). For reference, Realty Income (O) and NNN REIT (NNN) continued to raise dividends. W. P. Carey (WPC) could’ve continued to grow their dividend (very slowly), but instead they spun off the office properties and chopped the dividend. BRT Apartments Corp. (BRT) Well, we finally got a housing REIT. BRT is pretty small. The market cap was around $337 million. They have internal management. This is a REIT that might be interesting. There is a sharp drop in the NAV estimate, but there was also a sharp increase a few years ago. This is the first REIT that could be interesting on the list. TIKR RLJ Lodging Trust (RLJ) Oh good, another hotel REIT. Have I mentioned that hotel REITs don’t fit my style? The problem with hotel REITs isn’t just the high level of recurring capitalized expenditures. They also suffer worse during recessions. Do I want a leveraged investment that sees a huge decline in revenue during recessions? No, not really. Recessions are precisely when I want to be shopping for bargains. If you’re going to buy a hotel REIT, you should probably do it during a recession. Just make sure they can withstand whatever happens. TIKR Conclusion You may have noticed a clear trend. The equity REITs that are most likely to trade at huge discounts to NAV are office REITs. The consensus estimate for NAV is generally trending lower, but the price moves far sooner than the NAV estimate. I’m not investing in office REITs because I see office property values plunging. Wait, is it still \"plunging\" if it already happened, but some sellers don't admit it already happened? Oh, well. These REITs are at huge discounts as investors chase REITs like Digital Realty (DLR). Is DLR (owner of data centers and 6 years of stagnant adjusted funds from operations, or AFFO, per share) the greatest way to play artificial intelligence? No. I already bashed DLR, so I won't repeat the argument here. The argument about Equinix (EQIX) moving expenses into development cap ex caught my attention and got me to look closer into DLR. The best thing for office investors would be changes to local laws to allow developers to repurpose office properties. As it stands, there is simply far more office real estate than landlords can fill. Even if we assume that landlords default on mortgages, the existing owner has to pay property taxes. That can make some office properties unattractive even if they were free. However, if landlords could redevelop them into more useful purposes, it would benefit the city, the developers, and the other office owners. How long do you think it will take cities to change? I think it’s much longer than I would want to be stuck holding an office building. Should you go buy all of these REITs? Probably not. I certainly don’t plan to.  What you could do is leave a comment. That’s always a good choice (on my articles, obviously).","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.5","shortVersion":"4.22.5","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2435693579"}