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Private Eye Capital

@PrivateEyeCap

Mar 16

1/n Higher/rising rates $TLT & 2023/24 unit deliveries have weighed on #multifamily #REITs $AVB $CPT $EQR $ESS $MAA $UDR over the past year. I see the credit events $SIVB $FRC $SBNY $KBE of the past week being a positive for the sector as:

https://twitter.com/TheTranscript_/status/1636296322784411648

2/n Small/Med banks are a key lender to developers. Last week (prior to bank crisis), at Citi conf $MAA CEO said that new MF permitting had come to a halt due to rising rates/spreads/const costs. Bank crisis will further curtail development. LOWER SUPPLY

https://twitter.com/TheTranscript_/status/1636296322784411648

3/n 10y now below 3.5%. MF REITS are low leverage (sub 30% LTVs) and primarily access debt financing through corporate bond market. While banks will be reticent to lend, I see debt costs for the REITs heading lower

Read 9 tweets

Private Eye Capital

@PrivateEyeCap

Mar 10

Ugly week for #REITs. Bought the CA heavy stuff hard today:
$KRC -10.7% overall cap. Office is 13+% stripping out MF/LifeSci @ 6.
$ARE -6.5%
$ESS -5.9%; 370k/door
$EQR -6.1%; $372k/d

I $SIVB $FRC $SBNY $PACW doesn't sink the SF Bay/CA economy

non CA:
$MAA -5.9%; $218k/d

I'm implicitly betting the the troubled banks don't F up the golden goose of the SF Bay /LA VC ecosystem. Yes many wannabe unicorns had deposits there but I believe recoveries will be 80%+ of funds. Might lead to some incremental job losses but not the end of the world

I am concerned about general banking problems (which could continue to spill into RE and/or REIT). $BAC appears to have $100+ BN in unrecognized Held to Maturity securities. Others must as well. Could get ugly out there.

Read 5 tweets

Private Eye Capital

@PrivateEyeCap

Aug 8, 2021

@FrancoOlivera

1/n So I posted this in reply to another thread but wanted to see if I can find more pushback. Clearly people have been disappointed with $ATUS 1Q net adds, particularly versus $CHTR and $CMCSA. However, I think there is plenty of evidence which...
@FrancoOlivera @AndrewRangeley

2/ A) 1-3Q20: People flee NYC in droves, many end up (temporarily) in $ATUS footprint and register as net adds in 2020. Slide below is from a Nov2020 presentation by $UDR, an apartment REIT with exposure to NYC area:

@maffei_fake

3/ This was openly acknowledged by $ATUS last year's 2Q call. Unlike $CHTR/ $CMCSA, ATUS has highly concentrated footprint where 60-65% of biz is in areas(i.e. the old CVC assets) in a position to benefit from this in 2020.
@maffei_fake

Read 6 tweets

Private Eye Capital

@PrivateEyeCap

Mar 8, 2021

$KRC CEO John Kilroy says he believes the stock is trading at a 1/3 discount to NAV on $C Citi Property CEO conference. Kilroy Oyster Point Ph 2 (Life sciences $ARE) to start this summer. Will also start development of new life sciences project in San Diego. KRC has plenty of $

for development. May also repurchase shares/pay special dividend. #reits #dividends #dividendstocks Great track record of value creation via development - should trade at a premium to NAV. I think this is worth $100-120 per share.

I estimate today's $1.1 bn sale of The Exchange was done at a ~4% cap rate. Tenant is $DBX who has leased space until 2023 but is looking to sublease.

Read 9 tweets

Private Eye Capital

@PrivateEyeCap

Mar 7, 2021

The RATE-ARDs at $MCO Moody's and S&P $SPGI have too much influence over companies - case in point is $INVH which owns 80k single family homes with a loan-to-value (LTV) of just 32%. Somehow this company is NOT 'investment grade' and they are de-levering...

2/ to appease these idiot rating agencies. Consider that people typically put down only 5-10% of the purchase price of a home (the rest is financed with a mortgage at an LTV of 80%+). Of course there is one recent example of a situation where the US housing market blew up -caused

3/by rating agencies who in pursuit of fees did whatever $BAC $GS $MS $C $JPM etc told them too - rating hundred$ of billion$ in garbage debt as investment grade creating a housing bubble followed by a global financial crisis truthout.org/articles/the-i…

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Private Eye Capital

@PrivateEyeCap

Mar 5, 2021

Inflation $TLT worries=opportunity to invest in single family rental leader Invitation Homes $INVH. At $28/sh implies 4.8% 2021 cap rate. Trades at ~5-10% discount to NAV.
$AVB $EQR $CPT $MAA $ESS $VNQ $AMH $XLRE #reits #dividends
SHOULD trade at premium to NAV->Platform value:

2/While anyone can buy a home and become a landlord, this is a scale/density business. To effectively manage single family homes bigger is MUCH better. Scale allows for in-house provision of services (hire a plumber full time for $200/day rather than pay $150 for each visit).

3/Route density is also critical. On average, INVH owns at 5,000 homes per market. Can cluster maintenance jobs. This has lead to NOI margins of ~67%. Put simply, with scale INVH retains more of each rental $ as profit than competitors.

Read 11 tweets

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