1) I think I massively under estimated the value of Rego 2 owned by $ALX

Let me explain, I have watched a bunch of tenants filed bankruptcy at the center since GFC when it opened. Century 21 filed bk during Covid, Kohl's left and At Home went into the space, then At Home filed BK but is on the hook for the rent till 2031. NYC faced so much retail drama in the past decade. Miller Ale House was the ground floor tenant, they closed
2) But new tenants took over their space and paid rent that is new 85% higher than the 2013 time period. 2013 is a good reference point because that's when retail rent in Manhattan started to trend down 40-50% in certain corridors. But the average rent went up from $40.22 to $74.64 today. That's a 85% increase in rent

Rego 2's performance has bifurcated from Manhattan retail. Thinking through it, it makes sense. This is a more car centric retail center with over 1,100 parking spots. The curated tenants have offerings that are better than Amazon, i.e

1/6) I think $ALX is worth 64% more than the current price and is paying an 8.4% dividend. Due to rent escalators, ALX could be worth 134% more than today’s price while paying shareholders 8.4% dividend
Full write up at hardasset2023 “at” gmail_com 2/6) Owns the Bloomberg Tower with a 15 yr NNN lease till 2040 worth $1.3 bn (could be worth close to $2bn in future due to rent escalation)
Owns a 600k sqft retail, Rego II, in Queens worth $433mm
Owns a 5 acre development site in Queens, Rego I, worth $150mm to $200mm
Owns a 255,000 sqft apartment building worth $160mm
$397mm of cash on balance sheet or 36% of the market cap
Historically a 47 bagger since 1992 when the company filed bankruptcy
Only 2% dilution since 1992

1) Talking to my family about public real estate is always a funny experiment

I have given them lots of ideas that doubled in 3 years which equates to 26% IRRs and batting average of over 90% (only giving them high conviction ones)

So probably low 7 figures of total profits in the past decade

Worst outcome is usually just dead money for a while 2) But it's not something that they ever get excited about. Usually, it's "I'll just throw a few dollars at it" while I explain it's a top 3 position in the fund, 7-8 figures of exposure. It doesn't mean much to them. I'll even break it down to $/sqft, $/apartment, so they get it in real estate terms. Can't get them excited. Their eyes just gloss over and I can see their brain thinking about something else.

1) Variant Perspective - How does one develop it? I want to talk about how one develop a contrarian views and buy warehouses at over 10% cap rate in 2018

After Blackstone bought the warehouse portfolio of $FRPH, I looked to redeploy the large cash chunk. I knew warehouses pretty well by that point

Griffin Industrial was trading at an implied 10.6% cap vs the markets were in the 4-6% range

E-mail to hardasset2023@gmail.com for our distribution list
2) Remember, this was 2018 and value investors were still obsessed with Sears, Macy's, CBL, Seritage etc.

Many investors still openly debated whether warehouses are a good RE asset class while Blackstone bought up every 4+mm sqft portfolio

It is fun looking over the old pitch

1/n) Had a recent college grad come by the beach house yesterday and we hang out for a bit and did a workout together Erg/Kettlebell

Here is my advice to people seeking mentors

Leverage Twitter, find the accounts you like and ask if you can meet in person, this youngster did this very well and connected with many of the "top investors" on Fintwit that I deeply respect 2/n) Have an actionable idea or a theme - Everyone is busy. When people meet with you, they are taking time from their busy day. So if you have a pitch on an idea, a process improvement, a simple way to leverage AI, etc.

The best ideas are the ones that are large/liquid and have good upside. Always have 2-3 actionable ideas. Ideas are currency!!!

1) I recently spoke with @AndrewRangeley about $AIV which is selling a $500mm-650mm development site 2 streets north of Citadel's new Global HQ. The company is buying back shares, selling non-core assets, and advancing developments. Here is the report card.

$8.8 vs $13.67 NAV

2) I think the company is worth just under $14 and will be worth more as they continue to buy back shares and as new construciton stabilize

We believe our cap rate assumptions are conservative and there may be room for cap rate compression as rates get cut

1/4) Keeping to my promise of sharing content under the playful moniker of "Howard Marks of REITs"

The first memo is titled "Not All 15% IRRs Are Created Equal"

This is a discussion on risk adjusted returns
@BillBrewsterTBB @compound248 @AndrewRangeley @marketplunger1 2/4)

1/n) FRP Holdings $FRPH is compelling here 1) It is trading at about 60% of NAV 2) Pristine balance sheet with 33% of market cap in cash 3) Great management team 4) Assets with strong moats. IMO NAV grows at 10% a year, buying it at 60% of NAV gets you mid-high teens CAGR for. 2/n) This is the historical capital allocation track record. They were approached in 2018 by Blackstone and sold their warehouse for $359mm. The “through-the-cycle” IRR is about 13.8% with very little use of leverage. This is a 11-year holding period including the GFC

1/10 Ackman increased the tender price for $HHC from a range of $52.50-$60 to a range of $61-$70 per share. Only 4,100 tendered their shares. Ackman wanted to buy 6,340,000 shares! $HHC has insane unit economics with avg 26% IRR and a long runway @Brandonbeylo @andrewwalker 2/10 Why is Ackman so interested in a company with a bad long term price chart? IMO, Ackman’s buy is a poker tell. $HHC has the best unit economics in RE development of any company that I know of. Here is their historical track record. @monishpabrai @guyspier

Howard Hughes Corp $HHC is a two to four bagger sitting in plain sight. Today, Bill Ackman is trying to squeeze out minority shareholders to keep all the upside to himself. I will get into the valuation shortly, but first let me explain how Ackman is trying to screw us 2) How did billionaire hedge fund manager Ackman wind up with 27% of $HHC AND his entity is now tendering for another 12% of the shares outstanding? Ackman famously bought CDS for $27mm before the Covid outbreak in 2020 and turned it into $2.6bn.