More info on GOV -
I located the prospectus that was filed for the initial IPO for GOV:
sec.gov
Here are some pictures of the 29 properties in the portfolio:
sec.gov
sec.gov
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Some analysis:
HRPT launches IPO for new REIT to invest in regional properties leased to government tenants
baltimorerealestate.citybizlist.com
From the article:"...INVESTMENT HIGHLIGHTS
Strong Credit Quality Tenants.
Approximately 89% of Government Properties Income Trust pro forma rental income for the twelve months ended March 31, 2009 was paid by the U.S. Government.
An additional 6% of pro forma rental income in these twelve months was paid by the States of California, Maryland, Minnesota and South Carolina.
Government Properties Income Trust's future investments will be focused on properties that are majority leased to government tenants, the belief being that government tenants generally have strong credit characteristics and are less likely to default under lease obligations than commercial tenants. Accordingly, for investors, expected distributions may be more secure than the distributions paid by many other REITs...."
"...Favorable Lease Renewal Experience.
Based on RMR's experience, properties leased to government tenants are typically relet to the same tenant or another government tenant. During the period that RMR has managed the 29 properties that comprise Government Properties Income Trust's initial portfolio, all of the government leased properties that have been relet were relet to a government tenant...."
"...Growth Potential.
During the past 40 years, the amount of GSA owned space has remained relatively constant, but the amount of GSA leased space has increased from 46 million square feet to 178 million square feet. Due to the large amount of space currently leased to government tenants, and the belief that government demand for leased office space will increase, Government Properties Income Trust will have significant opportunities to acquire additional properties that are majority leased to government tenants...."
IPO Overview: Government Properties Income Trust
seekingalpha.com
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My take was a bit different in that since HRP still owns 49% of the GOV shares, HRP has a vested interest in seeing good overall performance in GOV. HRP management still receive a lot of their compensation in stock options, so they have a vested interest in seeing the common shares perform well.
I would like to see the vesting of their options be modified so that they are fully valued when exercised at higher values and are held for a longer period of time. This way management maintains a long term perspective when making their property buy & sell decisions.
EKS |
