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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend
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To: Bob Rudd who wrote (1428)8/12/1999 3:43:00 PM
From: Bob Rudd  Read Replies (1) of 2561
 
HRPT (HRP) is currently yielding 11.4% presumably because oh health
care exposure. Actual exposure to health care is 25%. The balance is
decent quality offices. To unlock the value, HRP is spinning off the
health care to shareholders

Yahoo - HRPT Announces Revised Spin Off Plan
biz.yahoo.com
According to the 7/30 NAREIT survey, the average office REIT yields
7% and the average health care reit yields 10.7%. If the spinoff
succeeds in getting segments of currently neither fish nor foul HRP
to be percieved as pure plays and yield revert to mean for sectors,
what impact does that have on the price of the package?

Looks to my simple mind that 50% increase is in the works IF the
market awards average yields:
Spinoff Div HC 2.40
HC avg div yld 10.7%
Hc Implied price 22.49
Spinoff Div HRP OFF 1.28
Office avg Div Yld 7.0%
Off Implied price 18.18

Yeild Implied value 20.43 [1 Off + .1 HC spinoff shares]
Current HRP price 13.38
Expected increase 152.8%
Same info with more pessimistic implied yield assumptions in later 2
columns
BASE WORSE WORST
Spinoff Div HC 2.40 2.40 2.40
HC avg div yld 10.7% 15.0% 20.0%
Hc Implied price 22.49 16.00 12.00
Spinoff Div HRP OFF 1.28 1.28 1.28
Office avg Div Yld 7.0% 7.0% 9.0%
Off Implied price 18.18 18.18 14.22

Yeild Implied value 20.43 19.78 15.42
Current HRP price 13.38 13.38 13.38
Expected increase 152.8% 147.9% 115.3%

Took a position today @ 13 3/8

Thoughts comments....?
bob
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