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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (55659)7/10/2015 8:19:33 PM
From: Spekulatius1 Recommendation   of 78748
 
I have looked at ARCP and what scares me away is their extremely high leverage. They have roughly $10B in net debt and $1.2B in NOI. A typical low investment grade REIT would have max. 7x leverage (or $8.4B) in net debt. That $10B in debt does not even count the preferred, which count as equity (for the bond holders that is correct) but from the shareholders point of view, it is just like debt. For me, the leverage is a deal breaker and I would look somewhere else for value in real estate.
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