Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: bruwin who wrote (57706)	8/7/2016 12:11:32 PM
From: E_K_S	Read Replies (2) of 78670

From your chart that is 2.21%. What about for specific sectors like REIT? I have a friend who is a real estate developer in Silicon Valley and Seattle and was able to refinance a $50mln residential project loan at 2.95%. Put that into your model for 30 years and see how the DCF look in the out years. It was interesting as he said he went through the small business administration so there was some government backed product helping to get secured capital (at very low rates) to build these new projects. Such a long term loan/rate makes the project cap rates very attractive so my thinking is the smart REIT companies are securing similar loans and rates. I have never seen rates so low for such long term issues and when bundled w/ a project that also has a similar long term life, the value proposition is huge especially if/when the cycle turns (say in 10 years). I think that may be one thing Buffet is missing or maybe we see some larger investments that focus on real estate and future FFO's financed w/ 2.5% 30 year debt. EKS

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next