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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend -- Ignore unavailable to you. Want to Upgrade?

To: Richard Barron who wrote (1364)	6/17/1999 2:26:00 PM
From: zebraspot	Read Replies (1) \| Respond to of 2561

>>Walden Res CEO Says Co. Mulling Several Merger Offers By Janet Morrissey Dow Jones Newswires -- June 17, 1999 NEW YORK -- Walden Residential Properties Inc. (WDN) is "considering" at least three offers to buy the company, Walden President and Chief Executive Marshall Edwards told Dow Jones Newswires. Edwards said the bids are from both public and private entities, although he wouldn't disclose the parties' identities. The Dallas apartment real estate investment trust retained J.P. Morgan Securities Inc. to assess the offers, and Walden's board will likely meet within the next several weeks to discuss the bids, Edwards said. The executive said the bids came at the initiative of the other entities. "We did not retain an investment banker to solicit bids," said Edwards. Walden has been facing oversupply problems in its key markets of Dallas and Houston, which has numbed investor enthusiasm for the company's stock. Its shares recently traded at 21 5/8, up from its 52-week low of 16 in March but still off its high of 26 3/8 set last July. Chief Executive Edwards said the supply troubles are real but not as distressing as the mid-'80s when the real estate market crashed and not as bad as the market has made it out to be. "It's been overblown," said Edwards. The executive said there has been a move to apply the brakes to new multi-family development in Houston in recent months, which could help that market's outlook. Still, he said he expects oversupply issues to continue in Texas. "Increasing permits and declining job growth" in those markets will make it difficult for them to absorb new supply, he said. Walden has taken big steps over the past year to reposition itself and win back investor confidence. Its merger with Drever Partners Inc. doubled the company's portfolio size and marked its entry into new markets in California and Florida. It also launched a property refurbishing program in an effort to boost sagging rent and occupancy growth and brought in new management faces. But sluggish REIT prices have made it difficult for Walden to make acquisitions over the past year to grow its portfolio. So, the company has been selling off noncore assets. Over the past year, it sold $65 million to $70 million in properties, and it expects to sell another $85 million within the next 30 to 90 days, Edwards said. The company currently has 150 properties. Edwards concedes he's been frustrated by the company's sluggish stock price. "(A REIT) should be trading at at least NAV (net asset value) or they shouldn't be a public entity," said Edwards. Merrill Lynch analyst Eric Hemel estimates Walden is currently trading at a 10% discount to NAV.<< [end] [Merrill had said in 12/98 that NAV was about $27 for WDN] /// The preferred S's sec.gov at $20 seem to be a screaming buy. (Anyone have any idea why the S's are yielding 11.5%, while the B's are yielding 9.25%? - particularly given that the S's are senior and they throw in a warrant!). If WDN gets bought by a larger, more diversified entity, perceived risk here should diminish dramatically, and these preferred S's should go up at least a few points ($25 would equal about a 9.25% yield).