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

To: JOHN N. who wrote (1453)	8/21/1999 11:31:00 PM
From: Richard Barron	Read Replies (1) \| Respond to of 2561

STEVEN, PZN is risky, but with huge potential swings in either direction. The biggest risk was financing dried up, and should be tight for a while due to lack of confidence in management. They have potential conflicts of interests. The current risk is whether or not they will run the prisons well enough to keep the current contracts and add new ones. It also is questionable how profitable they are, since the costs are currently floating. John, KRT has paid out nearly 100% of FFO for years, and was well on the way to covering the dividend easier, until Caldors went bankrupt. I have no idea if they will need to cut the dividend, nor if the last FFO report was a full quarter or partial without Caldors rents. The future obviously depends on re-leasing these spaces. A dividend cut would likely dry up interest in the REIT for 3-6 months or longer, until the dividend reached 15% at that dividend level. GLR, SIZ, and CWN had dividend cuts a few years ago during good times for REITs and all dropped until the dividend reached 13-15%. Same with AEC recently at more than 15%. If you are investing new monies, you may want to speak to the CFO to find out how long KRT was without the Caldor rents in the quarter, and what the leasing interest is, and if it is at lower or higher lease rates than Caldor was paying. Richard