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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (33605)	2/21/2009 8:31:18 PM
From: Spekulatius	1 Recommendation Respond to of 78748

Grommit - i think that CLI's numbers are better but yahoo stats won't show it. you need to dig a little deeper. CLI has 4.4B$ in assets and 770M$ in rent revenue. BDN has 5.2B$ and 680M$ in revenue. Since both are so similar in asset location and business we can reasonably assume that CLI assets are on the books more depreciated than BDN's (using the rent/asset ratio as an indicator) Also CLI interest was 128M$ annualized versus 195M$ for BDN. That's a fairly large difference when you look at Rent revenue/interest coverage. The biggest problem with BDN are the capital needs to finish up the development projects (CLI has none - a big plus) and the refinancing. Those are about 1B$ or a little more until the end of Y2010. I run some stats 2 years ago that clearly showed that CLI is less leveraged and was cheaper than (and still is cheaper no, leveraged adjusted).

To: Grommit who wrote (33605)	2/21/2009 9:29:04 PM
From: E_K_S	Respond to of 78748

Hi Grommit - Have you calculated the total dividend payout for the different series preferreds and that of the common for several of the REITs you follow? It would be interesting to see how much total money is saved by the REIT on a dividend cut relative to the series preferred payouts. I was having a hard time finding the total dividend payout on the different series of preferreds so I could make this calculation. If the total dividend payout on the common is large compared to the preferred payouts, this is just another margin of safety for owning the preferreds. HRP cut their dividend by 50% last month which saved them a lot of cash. They plan to use the proceeds to pay down debt and buy back common stock. I expect the REIT rent rolls to be less in 2009 and perhaps even in 2010. REITs will slash their dividends and may even pay their preferred dividends in stock rather than cash. Could HRP be setting their plate now by buying back common stock only to pay their preferred series dividend in common stock shares next year? My hedging strategy when this occurs is to short the common shares while owning the safer high yielding preferred shares. I would want to own only those REIT preferreds with a small total dividend payout when compared to the total common share dividend payout and the total REIT net revenues. Without going through each SEC filing, it's hard to determine the relative dividend payout for each of the series of preferreds. The smaller the better. BDN's preferred dividend payout looks quite small when compared to their common dividend payout and to their total net revenues. EKS

To: Grommit who wrote (33605)	3/18/2009 4:09:19 PM
From: E_K_S	Read Replies (2) \| Respond to of 78748

Brandywine Realty Trust (BDN) declared a quarterly cash dividend of $0.10 per common share today which is 30% below from their last year's quarterly payout. The preferred series continue to be paid at their stated rates. ( biz.yahoo.com ) The common shares traded at a 15 year low inter-day at $2.95/share (previous low in Dec 1992 was $1.50/share) and recovered back into it's previous trading range of $3.40/share - $3.60/share. After it's low in 1992, BDN traded to a recovery high of $25.00/share in December 1997 (5 years got a 16 bagger). Is a similar recovery possible in this cycle or will BDN default on some of their LT debt? Low 10 year yields pave the way for much better credit terms for REIT's. If they are borrowing at a premium to 10 year yields, the cost of capital just went down 25% today with rates dropping from 3% to 2.5% I doubled up on my BDNpC shares. Still underwater on my small amount of common shares. ================================================================ Sold out of 1/2 of my Enbridge Energy Management LLC (EEQ). I Hope to reenter the position if EEQ tests resent lows again around $23.00/share.