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

To: Madharry who wrote (76434)	10/27/2024 8:00:01 AM
From: Harshu Vyas	Read Replies (1) \| Respond to of 78752

I recently watched Paul Tudor Jones's CNBC interview. He's betting on inflation. I know people say politics doesn't affect markets but that's a very untrue remark - take Thatcher and Reagan's policies of general deregulation and favourable business policy which definitely affected stock market returns. And what about housing policy that allowed Wall St to behave stupidly in the run up to the GFC? I think govt really does massively affect market returns (infra + chips today is a very recent example) but I cannot predict which out of DJT/Harris is better for your portfolio. Market's indicating a Trump win - lower taxes, tariffs are the headlines, but can it actually be implemented? I know we shouldn't talk about politics on this thread, but I feel this election probably will affect portfolios. Without getting into ethical/morality issues, I think maybe it can/should be discussed. As a Brit, I certainly won't even comment on which candidate I prefer from a personal standpoint. As for BTC, I understand why people like it and some of the arguments for it are quite sound. However, I just have no way of gauging what a reasonable value is/isn't.

To: Madharry who wrote (76434)	10/27/2024 11:37:18 AM
From: E_K_S	1 Recommendation Recommended By Lance Bredvold Read Replies (1) \| Respond to of 78752

Re: W.P. Carey & Company Llc (WPC) I am not too worried about leases that may come up for renewal as 99% of their Annual Base Rent (ABR) is linked to price escalations and 53% are tied to CPR increases. There may/could be some outliers but I suspect those would be small. -------------------------------------------------------------- W. P. Carey & Company LLC (WPC) specializes in triple net leases, where tenants are responsible for most property-level expenses, including taxes, insurance, and maintenance. This structure allows WPC to maintain stable cash flows and minimize operational risks associated with property management 1 4 .Lease Terms and Renewals Average Lease Terms: The average lease term for WPC's properties is approximately 12 years, with many leases originating around 20 years. As of recent reports, the weighted average remaining lease term is about 10.9 to 12.2 years depending on the specific portfolio segment analyzed 1 3 .Lease Renewals: Typically, a small percentage of leases come up for renewal each year. For instance, around 16% of annual base rent (ABR) is subject to lease expirations annually 2 3 . This indicates that WPC has a relatively stable portfolio with a manageable turnover rate. Rent Increases and Impact on FFO For those leases that do come up for renewal, WPC has structured its contracts to include contractual rent increases, with over 99% of ABR linked to such escalations. Notably, about 53% of these increases are tied to the Consumer Price Index (CPI), which helps maintain rental income in line with inflation 2 3 .The average increase in rent during renewals has been reported at around 3%, which contributes positively to WPC's Funds From Operations (FFO). The consistent rent escalations not only enhance revenue but also support the company's ability to sustain and potentially grow its dividends over time 1 2 .In summary, WPC's strategy of utilizing triple net leases with long terms and built-in rent escalations positions it favorably within the real estate investment trust (REIT) sector, allowing for stable cash flows and growth potential amidst varying market conditions. ------------------------------------------------- I actually find it comforting that leases are long term and have built in escalation rates. So if the Fed and/or economy and/or election creates uncertainty; leases and more importantly FFO s/d remain stable to growing allowing consistent dividends. Since spinning off its office property division, W. P. Carey & Company LLC (WPC) has targeted a payout ratio of 70% to 75% of its adjusted funds from operations (AFFO) for 2024. This adjustment follows a nearly 20% reduction in its dividend, which was necessary to align with the decreased cash flow resulting from the divestiture of office assets that previously contributed approximately 16% of the company’s rental income 1 2 4 . The current dividend yield is 6.09% ($3.50/$57.40) using the most current annualized div amount (adjusted to reflect the Office Property Division spin off) and Friday's closing price.