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Microcap & Penny Stocks : TNRG Tianrong Building Materials -- Ignore unavailable to you. Want to Upgrade?

To: ISOMAN who wrote (2701)	6/29/1998 12:40:00 AM
From: Sigmund	Read Replies (1) \| Respond to of 9824

No I haven't questioned why the owners would sell. Why not sell? If they thought it was a good deal or could better use the money elsewhere or for many other reasons. <<<< Typically mall retain revenues are in the neighborhood of 10-15% of gross revenue. <<<< I just don't think that this is correct. I am no expert on this so I might be very wrong but I thought that the cap rate for real estate in general was running about 8% meaning properties were priced to yield approximately 8%. This means the new owner has to wait a while to make any money. If the cap rate is 10% - 15% as you suggest, TNRG overpaid for this property. Hopefully they will be able to improve the operations but an outsider might overestimate the potential for doing so....or perhaps will be able to do some things that the locals couldn't. Time will tell.