Author Topic: Smart, Fiduciary-Minded Real Estate Operators  (Read 3253 times)


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Re: Smart, Fiduciary-Minded Real Estate Operators
« Reply #10 on: June 18, 2019, 08:10:16 PM »
No offense taken.  It's the one seeing value that has to explain and has the burden of proof!   ;)

But since you asked... The short answer is profits.  Way too low for the phase of development they are in and for the price the stock commands.  They've pushed a lot of units already, and I just don't see a level of profits (or return on cap or equity) that justifies the almost $7.5 billion price tag (Enterprise Value).  Even if revenue estimates play out nicely and they achieve a double-digit margin, there's not a lot of profit vs. price.  Add to this the additional capital (debt plus printing shares) they'll need to build and monetize and economic uncertainty, and I don't see a margin of safety for buyers today.  Moreover, we have to remember that the times have been about as good as a real estate developer can ask for.  May not be as favorable going forward.

I could be wrong and my lack of faith might be because I find the complexity daunting and I've seen some of their best developments either already behind them (Honolulu) or disappointing (NYC). 

I hope the bulls are right and I'm too stupid to see this clearly. 


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Re: Smart, Fiduciary-Minded Real Estate Operators
« Reply #11 on: June 21, 2019, 10:33:55 AM »
Anyone has an opinion on SLG, the NYC focused office and retail REIT?  They are buying back stock aggressively. Implied cap rate according to their last IR presentation is 7.27%, while NYC real estate of comparable quality goes for 5% it less. I am not bullish on NYC real estate, but this discount is quite large.
« Last Edit: June 21, 2019, 10:36:38 AM by Spekulatius »
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