Author Topic: EQC - Equity Commonwealth  (Read 36523 times)

thepupil

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Re: EQC - Equity Commonwealth
« Reply #60 on: March 06, 2020, 12:03:25 PM »
Didn't like it at $4 billion, but like it a little at $3.8 billion.

Why? well as markets go down, I would argue cash in Mr. Zell and team's hands becomes more valuable.

$122mm preferreds + $3,750mm market cap = $3,872mm

what does that get you?

$3,350 of cash pro-forma for completed asset sales
$650-$750mm of remaining buildings
$4,000mm at the midpoint.

trades about 96% of NAV.

note that one should buy in tax advantaged accounts, something like $400mm (just over 10%) or whatever will have to be dividended before year end for REIT rules which will slightly decrease the effective NAV multiple paid, but not materially.

From the last call:
Taxable gains from this disposition will total over $220 million and will require the payment of another special dividend.
Assuming the sale of Tower 333, which is currently under contract, an incremental $190 million of taxable gain will be generated. We will also generate taxable income in the normal course of our business, which will impact the size of this year's distribution. We continue to look for opportunities where our team, liquidity and financial strength, will provide a competitive advantage.

beyond a deal that the market doesn't like, the biggest risk here is obviously opportunity cost.

for all you fellas using this drop to buy 50 cent dollars, I congratulate you. please direct me to them.

Diversify that up with some 95 cent dollars.

« Last Edit: March 06, 2020, 12:08:37 PM by thepupil »


BG2008

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Re: EQC - Equity Commonwealth
« Reply #61 on: March 06, 2020, 12:44:29 PM »
Didn't like it at $4 billion, but like it a little at $3.8 billion.

Why? well as markets go down, I would argue cash in Mr. Zell and team's hands becomes more valuable.

$122mm preferreds + $3,750mm market cap = $3,872mm

what does that get you?

$3,350 of cash pro-forma for completed asset sales
$650-$750mm of remaining buildings
$4,000mm at the midpoint.

trades about 96% of NAV.

note that one should buy in tax advantaged accounts, something like $400mm (just over 10%) or whatever will have to be dividended before year end for REIT rules which will slightly decrease the effective NAV multiple paid, but not materially.

From the last call:
Taxable gains from this disposition will total over $220 million and will require the payment of another special dividend.
Assuming the sale of Tower 333, which is currently under contract, an incremental $190 million of taxable gain will be generated. We will also generate taxable income in the normal course of our business, which will impact the size of this year's distribution. We continue to look for opportunities where our team, liquidity and financial strength, will provide a competitive advantage.

beyond a deal that the market doesn't like, the biggest risk here is obviously opportunity cost.

for all you fellas using this drop to buy 50 cent dollars, I congratulate you. please direct me to them.

Diversify that up with some 95 cent dollars.

That Sam Zell knows a thing or two about market cycles

Just to be contrarian, look at the track record of ROIC.  That is very similar to what Equity Commonwealth is trying to do.  It's not the home run that people hoped for and Stuart Tanz is a pretty darn good operator. 

thepupil

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Re: EQC - Equity Commonwealth
« Reply #62 on: March 06, 2020, 12:54:21 PM »
yea, the bear case is there's so much real estate PE dry powder that EQC really doesn't need to exist / won't be able to consummate a deal.

I think EQC could outmanuever PE by opportunistically buying a real estate stock in a way that most PE firms wouldn't (some would). FCE is a good precedent. EQC was buying FCE stock, but then Brookfield outbid them (I maintain Brookfield modestly underpaid for FCE).

BG2008, I would note that the EQC bear case is your and my entire real estate related portfolios' bull case lol.
« Last Edit: March 06, 2020, 01:02:55 PM by thepupil »

thepupil

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Re: EQC - Equity Commonwealth
« Reply #63 on: March 11, 2020, 10:23:19 AM »
share repo announced. we are at about 105% of net cash and 89% of NAV.

this is the one stock I own that I want to keep falling. tis only natural that it will not : )




Equity Commonwealth Announces $150 Million Share Repurchase Authorization

Equity Commonwealth <EQC> announced today that its Board of Trustees authorized the repurchase of an additional $150 million of its outstanding common shares over the next 12 months under the company’s existing share repurchase program. The prior $150 million authorization will expire on March 13, 2020.

Any purchases made pursuant to the program will be made from time to time in the open market, privately negotiated transactions or other manners as permitted by federal securities laws. The timing, manner, price and amount of any repurchases will be determined by the company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time.

About Equity Commonwealth

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. As of February 12, 2020, EQC’s portfolio comprised 6 properties and 2.2 million square feet.

Regulation FD Disclosures

We use any of the following to comply with our disclosure obligations under Regulation FD: press releases, SEC filings, public conference calls, or our website. We routinely post important information on our website at www.eqcre.com
, including information that may be deemed to be material. We encourage investors and others interested in the company to monitor these distribution channels for material disclosures.

Forward-Looking Statements

Some of the statements contained in this press release constitute forward-looking statements within the meaning of the federal securities laws, including, but not limited to, any statements regarding future share repurchases. Any forward-looking statements contained in this press release are intended to be made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

thepupil

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Re: EQC - Equity Commonwealth
« Reply #64 on: March 11, 2020, 10:35:14 AM »
sold some december $30 puts at $2.70, $2.10 of extrinsic value. happy to bear the downside of a cash pile plus some unlevered buildings for 7% over 9 months, used the proceeds to partially fund some puts on stocks with more risk.
« Last Edit: March 11, 2020, 10:38:21 AM by thepupil »

CorpRaider

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Re: EQC - Equity Commonwealth
« Reply #65 on: March 11, 2020, 11:38:02 AM »
Nice.  Sell it people!

thepupil

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Re: EQC - Equity Commonwealth
« Reply #66 on: March 18, 2020, 11:54:48 AM »
bought back those puts the other day for a loss, sold the puts I bought with the proceeds for a substantial gain...

now EQC is down today to $3.4 billion, roughly 85% of NAV/100% of net cash.

 the option value of that cash is increasing as the REIT index has fallen by 40%, but at the same time the opportunity cost of owning EQC is also increasing.



CorpRaider

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Re: EQC - Equity Commonwealth
« Reply #67 on: March 18, 2020, 12:41:34 PM »
Yeah at this rate in a few weeks he can take over SLG, VNO, and ESRT.   :o

thepupil

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Re: EQC - Equity Commonwealth
« Reply #68 on: March 19, 2020, 10:57:44 AM »
this is a gloriously volatile trading vehicle for something that should have a beta of 0.1 or even negative beta since distress helps the chance of a good deal...up 7% today; it is just a pile of cash.. have been in and out of EQC 2 times in the past month.

Also doing some quasi small time fully funded market making in less liquid bonds and prefs but this is a pile of cash so it’s a sleep well at night trading vehicle (unless they did some crazy deal that people hated)
« Last Edit: March 19, 2020, 11:37:04 AM by thepupil »

thepupil

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Re: EQC - Equity Commonwealth
« Reply #69 on: March 26, 2020, 07:02:57 AM »
sold again in IRA for 10-12% on lots purchased 4-5 trading days ago.

i invite small time competition in taking advantage of this very low risk of permanent impairment trading vehicle here.