Author Topic: GRIF - Griffin Industrial Realty  (Read 26491 times)

BG2008

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Re: GRIF - Griffin Industrial Realty
« Reply #130 on: January 24, 2020, 08:08:52 AM »
Gregmal has talked about this quite a bit and he is a much better trader than me in terms of timing entry and exits.  In the last couple months, it is interesting to see the bid/ask of GRIF and overall trading volume.  It does appear that there is a new shareholder base in the stock like myself, Gregmal, ThePupil, and others on this board and potentially new MOI investors who understand the wide gap between GRIF's price and NAV.  I think NAV as of today is $72 and probably $76-$77 by year end.  At $40, there is still 90% upside one year out if the company got bought out.  There is now a solid 1,000 share bid over $40.  This has become a more consistent theme.  Like Gregmal says, the sellers in the $30s have likely been taken out.  The shareholder base has swapped over or is in the process of swapping over to a new shareholder base that understands the intrinsic value.  Most of the new shareholder base likely won't be seller until this trades with a $5 handles.  Sometimes, I see these illiquid stocks gap up due to the sellers in the $30s being taken out and the remaining shareholders have no intention of selling till a $5 or $6 handle.  It is an interesting set up.  If this trades down to the $3s because of market selloff or what have you, it likely won't trade much lower than $37 (famous last words, rights?).  At $37, I figure there are enough informed buyers that will step in buy a 50 cent dollar.  I doubt GRIF ever trades to $28-30 like it did in late 2018.  There is enough dry powder and interest just from guys on this board who would buy it.  At $35, there is 117% 2020 year end upside for an asset class with long term structural tailwind.  I know that value guys are only supposed to care about price to NAV, blah blah blah.  But I think we can all improve by getting a bit better at timing our buys and sells.  If you note the commentaries by Gregmal and ThePupil,  you can see some of their rationale that echoes what I just wrote.  Hopefully, a larger REIT or a PE shop comes along and pays a $7 handle sometime soon.  But the look through compounding isn't that bad either.  As the transformation continues, it will become easier for everyday folk to put a cap rate on this company.   


Gregmal

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Re: GRIF - Griffin Industrial Realty
« Reply #131 on: January 24, 2020, 08:39:10 AM »
I wouldn't say "never see those prices again"....only because, and the beauty, if you are a long term investor in names like this, is the panic selling scenarios in illiquid names and the overreaction, even if just for a few seconds/minutes/days sometimes, where you can grab shares at ridiculous prices and then see quick snap backs and big profits(granted on smallish sums of capital). Griffin's trading reminds me a lot of FRP; a stock notorious for the occasional fat finger order. This is where having liquidity available is important and margining out if need be is not really all that risky.

But generally speaking, yea...all of the above is occurring, and part of investing is pattern recognition and a whole bunch of mumbo jumbo that relates little to fundamentals. When you see this stuff occurring, there should be a tendencies to start leaning a little bit more in anticipating of going where that pattern typically takes one. When you get confirmation, much like when taking a lead in baseball, being able to start running before others react is important. There are no shares left under $40 from the old Griffin story, and the new GRIF shareholders, and future shareholders, will likely continue to eat away at the legacy ones. How quickly, remains to be seen.

BG2008

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Re: GRIF - Griffin Industrial Realty
« Reply #132 on: January 28, 2020, 10:13:13 AM »
This is great news and a great way to structure the loans.  10 years, non-recourse, 3.48% with 25 year amortization.  GRIF does a better job than any other sub $1bn market cap company in "ring fencing" their debt.  The total debt number should be viewed as a max number not a min number.  There is optionality that GRIF's debt could be lower if they simply give keys back to the bank on some low performing assets during a rough patch.

Now reading the tea-leaves.  6975 is likely close to a full lease up despite having 70k sqft that is still vacant.  The lender can go "over the wall" in their underwriting.   On the other hand, it looks like one of the Charlotte buildings is fully leased now as the 147k sqft 160 International Dr building appears to be fully leased on their website.   

I think this is a combination of a lot of tailwind in this sector and a decent management team who knows how to acquire, develop, and lease.  They had no footprint in Charlotte, NC until a couple years ago and now they now have a half a million sqft.  They probably created $5mm of value for the fully leased 160 International Dr.     

NEW YORK, Jan. 28, 2020 (GLOBE NEWSWIRE) -- Griffin Industrial Realty, Inc. (GRIF) (“Griffin”) announced that Riverbend Upper Macungie Properties I LLC and Riverbend Crossings III Holdings LLC (collectively, the “Borrowers”), each wholly owned subsidiaries of Griffin, entered into a promissory note (the “Promissory Note”) providing for a $15.0 million loan (the “Mortgage Loan”), secured by a nonrecourse mortgage given by Riverbend Upper Macungie Properties I LLC on an approximately 134,000 square foot industrial/warehouse building (“6975 Ambassador Drive”) and a nonrecourse mortgage given by Riverbend Crossings III Holdings LLC on an approximately 120,000 square foot industrial/warehouse building (“871 Nestle Way”). Both buildings are in the Lehigh Valley of Pennsylvania. The Promissory Note, issued by the Borrowers to State Farm Life Insurance Company, has a fixed interest rate of 3.48% and ten-year term, with principal payments based on a twenty-five-year amortization schedule. Approximately $3.2 million of the proceeds from the Mortgage Loan (the “Loan Proceeds”) were used to repay a maturing mortgage loan on 871 Nestle Way. The balance of the Loan Proceeds will be used for general corporate purposes, including investment in real estate assets.

BG2008

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Re: GRIF - Griffin Industrial Realty
« Reply #133 on: January 31, 2020, 10:05:15 AM »
GRIF writen up on VIC by Lukai who is pretty good at small cap value

More eyeballs and more recognition of the name. 

Up 2% while market is down 2%, more shareholder rotation? 


« Last Edit: January 31, 2020, 10:07:05 AM by BG2008 »

Gregmal

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Re: GRIF - Griffin Industrial Realty
« Reply #134 on: February 11, 2020, 10:35:36 AM »
BG has been missing, but in his honor, it should be announced.... New 52 week high and a respectable sized bid at $42!

BG2008

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Re: GRIF - Griffin Industrial Realty
« Reply #135 on: February 12, 2020, 09:01:43 AM »
Gregmal,

Thank you for the kind words and thank you for your post a few months back which certainly helped with instilling some sanity in me. 

GRIF is not going to win any awards for "investability" in this new world of indexing, large cap, and partying-in-compound-town.  Like with FRP Holdings, I am starting to see a lot of the skepticism turn into believes.  It's taken much longer.  But, I am seeing sentiments on Seeking Alpha, VIC, and this board change lately.  People are starting to talk about this idea.  What's unbelievable is that the value here is still wide enough to drive a truck through.  As you and Eric have mentioned about LAACZ, GRIF actually does a really good job of using leverage in a prudent way by putting non-recourse leverage on its properties.   I am going to enjoy this small victory for a little bit.  Knock on wood, I hope it is not transient.  For those that bought in mid to late 2019, congrats to you guy.  For me, this one has been a bit of a 5 match wrestle-back on the consolation bracket with a bad weight cut and a banged up body.  I am wrestling for third place.  If it means anything to people, GRIF is something like a quarter to 1/3 of my IRA. 

For those that worry about overall market or warehouse valuation, you can easily hedge out risk by buying some PLD puts.  They are liquid and fairly inexpensive.  10-K should be out in the next couple of days.   

BG2008

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Re: GRIF - Griffin Industrial Realty
« Reply #136 on: February 13, 2020, 04:55:34 PM »
10-K out, haven't had a chance to fully digest everything yet.  GRIF is moving further along the land parcel ==>> warehouse conversion thesis.  Selling Meadowood for $5.4mm for conservation.  Also granted option on a 280 acres to a purchase price between $6mm to $8mm. These could take some time to sell. So this could be an additional $11.4mm to $13.4mm that could be converted into $20-25mm of warehouses with 50% LTV mortgages.  GRIF is now roughly 4.2-4.3mm sqft of warehouses.  Every transactions results in Griffin becoming more "investable" or "acquirable"  Company NOI is at 25.3mm, take out $2mm for the office portion and you have a $23.3mm of NOI for the warehouse.  There is still another $1.1mm of NOI if Lehigh and Charlotte gets leases plus the newly acquired Orlando.  Looks like Warehouse NOI will be roughly $25-25.5mm. 

BG2008

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Re: GRIF - Griffin Industrial Realty
« Reply #137 on: February 17, 2020, 09:28:53 PM »
This is great news and a great way to structure the loans.  10 years, non-recourse, 3.48% with 25 year amortization.  GRIF does a better job than any other sub $1bn market cap company in "ring fencing" their debt.  The total debt number should be viewed as a max number not a min number.  There is optionality that GRIF's debt could be lower if they simply give keys back to the bank on some low performing assets during a rough patch.

Now reading the tea-leaves.  6975 is likely close to a full lease up despite having 70k sqft that is still vacant.  The lender can go "over the wall" in their underwriting.   On the other hand, it looks like one of the Charlotte buildings is fully leased now as the 147k sqft 160 International Dr building appears to be fully leased on their website.   

I think this is a combination of a lot of tailwind in this sector and a decent management team who knows how to acquire, develop, and lease.  They had no footprint in Charlotte, NC until a couple years ago and now they now have a half a million sqft.  They probably created $5mm of value for the fully leased 160 International Dr.     

NEW YORK, Jan. 28, 2020 (GLOBE NEWSWIRE) -- Griffin Industrial Realty, Inc. (GRIF) (“Griffin”) announced that Riverbend Upper Macungie Properties I LLC and Riverbend Crossings III Holdings LLC (collectively, the “Borrowers”), each wholly owned subsidiaries of Griffin, entered into a promissory note (the “Promissory Note”) providing for a $15.0 million loan (the “Mortgage Loan”), secured by a nonrecourse mortgage given by Riverbend Upper Macungie Properties I LLC on an approximately 134,000 square foot industrial/warehouse building (“6975 Ambassador Drive”) and a nonrecourse mortgage given by Riverbend Crossings III Holdings LLC on an approximately 120,000 square foot industrial/warehouse building (“871 Nestle Way”). Both buildings are in the Lehigh Valley of Pennsylvania. The Promissory Note, issued by the Borrowers to State Farm Life Insurance Company, has a fixed interest rate of 3.48% and ten-year term, with principal payments based on a twenty-five-year amortization schedule. Approximately $3.2 million of the proceeds from the Mortgage Loan (the “Loan Proceeds”) were used to repay a maturing mortgage loan on 871 Nestle Way. The balance of the Loan Proceeds will be used for general corporate purposes, including investment in real estate assets.

From the 10-K "In fiscal 2019, Griffin leased approximately 64,000 square feet in 6975 Ambassador. Subsequent to November 30, 2019, the balance of 6975 Ambassador was substantially leased. "  I interpret that as more than 90% leased.  Every once in a while, you get the tea leaves right.