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General Category => Investment Ideas => Topic started by: Deepdive on March 05, 2018, 11:32:12 PM

Title: LAACZ - LA Athletic Co
Post by: Deepdive on March 05, 2018, 11:32:12 PM
I believe this name appeared in an Oddball newsletter, but I've also seen it mentioned a few times on this site. Many of the REIT names have been hurt recently, probably due to rises in interest rates. The 50% LTV will lead to lower funds from operation while investors will demand a higher yield on their investments.

More on the company:
LAACZ owns a portfolio of self-storage in various cities - namely LA, San Diego, Houston, Las Vegas, and Phoenix. The cap rate for LA and San Diego is sub-5% in the private market and in short, you get to buy the portfolio at a 7-8% cap rate (backing out an estimated $3mm of SGA for 20 employees at HQ). The company also owns a parking garage, surface lot, and the Downtown Athletic Club which has roughly 100 hotel rooms, gyms, restaurants, etc. in an up-and-coming neighborhood (downtown LA). At $350 a sqft for the building, the building and parking lots are worth $80-125mm, while only generating about $2mm of pre-tax cash flow. The parking lot will probably be developed into a luxury condo when the management sees fit in the future.

There's only $52mm of debt on an asset base that is likely in the $600-700mm range. LAACZ pays roughly a 3.3% distribution with a 50% payout policy. The other 50% is re-invested in self-storage where they are building new facilities at an 8-9% cap rate. Because the LA and San Diego facilities are older, they tend to be one-story drive-ups while newer facilities are dense, 3-4 stories. The company has also been investing to add density to existing footprints in LA and is looking to continue doing so as the returns are quite good. The company has new facilities in the process of leasing up in Houston and Phoenix that should lead to increased cash flow in the next few years. The LA and San Diego portfolio should have pricing power and increase rent in the long run.

Management is good and possibly too conservative. Large insider ownership aligned with shareholder interests, but don't expect a buyout anytime soon. Ben Stein calls the company his second best investment after Berkshire Hathaway. This is an MLP, so you will receive a K-1. Be mindful. The controlling family owns 70%, so buybacks are tough, but they do manage to buy back small amounts every year. I take my dividends and buy whenever shares trade low.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 08, 2018, 10:14:49 AM
This is probably one of the more undervalued and safer companies out there.  It is rare to find a low leverage cashflowing real estate company trading in the $2,200 per share range with intrinsic value in the high $3,000 to low $4,000.  Intrinsic value also grows about $160-200 a year.  It's cheap on almost every metric including cap rate, P/FFO, and especially $/SQFT which is around $80 or so (backing out the club assets).  Comps for Southern California trade for 3x that and comps for Houston/Phoenix/Vegas trade for 2x that.  Management is pretty good as well (in terms of not doing dumb things).   

Title: Re: LAACZ - LA Athletic Co
Post by: bskptkl on March 08, 2018, 12:18:57 PM
VIC has a write-up done in 2015 - so available to public.
https://www.valueinvestorsclub.com/idea/LAACO_LTD/136913 (https://www.valueinvestorsclub.com/idea/LAACO_LTD/136913)
Title: Re: LAACZ - LA Athletic Co
Post by: DTEJD1997 on March 08, 2018, 02:23:21 PM
Hey all:

No doubt this company is probably worth more than what it trades for.

No doubt the company has very conservative managers.

It very could be an interesting play going forward.

The one caution I would add is that the "silly" high valuations on coastal properties may not last.  There is some amount of risk here that I think is being overlooked by the market.

What happens if an earthquake hits CA?  What happens if the ranks of homeless swell up even further than where they are at now?  What happens if CA's budget/pension falls to pieces?  A political crisis? 

I would just discount their CA properties a bit more than others is all I'm saying...
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 08, 2018, 06:07:21 PM
Hey all:

No doubt this company is probably worth more than what it trades for.

No doubt the company has very conservative managers.

It very could be an interesting play going forward.

The one caution I would add is that the "silly" high valuations on coastal properties may not last.  There is some amount of risk here that I think is being overlooked by the market.

What happens if an earthquake hits CA?  What happens if the ranks of homeless swell up even further than where they are at now?  What happens if CA's budget/pension falls to pieces?  A political crisis? 

I would just discount their CA properties a bit more than others is all I'm saying... 

Earthquake will probably temporarily be very good for the company as it creates more demand for the storage units as people get displaced.  In the long run, peoples views on Southern CA sours and it will impact value.  I think there is a degree of undervaluation where you say "yes, the market maybe silly, but I'm paying $80 a sqft for the portfolio and the market is low to mid $200 for the SoCal and mid $100 for the Phonenix, Houston, and Vegas.  At a certain point, it becomes a bit of a non-factor.  If your thesis is that NYC and CA will migrate to the warmer climates with lower taxes, I think the Phoenix, Houston, and Vegas are those cities that will become net beneficiaries of that migration.  There is an inherent hedge built into the portfolio.  Never thought of it that way until you bought up the question.  I wonder if management meant to do that.  It appears that Houston, Phoenix, and Vegas are the cities where development opportunities still exist and that's why LAACZ has allocated capital there.  It's very hard to build in SoCal with the NIMBYism there.  Which makes it a good portfolio.       

We're not saying that their CA properties should go for 2% cap rate.  Private market value is sub 5%.  Their assets sit on large sites and have re-development opportunities.  So, if you're paying a 5% cap rate for them in the private market, you've got optionality on the development side.  Sure, 2% is silly.  5% is too rich for me.  But, I'm paying 9% when I strip out the downtown LA assets.  Plus, they have development assets that should increase cashflow in the next couple years.   
Title: Re: LAACZ - LA Athletic Co
Post by: DTEJD1997 on March 08, 2018, 06:54:50 PM
Hey all:

No doubt this company is probably worth more than what it trades for.

No doubt the company has very conservative managers.

It very could be an interesting play going forward.

The one caution I would add is that the "silly" high valuations on coastal properties may not last.  There is some amount of risk here that I think is being overlooked by the market.

What happens if an earthquake hits CA?  What happens if the ranks of homeless swell up even further than where they are at now?  What happens if CA's budget/pension falls to pieces?  A political crisis? 

I would just discount their CA properties a bit more than others is all I'm saying... 

Earthquake will probably temporarily be very good for the company as it creates more demand for the storage units as people get displaced.  In the long run, peoples views on Southern CA sours and it will impact value.  I think there is a degree of undervaluation where you say "yes, the market maybe silly, but I'm paying $80 a sqft for the portfolio and the market is low to mid $200 for the SoCal and mid $100 for the Phonenix, Houston, and Vegas.  At a certain point, it becomes a bit of a non-factor.  If your thesis is that NYC and CA will migrate to the warmer climates with lower taxes, I think the Phoenix, Houston, and Vegas are those cities that will become net beneficiaries of that migration.  There is an inherent hedge built into the portfolio.  Never thought of it that way until you bought up the question.  I wonder if management meant to do that.  It appears that Houston, Phoenix, and Vegas are the cities where development opportunities still exist and that's why LAACZ has allocated capital there.  It's very hard to build in SoCal with the NIMBYism there.  Which makes it a good portfolio.       

We're not saying that their CA properties should go for 2% cap rate.  Private market value is sub 5%.  Their assets sit on large sites and have re-development opportunities.  So, if you're paying a 5% cap rate for them in the private market, you've got optionality on the development side.  Sure, 2% is silly.  5% is too rich for me.  But, I'm paying 9% when I strip out the downtown LA assets.  Plus, they have development assets that should increase cashflow in the next couple years.   

I think there is a tremendous opportunity to "arbitrage" the coastal properties/businesses with those lower cost areas of USA. 

I know that there is a "on-shoring" business going on the USA.  That is, moving office/production work from high cost areas (NYC, Wash DC, San Francisco) to the low cost mid-west.  i have briefly worked for a company doing this.  It really opened my eyes to some things.
I think there is a tremendous amount of money to be made moving stuff to the lower cost areas of the USA.  How many companies are already doing this I do not know.

Obviously not everything can be moved....but a lot of stuff can.  There is no need for a company to have relatively low & medium level work done in the NYC area.  Move it to Detroit.  Detroit is FULL of skilled people who will work for less than 1/2 of NYC rates.  Keep client interaction & C-suite & the very highest level work in the coastal areas...move everything else to the hinterlands.  Rental rates are a FRACTION of NYC.  Detroit is in same time zone as NYC.  Most of it's denizens can talk American pretty good.  Detroit has interweb access, postal access, phone access.  It is a huge shipment hub (America's most valuable international crossing is in Detroit). There are banks.  Detroit uses the USD$.  Manufacturing is abundant, just waiting to be utilized...semi-paved roads, interstate highways that can reach NYC in one day's drive.  There are airports here too!

I've BOUGHT commercial properties in Michigan for way LESS than what you could rent for in NYC....Heck I BOUGHT property for the equivalent of about 3 months rent in Manhattan.  Could this article be true?

https://therealdeal.com/2016/02/11/average-manhattan-office-asking-rent-exceeds-72-psf-for-the-first-time-report/

It states that the AVERAGE office rent in NYC is $72/foot.   That is about $6/month.  So I got property for less than 3 months rent in NYC.  That is where I am working and typing this reply.

I've worked with skilled graduates of U of M, University of Chicago, Michigan State and other Mid-Western schools that I would put up against almost anybody in terms of skill/experience. 

A similar thing is going to occur in Houston.  I lived/worked in Houston for a decade.  That is a city/state that knows how to get things done.  It is not as inexpensive as Detroit, but it is safer and more civilized. 

If  I were in charge of a company with coastal operations, in-shoring is exactly what I would be doing.

I think that management is ahead of the game at LAACZ if they are taking cash flow from CA and moving it inland, especially to Texas and Houston. 

California & NYC has gotten ahead of itself, I would short it if I could!
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 08, 2018, 07:21:20 PM
https://www.storagewest.com/locations/texas/
https://www.storagewest.com/locations/nevada/
https://www.storagewest.com/locations/arizona/

Here are the footprint to Vegas, Phoenix, and Houston
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 08, 2018, 07:44:26 PM
Hey all:

No doubt this company is probably worth more than what it trades for.

No doubt the company has very conservative managers.

It very could be an interesting play going forward.

The one caution I would add is that the "silly" high valuations on coastal properties may not last.  There is some amount of risk here that I think is being overlooked by the market.

What happens if an earthquake hits CA?  What happens if the ranks of homeless swell up even further than where they are at now?  What happens if CA's budget/pension falls to pieces?  A political crisis? 

I would just discount their CA properties a bit more than others is all I'm saying... 

Earthquake will probably temporarily be very good for the company as it creates more demand for the storage units as people get displaced.  In the long run, peoples views on Southern CA sours and it will impact value.  I think there is a degree of undervaluation where you say "yes, the market maybe silly, but I'm paying $80 a sqft for the portfolio and the market is low to mid $200 for the SoCal and mid $100 for the Phonenix, Houston, and Vegas.  At a certain point, it becomes a bit of a non-factor.  If your thesis is that NYC and CA will migrate to the warmer climates with lower taxes, I think the Phoenix, Houston, and Vegas are those cities that will become net beneficiaries of that migration.  There is an inherent hedge built into the portfolio.  Never thought of it that way until you bought up the question.  I wonder if management meant to do that.  It appears that Houston, Phoenix, and Vegas are the cities where development opportunities still exist and that's why LAACZ has allocated capital there.  It's very hard to build in SoCal with the NIMBYism there.  Which makes it a good portfolio.       

We're not saying that their CA properties should go for 2% cap rate.  Private market value is sub 5%.  Their assets sit on large sites and have re-development opportunities.  So, if you're paying a 5% cap rate for them in the private market, you've got optionality on the development side.  Sure, 2% is silly.  5% is too rich for me.  But, I'm paying 9% when I strip out the downtown LA assets.  Plus, they have development assets that should increase cashflow in the next couple years.   

I think there is a tremendous opportunity to "arbitrage" the coastal properties/businesses with those lower cost areas of USA. 

I know that there is a "on-shoring" business going on the USA.  That is, moving office/production work from high cost areas (NYC, Wash DC, San Francisco) to the low cost mid-west.  i have briefly worked for a company doing this.  It really opened my eyes to some things.
I think there is a tremendous amount of money to be made moving stuff to the lower cost areas of the USA.  How many companies are already doing this I do not know.

Obviously not everything can be moved....but a lot of stuff can.  There is no need for a company to have relatively low & medium level work done in the NYC area.  Move it to Detroit.  Detroit is FULL of skilled people who will work for less than 1/2 of NYC rates.  Keep client interaction & C-suite & the very highest level work in the coastal areas...move everything else to the hinterlands.  Rental rates are a FRACTION of NYC.  Detroit is in same time zone as NYC.  Most of it's denizens can talk American pretty good.  Detroit has interweb access, postal access, phone access.  It is a huge shipment hub (America's most valuable international crossing is in Detroit). There are banks.  Detroit uses the USD$.  Manufacturing is abundant, just waiting to be utilized...semi-paved roads, interstate highways that can reach NYC in one day's drive.  There are airports here too!

I've BOUGHT commercial properties in Michigan for way LESS than what you could rent for in NYC....Heck I BOUGHT property for the equivalent of about 3 months rent in Manhattan.  Could this article be true?

https://therealdeal.com/2016/02/11/average-manhattan-office-asking-rent-exceeds-72-psf-for-the-first-time-report/

It states that the AVERAGE office rent in NYC is $72/foot.   That is about $6/month.  So I got property for less than 3 months rent in NYC.  That is where I am working and typing this reply.

I've worked with skilled graduates of U of M, University of Chicago, Michigan State and other Mid-Western schools that I would put up against almost anybody in terms of skill/experience. 

A similar thing is going to occur in Houston.  I lived/worked in Houston for a decade.  That is a city/state that knows how to get things done.  It is not as inexpensive as Detroit, but it is safer and more civilized. 

If  I were in charge of a company with coastal operations, in-shoring is exactly what I would be doing.

I think that management is ahead of the game at LAACZ if they are taking cash flow from CA and moving it inland, especially to Texas and Houston. 

California & NYC has gotten ahead of itself, I would short it if I could!

I think Manhattan, NYC has gotten ahead of itself.  The property value is so high that all the landlord just want to sign a Chipotle as their retail tenant.  Over time, restaurant owners and bar operators move to cheaper locations.  This is why Brooklyn is now so hip and even more expensive than Manhattan (certain locations near the water and closer to Manhattan). 

I was out in LA for the Daily Journal conference.  LA certainly has some of the best weather and scenery.  There is some stickiness to that.  The traffic is atrocious.  A bunch of guys way smarter than me had a conversation.  We talked about different places getting expensive and how geographic constraints such as ocean, mountain, etc wind up creating natural barriers to entry for new supply for real estate.  Regarding shorting NYC, LA, or SF, or Seattle, one cannot overlook at the fact of clustering of talent, attractive mates, job opportunities, career advancement etc.   

If you are a 23 year old recent college grad from a respectable school, where do you go?  Most elect to go to these cities that I mentioned because they believe it offers the best career advancement.  What's often not talked about is the mating opportunities.  I once overheard a recent college grad basically boil it down to the following "if I take a job at Cincinatti, I'll never get laid!"  Although, politically incorrect, I think it conveys a tremendous amount of wisdom.  Young talented college graduates want to flock to NYC, LA, SF, or Seattle because their potential mates are flocking there.  So, I will not dismiss this powerful dynamic so readily.  While, I am not a buyer of NYC, LA, and SF real estate assets at current market value, I wouldn't short it either. 

I don't know how old you are, but my friends and I have been complaining about New York being expensive for the last 15 years and why we should rent.  We've missed out on a heck of an investment.  Aetna has been in Hartford CT for 164 years, yet they recently announced that they are moving to New York City.  They simply can't attract and retain talent in Hartford.  Maybe Detroit is different and have much more to offer than bumblefuck Hartford CT.  But we're actually witnessing the opposite of what you're describing in real time.  In Sam Zell's book, he talked about the delayed marriage.  That's a permanent structural change.  That means more millenials will wait till their 30s to get married.  That's why Sam Zell sold all his Garden style apartment buildings and re-allocated to cosmopolitan urban locations. 

I think the finance, Tech Advertising Media Information (TAMI) folks still look to these coastal cities.  Where Amazon picks its HQ2 will tell us a lot about the future of corporate HQ locations.  Sure, it makes sense to stuff some of the call centers or lower paid jobs in Detroit.  But can you really convince the math wiz from MIT, Harvard, or even the scrappy Cornell kids to move to Detroit for their first job?  LA, NYC, and SF, certainly sounds a lot more exciting, both from a job and getting laid perspective.   

The Delta between Detroit, Houston, NYC, Jacksonville, FL, Reno, etc have always been there.  It's there for a good reason in my opinion.  Going back to LAACO, you're buying at a 9% cap rate (backing out the DTLA assets), not a 5% cap at today's price.  I think that's called the Margin of Safety. 

DTEJD1997 - In the spirit of being true value investors, would you host me if I come out to Detroit for a visit.  Maybe you can even show me a couple properties in the market?  I would love to learn more about the "on-shoring" that's going on. 



Title: Re: LAACZ - LA Athletic Co
Post by: Foreign Tuffett on March 09, 2018, 06:23:08 AM
To play devil's advocate here: I don't understand why almost everyone glosses over the GP-LP structure here. Generally speaking I detest investing in GP "yieldco" structures as they usually result in management teams with incentives that conflict with outside shareholders' best interests.
Title: Re: LAACZ - LA Athletic Co
Post by: txvalue on March 09, 2018, 08:30:03 AM
I bought a small position in this years ago, I found it along with Ash Grove and some others in an old Walkers manual.  Management is not spectacular but they are solid and conservative as others have mentioned. They have been slowly growing the self storage side through tax free exchanges of various real estate pieces they owned as well as a bit of debt and the cash they have coming in.  If they were to stop developing new properties and acquiring new land this would spit off quite a bit of cash.

On the OTC markets web site they disclose financial info, quarterly letters and annual reports. 

An intersting site for self storage news is insideselfstorage.com

News for LAACO is mixed between LAACO and Storage West but searching around can give you some history on comps and what they have been up to.  The site is not the easiest to navigate but I found it helpful to give a sense of their scale vs public and private competitors. For example on the 2017 operator list they are the 23rd largest self storage company in the US (net rentable sq ft).

Lots of interesting scuttlebutt out there on blogs, write ups and message boards.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 09, 2018, 09:11:13 AM
To play devil's advocate here: I don't understand why almost everyone glosses over the GP-LP structure here. Generally speaking I detest investing in GP "yieldco" structures as they usually result in management teams with incentives that conflict with outside shareholders' best interests.

http://www.nytimes.com/2005/06/19/business/yourmoney/these-stocks-are-short-on-glamour-long-on-returns.html
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 09, 2018, 09:14:59 AM
To play devil's advocate here: I don't understand why almost everyone glosses over the GP-LP structure here. Generally speaking I detest investing in GP "yieldco" structures as they usually result in management teams with incentives that conflict with outside shareholders' best interests.

http://www.nytimes.com/2005/06/19/business/yourmoney/these-stocks-are-short-on-glamour-long-on-returns.html

I also think that the LP structure was a remnant of a time ago where more real estate companies were LP structures.  The GP have very little take here in this situation unlike a Kinder which at the high splits takes 50% of the incremental cashflow above a certain threshold.  Yes, you will get a K-1 form for investing in LAACZ.  People should be mindful of that. 
Title: Re: LAACZ - LA Athletic Co
Post by: Foreign Tuffett on March 09, 2018, 01:03:50 PM
Hi, just going to chime in here. Our company has 155 shares in LAACO. I believe we are treated very fairly by GP. Fees are something like a half percent. Hathaway family has a history of treating shareholders quite fairly.

I wouldn't get so hung up on the GP/LP structure regarding having minority shareholders being screwed at shareholders expense.

Only 155 shares? If you bump your position up to 200 shares then I'll buy some too. Otherwise I'm on the sidelines.*


* In case it's not obvious, this is a tongue-in-cheek comment

Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 11, 2018, 06:11:30 PM
I bought my position in 2012 for about $1000/share after doing a fair amount of research. I have little concern that the Hathaway will treat minority’s owners unfairly. THey have proven to be fair to shareholder, predating the LP incorporation for decades now. I think these guys are pretty good sellers and buyers of real estate shown over a long period of time and at least decent operators.

I did notice thwt this year the expenses have outrun revenues and recent results were somewhat subpar.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 12, 2018, 07:14:54 AM
A few of us have mentioned that management team is honest and shareholder friendly despite the LP/GP structure.  I highly encourage people to read the Ben Stein New York Times articled titled These Stocks Are Short on Glamour and Long on Returns.  For someone like Ben Stein to claim that Laaco is their second best investment next to Berkshire Hathaway has to mean something.  That's a pretty bold statement.  It's not enough to buy a stock based on what he said, but it's enough to dig deeper.   

Many years ago (2-3 decades, but with the same family in control), the company paid a special dividend that was 1.5-2x of its share price.  I don't know too many companies that does that.  I think they did that because the family owns 70% of the shares outstanding, so they are the shareholders who benefits the most.  Per my conversation with management, many of the current 70% family shareholder depends on the distribution for their living expenses and taxes etc.  Hence, the distribution and the allocation of additional growth cap ex is a lot more long term and sustainable rather than the typical "weighted cost of capital is x and buy assets at x + 100 bp cap rate" strategy.  Then you add in the fact that you're buying these self storage assets at 9% cap rate and 1/2 of $/sqft of private comps, it becomes really interesting.   

http://www.nytimes.com/2005/06/19/business/yourmoney/these-stocks-are-short-on-glamour-long-on-returns.html

My 2 cents
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on March 19, 2018, 05:05:50 PM
I'm concerned about any valuation of this company that tries to estimate the market value of the club property: as far as I can tell you should consider that property not-for-sale-under-any-circumstances. I'd bet the surviving Hathaways would much rather retain the family legacy/identity associated with being the custodians of this Grand Institution than discard it all just so that they can go all-in on being vulgar storage facilitators and bump their partnership's ROE up another percent or so.

That said, has anybody here actually been to the club? I'm sort of flabbergasted how cheap it is. Monthly dues were $84 in 1985 and are barely twice that now. There's a conspicuous lack of pictures of the actual exercise facilities on their website, so maybe I'm not correctly weighing the "athletic" part against the "club" part in my head. I realize this business isn't -really- about the club or its operations (by my own argument), but I'm just curious what the deal is with it, exactly.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 19, 2018, 05:38:53 PM
I'm concerned about any valuation of this company that tries to estimate the market value of the club property: as far as I can tell you should consider that property not-for-sale-under-any-circumstances. I'd bet the surviving Hathaways would much rather retain the family legacy/identity associated with being the custodians of this Grand Institution than discard it all just so that they can go all-in on being vulgar storage facilitators and bump their partnership's ROE up another percent or so.

That said, has anybody here actually been to the club? I'm sort of flabbergasted how cheap it is. Monthly dues were $84 in 1985 and are barely twice that now. There's a conspicuous lack of pictures of the actual exercise facilities on their website, so maybe I'm not correctly weighing the "athletic" part against the "club" part in my head. I realize this business isn't -really- about the club or its operations (by my own argument), but I'm just curious what the deal is with it, exactly.

Johnny,

Fair statement.  The club is not for sale.  They've given me a tour.  Some others have seen it.  The club is nice in a Gordon Gekko kind of way.  It's got nice restaurants and amazing facilities.  They recent put a good chunk of cap ex into the club redoing the locker rooms etc.  Two ways that the market pays proper value for the club assets.

1) They eventually develop the surface parking lot on the same block as the club into a luxury high rise condo building. 
2) Enough millennial move to DTLA that they actually start using the club amenities.  It's very under utilized right now.  Frankly, if I were trying to start a tech business in DTLA, I would probably just get a membership there.  You can do work, eat, and get awesome workouts in.  Which is perfect for a tech incubator, small money manager, etc.   So, the upside comes from EBITDA going from less than $2mm from the club to some number that is $5-10mm.  You can pretend that there is no value attached to the brick and mortar of that 184k sqft or you can use the $/sqft of what people pay for a rat infested building within a one block radius and get to a $65mm figure just for the club building alone.  Just because a tree stands in a forest and there's no one to see it doesn't mean it isn't there.   

Regarding your comments about the vulgar storage facilitators, I think these guys understand very well that the vulgar storage facilities is what's paying for their living expenses and taxes.   

Kind of not surprised about prices being about 2x today vs 1985.  If you follow the trajectory of downtown LA, it's only in the last 5-10 years that there's been some revival of downtown.   


Title: Re: LAACZ - LA Athletic Co
Post by: oddballstocks on March 19, 2018, 05:50:25 PM
There is a *club* here in Pittsburgh that I sort of view along the same lines.  It's the Duquesne club, and there's a tiny hotel, a gym, a restaurant, bar etc.  But the value is in belonging.  If you're selected you're "in".  And it's hard to get that invite.

The Duquesne club is beautiful, a very old money feel.  Dark wood rooms, fountains, marble etc.  If you look them up online there are barely any pictures as well.  I don't think that's a coincidence.  Places like this are the type where they aren't necessarily interested in attracting the public.

Case in point.  A few years ago I was in a business transaction with some people in Chicago.  Turns out one of these guys was in a tight knit gym there as well.  He regularly played basketball with Obama before he was President, and I suspect they're back at it again.  From my understanding it was the type of gym where you shoot hoops, then sit in the sauna and ink deals.  You don't walk up in January and apply for a membership..

From the looks of the website LA Athletic Club is a similar club. 
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on March 20, 2018, 04:53:26 PM
Fair statement.  The club is not for sale.  They've given me a tour.  Some others have seen it.  The club is nice in a Gordon Gekko kind of way.  It's got nice restaurants and amazing facilities.  They recent put a good chunk of cap ex into the club redoing the locker rooms etc.  Two ways that the market pays proper value for the club assets.

So would you say the fitness component is on par with, say, Equinox? At this point I'm asking because now I'm interested in becoming a member. Club membership might be the most unambiguously undervalued component to my unsophisticated brain. Did you get a tour as a prospective member, or as an investor?


So, the upside comes from EBITDA going from less than $2mm from the club to some number that is $5-10mm.  You can pretend that there is no value attached to the brick and mortar of that 184k sqft or you can use the $/sqft of what people pay for a rat infested building within a one block radius and get to a $65mm figure just for the club building alone.

I think that's a very reasonable case: looking at what the EBITDA of the club could be and valuing from there. But frankly I just can't shake the feeling that even if the club enjoys some sort of renaissance, the entire offering is basically an anachronism that will never really pencil out to a plausible "best use" of the property, so any market investment case; I am almost tempted to say that the economic loss of that property being indefinitely underutilized is outweighed by the positive expectations it should give you about the conservatism of management in other areas. But still, that property doesn't look like it's going anywhere, and that makes the value of the building to somebody with designs on turning it into a 200-unit loft conversion is just an intellectual conversation.[/quote]

Regarding your comments about the vulgar storage facilitators, I think these guys understand very well that the vulgar storage facilities is what's paying for their living expenses and taxes.

No doubt. I used strong language not to take a stab at the family (or business), but only to try and evoke what seems to me to sometimes be a very under-appreciated reality in our spectrumy/spreadsheety circles. Owning 300 self storage facilities and a 120 year old social club in downtown LA will get you a lot more Tinder interest than owning 350 self storage facilities, and the marginal utility of money diminishes much faster than the marginal utility of SuperLikes in my unjustly limited experience with either.

Quote
Kind of not surprised about prices being about 2x today vs 1985.  If you follow the trajectory of downtown LA, it's only in the last 5-10 years that there's been some revival of downtown.

Even so, it's basically on par, or maybe even slightly cheaper than a single-club membership to the Equinox just 3ish blocks away. Definitely can see those dues outpacing inflation substantially, assuming the club is anything like I'm imagining.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 20, 2018, 06:15:46 PM
I got a tour as an investor.  I don't think the club is that exclusive and you can probably just walk in and ask for tour to become a member.  Their equipment is older.  But they feature a pool, a running track, sauna, steam rooms, basketball courts etc.  My assessment is also clouded by NYC lens.  I will gladly pay $300-500/month for amenities like that in Manhattan.  The WeWork rent in NYC is $2,000 for 100 sqft of fishbowl office.  They also have hotel rooms that you can book.  They mentioned that Equinox took a lot of their business.  I think Equinox is posh and cool.  This is an old school athletic club that I would personally love to be a member of.  New York has a NYAC which cost over $10k to join and the monthly is quite expensive. It's all about the cost of the land.  DTLA is ironically somewhere between rat infested buildings and the hip and cool Nomad hotel across the street.  If you pay attention to any sorts of gentrification in the last 20 years, there is always a weird period when a neighborhood has warehouses and WholeFoods on the same block.  But directionally, it seems like the forces of gentrification is inevitable sometimes.

Johnny, I'll be willing to subsidize 50% of your first three months of membership if you want to try it out.  I would love to get some real on the ground feedback on the competitiveness of the club vs other options in the neighborhood.   

If the club generates $10mm of EBITDA, it trades at some absurd 10-11x FFO.  Anachronism or not, it's becomes smack you in the face cheap.  I would also expect dividend yield to approach 5% with a 50% payout ratio in that scenario.   I think the surface parking will be built to highest and best use.  In a previous annual meeting, they have mentioned that it will likely be a luxury building when the time is right (DTLA gentrified).  So, club operation is a EBITDA play.  Do more members join?  Do they increase their EBITDA.  Surface parking lot is a DTLA luxury condo development play. 

The management team is older.  I doubt they are on Tinder.  But nice imagery.  I got a laugh out of it.  But true and more applicable for 30-40 year old.  I get your point.  I think they're holding onto their club business because of the legacy.
 
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 20, 2018, 06:17:33 PM
This is a pretty good representation of the club. Renovations are pretty new.  The difference of when I was there is that there were people in the spaces rather than it being empty. 
https://www.discoverlosangeles.com/blog/los-angeles-athletic-club-hotel-champions?utm_source=Facebook&utm_medium=post&utm_campaign=SocialMedia

Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 21, 2018, 04:22:43 AM
This is a pretty good representation of the club. Renovations are pretty new.  The difference of when I was there is that there were people in the spaces rather than it being empty. 
https://www.discoverlosangeles.com/blog/los-angeles-athletic-club-hotel-champions?utm_source=Facebook&utm_medium=post&utm_campaign=SocialMedia

That‘s a pretty awesome club. I would rather be member of this club in the 1920 Art Deco style with a storied history, rather than a new and maybe more practical but generic Equinox club.

I think they will keeping because it is their legacy. If they develop the building, it will probably become a new place somewhere. Anything wrong with this either, because I think these sort of things have a real and enduring brand value.
Title: Re: LAACZ - LA Athletic Co
Post by: Deepdive on March 25, 2018, 07:25:45 PM
Posted this a while back - here's a presentation on the company from Rhizome Partners, I think it's definitely worth a look.
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 25, 2018, 07:56:19 PM
It’s listed confidential, so hopefully Bill is Ok with posting it here.

One should note that recent results have been poor due to cost increasing faster than revenues. Their annual report will be published on 4/1 (probably coming in by mail a few days earlier) and they hopefully will shed some light into this trend.

I have a seizable stake (for me) since 2012 and I agree, this is a great LT investment.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on April 09, 2018, 05:07:51 PM
2017 Annual Reports Out

Consolidated revenues grew by 5% to $81 million, driven by increased self-storage revenue in all regions.

Storage West grew from 52 to 56 self-storage facilities in 2017, as four newly constructed stores came on line – three in the Houston market and one in Phoenix. Significant startup costs are
 associated with newly opened self-storage facilities, including staffing, marketing and depreciation, while revenues are low during the beginning of the lease-up period. As occupancy increases, rents reach and then pass the break-even level, revenues offset expenses, and the property begins to generate profits.

The Houston market is extremely competitive, and we are still growing into our capacity there. But in September 2017, nearly 1,000 new customers – many of whom were dealing with the effects of the hurricane – chose Storage West Houston. The average occupancy of our five newest Houston stores nearly doubled from 26% to 49% in the space of just a few weeks.  By year end, all of the new stores reached break- even occupancy, a level far greater than we would normally expect so early in the lifecycle of new properties.

Bought back 777 shares or 1.5% of the float

Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on April 10, 2018, 12:16:22 PM
Does anybody here have a relationship with management or have spoken to them? Something that I wonder about is whether LAACO makes sense being part of a larger self-storage management company. LAACO is clearly run for the benefit of unitholders but my concern is that there's a lot of low hanging fruit being left on the table being a stand-alone company. If I was running one of the larger SS co's, I'd much rather buy LAACO to expand my portfolio than purchase SS through a broker in the private market. I was speaking to my business broker about LAACO last week and he said there's no way he could ever find anything that cheaply valued in the private market. Also, margins would instantly expand (hence the low hanging fruit) through a more favorable cost structure. Correct me if I'm wrong but I would imagine the reason margins are higher at one of the larger publicly traded SS companies is due to the fact that as size increases, expenses don't rise nearly as quickly.

Would love to hear other input on this.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on April 10, 2018, 01:03:28 PM
Does anybody here have a relationship with management or have spoken to them? Something that I wonder about is whether LAACO makes sense being part of a larger self-storage management company. LAACO is clearly run for the benefit of unitholders but my concern is that there's a lot of low hanging fruit being left on the table being a stand-alone company. If I was running one of the larger SS co's, I'd much rather buy LAACO to expand my portfolio than purchase SS through a broker in the private market. I was speaking to my business broker about LAACO last week and he said there's no way he could ever find anything that cheaply valued in the private market. Also, margins would instantly expand (hence the low hanging fruit) through a more favorable cost structure. Correct me if I'm wrong but I would imagine the reason margins are higher at one of the larger publicly traded SS companies is due to the fact that as size increases, expenses don't rise nearly as quickly.

Would love to hear other input on this.

Take a number and get on the queue  :P   

Yes to most of your questions.  I doubt the management will sell.  Some hedge fund manager offered a take private years ago.  I think if they offer $4,000-$5,000 a share, they may.  The structure is what it is.  If you want to own RE and don't have to do a lot of work, this is an awesome investment.  If you want a quick IRR, selling to a PSA would obviously make sense.     
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on February 26, 2019, 06:26:02 PM
Has anyone followed this recently? I bought some more shares last quarter - the stock price is basically the same as it was last year even though the business has gotten slightly better.

Also, I have bugged them about doing a tender offer at a price slightly higher than it is today. I told them there's no downside if they can't get a lot of units. They've told me that the reason they stay public is that there are people who have relied on the stock ownership for several generations and there's a few families in LA that rely on the company's stock. My thinking is that if some shareholders wanted liquidity, it would give them a way out. It would also allow LAACO to increase the speed of their buybacks which is severely limited due to how thinly traded the units are.

Are there any other unitholders on this board that would be in favor of a tender offer at say 10% above the current unit price?

I currently have 170 units.
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on February 26, 2019, 10:08:26 PM
I wouldn't be very enthusiastic/confident about tender pricing until I felt more informed about what sort of returns they model on building new facilities; they don't really reveal much here. In 2013 they briefly outlined why they were preferring to build rather than buy new facilities, indicating that the return was something like "3 or more" percentage points better for builds. So I guess that gives us some vague, relative idea, from half a decade ago when it was pretty cheap to book concrete trucks. Have I missed some burst of transparency/clarity on this?

Anyway, if they're building new facilities at 10x EBITDA, then buybacks at 14X aren't exactly something I'm going to go out of my way to draft a petition over.

Topic change: One of the reasons I talked myself into playing around here was that I liked the performance of the business over the last recession. Peak-to-trough FCF change was like -16%.

I now think it's an error to model future recession-proofiness this way. Current national spending on new self-storage construction clocks in at like 2-3x what it did in the years preceding 08/09...I think people paying 20x EBITDA for these businesses are sort of nuts.

That said, 13x is fine. I have a few units, mostly because I enjoy passive-aggressively invoking them as a hedge against my family's storage-unit addiction.
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on February 27, 2019, 03:46:32 AM
Has anyone followed this recently? I bought some more shares last quarter - the stock price is basically the same as it was last year even though the business has gotten slightly better.

Also, I have bugged them about doing a tender offer at a price slightly higher than it is today. I told them there's no downside if they can't get a lot of units. They've told me that the reason they stay public is that there are people who have relied on the stock ownership for several generations and there's a few families in LA that rely on the company's stock. My thinking is that if some shareholders wanted liquidity, it would give them a way out. It would also allow LAACO to increase the speed of their buybacks which is severely limited due to how thinly traded the units are.

Are there any other unitholders on this board that would be in favor of a tender offer at say 10% above the current unit price?

I currently have 170 units.

I thought about this and reviewed the last few years annual statements since I bought it in 2012 and I don’t feel that a tender is such a no brainer. For one thing, getting 10% of the shares tendered would add about $40M to their existing $80M in debt. This is probably OK, but I really liked about this investment that here was very little debt when I bought into this to begin with and I would like them to keep it this way. Their leverage is already somewhat larger than in 2012, due to Capex expenses gong into the new facilities in Texas. I also note that they reduced their units from about 172.5k to 165.5k since I owned it, which is not too bad considering that they are growing their business, while paying a nice distribution a along. The other issue with reducing the unit count is that the liquidity for the remaining shareholders will get even worse. I’d rather have them put a message in the annual report that they are willing to buy back shares from owners in a privately negotiated  transaction at prevailing market prices by contacting management.

I think the bigger question for me is how they feel about the expansion into Texas after being there a couple of years and if they feel it’s giving a good return on investment. In particular the Houston market, which is dependent on Energy and has low barriers to entry looks iffy to me.

FWIW, I just added a few units a couple of days ago below $2200.
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on February 27, 2019, 06:29:47 PM
Want to correct and elaborate on my earlier post, which got some stuff wrong. I made the claim that back in 2013 they discussed build v. buy. That was way off. I couldn't find anything like that in the AR when I checked, so I scanned the rest and found what I was thinking about, actually in the 2015 (so, a bit more fresh, which is nicer).

Here are the relevant snippets:

Quote
We generally anticipate that the entire process, beginning with identifying land in a prime location, continuing through construction and on to the point when we have achieved 85% occupancy, will take five years.

(later)

Quote
In our experience, by developing a ground-up project, even with the delays in realizing revenue, we can expect a return on investment that is three or more percentage points above what we would receive from an acquisition property.

That "even with delays" bit makes me assume they're talking IRR and not ~stabilized~ yield.

So, I figure the regional cap rates in those markets was safely 6%, they're expecting a minimum of 9%. As long as those opportunities are available, isn't this a better avenue for capital than buybacks (FCF yield something like 7ish% today)? As Spek mentions, they have found more capex opportunities than cash in the past few years, so it's not like the capital structure is an urgent issue that needs addressing.

And if something -has- changed and the prospects of new facilities are substantially less rosy than they were a few years ago, that probably means we should be correspondingly less bullish on the shares, though the logic of this begins increasingly depending on what your valuation of the club stuff is.
Title: Re: LAACZ - LA Athletic Co
Post by: Gregmal on February 27, 2019, 07:02:15 PM
I only have a tracker position here so I dont forget about it, but have dug into the storage space previously and think that on the surface these guys get "it", but also have certain alignment of interests that make this a difficult investment for most people. It is absolutely a low maintenance, buy and put away type of investment.

With regard to buy vs build, I've been told by people at other companies that target acquisitions you look at 5.50-6% cap rates with room to either build out or bump occupancy rates. Anything over 6% and you really have to be careful and start looking for red flags.

There are actually decent barriers to entry here depending upon where you look. Certain markets it can be very difficult to get proper approvals to build. Often(as Johnny pointed out) it's about a 5 year process so if you can get a good feel for certain markets you have windows to move. Often the most value is in secondary markets or fringe markets just outside larger msas.

Building just seems quite capital intensive and also, thinking about it logically, if you're there and able to build, generally so is the next guy. You want to be in areas where it's hard to get in and a nuisance to build.

I have always been under the impression(and the statistics I've seen quoted indicate it too) that the self storage business is predominantly fragmented mom and pop stuff. Maybe 25-30% are institutionally owned. So again, I'd think buying would be more optimal. Goal would be to find something mom and pop owned, somewhat, but not entirely neglected, and then just pump some money into fixing up the appearance and advertising and in 12-18 months you can take 60-70% occupancies and get them in the mid to high 80's. IMO a superior option to taking 5 years trying to turn dirt into cash.
Title: Re: LAACZ - LA Athletic Co
Post by: bobozou on March 11, 2019, 06:14:48 PM
Tax season question

I think in past years there was a website I could go to get LAACO unit-level K-1 information.  Understanding that 2018 K-1's may not yet be ready, does anyone else know what I'm talking about and can point me to the site (maybe it wasn't a site, but was something that was sent)?

TIA
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 11, 2019, 07:06:33 PM
Tax season question

I think in past years there was a website I could go to get LAACO unit-level K-1 information.  Understanding that 2018 K-1's may not yet be ready, does anyone else know what I'm talking about and can point me to the site (maybe it wasn't a site, but was something that was sent)?

TIA

There is no website to pull the K-1 from. In my case, LAACZ actually sents me a letter to confirm how many units I own and if there are changes to my ownership. It is the only Lo to do so (others LP’s get this info from the broker where the units are with, but not with LAACZ). Then after a while, I get the K-1 per mail. So far, I have not received my K-1 yet this year.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 11, 2019, 08:49:00 PM
Did you have to email them with your contact information to get this letter? I was told by management that I had to but I'm wondering if they got your contact information through your broker and not with you manually.

Tax season question

I think in past years there was a website I could go to get LAACO unit-level K-1 information.  Understanding that 2018 K-1's may not yet be ready, does anyone else know what I'm talking about and can point me to the site (maybe it wasn't a site, but was something that was sent)?

TIA

There is no website to pull the K-1 from. In my case, LAACZ actually sents me a letter to confirm how many units I own and if there are changes to my ownership. It is the only Lo to do so (others LP’s get this info from the broker where the units are with, but not with LAACZ). Then after a while, I get the K-1 per mail. So far, I have not received my K-1 yet this year.
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 12, 2019, 04:01:34 AM
Did you have to email them with your contact information to get this letter? I was told by management that I had to but I'm wondering if they got your contact information through your broker and not with you manually.

Tax season question

I think in past years there was a website I could go to get LAACO unit-level K-1 information.  Understanding that 2018 K-1's may not yet be ready, does anyone else know what I'm talking about and can point me to the site (maybe it wasn't a site, but was something that was sent)?

TIA

There is no website to pull the K-1 from. In my case, LAACZ actually sents me a letter to confirm how many units I own and if there are changes to my ownership. It is the only Lo to do so (others LP’s get this info from the broker where the units are with, but not with LAACZ). Then after a while, I get the K-1 per mail. So far, I have not received my K-1 yet this year.

I don’t recall, since I owned it for so long, but I believe I had to contact them. I also have to email them when I change the address etc., so I don’t think they get the info from my broker.
LAACZ is different from all the other LP that I own which will sent you a K-1 automatically, based on what your broker provided. LAACZ will not do that. I think they might do so, if you have the shares registered in your own name, since they mention ComputerShare.
Title: Re: LAACZ - LA Athletic Co
Post by: bobozou on March 12, 2019, 04:46:08 AM
That's helpful, but to be clear the site/mailer I'm referring to does not provide an individual's k1 for laaco, but rather the theoretical k1 for a theoretical unitholder who owns a single theoretical unit.

I will reach out to company and report back, but if anyone else is also suffering from the same hallucination, please let me know.
Title: Re: LAACZ - LA Athletic Co
Post by: rkbabang on March 12, 2019, 11:03:54 AM
I emailed them today and found out that I wasn't on their list to send a K-1 to.  This is what they replied to me:

Quote
From: Shirley Lee <Shirley.Lee@laaco.net>
Thank you for reaching out.  Based on our records, we haven’t previously received your information to set it up in our K-1 system to have a K-1 generated.  Please provide me with the following information so I can have your record setup.

·        Name, as units are held
·        Address, city, state, and zip
·        Tax ID
·        Number of units held with dates and counts of buys and sells
·        Telephone number
·        Email address

Please feel free to contact me if you have any questions.
 
Regards,
Shirley Lee
Property Accountant
LAACO, Ltd
213-260-9934

Title: Re: LAACZ - LA Athletic Co
Post by: bobozou on March 12, 2019, 12:20:11 PM
Thanks that's helpful!

They also left a VM for me, indicating that they plan to send K-1 information to brokers 3/15/19 (I probably got the info from brokers in previous years)
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 15, 2019, 10:30:36 PM
Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet. 
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 16, 2019, 04:42:53 AM
You will get the K-1 directly from the company. The brokers have nothing to do with it. They may even sent you a pdf of the K-1 via email, if you ask nicely.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 22, 2019, 12:28:51 AM
Any thoughts on this as a threat to the self-storage industry?

https://www.forbes.com/sites/samanthasharf/2019/02/20/softbank-leads-200-million-investment-in-storage-startup-clutter/#352b7ba6667d
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 22, 2019, 03:48:55 AM
Interesting idea. I laugh anout this example  though:
Quote
With self-storage, if you want to store a sofa, you have to call up your friends and bribe them with pizza to help you on a Saturday,” Mir told Forbes in a 2017 profile. “You drive it to a facility, you return the U-Haul, take an Uber home, and your whole day is shot. With us, you just push a button.”

I have a much better idea: put the sofa in front of the house and hang a sign on it “Free”. You save a lot of money and hassle this way.

It’s also not too convenient to use clutter if you need to access your stuff from time to time. Then you got to make an appointment and wait for the forklift driver to pull your container from the warehouse. And if you don’t need access to your crap, why store it to begin with?
Title: Re: LAACZ - LA Athletic Co
Post by: DTEJD1997 on March 22, 2019, 06:25:42 AM
Any thoughts on this as a threat to the self-storage industry?

https://www.forbes.com/sites/samanthasharf/2019/02/20/softbank-leads-200-million-investment-in-storage-startup-clutter/#352b7ba6667d

I would have to fully think it through...but I think this is a solution looking for a problem.  Perhaps it is for trust fund millenials on the coasts?  I don't see this playing out too well in the Mid-West.

As another poster said, "just put it on the curb with a "FREE" sign".

I would also be curios to see how much money this concept is losing?  Of course, maybe the goal of the founders is to get something up & running and then off load it to "investors"?
Title: Re: LAACZ - LA Athletic Co
Post by: rkbabang on March 22, 2019, 06:36:10 AM
And if you don’t need access to your crap, why store it to begin with?

A few years ago I closed on the house I was living in and rented an apartment for 3 months until I could close on my new house.  I rented a self storage unit for that time in-between houses.  We moved everything into storage then moved everything again into our new house 3 months later. This clutter service might have been good for that purpose.  It took us weeks to pack everything, and bring everything to the storage unit.  My wife and kids would pack during the day and we'd fill up the SUV and a utility trailer I have and run a load or two to the storage unit when I got home from work every night.  If I had an option of having someone just come and pick everything up for me and store it, I might have done that.   

But there are people who rent storage units long term and keep stuff in them that they don't need and keep adding to it.  I don't think in that case this Clutter business is much of a threat to regular self storage. I've never understood why people use these self storage facilities for long term storage, but for LAACO's sake I'm glad that they do.
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on March 22, 2019, 08:59:30 AM
The business model is straightforward: charge high urban mini-storage rates, lease cheap warehouse space that is on the periphery of town, and hope that the margin will pay for the insanely inefficient logistics operation.

I'm going to guess the numbers aren't great (how many of these new-economy urban logistics players are crushing it while keeping the price-to-the-customer at par?) As already mentioned, this is a pretty attractive solution to people who just need to dump stuff off for a few months. I have in fact used it for just that purpose when we took an overseas trip for a few months that coincided with a move. The total all-in cost of the storage for a few months was basically the same price as using professional movers. So rather than operating a less capital-intensive storage business, they were in fact operating a more capital intensive moving company. The adverse selection problem here is real.

Beyond that, we had problems at almost evetry conceivable stage of the process. Our scheduled appointment for pickup was cancelled the day before because of scheduling issues. That delayed things a few days. Once we took all items back, they continued to attempt to bill for the space. They clearly had all the normal problems companies have: "closers" on the phone who are less than meticulous about noting the various promises and generally sloppy with the truth, contract-labor on the ground that may be turning over so much that they're in a perpetual state of systems-training ong the job.

One reason I tried Clutter was because I was concerned about what it meant for StorageCos. I'm less concerned now than I was. I think Clutter is the sort of concept that presents well to investors because it appeals to exactly the sort of people who are not actually customers of the industry. Think of the Ron Johnson era at JC Penney. To me, the idea of eliminating coupons and dumping millions into store capex to create an elevated experience made a lot of sense. But it turns out the thing that I found repulsive was actually the very thing the core customer wanted, and making JC Penney slightly repulsive to me didn't convert me to a shopper (just a bagholder). In the case of storage, I think the average self-storage customer values the sense that they are in control of their stuff. They can go fondle it whenever they want, it'll be exactly where they put it, behind a big metal door with a big padlock that only they have the key to, etc. Even if they go years without doing it, they value the option.

I'm more concerned with the general proposition that self-storage utilizagion is super super concentrated in a special generation of USAmericans, and that it represents some impermanent cultural defect that may not sustain itself through the generations. I don't think Milennials are going to be using Clutter en masse, but I do think they're going to generally be less crow-like in amassing their collections of garbage.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 24, 2019, 09:06:05 PM
https://www.sparefoot.com/california-storage.html
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 25, 2019, 04:08:39 AM
Interesting website above. I bought most of mymposition in LASCZ in 2012 and same store trends were just turning positive. It seems that trends were lagging economic trends which had turned positive way before self storage demand did after the recession.

Whether the millennials are really so different remains to be seen. As far as self storage is concerned, clutter is something that gets accumulated over time. Self storage demand also depends on mobility and an apartment dweller (Millenials have lower home ownerships than proof generations) have less storage available to them than homeowners. So it could work out either way. Whatever happens, trends will be very very slow to materialize and there will be time to adjust the business model.

Overbuilding of self storage is a much larger and immediate concern, as this asset class has become way more popular.
Title: Re: LAACZ - LA Athletic Co
Post by: lschmidt on March 27, 2019, 09:31:24 PM
I still haven't received my K-1. Getting a bit late in the season. Wondering if others are in the same boat.

Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 27, 2019, 10:28:30 PM
I still haven't received my K-1. Getting a bit late in the season. Wondering if others are in the same boat.

Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet.

E-Mail the CFO.  Call the company and ask for the CFO. I hope you provided your name and shares to them already. Be nice and explain that it is getting late and you're worried.  If you did not provide name and shares and when you bought them, it will get tricky.  I learned the hard way last year. 
Title: Re: LAACZ - LA Athletic Co
Post by: lschmidt on March 28, 2019, 09:54:02 AM
Thanks for the advice. I've had no answer to 2 emails to the accounting Department, so I will take
your advice and ask for the CFO's email. I'm of two minds about this: 1) on one hand, I'm a bit
dismayed about their organizational efficiency and responsiveness to shareholders   2) it may be
reflective of low staffing and bare-bones overhead, which I generally like in an operation.

I still haven't received my K-1. Getting a bit late in the season. Wondering if others are in the same boat.

Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet.

E-Mail the CFO.  Call the company and ask for the CFO. I hope you provided your name and shares to them already. Be nice and explain that it is getting late and you're worried.  If you did not provide name and shares and when you bought them, it will get tricky.  I learned the hard way last year.
Title: Re: LAACZ - LA Athletic Co
Post by: rkbabang on March 28, 2019, 10:49:26 AM
Thanks for the advice. I've had no answer to 2 emails to the accounting Department, so I will take
your advice and ask for the CFO's email. I'm of two minds about this: 1) on one hand, I'm a bit
dismayed about their organizational efficiency and responsiveness to shareholders   2) it may be
reflective of low staffing and bare-bones overhead, which I generally like in an operation.

I still haven't received my K-1. Getting a bit late in the season. Wondering if others are in the same boat.

Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet.

E-Mail the CFO.  Call the company and ask for the CFO. I hope you provided your name and shares to them already. Be nice and explain that it is getting late and you're worried.  If you did not provide name and shares and when you bought them, it will get tricky.  I learned the hard way last year.

I'm in the same boat as you.  I've been waiting for the k-1 to come in the mail.  I finally emailed the accounting dept this morning and haven't heard back yet.  Let us know how you make out calling.
Title: Re: LAACZ - LA Athletic Co
Post by: lschmidt on March 28, 2019, 04:12:27 PM
I called LAACO and asked for the CFO. They routed me instead to the Controller, George Cox.
He was very helpful, explained the process, and said that the late batch of K-1s were
mailed out on Monday. He offered to email an electronic copy, which they promptly did.
Problem solved. If you've previously given the company your ownership info and haven't
received your K-1 in the next couple of days, I would give them a call and ask for Mr. Cox,
Controller  213-622-1254. If you haven't yet given them your share info., I would ask for
Shirley Lee in Accounting and give it to her promptly.
Cheers.


Thanks for the advice. I've had no answer to 2 emails to the accounting Department, so I will take
your advice and ask for the CFO's email. I'm of two minds about this: 1) on one hand, I'm a bit
dismayed about their organizational efficiency and responsiveness to shareholders   2) it may be
reflective of low staffing and bare-bones overhead, which I generally like in an operation.

I still haven't received my K-1. Getting a bit late in the season. Wondering if others are in the same boat.

Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet.

E-Mail the CFO.  Call the company and ask for the CFO. I hope you provided your name and shares to them already. Be nice and explain that it is getting late and you're worried.  If you did not provide name and shares and when you bought them, it will get tricky.  I learned the hard way last year.

I'm in the same boat as you.  I've been waiting for the k-1 to come in the mail.  I finally emailed the accounting dept this morning and haven't heard back yet.  Let us know how you make out calling.
Title: Re: LAACZ - LA Athletic Co
Post by: rkbabang on March 28, 2019, 05:37:42 PM
I called LAACO and asked for the CFO. They routed me instead to the Controller, George Cox.
He was very helpful, explained the process, and said that the late batch of K-1s were
mailed out on Monday. He offered to email an electronic copy, which they promptly did.
Problem solved. If you've previously given the company your ownership info and haven't
received your K-1 in the next couple of days, I would give them a call and ask for Mr. Cox,
Controller  213-622-1254. If you haven't yet given them your share info., I would ask for
Shirley Lee in Accounting and give it to her promptly.
Cheers.


Thanks for the advice. I've had no answer to 2 emails to the accounting Department, so I will take
your advice and ask for the CFO's email. I'm of two minds about this: 1) on one hand, I'm a bit
dismayed about their organizational efficiency and responsiveness to shareholders   2) it may be
reflective of low staffing and bare-bones overhead, which I generally like in an operation.

I still haven't received my K-1. Getting a bit late in the season. Wondering if others are in the same boat.

Anyone got their K-1 via their Broker today? I haven't seen anything via IB yet.

E-Mail the CFO.  Call the company and ask for the CFO. I hope you provided your name and shares to them already. Be nice and explain that it is getting late and you're worried.  If you did not provide name and shares and when you bought them, it will get tricky.  I learned the hard way last year.

I'm in the same boat as you.  I've been waiting for the k-1 to come in the mail.  I finally emailed the accounting dept this morning and haven't heard back yet.  Let us know how you make out calling.

I gave Shirley my info over 2 weeks ago, I'll give it until the middle of next week to come in the mail then I'll call. Thanks for this info.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on April 02, 2019, 12:39:04 PM
Annual Report: https://backend.otcmarkets.com/otcapi/company/financial-report/215312/content
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on April 02, 2019, 05:31:52 PM
Looks like someone fat fingered a few shares today
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on April 02, 2019, 06:59:32 PM
Looks like someone fat fingered a few shares today

Or they just wanted cash and didn't mind selling a few shares at low price...who knows.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on October 16, 2019, 01:30:59 PM
Has anyone reached out to LAACZ regarding the SEC propose to essentially stop Pink sheet trading? 
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on October 16, 2019, 01:34:30 PM
This is the thread

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/proposed-new-sec-rules-for-otc-securities-relevant-for-us/
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on October 16, 2019, 05:44:11 PM
Based on my understanding of the rule change, the proposed changes would only affect “no info” stocks, not “limited info” stocks like LAACZ.
Title: Re: LAACZ - LA Athletic Co
Post by: Gregmal on November 20, 2019, 12:18:25 PM
I have/had a small tracking position in this until today. Finally got tired of the tax reporting and a few other issues which are besides the point. Was looking to sell and apparently there were FINRA rule changes regarding certain OTC positions, I was told these occurred back in May, which require the firm to jump through hoops when transacting in certain securities. Which of course just means the unit holder has to jump through hoops. I was further surprised to find out that Fidelity WILL NOT accept this security via an account transfer. I ended up having to chase down my paper confirmation statements from years ago... and finally after significant inconvenience, was able to sell this. Just a word of caution. Not sure it will apply to everyone and not sure you'll have any issues if you can prove(onus on YOU) that the securities where bought and sold with the same firm. But buyer beware.
Title: Re: LAACZ - LA Athletic Co
Post by: maude on November 20, 2019, 01:31:11 PM
This year for Thanksgiving, I am going to say a special thanks to the regulators and lawmakers who keep all of us in the investment community safe from ourselves. Without them, we would all be lost.
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on November 20, 2019, 03:40:14 PM
I have/had a small tracking position in this until today. Finally got tired of the tax reporting and a few other issues which are besides the point. Was looking to sell and apparently there were FINRA rule changes regarding certain OTC positions, I was told these occurred back in May, which require the firm to jump through hoops when transacting in certain securities. Which of course just means the unit holder has to jump through hoops. I was further surprised to find out that Fidelity WILL NOT accept this security via an account transfer. I ended up having to chase down my paper confirmation statements from years ago... and finally after significant inconvenience, was able to sell this. Just a word of caution. Not sure it will apply to everyone and not sure you'll have any issues if you can prove(onus on YOU) that the securities where bought and sold with the same firm. But buyer beware.

I own this also in. Fidelity account. I never had issues selling something, but sometimes have issues buying OTC stocks. Fidelity had me sign an online form, before I could buy in the pink sheets. Fidelity also doesn’t let you buy dark stocks at this point (they changed their rules a couple of years back), but you can sell the,. LAACZ is not a dark stock, so it can be bought in Fidelity accounts without issues (I bought some a couple of month ago and have open orders currently).

The new SEC rule regarding non filets will create a big problem for money managers dabbling into those, because without visible bids, there will be no objective value for them any more. I am not sure how one would even trade these outside of private negotiated transactions. So there could well be a lot of forced selling when this rule goes into effect.
Title: Re: LAACZ - LA Athletic Co
Post by: Gregmal on November 20, 2019, 04:01:55 PM
The Fidelity issue was solely referenced in relation to transferring in LAACZ shares. They will not accept it I was told. Your ACAT will get NIGO'd and bounce. You can trade it freely once there, AFTER signing the form you mentioned. They also told me this is something they will now classify as an "alternative investment". For those of you with finance backgrounds, that is a very dirty area and means a lot of paperwork/documentation/CYA for the firm typically; which always seems to pass its way on to the customer. My assumption is that they won't let you transfer it in, but will let you trade it there, because its easier for compliance to document.

The new SEC rule is just icing on the cake for this kinda stuff. And it's a shame. I have no real issue with LAACZ as an investment, but the landscape is becoming ridiculous, and especially when managing OPM it's getting near impossible. One of the realities of managing money whether your own or others, is that sometimes you change brokers or use multiple ones. Regulatory requirements for firms with regard to OTC positions has gotten quite insane. Now imagine transferring around and then trying to sell and being asked to provide proof of open market acquisition from something you bought 5+ years ago? And then being told if you cant provide it you cant sell? And then your other brokers won't accept an ACAT with an OTC security? Now imagine this scenario but with someone else's money? Having to ask an investor to come up with that and then deal with it as an advisor? Just too much hassle to justify dealing with...
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on November 20, 2019, 04:20:29 PM
 I understand the issue when you manage OPM, but I just manage my own. The less competition there is for these securities, the better for a private investor who doesn’t care  8).
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on November 24, 2019, 08:29:21 AM
One thing to consider when looking to invest in LAACZ right now is that the self storage markets in several areas seems to be weakening. The recent CC especially from PSA and Cubesmart with weak SS and occupation Trends gave an explanation. There has been a lot of supply coming to the market, and there is more coming (likely peaking in 2020), so they put a clear damper on pricing and the stocks of PSA and CUBE have not been immune to this. I think this will limit the near term appreciation potential of LAACZ as well. I am not terribly concerned, because LAACZ core markets in southern CA are supply constraint, but Houston not so much.

I would be quite concerned if holding UHAL, because they are betting the company on self storage and adding a lot of debt with 2-3 more years of heavy investing ahead, before they have build out all their acquired properties.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on December 09, 2019, 09:14:14 AM
"On December 3, 2019, the Managing General Partner of LAACO, Ltd. declared a quarterly cash distribution of $23.00 per partnership unit, and a special cash distribution of $1.50 per partnership unit, payable on December 20, 2019, to partners of record as of the close of business on December 16, 2019."



https://www.otcmarkets.com/stock/LAACZ/news/Distribution-Announcement?id=248454
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on February 11, 2020, 10:39:06 AM
Due to the fact that LAACO is probably underlevered, is anyone concerned that perhaps today's valuation might be appropriate given the fact that if they never sell the real estate, the actual return on investment would be lower due to the fact that the company doesn't use much debt. The management told me their hurdle rate was to make an 8% return on any new investment property. That's a pretty low return, so perhaps the discount is warranted since it's not likely they'll be selling their self storage real estate anytime soon.

I was just thinking about this while purchasing some properties recently. I just purchased a residential property in Detroit at a 9.6% cap rate. For about 25,000 down, I'll make slightly over 5,000 net on year 1. Now if I was a publicly traded company and decided to pay for that in cash, my return goes from ~20% to somewhere between ~10%. And if I never decided to sell my properties, the market valuation of my company should be lower based off the way I do business even though I hold the exact same asset.

So perhaps LAACO isn't as undervalued as we may think if we look back a decade from now. Would love to hear everyone else's thoughts on this.

Warmly,

Eric



Hey all:

No doubt this company is probably worth more than what it trades for.

No doubt the company has very conservative managers.

It very could be an interesting play going forward.

The one caution I would add is that the "silly" high valuations on coastal properties may not last.  There is some amount of risk here that I think is being overlooked by the market.

What happens if an earthquake hits CA?  What happens if the ranks of homeless swell up even further than where they are at now?  What happens if CA's budget/pension falls to pieces?  A political crisis? 

I would just discount their CA properties a bit more than others is all I'm saying... 

Earthquake will probably temporarily be very good for the company as it creates more demand for the storage units as people get displaced.  In the long run, peoples views on Southern CA sours and it will impact value.  I think there is a degree of undervaluation where you say "yes, the market maybe silly, but I'm paying $80 a sqft for the portfolio and the market is low to mid $200 for the SoCal and mid $100 for the Phonenix, Houston, and Vegas.  At a certain point, it becomes a bit of a non-factor.  If your thesis is that NYC and CA will migrate to the warmer climates with lower taxes, I think the Phoenix, Houston, and Vegas are those cities that will become net beneficiaries of that migration.  There is an inherent hedge built into the portfolio.  Never thought of it that way until you bought up the question.  I wonder if management meant to do that.  It appears that Houston, Phoenix, and Vegas are the cities where development opportunities still exist and that's why LAACZ has allocated capital there.  It's very hard to build in SoCal with the NIMBYism there.  Which makes it a good portfolio.       

We're not saying that their CA properties should go for 2% cap rate.  Private market value is sub 5%.  Their assets sit on large sites and have re-development opportunities.  So, if you're paying a 5% cap rate for them in the private market, you've got optionality on the development side.  Sure, 2% is silly.  5% is too rich for me.  But, I'm paying 9% when I strip out the downtown LA assets.  Plus, they have development assets that should increase cashflow in the next couple years.   
Title: Re: LAACZ - LA Athletic Co
Post by: Gregmal on February 11, 2020, 10:58:57 AM
Due to the fact that LAACO is probably underlevered, is anyone concerned that perhaps today's valuation might be appropriate given the fact that if they never sell the real estate, the actual return on investment would be lower due to the fact that the company doesn't use much debt. The management told me their hurdle rate was to make an 8% return on any new investment property. That's a pretty low return, so perhaps the discount is warranted since it's not likely they'll be selling their self storage real estate anytime soon.

I was just thinking about this while purchasing some properties recently. I just purchased a residential property in Detroit at a 9.6% cap rate. For about 25,000 down, I'll make slightly over 5,000 net on year 1. Now if I was a publicly traded company and decided to pay for that in cash, my return goes from ~20% to somewhere between ~10%. And if I never decided to sell my properties, the market valuation of my company should be lower based off the way I do business even though I hold the exact same asset.

So perhaps LAACO isn't as undervalued as we may think if we look back a decade from now. Would love to hear everyone else's thoughts on this.

Warmly,

Eric



Hey all:

No doubt this company is probably worth more than what it trades for.

No doubt the company has very conservative managers.

It very could be an interesting play going forward.

The one caution I would add is that the "silly" high valuations on coastal properties may not last.  There is some amount of risk here that I think is being overlooked by the market.

What happens if an earthquake hits CA?  What happens if the ranks of homeless swell up even further than where they are at now?  What happens if CA's budget/pension falls to pieces?  A political crisis? 

I would just discount their CA properties a bit more than others is all I'm saying... 

Earthquake will probably temporarily be very good for the company as it creates more demand for the storage units as people get displaced.  In the long run, peoples views on Southern CA sours and it will impact value.  I think there is a degree of undervaluation where you say "yes, the market maybe silly, but I'm paying $80 a sqft for the portfolio and the market is low to mid $200 for the SoCal and mid $100 for the Phonenix, Houston, and Vegas.  At a certain point, it becomes a bit of a non-factor.  If your thesis is that NYC and CA will migrate to the warmer climates with lower taxes, I think the Phoenix, Houston, and Vegas are those cities that will become net beneficiaries of that migration.  There is an inherent hedge built into the portfolio.  Never thought of it that way until you bought up the question.  I wonder if management meant to do that.  It appears that Houston, Phoenix, and Vegas are the cities where development opportunities still exist and that's why LAACZ has allocated capital there.  It's very hard to build in SoCal with the NIMBYism there.  Which makes it a good portfolio.       

We're not saying that their CA properties should go for 2% cap rate.  Private market value is sub 5%.  Their assets sit on large sites and have re-development opportunities.  So, if you're paying a 5% cap rate for them in the private market, you've got optionality on the development side.  Sure, 2% is silly.  5% is too rich for me.  But, I'm paying 9% when I strip out the downtown LA assets.  Plus, they have development assets that should increase cashflow in the next couple years.   

I dont really have anything specific to LAACZ because I think for a number of reasons, its hard to triangulate a proper valuation given a lot of the nuances here, in addition to your observation about the management style. I sold out here a few months ago. Many of the reasons had little to do with the company, but at the end of the day I didn't feel it was impossible to get better returns with better liquidity elsewhere.

But I arrived at the same conclusion as you did above, by making the same type of investments you described above. I used to have a little thing for under leveraged real estate companies. I still kind of do. But with the rate environment being what it is, I think its crazy for any real estate investor/company not to be utilizing some form of leverage. Many companies Ive followed and managers quote the 8% number, if anything I think its just boilerplate industry speak. A good deal is a good deal. The implications of a set hurdle kind of imply the bar is pretty low so Im not entirely certain why people so frequently cite figures like that. Purchasing RE with just cash, isn't very enticing, if it is, along with the never sell mantra, JW Mays probably checks a lot of boxes as well.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on February 18, 2020, 12:06:55 PM
Firework in the volume today, a whopping $0.5mm traded
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on February 19, 2020, 04:16:59 PM
Firework in the volume today, a whopping $0.5mm traded

Wild times!
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 10, 2020, 05:25:13 PM
Managed to get my grimy hands on a few more units today at a good price. I feel like a collector 💵. They announced a small raise in distribution to $25 so business seems to be going on somehow.
 https://www.otcmarkets.com/stock/LAACZ/news/Distribution-Announcement?id=255435 (https://www.otcmarkets.com/stock/LAACZ/news/Distribution-Announcement?id=255435)

Eric is correct that if you actively manage your own real estate with significant leverage, you can get higher returns. I personally expect a compounded return in the high single digits (8-9% conservatively), consisting of a 4-4.5% distribution yield, some organic growth ~4% and share repurchases 0.5%. 4% organic growth shouldn’t be too hard with some inaction and some organic growth from upgrading properties or purchasing new ones from retained earnings. I have owned this since 2012 and they expanded from 47 wholly owned to 59 owned properties just with organic growth. It’s like watching grass grow, but in a good way. Easy to understand and no worries.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 12, 2020, 10:37:56 AM
I bought another unit today at 2070
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 23, 2020, 01:12:03 PM
Down 50% today??
Title: Re: LAACZ - LA Athletic Co
Post by: jwelborn93 on March 23, 2020, 01:21:20 PM
Looks like the price fell on the volume of 4 shares...was most likely a market sell order.
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on March 23, 2020, 01:51:09 PM
lol congrats to whoever went to the trouble of keeping that bid out there
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 23, 2020, 01:52:52 PM
lol congrats to whoever went to the trouble of keeping that bid out there

Seriously ;)
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 23, 2020, 01:59:51 PM
Okay, I'm going to put in some bids at some ridiculous prices now
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 23, 2020, 03:02:17 PM
Down 50% today??

I think it was a margin call. I picked up some at $1410 (my stinker bid) but wasn’t quick enough to get more. The guy who scoreD some at $1025 got a price that is better than during the GFC, especially if you adjust for the value created since then. Absolutely crazy.
Title: Re: LAACZ - LA Athletic Co
Post by: bskptkl on March 23, 2020, 09:58:02 PM
Yeah - 25 share sell order drove it from 1700 bid to printing 17 at 1025.
Dang - didn't have any bids out there.

Look at WXMN trading today as well. 1700 shares drove it down from 3.75 bid to a print at 1.25.

What's up in deep dark value land?
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 24, 2020, 04:14:30 AM
Yeah - 25 share sell order drove it from 1700 bid to printing 17 at 1025.
Dang - didn't have any bids out there.

Look at WXMN trading today as well. 1700 shares drove it down from 3.75 bid to a print at 1.25.

What's up in deep dark value land?

Lack of buyers , some forced selling. It’s the Wild West out there. Act accordingly and have your revolver loaded and ready to shoot.

According to my rough calculation the buyer @1025 bought LAACZ at an unlevered cap rate of ~20%. Of course the earnings may go down somewhat, but it is really really difficult to see a scenario where this isn’t a good deal.
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 24, 2020, 01:34:06 PM
Yeah - 25 share sell order drove it from 1700 bid to printing 17 at 1025.
Dang - didn't have any bids out there.

Look at WXMN trading today as well. 1700 shares drove it down from 3.75 bid to a print at 1.25.

What's up in deep dark value land?

Lack of buyers , some forced selling. It’s the Wild West out there. Act accordingly and have your revolver loaded and ready to shoot.

According to my rough calculation the buyer @1025 bought LAACZ at an unlevered cap rate of ~20%. Of course the earnings may go down somewhat, but it is really really difficult to see a scenario where this isn’t a good deal.

Up 77% today to $1822 #feelsbadman for the forced seller yesterday. Crazy.
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 24, 2020, 01:41:33 PM
Yeah - 25 share sell order drove it from 1700 bid to printing 17 at 1025.
Dang - didn't have any bids out there.

Look at WXMN trading today as well. 1700 shares drove it down from 3.75 bid to a print at 1.25.

What's up in deep dark value land?

Lack of buyers , some forced selling. It’s the Wild West out there. Act accordingly and have your revolver loaded and ready to shoot.

According to my rough calculation the buyer @1025 bought LAACZ at an unlevered cap rate of ~20%. Of course the earnings may go down somewhat, but it is really really difficult to see a scenario where this isn’t a good deal.

Up 77% today to $1822 #feelsbadman for the forced seller yesterday. Crazy.

Best performing name in my portfolio for the day!  I think between LAACZ longs, dividends, and the Public Storage puts that are up 17x or whatever, I may actually be net zero on my self storage investments this year.   
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on March 24, 2020, 02:21:17 PM
Yeah - 25 share sell order drove it from 1700 bid to printing 17 at 1025.
Dang - didn't have any bids out there.

Look at WXMN trading today as well. 1700 shares drove it down from 3.75 bid to a print at 1.25.

What's up in deep dark value land?

Lack of buyers , some forced selling. It’s the Wild West out there. Act accordingly and have your revolver loaded and ready to shoot.

According to my rough calculation the buyer @1025 bought LAACZ at an unlevered cap rate of ~20%. Of course the earnings may go down somewhat, but it is really really difficult to see a scenario where this isn’t a good deal.

Up 77% today to $1822 #feelsbadman for the forced seller yesterday. Crazy.

Best performing name in my portfolio for the day.  I think between LAACZ longs and the Public Storage puts that are up 17x or whatever, I may actually be net zero on my storage investments this year.   

Well it was the worst performing name in my portfolio yesterday and the best performing today.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 24, 2020, 02:53:37 PM
I find it weird the company doesn't break out opex. Does anyone have any idea about the breakout? Has anyone ever spoke to management about this?
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 26, 2020, 09:57:03 PM
I find it weird the company doesn't break out opex. Does anyone have any idea about the breakout? Has anyone ever spoke to management about this?

Bumping this. Any of you guys know the break out of opex?
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 31, 2020, 09:20:53 AM
Someone got lucky and got a fill at $1605 today, 1 share
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 31, 2020, 11:48:31 AM
Someone got lucky and got a fill at $1605 today, 1 share

Wow that was you...preventing me from hitting my 1,600 bid today. So rude! LOL
Title: Re: LAACZ - LA Athletic Co
Post by: LC on March 31, 2020, 11:54:55 AM
BG to Eric:

https://youtu.be/axUuI9p54hk
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on March 31, 2020, 12:28:58 PM
https://www.youtube.com/watch?v=p50WnKq-x1c
Title: Re: LAACZ - LA Athletic Co
Post by: johnny on March 31, 2020, 01:15:51 PM
Maybe everybody in this thread should go in on a partnership to establish some god damned BIDDING DISCIPLINE. Some of us are waiting for blood in the streets and SOME of us are running around with tourniquets.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on March 31, 2020, 02:11:25 PM
https://www.youtube.com/watch?v=p50WnKq-x1c

That's what they all say.

Either way, #jelly
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on April 04, 2020, 01:35:02 PM
LAACZ - annual report is out. Solid results for 2019 and the balance sheet is ready for what 2020 will bring:
 https://backend.otcmarkets.com/otcapi/company/financial-report/243339/content (https://backend.otcmarkets.com/otcapi/company/financial-report/243339/content)
Title: Re: LAACZ - LA Athletic Co
Post by: bskptkl on April 04, 2020, 05:27:58 PM
They bought back 125 shares at average price of $2304 per share so far in 2020.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on April 20, 2020, 01:17:53 PM
Just a reminder to unitholders - the Annual Meeting is today (broadcasted online) at 3:00 pm Pacific Time. I'll be on!
Title: Re: LAACZ - LA Athletic Co
Post by: Spekulatius on April 20, 2020, 03:36:27 PM
Just a reminder to unitholders - the Annual Meeting is today (broadcasted online) at 3:00 pm Pacific Time. I'll be on!
Unfortunately, the snail mail arrived way too late for me to go through the convoluted sign up procedure. Hopefully, someone write up a short summary of the shareholder meeting. It would be very much appreciated.
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on April 20, 2020, 06:05:34 PM
Just a reminder to unitholders - the Annual Meeting is today (broadcasted online) at 3:00 pm Pacific Time. I'll be on!
Unfortunately, the snail mail arrived way too late for me to go through the convoluted sign up procedure. Hopefully, someone write up a short summary of the shareholder meeting. It would be very much appreciated.

you didn't miss much
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on June 18, 2020, 02:38:17 PM
Scooped up another unit today
Title: Re: LAACZ - LA Athletic Co
Post by: Williams406 on June 18, 2020, 03:13:26 PM
Way to go. Watch those position limits, though.
Title: Re: LAACZ - LA Athletic Co
Post by: capitalg on June 19, 2020, 05:37:51 AM
Way to go. Watch those position limits, though.

What do you mean by position limits?
Title: Re: LAACZ - LA Athletic Co
Post by: DooDiligence on June 19, 2020, 05:38:50 AM
Way to go. Watch those position limits, though.

What do you mean by position limits?

Might have been a joke?
Title: Re: LAACZ - LA Athletic Co
Post by: Williams406 on June 19, 2020, 07:31:15 AM
Apologies--meant as a joke, but inelegant phrasing given existence of exchange-set actual position limits on certain contracts. I'm putting in my notes for future reference:
Good: Use emojis to clarify joke status of comment
Better: Just don't post that!

Sorry for the confusion.
Title: Re: LAACZ - LA Athletic Co
Post by: capitalg on June 19, 2020, 07:36:01 AM
No problem - just wasn't sure if there was something more I wasn't aware of!
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on June 25, 2020, 07:11:45 PM
Club operations re-opening!
Title: Re: LAACZ - LA Athletic Co
Post by: BG2008 on June 29, 2020, 11:49:25 AM
Did LAACZ just traded 481 units today?
Title: Re: LAACZ - LA Athletic Co
Post by: EricSchleien on June 29, 2020, 08:32:16 PM
Did LAACZ just traded 481 units today?

Yup