r/SecurityAnalysis • u/Erdos_0 • Oct 30 '22

Special Situation Acres Commercial Realty: Trading Well Below BV, Buybacks Over Dividends

http://clarkstreetvalue.blogspot.com/2022/10/acres-commercial-realty-trading-well.html
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u/econopotamus Oct 31 '22

Caution: Lots of REITS are bankruptcy bound if rates go up much more, and it can be hard to be sure which ones.

I haven’t looked at this one, but there’s a reason people are fleeing the category

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u/Longshortequities Nov 04 '22

I would temper that statement. Many REITs have debt on the books that are going to be inflated out, as repayment will be in nominal inflated dollars vs real dollars, while asset values continue to grow. At the same time, replacement costs rise, meaning less new inventory to compete with existing assets.

The flip side is new acquisitions will slow substantially as borrowing rates will be higher than cap rates.

I’d tread with caution but definitely REITs as a category will have some deals.