Comments on: Vocal Attack on Realty Income http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/?utm_source=rss&utm_medium=rss&utm_campaign=vocal-attack-on-realty-income Commercial Real Estate Blog Wed, 08 Sep 2010 03:27:06 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Andrew http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/comment-page-1/#comment-4868 Andrew Wed, 04 Nov 2009 01:00:33 +0000 http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/#comment-4868 I've purchased properties from Realty Income in the past. I was very impressed with the quality of the company. The underwriting that they employ is very sound. I own some of their unsecured corporate bonds but not the common stock. I've purchased properties from Realty Income in the past. I was very impressed with the quality of the company. The underwriting that they employ is very sound. I own some of their unsecured corporate bonds but not the common stock.

]]> By: Chris Rodriguez http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/comment-page-1/#comment-4771 Chris Rodriguez Wed, 21 Oct 2009 15:18:28 +0000 http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/#comment-4771 Agreed. I do think that Realty Income needs to be given a bit more credit than the one-off 1031 buyer when it comes to sophistication and due diligence in determining what is and isnt a good buy. Agreed. I do think that Realty Income needs to be given a bit more credit than the one-off 1031 buyer when it comes to sophistication and due diligence in determining what is and isnt a good buy.

]]> By: Joshua http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/comment-page-1/#comment-4587 Joshua Fri, 09 Oct 2009 04:31:15 +0000 http://www.retailchatr.com/2009/10/08/vocal-attack-on-realty-income/#comment-4587 well, Realty Income's dividend growth has flattened out significantly recently. and there are obvious reasons to believe it may fall in line with the economic issues we have seen. beyond that, if you get a 200 bps discount in CAP rate for purchasing a portfolio and the assets are now worth 25% less, that would equal a 200 bps decrease in CAP rate. so there is that issue. I havent worked with Realty Income, nor am I privy to their portfolio, but most of these sale/leaseback companies make their money on spinning off the assets in one off deals. if they are long term holders they may be fine and the dip in stock price wont matter much. but many of these "regional" chains are highly leveraged to begin with and sale/leasebacks become the only mechanism to free up large amounts of cash. how many times have we seen a balance sheet for a 50 unit operator that just doesnt make any sense and they think that if they sell 20 units and build 20 more it will correct their operational issues? either way, shorting retail REITs in this and the coming environment isnt a terrible idea. well, Realty Income's dividend growth has flattened out significantly recently. and there are obvious reasons to believe it may fall in line with the economic issues we have seen. beyond that, if you get a 200 bps discount in CAP rate for purchasing a portfolio and the assets are now worth 25% less, that would equal a 200 bps decrease in CAP rate. so there is that issue. I havent worked with Realty Income, nor am I privy to their portfolio, but most of these sale/leaseback companies make their money on spinning off the assets in one off deals. if they are long term holders they may be fine and the dip in stock price wont matter much.

but many of these "regional" chains are highly leveraged to begin with and sale/leasebacks become the only mechanism to free up large amounts of cash. how many times have we seen a balance sheet for a 50 unit operator that just doesnt make any sense and they think that if they sell 20 units and build 20 more it will correct their operational issues? either way, shorting retail REITs in this and the coming environment isnt a terrible idea.

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