I would rather just buy MRT but I think there is a case for MRC as well, but that comes after they take MRT private. Both offer compelling value. The question is about timing.
I don't think they'll pay in MRC shares because they are just as discounted or more then MRT units. They are carrying a high level of cash at MRC as well.
Agreed on discount to NAV but it looks like NOI is about to take a huge hit with 1.5M SF of office rolling.
Some gems from the Q4 report:
- 152K of Alberta Office (Petroleum Plaza) leased to the government expired in 2021 but "because of COVID" they haven't got around to renewing yet (currently MTM)
- Penn West (637K office) in AB expecting to lose $15M in NOI after tenant rolls Feb/1/2025
$15M hit is AFTER they re-lease the building = ~0.23c per unit
Thanks for the article and share, very good as usual. Loved this quote:
"A NAV discount does not mean much if the discount gap cannot be closed, be it by inability to sell assets or managements decision to not sell any."
So true.
So the safe bet as a minority shareholder is to buy both the REIT and Morguard Corp, would you agree?
If not, then I am not really sure the incentives are in place to close the NAV gap any time soon.
I would rather just buy MRT but I think there is a case for MRC as well, but that comes after they take MRT private. Both offer compelling value. The question is about timing.
Why just MRT? What if they pay low premium in cash? If they pay in MRC shares, then you can rollover and you're covered.
I mean it depends on your cost basis so I shouldn't be assuming low premium :)
I don't think they'll pay in MRC shares because they are just as discounted or more then MRT units. They are carrying a high level of cash at MRC as well.
Interesting write up as always Roger
Agreed on discount to NAV but it looks like NOI is about to take a huge hit with 1.5M SF of office rolling.
Some gems from the Q4 report:
- 152K of Alberta Office (Petroleum Plaza) leased to the government expired in 2021 but "because of COVID" they haven't got around to renewing yet (currently MTM)
- Penn West (637K office) in AB expecting to lose $15M in NOI after tenant rolls Feb/1/2025
$15M hit is AFTER they re-lease the building = ~0.23c per unit
Destroys AFFO and payout ratio near term
Value looks interesting but could be a rough 2025
They mentioned they expect to get back $4 to $6 million of that in 2026 though. Thanks for the comment.
Very interesting. Before i did read the article, i checked the chart and was thinking "this thing has been going exactly nowhere for years, yikes".