thepupil

I’ll never fully understand why people love to hate this guy and/or dismiss his record. We don't have all the data, you're right, but I've yet to see evidence that Ursus is not short only or very short biased. Here we have an updated figure: -0.7% / year for Ursus, which is phenomenal. I hadn't seen this article until now. Looks like Chanos has a 100% long fund that's made a spectacular return (through the end of '17) though I bet his short alpha is heavily front loaded (but may be improving now). https://www.institutionalinvestor.com/article/b1b00ynrgtn05r/How-Jim-Chanos-Uses-Cynicism-Chutzpah-and-a-Secret-Twitter-Account-to-Take-on-Markets-and-Elon-Musk But since 2009, Ursus has lost about 70 percent of its value — 11 percent on an annualized basis — and is now less than $100 million, making it a relatively insignificant portion of the firm’s overall assets. Although Kynikos’s Tesla short may be in the money for the year, Ursus was down 19.3 percent through July, according to a recent report to investors. The secret to Chanos’s longevity as a short-seller is Kynikos’s flagship fund, the vehicle where Kynikos partners invest, which was launched alongside Ursus in 1985. Kynikos Capital Partners is 190 percent long and 90 percent short, making it net long. Unlike most long/short hedge funds, however, the longs are primarily passive, using such instruments as exchange-traded funds, as the intellectual effort goes into the short side. Chanos argues that by protecting the downside with his shorts, an investor can actually double his risk — and over time that has proved a winning strategy. Through the end of 2017, Kynikos Capital Partners has a net annualized gain of 28.6 percent since launch in October 1985, more than double the S&P 500. That has happened even though the short book — as represented by Ursus — has lost 0.7 percent annually during the same time frame, according to a recent Kynikos document Institutional Investor has obtained. “It’s one of the greatest records ever,” says one fellow hedge fund manager, initially skeptical of the results. “No one has made a 28 percent annual return since 1985.” The increased gross leverage — offset by virtually breaking even on the short side — helps explain the returns. However, as is the case with most hedge fund managers who’ve been around for decades, the big money was made in the early years. In 1990, Kynikos was one of the top-ten hedge funds in the world, with Ursus running $660 million, according to Chanos. After a few rough years, that fund was down to $150 million before an investment by the Ziff brothers — known for their savvy investments in hedge funds — saved the firm in the mid-’90s when they invested in Kynikos Capital Partners.

blast from the past here. and i very well may not have included interest expense in my spreadsheet of 6.5 years ago. Let's say I have a $1 billion family office. I might go to Chanos and say "can you run $50-$100 million of notional short exposure for me"? Here's my account at Pershing. I will give you discretion over this sub-account and to you will maintain 100% short exposure in your alpha generative short ideas. In that same account, please go long 100% SPX futures. Note in a recent interview that Liberty posted, Chanos mentioned he managed some SMA's that require him to maintain a certain exposure. This is a very plausible scenario. This account would be 100% long SPX, 100% short Chanos collection of craptostic companies. It would generate the rebate return + chanos short alpha (as it is market neutral) and provide a differentiated source of return for the wealthy family.

potentially so. I'll give you an example in my backyard. Behold this Zillow listing: https://www.zillow.com/homedetails/5500-Friendship-Blvd-APT-817N-Chevy-Chase-MD-20815/37195057_zpid/ this is in a well-located but tired building, it is spitting distance from Whole Foods the Friendship Heights metro, etc. $500K gets you a 1200 sq foot 2/2 with some outdoor space that would rent for $2,500 - $3000 (the listing shows a rental at $2,950, I assume someone would rent a little lower than that). If you paid cash, you'd still have a $1000 / month HOA. this is a decent albeit somewhat unhip location. the building was built in 1968. I think its a terrible investment proposition. $2600 /month rent less $1000 HOA = $1600 / month before any other expenses. We're already at an extremely low cap rate. Maybe it goes for lower, but I happen to know a lot of investors own units in this building (let's just say I know a former tenant very well); the units seem to move slowly but they do sell at prices indicating ridiculously low cap rates. Let's walk across the street, to EQR's property (formerly owned by Archstone), Wisconsin Place. Wisconsin Place sits atop Whole Foods (shared parking garage) which also connects to the Friendship Heights metro, which connects to a little retail center that includes movie theater, department store, restaurants, gyms, etc. This was built in 2009 and is in good shape. https://www.equityapartments.com/washington-dc/friendship-heights/wisconsin-place-apartments https://www.equityapartments.com/washington-dc/friendship-heights/wisconsin-place-apartments##bedroom-type-section-2 A 1000 square foot two bedroom is listed for $3600 / month and up. studio's and one bedrooms $2,100-$2,200 and up. this is kind of a contrived comparison using anecdotes, but the first one trades at an 6%-7% rental yield or so and as you point out EQR is closing in on a 9%. But the maintaince and capex and running cost of that 9% are LOWER because the building is newer and the room for error is higher because the rents are high because of the quality. you are buying property in areas where even old kind of tired buildings still command high prices because (in this instance) this is metro-accessible high rent areas with amenities and stuff. and jsut for shits and giggles, you all will be happy to know that GEICO's corporate headquarters is right next to both buildings:

corporate debt: $1.4 billion + whatever they need to borrow to get through this market cap : $1.7 billion $3.1 billion + for the corporate entity $2.4 billion of asset level debt, of which $1.2 billion is Hilton Hawaiian Village. they seem to own about 30,000 rooms at share (that is a very rough calc done with my eyeballs trying to account for JV's). On a consolidated basis the EV is about $5.5 billion or $180K per room. About 7000 of their 30,000 rooms ahve asset level leverage. So another way to view it is to look at the corporate EV of $3 billion and assume they have to hand back the keys, so $3 billion for 23,000 rooms. That's $130K per room, but I'd point out that it looks like some of their most valuable assets are the ones that are encumbered, including their top 2 in Hawaii/SF Pre-corona Revpar is about $277. Host Hotels top 40 assets do about $227 (2/3 of EBITDA) the whole company does about $184 revpar. althought "total revpar" is more for HST. I'm not sure what number is apples to apples. HST has a bifurcated portfolio with some huge assets that are very valuable (the three hyatt hotels bought for $700K / room, the south beach bought for $1.4 million / room, the Don Cesar, etc.) on a weighted average basis it's lower quality (maybe) than Park, but that's because of huge scale and its ownership of some more mid range stuff, which from a data/importance to the franchisors standpoint is a small positive. Host trades for $200K / room, but just drew down their revolver completely, so they have a $2.8 billion cash horde, virtually no asset level leverage and the cleanest balance sheet int the space. I think what you may be missing is that HST is potentially a better risk reward. Although I did all of that on the fly and I could hear an argument for Park in that someone like HST could buy Park. No one will buy HST because it's the big kahuna. On a mark to market consolidated basis, Park has 70% debt 30% equity balance sheet (again all this was quickly done). On a mark to market casis HST has a $7 billion market cap and $2.5 billion of net debt or so (so more like 70/30).

I would like to buy ELS at an $8 billion EV, but Bloomberg says $9.6 billion market cap and $12 billion EV. Likewise SUI is at $14 billion EV. Is there some discrepancy on BBG or subtlety/ adjustment here that I’m missing or are your EV’s off?

we are thinking about it the same way. haven't pulled trigger on HST or anything hospitality related. There I think the EV / Key comparison is a harder to make at this time because you could be looking at a (maybe only slightly) different cap structure. Big picture, if on January 1 you knew this was going to happen and you asked how much would EQR/HST/VNO be down, I would think that most would guess HST would be down the most (75-100% of its tenants aren't paying rent for the next 2-undefined months) In actuality, HST is down 45%, VNO is down 51% and EQR is down 32%. Now YTD stock moves is not indicative of price to "value" gap. HST traded at a discount to replacement costs beforehand and had issues beforehand (EQR arguably did not) and Host now trades at a (using a sell side estimate) 50-60% discount to replacement cost. I'm not saying that HST isn't cheaper than the other two on a very long term basis, but I think the others (just using them as proxies for other type of RE and because I know VNO to an unfortunate degree) are safer and still offer upside. In a year, stodgy institutional investors will be bidding for / lending to EQR type of properties, but I think hospitality will have a longer and stronger taint/increase in the cost of capital

more negative headlines and these are starting to come down again, may get another bite at the apple/average down opportunity. there's a Bloomberg intelligence article out today pointing out the following: Property level expenses are about 30% of rents (70% NOI margin) in coastal markets, giving a big cushion and insulating from some rent/occupancy declines and or cost increase (property tax hikes). Costs are mostly fixed (property taxes and insurance are 40% of property level costs). Even the lower rent / non coastal ones like Camden are at 35% (65% NOI margin). The apartment REITs on average have 5x EBITDA / Interest. They have low leverage that has low cost giving them an ample runway. In 2008 (before the crash), this number was 2.5x for perspective. Apartment REITs have locked in long and low leverage and (if spreads normalize) that costs is going lower, they've spent the past few years selling non-core assets to opportunity funds/locals and upgraded their portfolio quality / age through development and acquisition. that a storm is coming is certain, that they are more than ready is my opinion. that they are cheap..well I don't think they are SUPER cheap. EQR is at about a 5.7% cap right now. ($1.7 billion / $9B Debt + $21 Billion market cap); i like them more as that gets to a 6 or even (gasp) a 7 handle. think about what huge institutional pools of capital are going to be faced with rates at 0%-1%. What is TIAA traditional and TIAA real estate account going to buy? What about Metlife? I'd say high quality multi-family in gateway cities at unlevered 5,6% yields fits that bill just fine (for a portion of the balance sheet). I don't think we're going to see multi-fam cap rates blow out to 8% or something, and if they do, then EQR and its friends are probably still going to have capital markets access and will be buying buildings. EQR owns about 70,000 apartment units and trades for $30 billion. That's about $422K / unit. Can someone please direct me to condo listings in NYC/DC/LA/Boston, where I can buy a new-ish condo next to the metro/soulcycle/sweetgreen for $422K? After you do that, can you provide me with 4% interest only financing at say 27 years (EQR's 2047's have a 4% coupon). Okay great, now can you buy 70,000 of those and manage it all professionally for me? K thanks. Oh wait, that doesn't exist in real life. anecdotal survey for the crowd, has anyone heard of people with "good" jobs getting fired/laid off. Here is my anecdote: Marriott corporate HQ in Bethesda furloughed a large percentage of their corporate folks; that likley includes some very good jobs. I don't think people who rent yuppie apartments are completely immune, but I'd be surprised if a very large percent aren't able to make rent/lose their jobs; Ive been wrong before so we'll have to see.

buy CLPR at... $2 / share?

Where?

Here in DC metro burbs, the market continues to function well albeit at a less frenzied pace, my friends are looking in th $1mm range (entry level SFH for the wealthy parts). Pre-corona, a house they looked at had 5 offers within 3 days of list (before the open house), 2 of which are were all cash. Now things are slower, no open houses and showings/pre-inspections must be scheduled one at a time. They’re in the middle of the process on a house whose offer deadline was set a week after list instead of 3-4 days because of the coronavirus complications. There are still 3 people who have paid $500+ for a pre-inspection so as to make an offer without the inspection contingency. Hasn’t hit us yet, probably because there aren’t many other major world capitals where you can buy a nice little updated 80 year old house with a little yard within 30 minutes of downtown for only $1mm USD(actually much less if you don’t have your heart set on the wealthiest/less diverse neighborhoods) High acyclical incomes in the area help too. I expect to see some volatility and perhaps some decreased liquidity (maybe things tsk a month instead of a week to sell eventually?). The luxury market on the other hand appears to have slowed, more than couple of speculative $3mm newbuilds sitting there and causing pain and construction loan interest.

https://www.google.com/amp/s/wtop.com/local/2020/03/coronavirus-test-results-in-dc-maryland-and-virginia/amp/ Both from the data and anecdotes (wife works in DC hospital, neighbor works in another), i do not conclude that DC is a hot spot, yet at least. Anecdotally, Michigan is awful (know doctors there)

There was recently a VIC writeup about dislocations in the muni bonds issued by the likes of Harvard, Princeton, Stanford, MIT, etc. It mostly focused on front end muni paper, making a nice tax free 2 or 3% annualized for a few months as there was a liquidity squeeze in all parts of the bond market. I am looking at this a bit differently and am more focused on the exceedingly long duration taxable corporate debt, quasi-perpetuals issued by these institutions as a convex Japanification/deflation hedge/juicy portion of my parents bond portfolio. there is also a short to intermediate term spread tightening trade once liquidity and normalization return to the bond market. As an example. The taxable MASSIN 3.885% of 2116 (you read that maturity correctly), are offered at $116/3.33%, approximately 200 bps of credit/liquidity vs the 30 year to lend to MIT which has a) a top-performing endowment b) large property holdings c) diversified source of revenue (tuition, grants, summer camps, etc). It deserves its AAA credit, unlike say, Exxon Mobil whos 2050 paper offers the same yield. I don't really think this is anyone's bag here, but I think this is actually decent risk/reward as part of an overall portfolio and a good way to safely (from a credit perspective) add duration at a substantial pick-up to a zero coupon or 30 year tsy bond. 200 bps is a good liquidity/credit risk pickup for quasi-soveriegn paper. If you want to get really fancy you could short 30 year futures against it and just be long the spread and make a nice return on tightening. If I knew where the 30 year would be in 6 months, I would be sending this from my $10 million bugout compound. I don't. It could be at 3% and these could continue to trade 200 over (that would be bad), it could be at 3% and these trade 30 over (and you'd be flat) or it could be right where it is and these trade 50 over (lots of profit). In this environment expect huge bid/asks tons of mark to market vol, but again once dealers are back at their desks, this stuff should tighten substantially. Responses ahead of time: 1) what about inflation? that's not what this part of the portfolio is meant to protect against. inflation will destroy this. period. 2) don't you want the bonds part of the portfolio to be super liquid so you can use them for rebalancing? yes, and this isn't, you can't have this be all your bond portfolio 3) will fidelity/SChwab/ IBKR screw me on the bid ask? yes, as will any dealer. i suggest using IBKR to get a good idea of where actual bid/ask is. Fidelity is terrible and will trade against you or just not offer you the bond 4) I think lending at 3% for 100 years is insane..I agree, but so is lending at 1.3% for 30 years. Positive yielding dollar duration with virtually no credit risk is a scarce asset. It may not always be, rates can normalize. if you want to hedge duration you can, but that's a different trade with a new set of risks (you could lose money as sovereign trends to zero and credit spreads blow out)

sure. would appreciate it if you give us a heads up about what you find. You have been looking very closely across the whole RE asset space so you are in a great position to speak to the relative value of the opportunities. well... I think if you were to pop open the performanceanalyzer on my interactive brokers account, ya might feel differently!

have always thought those too expensive but awesome companies/biz models. maybe I'll have another look, thanks.

interesting, haven't really felt the need to thoroughly quantify this risk as it relates to luxury/semi-luxury housing, saw it as more of a risk to my NEN which is more of a slumlord type in boston. (which I actually completely blew out of at a 25% loss to add to this basket). NEN is/was cheaper, thought this stuff was lower risk/more liquid/higher quality. The most direct address of it I've seen is in Essex's deck (slide 21), text copied below: Housing costs remain a key political and business issue across the country with many states implementing various forms of rent control legislation including Oregon, Colorado, Florida, Illinois, Massachusetts, and New York California’s AB 1482 will cap renewal rents at CPI + 5%, providing renter protectionswhile not destroying the incentive for new home development Essex has a long-standing guideline capping renewals at 10% and expects AB 1482 will result in approximately 10 bps impact to 2020 same-property revenues, primarily due to short-term rentals California’s legislatures passed several housing related bills aimed at incentivizing affordable housing development A referendum to amend Costa Hawkins will be on the November 2020 ballot. A similar proposal was soundly defeated by voters in 2018 and the apartment industry is aligned to protect the incentive to build new homes It is highly likely that California’s 2020 ballot will contain a proposal to modify Prop 13 for Commercial and Industrial Properties, creating a rolling 3 year re-assessment for property taxes. Fortunately, Apartment properties are not affected by the proposal “Since 2005 California has only produced 308 housing units for every 1,000 new residents. Add in the fact that California will be home to 50 million people by 2050, and it’s obvious we’re not on pace to meet that demand…we need to generate more funding for affordable housing, implement regulatory reform and create new financial incentives” –

stranger things have happened, but it's tough to sneak a pet at these types of institutional quality apartments, much less an Airbnb. The doorman/doorwoman/doorpeople? always knew every resident at each of my yuppie apartments. it may certainly increase overall supply, but I don't think there'd be material Airbnb arbitrage folks at EQR's type of properties. matts, I can't answer your question with respect to how many people will stop paying rent. My anecdotal gut is a very small number. I am a member of the yuppie scum class; all my friends are paying their rent, have their jobs, and are just working remotely from ther $2/3/4K a month apartment buildings. haven't looked at BSR, but will. I just don't really know how to underwrite senior properties. to continue the anecdote fun, I used to trade agency CMBS which is backed by apartments and skilled nursing facilities/senior living. The financials on the senior living/nursing homes was just plain scary, low margins, low DCSR's, medicare volatility/noise. I am sure there are lots of opportunities and I'm missing A LOT of nuance between all the different property types (a 55+ community is very different than hospice/nursing home), but I'm not going to spend time learning about that stuff at this time. Easier to rent to my fellow yuppie scum, I understand that market better...though these prices are peskily going up by the day. up 7% intraday on some of my adds today. Thanks. Any thoughts on Single-family rental vs multi-unit? I don't really believe in the long-run economics of single-family rentals. just less efficient/benefits of scale. When I think about my old apartment in DC metro. It occupied a very small piece of land above high quality retail, with 200 units paying on average $2500 / monthor $3K. That's $6-$7mm / year of high quality rent being serviced by not that much in costs: 3 front desk staff, 2 leasing professionals, occasional temps and maybe 2 or 3 full time garbage/repairs folks with the occasional external contractor coming in. only one roof. I just think the long run capex needs and unit economics of SFR ownership are less attractive. I'll own anything at a price but haven't looked at SFR much lately. in short, I don't really believe the NOI margins put out there by SFR rental when they say they can just as efficient. I simply prefer dense high income buildings in dense high income cities, like most of what these REITs own.

stranger things have happened, but it's tough to sneak a pet at these types of institutional quality apartments, much less an Airbnb. The doorman/doorwoman/doorpeople? always knew every resident at each of my yuppie apartments. it may certainly increase overall supply, but I don't think there'd be material Airbnb arbitrage folks at EQR's type of properties. matts, I can't answer your question with respect to how many people will stop paying rent. My anecdotal gut is a very small number. I am a member of the yuppie scum class; all my friends are paying their rent, have their jobs, and are just working remotely from ther $2/3/4K a month apartment buildings. haven't looked at BSR, but will. I just don't really know how to underwrite senior properties. to continue the anecdote fun, I used to trade agency CMBS which is backed by apartments and skilled nursing facilities/senior living. The financials on the senior living/nursing homes was just plain scary, low margins, low DCSR's, medicare volatility/noise. I am sure there are lots of opportunities and I'm missing A LOT of nuance between all the different property types (a 55+ community is very different than hospice/nursing home), but I'm not going to spend time learning about that stuff at this time. Easier to rent to my fellow yuppie scum, I understand that market better...though these prices are peskily going up by the day. up 7% intraday on some of my adds today.

Mentioned on other threads by me and a few others, but I think apartments deserve their own thread, but don't think they all individually deserve their own thread. No hard science to my picks here, diversification is protection against ignorance and when these stocks fell at the pace they fell, I'm not going to kid myself and say I went through every companies filings or built up a property by property, city by city valuation. Broadly, these companies have a) very low leverage, thus a decline in share price is a decline in enterprise value/asset value b) high occupancy in (mostly) higher barrier to entry high housing cost markets c) high income yuppie renters (example: EQR's average income renter is makes $165K, that's not a waitress or uber driver), does a coder at GOOG lose her job from COVID-19, what about a big law associate in DC? maybe a financier in NYC does. d) cap rates blew out to 6% or more (this changes by the day); investment grade spreads have blown out as well, but these have well-termed out debt. once credit stabilizes, these guys are going to print some incredibly low-cost debt as multi-fam debt (agency and corporate IG) will in my view be a safe haven in an otherwise tumultuous commercial real estate credit world (hotels, some office) e) 4-5%+ divvy yields that appear sustainable. Risks: a) rents will surely come down as new supply hits a weaker economy (but these buildings will remain full, in my view) b) I think one should haircut NOI 5-15%, not 30% c) these weren't cheap beforehand from a public or private market perspective; i was previously an apartments hater as I thought it was one of the steamier parts of the real estate and real estate finance world. a 30%-40% move down in prices (which at low leverage flows straight to the asset level) makes me an apartment lover (in basket form at 10-15% lower prices than today's levels, but we'll probably get a few more bites at the apple)

So this is admittedly hearsay / anecdote, but I have several friends that are doctors/on the front lines and they speak of a lot of 30-50 year olds with no co-morbitities that are intubated and/or critical, as well as hospitals not being particularly forthright with respect to the number of cases and severity thereof. I have not taken any investment action with respect to this, I maintain long-term optimism, but I do not think this should be dismissed as only killing the old and the already sick. I always prefer data to anecdote, but these are people I've known for 10 years / went to college with; they are credible and are tops in their respective field (prestigious undergrad, med schools/fellowships.

So...it looks like this guy held CDS and went on CNBC last week and had a meltdown about the crisis. Then unloaded the CDS Monday and went long stocks and back on CNBC (edit: Bloomberg on Tuesday) touting that everything is going to be ok. How is this remotely allowed/ethical? He brought talking his book to a new level. Lol...makes you respect people like WEB and Munger that much more because they don't engage in such despicable antics and still outperform these scumbags. He was totally transparent about his position at all times. You are allowed to have an opinion - and I have agreed with his opinion all along. Doesn't matter if his opinion was right or wrong. He has a long track record of taking positions and then going on media outlets pounding out his thesis. One big example is Herbalife short position. So, taking a short and then going on CNBC and trashing it repeatedly. May not be illegal, but certainly not noble behavior. There are many investors out there who do not resort to such tactics that outperform this guy significantly. Could not agree more. This guy is a complete turd ball...comes on TV ..starts crying about his Dad and shows concern and all that...I can't believe how pathetic he is. Where was the crying when he was trying to fkover a lot of diseased patients when he was all in on Valeant...he is just a pathetic human being. I agree, he has shown questionable character all along- just look up Gotham Partner blowup. Then his fake moral display is just to much. He is just a guy talking his book. Ackman was early to identify a scenario not priced in the credit markets, bought a convex hedge, and protected his LP’s capital. As a very small LP PSHNA via I appreciate that very much. I think he truly believes in pretty mich everything he does whether it be Herbalife Valeant or his successes. The guy is dedicated, passionate, and his brain is worth more than a 40% discount to NAV. He was literally short indices, not talking down a company. He didn’t force levered holders of structured credit and mortgages to blow up. He didn’t force anyone to sell their stocks. #teamackman

I try to just focus on picking stocks and finding interesting things to do rather than make macro predictions or read the coronavirus thread. I tip my hat to everyone who saw this as a bigger deal than I did. But I will not change my policy of (personally) being fully invested at all times and just pressing on. I'm a net saver with a stable job. The one thing that does give me a lot of pause with respect to corporate equities is I don't see how we come out of this without MATERIALLY higher corporate tax rates and individual tax rates. For this reason, I'm maybe a little more biased toward pass through vehicles* in non-taxable accounts (even more so than I already am), have considered using these values to do roth conversions (despite not being in a low tax bracket) and am including 30-40% corporate tax rates in a kind of "downside but back to normal operating environment" scenario. for the business i own. We can't have wartime deficits without pretending to try to pay the bill, right? From my perspective, this is a far greater risk to LONG TERM corporate earnings power than whether the coronavirus lockdown last 1 month or 3 months, or whether we enter a recession or a severe recession. Of course, if we enter a depression, then the tax rate won't really matter. *of course they aren't necessarily immune.

IYR: maybe just buy all of them, though I think towers and data centers are expensive since they are the ones almost completely unaffected and/or helped by all this; I thought they were expensive before too. CUZ: trophy Atlanta Austin Charlotte office 8-9 cap, 4x levered JBGS: low leverage on asset basis, 5x on income, HQ2 focused DC metro 7-8 cap, office and apartments , huge land bank ALEX: 7 ish cap, 15% ground lease, 15% industrial 70% retail on Hawaii, long entitlement, low retail sq foot per capita, high rents, has what some would consider high leverage, its well termed, fixed rate and stated use of all cash flow is delevering VNO: see thread DEI: 7 ish cap, office and apartments in Honolulu and LA, lots of small tenants (lawyers hollywood agents, real estate complex) so a bit more sensitive oerhaps, no position EQR: Sam Zell high quality apartment REIT, down 40% or so, not super super cheap, but high quality ESS: high quality Washington / Cali multi family off a lot, no position yet NEN: illiquid class B multi family in Boston area, partnership structure, 7-8 cap (half of PMV on asset basis) with heavy single asset long term fixed rate leverage EQC: see thread, cash box / SPAC, benefits from turmoil GRIF: see thread FRPH: see thread, actually been using as a source of cash on up days because it isn’t as diversified and has a lot of cash development exposure as percentage of assets, but its still a larger position than most of these. KIM: 10% ish yield, 7-8x FFO, beautifully termed out balance sheet, people at the very least have been going to the grocery, I don't love it though because I don't love retail, super small starter SPG: if you're going to owna mall, might as well own the best one down 2/3 in a month, no position MAC: Unless you want to buy the other that may make it and trades for 2x FFO, no position the vegas/casino landlord REITs look cheap, but I haven't had the time

Here's one I like that at first glance seems pretty safe, it's s small issue though. Background on the issuer: https://www.valueinvestorsclub.com/idea/FIFTH_STREET_FINANCE_CORP/6441292480 https://www.valueinvestorsclub.com/idea/OAKTREE_SPECIALTY_LENDING_CP/8953158171#description https://investors.oaktreespecialtylending.com/static-files/c2b16f1c-31ec-4517-ac7f-4384fa0b987b OCSL 3.5% of 2025,issued last month, Oaktree Specialty Lending Corp unsecureds, not sure what the price is though honestly, Fido seems to indicate last trade at $90, but IBKR shows an ask at $83. At $83, that's a 7.5% YTM for what I would consider pretty solid paper. OCSL has low actual leverage and is targeting lower leverage than other BDC's. It's the old fifth street so it still has 13% of its portfolio in crap (referred in company presentations as non-core). as a lot of revolver capacity and all the cash from these notes they just issued. seems to be in good place to make some sopranos style loans. kind of even like the equity at 40% of NAV

There have been some levered ETF unwinds one BDC/MLP land. I made some markets successfully in REIT preferred land this week (10-20% intraday moves, and I missed the best of it). My dad sent me an e-mail that his account was a “pattern day trader” which was a first. Looking at BDC debt now (not interested in equity except maybe highest of quality below 50 points of NAV) General fears of lack of credit extension availability. For example, if you are BXMT, you’ve got a portfolio of 65% LTV loans that seems pretty safe, but you’ve back levered it with 0-40% corporate obligations, then all of a sudden 18% of your loan books NOI (hotel’s) drops 100%. With respect to the mREITs, their earnings power is kind of collapsing and the repo market is strained. That said, they could theory unwind their books quickly (the agency ones at least) and buy back stock. Also, if refi’s get pushed out by borrower credit problems that could help slow speeds. It’s an exciting and scary time. Two Exchange-Traded Notes See Forced Redemptions After 83% Drop Thursday, March 19, 2020 03:33 PM By Claire Ballentine UBS Group notes fell below $5 minimum share value Monday ETNs are tied to firms that cater to small businesses (Bloomberg) --Two leveraged exchange-traded notes from UBS Group AG are facing mandatory redemptions after falling below a $5 minimum share value, according to a March 17 statement from the bank. The two series of 2xLeveraged Long ETRACS, tickers LBDC and BDCL, are linked to the Wells Fargo Business Development Company Index and have a total market capitalization of about $15.6 million. They’re both down more than 83% year to date, according to data compiled by Bloomberg. The underlying index, which tracks business development companies or investment firms that help small businesses meet their capital needs, was down 47% for the year. It trimmed some losses Thursday along with the overall stock market. As the spreading coronavirus forces small businesses to close their doors, or drastically reduces customers, they’re facing limited cash flow to cover debt expenses. The index’s largest holding is an 11% stake in Ares Capital Corp., which dropped almost 17% Monday. UBS is also redeeming two series of the ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN, tickers MORL and MRRL. Those notes had a combined market capitalization of about $30 million.

thanks, I've been eyeing ARCC bonds as well. Ares has $14 billion portfolio, $6.3 of which is first lien. If I assume a 75% haircut to non 1L, then that's $5.7 billion of losses and a 40% haircut to 1L, that's another $2.5 billion, that's $8 billion total of losses in an EXTREME scenario, leaving you $6 billion of post-atomic NAV. There's about $7 billion of debt which is starting to trade into the low $80's / high single digit/low double digit yields context. I'd prefer a real bond versus a baby bond, but maybe that's not rational. Also I like this trade with ARCC because I think they will de-lever in a crash via issuing stock for busted BDC's (like the did last time around). I think Ares has a reason to exist whereas some BDC's don't. I'd prefer lower prices /higher upside to get me to play here, but it's starting to get pretty spicy.