VEREIT (ex American Realty Capital Properties) : immobilier triple net aux USA…

"Monsieur le marché" est bien injuste avec VEREIT et son management.

On cote toujours sous les $7, alors que Glenn Rufrano n’a eu de cesse de gérer la foncière en "père de famille", avec une diversification patrimoniale accrue, un désendettement, etc.

Le management a réduit le dividende pour ne pas pénaliser la solidité financière durement acquise ses dernières années. Finalement, les loyers remontent plus vite que prévu, et VEREIT profite du flux de trésorerie supplémentaire pour poursuivre les rachats des actions préférentielles qui coûtent cher avec leur taux à 6,7%.

Malheureusement, comme le cours de bourse ne suit pas, le coût du capital de VEREIT reste plus élevé que ses consœurs, ce qui pénalise la croissance.

Même le relèvement de la notation de la dette est très long. S&P la note toujours BBB-, et il faudra attendre novembre pour un relèvement en BBB, si le COVID n’entraîne pas encore un report d’un an !

Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.

Merci pour le suivi.

Mon message du 21 août est décidémment toujours d’actualité.

Pour l’anecdote, le fonds Green Street Investors lié au prestigieux cabinet d’analystes immobiliers US Green Street est rentré sur VEREIT au trimestre dernier :

The firm initiated five new positions in the second quarter. The largest new stake, a $6.3 million position in industrial REIT PS Business Parks Inc., became the firm’s seventh-largest investment at the end of June. The second- and third-largest initiations are a $4.4 million stake in single tenant retail-focused VEREIT Inc. and a $4.0 million stake in office REIT Boston Properties, Inc.

Source : Green Street Investors ups stake in majority of REIT holdings in Q2 | S&P Global Market Intelligence

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Vereit acquiert le Siege Social de Peraton en partenariat avec Arch Street

Acquisition d’un immeuble de bureau à Washington DC occupé à 100% par Pareton. valeur 170million$

Quel est votre avis sur le locataire ?

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superinvest, le 14/09/2020 a écrit :

Vereit acquiert le Siege Social de Peraton en partenariat avec Arch Street

Acquisition d’un immeuble de bureau à Washington DC occupé à 100% par Pareton. valeur 170million$

Quel est votre avis sur le locataire ?

Boite du secteur défense, active sur les bons segments (drônes, surveillance…) - mais pas côtée donc on n’en saura pas plus.

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95% de loyers collectés en septembre 2020.

Bien mieux que Store Capital et ses 88%.

VEREIT a écrit :

As of September 22, 2020, VEREIT had received rent of approximately 87% for the second quarter, compared to 86% previously reported, 92% for July, 94% for August and 95% for September, which includes approximately 2% to be paid in arrears by a Government agency tenant.

Et environ $250 k de titres achetés par le CEO il y a une semaine :

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InvestisseurHeureux, le 29/09/2020 a écrit :

95% de loyers collectés en septembre 2020.

Pour l’anecdote, c’est mieux que la foncière "star" Realty Income qui a collecté 93,8% "seulement".

Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.

Toujours la même histoire.
Pour que le cours rebondisse, ce REIT doit délivrer de la croissance des FFO.
Pas le cas depuis 2015 donc le cours n’a pas remonté la pente.

For heureusement, la fraude ARCP les a forcé à se désendetter avant le Covid. Il faut désormais utiliser la force de frappe financière pour acheter des biens qui vont délivrer cette croissance.

Bonjour,

A noter le commentaire du CEO qui parle à nouveau croissance…c´est bon signe pour les prochains trimestres.

Management CommentaryGlenn  J.  Rufrano,  Chief  Executive  Officer,  stated,  “We  have  improved  operations  on  many  fronts:  collections  for  October  were  97%,  Net  Debt  to  EBITDA  decreased  from  6.08x  to  5.76x  and  rent  relief  was  down  from  Q2  to  Q3.    Early  renewal leasing,  with  2.5  million  square  feet  this  year,  was  a  catalyst  to  our  Q3  office  dispositions  while  also  reducing  future  exposures. Capital allocation this quarter focused on reducing our preferred stock by $300 million and will be expanded to include properties chosen to provide stability and growth.”

Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.

Moi je comprends du call:
- objectif de payout de 70% à terme (3-5ans?). On est à 50%. Donc le dividende pourrait augmenter l’an prochain marginalement. We know that a more traditional ratio could be 70% to 80% but we may get there over time
- ils vont faire des achattes nettes de $150-300m les 2 prochains trimestres. Donc disons $200m à 7%, cela nous fera en FFO environ $8m de plus soit un peu plus de 1% du FFO.
- tender sur toutes les preferred qui restent: environ $13m d’économies soit 2% de FFO en plus
- croissance naturelle des baux, environ 1.5% selon eux (un peu ambitieux mais bon)
- ils savent que la croissance des actifs est importante mais restent prudents
- ils veulent être BBB partout

Imaginons qu’ils enlèvent leur Pref et fassent des achattes de $100m net par trimestre, on aurait comme impact FFO.
Base $700m
Croissance baux: 1% soit $7m
Achattes à 7%: $17m
Tender Pref: $13m
TOTAL= 5% de croissance du FFO pour 2021.

Pas extraordinaire mais aura-t-on finalement cette croissance tant attendue?

Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.

GoodbyLenine a écrit :

Au fait : a-t-on des nouvelles de ce que les actionnaires lésés vont récupérer et quand ?

Pas que je sache. J’ai des alertes Google sur diverses mots-clés pour ne pas passer à côté.

Mais si vous vous souvenez, il était dit que cela prenait au moins un an, et c’était dans un monde sans COVID…

Fitch maintient le rating BBB de la dette à long terme de VEREIT.

Le commentaire complet donne des informations sur les points forts et faibles de VEREIT :

Fitch a écrit :

Fitch Rates VEREIT’s Senior Unsecured Notes ’BBB’

Mon 09 Nov, 2020 - 10:28 AM ET

Fitch Ratings - New York - 09 Nov 2020: Fitch Ratings has assigned a ’BBB’ rating to the senior unsecured notes issued by VEREIT Operating Partnership, L.P. (NYSE: VER). The Rating Outlook is Stable.

Net proceeds from the issuance, together with available liquidity via its revolver and cash on hand, are expected to fund the repayment of the company’s $900 million term loan, as well as amounts to settle swap agreements and swap termination costs, with any remaining proceeds to be used for general corporate purposes.

Fitch affirmed the ratings of VER and maintained the Stable Rating Outlook in March 2020. Fitch believed that the company’s portfolio cash flows would prove more durable due to the benefits of asset class diversity, including 35% of ABR exposure in non-retail categories, as well as material investment-grade tenant exposure, at 39% of 3Q20 revenues (when including Tractor Supply). This assumption has thus far been proven out through VER’s rent collection rates of 87% in 2Q20 and 94% in 3Q20, both of which compare well amongst net-lease peers.

Additionally, Fitch believed VER’s credit metrics would sustain in ranges appropriate for the rating, including net debt to recurring EBITDA at or below 6.0x, even under conditions that strained operating performance. The company’s leverage spiked to 6.0x for 2Q20 annualized, but has since recovered to 5.7x for 3Q20 annualized.

KEY RATING DRIVERS

Strong Credit Profile: Fitch expects leverage to sustain in the mid- to high-5x range through the forecast period.

If necessary, VER’s revolver can shoulder the full debt repayment burden in FY21 and FY22 should rising health risks related to the coronavirus limit investor appetite for additional bond issuance. The company’s scheduled 2021 and 2022 maturities consist of $314 million and $267 million in secured mortgage debt, respectively - all of which can be comfortably taken on via VER’s $1.5 billion unsecured revolver, through which the company retained full availability as of Sept. 30, 2020, until the debt can be termed out at a later date.

Industry Exposure Risk: The portfolio’s largest tenant industry exposure is restaurants at 20.8% of ABR (casual dining - 12.2%; quick service restaurants - 8.6%), and includes it largest tenant, Red Lobster, at 4.8% of ABR. Casual dining restaurants highly reliant on dine-in revenue and profitability have experienced greater negative performance impacts, particularly in scenarios where transitioning to take-out and delivery services has also been challenging.

Positively, VER’s weighted-average rent coverage within its combined retail and restaurant segment was 2.39x for 3Q20, which indicates a buffer to withstand at least a short-term standstill.

VER’s other major exposures include manufacturing (8.8%), discount retailers (8.3%), and pharmacies (6.3%). Investment-grade tenants are responsible for 39.2% of VER’s ABR when including Tractor Supply, which received an investment-grade rating subsequent to 3Q20 (previously not rated).

VER’s portfolio is well-diversified by location: the largest geographic concentrations by MSA include Chicago (5.1% of ABR), Dallas (4.1%) and Atlanta (2.3%).

Portfolio Repositioning: Fitch expects that VER will continue to match fund external investment activity to preserve capital and manage debt balances. Fitch anticipates that the company will acquire retail and industrial assets and sell restaurant, office, and flat lease assets as market conditions allow. For the year ended Dec. 31, 2019, VER was a net seller, with $1.1 billion of dispositions and $425.6 million of acquisitions, in-line with stated portfolio repositioning objectives.

The company has disposed of more than $5 billion in assets since 2015, reducing Red Lobster tenant concentration to 4.8% of 3Q20 revenues from 11.9% in 2Q15 and office exposure to 17.1% from 22.7%.

Granular Portfolio: As of Sept. 30, 2020, VER’s portfolio consisted of single tenant retail, restaurant, office, and industrial real estate assets, comprising approximately 3,820 properties with a gross book value of approximately $14.6 billion. The portfolio’s economic occupancy was 98.5% with a weighted average lease term (WALT) of 8.4 years, lower than Fitch net lease peer WALT of approximately 10 years due largely to the office and industrial asset type diversification. The company’s portfolio has built in rent escalations on approximately 80% of leases which generate predictable cash flows, absent tenant bankruptcies and lease rejections.

Improved Capital Markets Activity: VER’s class action lawsuit was a significant overhang on its liquidity profile and capital access. VER’s absolute size and issuance frequency will support its capital markets’ presence now that the legal overhang has been resolved. Fitch expects VER to demonstrate strong access to both equity and debt markets once conditions stabilize as it shifts its focus to growing the portfolio after several years of strategic refinement.

Year-to-date through 3Q20, VER issued $600 million in unsecured bonds to redeem a higher cost unsecured bond issuance and a portion of its Series F preferred stock and netted approximately $90 million in proceeds via common equity issuance.

DERIVATION SUMMARY

VER’s portfolio has more non-retail (office, industrial) exposure than its Fitch-rated net lease counterparts, at an estimated 35% of 3Q20 ABR. This results in a WALT of approximately eight years, which is lower than the peer average of approximately 10 years. The company has been actively reducing its consolidated office exposure to limit capex costs but exposure is expected to remain materially higher versus peers, including National Retail Properties (BBB+/Stable), STORE Capital Corp. (BBB/Negative) and Spirit Realty Capital (BBB/Negative). VER’s investment-grade tenant exposure at 39% of total ABR compares favorably with peers.

VER’s credit metrics, including leverage expected to sustain in the mid- to high-5x range and UA/UD in the low-2x range, compare well with STORE and Spirit. National Retail is expected to sustain leverage in the low-5x range. VER is expected to demonstrate better capital access following the resolution of its class action litigation, and positive rating momentum would be contingent on access improving to levels consistent with higher rated peers and ’BBB+’ rated REITs generally.

KEY ASSUMPTIONS

--Negative cash releasing spreads in FY20 to reflect weaker operating environment with return to flat leasing spreads in FY21;

--Match funding of acquisition activity with disposition proceeds in FY20, followed by net acquisitions of $600 million in FY21.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

--Fitch’s expectation of net debt, excluding preferred stock, to recurring GAAP operating EBITDA sustaining below 5.0x;

--Fitch’s expectation of FCC sustaining above 3.5x;

--Demonstration of improved capital access, including unsecured debt capital, on par with ’BBB+’ rated REIT issuers;

--Stabilization of the company’s operating fundamentals (e.g. sustainable strength or stability in SSNOI results and or corporate earnings growth).

Factors that could, individually or collectively, lead to negative rating action/downgrade:

--Fitch’s expectation of net debt, excluding preferred stock, to recurring GAAP operating EBITDA sustaining above 6.0x;

--Fitch’s expectation of FCC sustaining below 2.5x;

--Fitch’s expectation of the ratio of unencumbered assets to unsecured debt (UA/UD) sustaining below 2.0x at a 9% stressed cap rate and/or deterioration in the quality, value and/or ability to finance the unencumbered pool.

LIQUIDITY AND DEBT STRUCTURE

Fitch considers VER’s base case liquidity coverage through FYE21 to be adequate for the rating. The company currently has full availability under its $1.5 billion revolver. VER has been actively unencumbering its portfolio as secured mortgages come due, and Fitch does not anticipate that current conditions will impede progress toward its 100% unsecured goal as mortgages mature through FY21.

Fitch defines liquidity coverage as sources of liquidity divided by uses of liquidity. Sources include unrestricted cash, availability under unsecured revolving credit facilities and retained cash flow from operating activities after dividends. Uses include pro rata debt maturities, expected recurring capex and forecast (re)development costs.

Source : https://www.fitchratings.com/research/n … 09-11-2020

Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.

Comme Kinder Morgan, une journée étrange hier pour VEREIT.

Presque +3,5% ; sans actualité et loin devant ses consœurs.

Comme si les valeurs qui avaient été les plus pénalisées se mettaient à "rattraper" leurs consœurs.

Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.