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URL:  http://boards.fool.com/cwh-gamblers-special-30644918.aspx

Subject:  CWH- Gamblers special Date:  4/20/2013  11:29 AM
Author:  yodaorange Number:  74144 of 76771

Barron's has an interesting article about Commonwealth REIT aka CWH. The article is about the hedge fund that is trying to remove the existing management team. CWH uses an outside management firm, Reit Management & Researchm, RMR. The hedge fund alleges that CWH is selling for roughly one half of the properties net asset value. CWH closed at 22.17, while the hedge fund estimates NAV @ ~ 40.00.

The hedge fund Corvex Management is run by Keith Meister, former right hand man to Carl Icahn. Corvex has filed a lawsuit in Massachusetts attempting to oust the board. Recall that Missash knew Carl from their Princeton days together. Somehow It makes me think Missash is involved . .

The article quotes our REITnut about the battle:


What's more, the March offering, at $19, was priced too low, significantly less than CommonWealth's book value of $34, and even less than the $23.90 where the stock traded at the time. "How do you justify that?" Block asks.


CWH has paid a total of $395 million in management feeds to RMR from 2007 to 2012. This was about 30% of the market value over that period.


The gamble is binary IMO. If the hedge fund wins and is able to change the management structure, the stock will jump. The article suggests a 30% jump, but if it traded like most property REITS it should trade closer to the $40 NAV.

The article is required reading for all REITsters IMO. Investing is NOT required IMO. Personally I would not own any of the RMR managed REITS in any of the widows and orphans accounts. The article quotes the father/son Portnoy management team as saying they are acting for the best interests of CWH. They win the Yoda Pinocchio award of the year for this belief.

Link to Barrons article:

http://online.barrons.com/article/SB500014240527487033184045...

Thanks,

Yodaorange
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