UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: yodaorange Big red star, 1000 posts Feste Award Nominee! Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77309  
Subject: CWH- Gamblers special Date: 4/20/2013 11:29 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 18
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
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next

Announcements

Related Boards
Real Estate Investing
This is a great board for Real Estate other than REITs.

Buying & Selling a Home
Get your personal advice about mortgages, agents, etc. here.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Deranged Monkey Criticism

RadioShack Afloat on a Sea of Financing
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement