Board of Directors has declared a cash dividend of $0.50 per share of common stock, payable with respect to the quarter ended June 30, 2014. The dividend is expected to be paid on August 22, 2014 to shareholders of record as of the close of business on August 18, 2014. NorthStar Realty's common shares will begin trading ex-dividend on August 14, 2014. Following the completion of the spin-off of NorthStar Asset Management Group Inc. as of July 1, 2014, NorthStar Realty expects to pay a quarterly dividend of $0.40 per share of common stock for each of the quarters ending September 30, 2014 and December 31, 2014.http://phoenix.corporate-ir.net/phoenix.zhtml?c=185725&p...
So the $.50 was as was rumored but the $.40 per qtr for the balance of the year is higher than I had heard. At a $1.60 run rate and todays price of $17.38 that is a yield of 9.2%. If they can hold that rate , and the Griffin deal closes , their is some nice potential upside to NRF if the market starts to value them as more of an equity reit with some legacy, opportunistic mtg businesses than as just a pure commercial mtg reit.This deal will take them from 63% owned real estate to 74% owned real estate, with the balance being CRE loans of various types.They have talked about spinning off the Senior housing at some point in the future if the market doesn't value the combined entity properly. Once concern I have with that scenario is where the NRF pfd's end up if they did that. If they stay with NRF after the possible spin off sometime next year (nothing firm on this yet but I have heard it talked about) the NRF pfds asset coverage starts to shrink rapidly.It may make sense to look to sell NRF pfds and buy NRF equity or look to swap the NRF pfds into other pfds (will have to give up some yield unless you swap to m-reit pfds.
Agreed, nittanyfan, the $1.60 run rate is above previous projections of a $1.40 or so run rate, and makes NRF an even more compelling buy for yield investors. I used to own a lot of NRF preferred in my IRA, but sold it all and switched it into NRF common a month or two ago. At the time, the common provided roughly the same projected yield as the preferred, but with good appreciation potential to boot. Now, the common provides a somewhat greater projected yield than the preferred, and still with the same good appreciation potential. Underlooked in all this is NSAM, which is poised to be the real rocket ship for those interested in capital appreciation potential with negligible income. (The higher than projected run rate on NRF probably means a correspondingly lower than projected run rate on NSAM, but who cares.) NSAM is probably "off topic" for this board, so let me just say that for a discussion of the ramifications of all this dealmaking for NSAM, please see the Yahoo MB for NRF:http://finance.yahoo.com/mb/NRF/as well as the posts of TMFRoyal on his board as well as on this board: http://boards.fool.com/right-nrf-did-a-reverse-split-and-so-...http://boards.fool.com/interesting-it-looked-like-that-deal-...
w/regards to preferred, even if the asset coverage goes down, NRF has to pay the dividend on the Preferred first, before any dividend is declared on the common, so you have a buffer of$1.60*200 million shares - $320 million annualised.As regards the Griffin deal, it is not accretive to to CAD, so that will not cause the Dividend to increase, at least not in the first year.
I suspect that NRF common would trade at a higher price if they would significantly slash their debt leverage (although that would reduce FFO to some extent, and perhaps even require a cut in the dividend). Unless and until they do that, NRF will occupy a special niche in REITdom, perhaps of interest mainly to speculators and yield-seekers.I have a very modest position in NRF but won't add to it given the complexity of the company and its high debt leverage and high cost of capital. That said, my investment in NRF has performed quite well, and so perhaps it's unfair of me to criticize Mr. Hamamoto. Good investments come in all shapes and sizes, and investors need to determine their taste for risk and potential reward.Ralph
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