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Subject:  If you had $20,000 to invest???? Date:  4/3/2002  4:56 PM
Author:  REITster Number:  12859 of 86598

NYYanqui wrote, As we know, REITs have generally reached healthy valuations. Question for this distinguished Board: if tomorrow you had $20,000 to invest in ONE REIT, which would it be, and why?

I liked his question so much I am starting a new thread.

My response is out of character for conservative REITster. TZH.

Trizec Hahn is a large Canadian real estate company with substantial properties in the U.S. They have announced a reorganization, to take place in May, whereby they will form a new U.S. REIT, Trizec Properties, to be officed in NY, if I remember correctly. They plan to sell a significant number of currently held properties instead of placing them in the REIT.

They believe the substantial savings in income taxes, etc. will allow them to pay a dividend in 2003 in the US$1.30 to US$1.45 range. The stock is around $16.00 currently, which will give a yield in the 8 to 9% range, if they successfully pull this off. At $16, TZH is selling at a 28% discount to the $22.38 NAV (RSR NAV).

Fundamentally, TZH is OK, not great. Its debt is about 55% of asset value (NAV + Debt). I would prefer the debt to be less than 50%.

Due to the substantial discount to NAV and the prospect of an 8% or more yield, this one looks like a good speculation, with a better that even chance of significant price rise over the next couple of years.
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