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No. of Recommendations: 4
I am planning to open a small position to track this. Here are my initial thoughts...
- KRG plans to sell assets and pay down debt
- Expect this and few other items to bring FFO to $1.6 (lower than company guidance); This will push the dividend payout ratio to 80%
- Given 30 Year UST went below 3%, financing should be relatively easy and hopefully they could divest at cap rates < 8
- KRG is expecting improved debt/EBITDA multiple will reflect on the valuation, not so sure about it
- KRG is expecting the asset sales will increase the ABR (lower ABR assets to be disposed)
- The company is expecting their NAV to be $19.5 at 7.5 Cap Rate; If they can execute their disposition at 7.5 cap rate, then there is an opportunity the remaining portfolio could be valued higher
- I expect, this selling assets and re-positioning will take 2 years
- They have not articulated a clear strategy on redevelopment, or ground-up development, looks like they are not going to undertake anything in the next 1 to 2 years and looking at these opportunities beyond that

I am expecting the share price will go through fluctuations and having a small position will help me keep track and research more.
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