No. of Recommendations: 3
Informative interview today of the AFR Pres. and CEO at REIT Talk at REIT Cafe, click on Programs:

http://www.reitcafe.com/REITcafe.html

The CEO characterizes the dividend as strong.

Insiders are buying shares at these low prices.

Chair of the Board owns 5 M shares.

David, long AFR.
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No. of Recommendations: 8
REIT Cafe's interview by Anatole Pevnev of AFR's CEO Nicholas Schorsch was actually conducted on November 5th, 2005 and posted on REIT Cafe's website yesterday.

More from the interview:

AFR acquires bank properties and other financial properties including office buildings. In addition to banks, tenants included other financial institutions such as AIG and Fireman's Fund.

AFR uses "matched funding": 96% to 97% of it debt is at a fixed rate (less than 6% as I recall) with average maturity of around 13 years; average lease term is 14 years.

The lack of understanding of AFR's business model and plan by analysts is something AFR is working hard to alleviate. Part of the problem is that in AFR's 2 years as a publicly traded REIT it has grown rapidly into a large cap REIT with over 1200 locations.

The growth has caused analysts to grapple with AFR's ever changing earnings on a quarter-to-quarter basis (instead of long-term?).

Since going public, occupancy has gone from 84% to 91% today.

Many analysts profess not to understand AFR's financing. It's simply a combination of equity and debt with the latter at around 67% to 70% of capital.

End of narrative.

David, who really enjoys the wonderful service provided by Anatole.
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No. of Recommendations: 8
wysockiman wrote (in part):


The lack of understanding of AFR's business model and plan by analysts is something AFR is working hard to alleviate. Part of the problem is that in AFR's 2 years as a publicly traded REIT it has grown rapidly into a large cap REIT with over 1200 locations.

The growth has caused analysts to grapple with AFR's ever changing earnings on a quarter-to-quarter basis (instead of long-term?).


I do not use analyst ratings as a big part of my decision process about which REITs to buy - mostly because I think the underwriting business (or potential underwriting business)compromises the objectivity of sell side analysts.

However, I think most of the analysts are really pretty bright guys. In fact, I would say they probably aren't giving away any IQ points to most REIT managements. No doubt, the better REIT managements will have an edge in experience and market knowledge. But I have a hard time swallowing the argument that "the analysts just don't understand our plan". I could possibly accept "the analysts disagree with the merits of our plan, but our results over time will prove we are right and they are wrong"

Perhaps some will say this is arguing over semantics, but I think the difference is significant.

Just my take,

Lee (MeanderingMecan)

Disclosure: I have never had a position in any AFR security.
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No. of Recommendations: 1
Lee posted, in pertinent part:

But I have a hard time swallowing the argument that "the analysts just don't understand our plan". I could possibly accept "the analysts disagree with the merits of our plan, but our results over time will prove we are right and they are wrong"

Valid point. But I think that was what the CEO was saying. Otherwise why would management be concerned about trying harder to make their business plan clear and understandable? While I don't recall the word "transparency" being used, it seemed clear to me that that was what the CEO was saying they needed to strive for.

David, long AFR.
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No. of Recommendations: 4
I agree with MeanderingMecan when he (?she) wrote <<I have a hard time swallowing the argument that "the analysts just don't understand our plan".>>. That was an attack on the messengers (analysts) rather than the message. Other REITs have felt their stocks were undervalued, but management usually have give reasons why (e.g. EOP and HME said replacement cost was way above what stock indicated); I never heard them say (until now) "analysts just don't understand". Mathew Emmert in post

http://boards.fool.com/Message.asp?mid=23293262

gave his reasons for his reservations about AFR. AFR's management could have said, for example, that Emmert did not take into account the credit worthiness of AFR's clients and higher leverage was justified. But instead AFR said analysts "just don't understand".

Let me repeat that AFR could be a fine investment, I don't have evidence that it will be or that it won't be because I haven't done any DD on AFR. I'm letting off a little steam because I have a thing with ad hominem statements.


klee12
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