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No. of Recommendations: 2
The preferred's are protected from conversion till 2023.
What am I missing ? what is your concern?

They aren't protected from liquidation if there is a merger or 'other corporate action', so paying >10% over the liquidation value is a concern to me. The fact that the coupon rates for the A vs. the B indicate that the premium for the conversion feature should be closer to 0.625%, paying >1% for that feature is a concern to me.

Now, think of the protection till 2023 as a call option on the stock or in much simpler terms the current preferred price assumes the stock will gain at 3.25% per year, not a big hurdle right?

Maybe, maybe not. Given the bull run that we've pretty much been in for years, assuming that any REIT is going to hit a hurdle rate, even 3.25%, for the next 4 1/2 years seems a bit optimistic, especially given the slow down in the real estate markets (increasing inventories and falling prices, even with lower rates) that I've been seeing recently.


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