- On November 1st, I reported on Omega Healthcare Investors and the angst of the skilled nursing REIT’s tenant, Orianna.
- Then, on November 3rd, Rubicon and I wrote, “The lipstick is beginning to fade, and the silk purse has become a dog treat”.
- I’m sure some of you are saying to yourself, “enough already".
- I consider the pullback a buying opportunity, as Physicians Realty Trust continues to have a robust pipeline of attractive MOB acquisitions that should drive above-average growth.
“Orianna has stopped paying rent, and the company is transitioning its assets. This means it is negotiating with Omega, and it could be either a “friendly” resolution or “not-so-friendly” resolution.
The friendly alternative means the landlord and tenant will be able to work out a new master lease, which includes a rent reduction to $32-38 million (an $8-14 million hair cut). Using my back-of-the-napkin math, and using $11 million as the rent reduction, the new “friendly” deal means Omega’s portfolio leased to Orianna is worth around $120 million less now (using a 9% Cap Rate).”
“The lipstick is beginning to fade and the silk purse has become a dog treat.”
Of course, we were referring to CBL Properties' (NYSE:CBL) dividend cut that caught most everyone off guard - shares were pounded, down over 25% at market close on Friday.
I’m sure some of you are saying to yourself, “enough already”, as shares of two popular REITs were whacked hard last week.
Nobody was expecting to see the sudden shift in sentiment, but when Mr. Market speaks, he usually carries a bull horn.
Today, I wanted to provide some calm to the storm, in hopes of providing REIT investors with an extremely safe alternative that won’t keep you up at night. Better said, just put this REIT on snooze control...