Gregmal

So this one has been smoked but I'm beginning to get more comfort with perhaps where things go in a "bad" scenario. Given a little bit of an assumption based on prior actions, is it theoretically more than a little likely that should many retailers get severely distressed, that Simon ends up owning a good chunk of retail businesses? So the hit to rent happens, but you also have a royalty/equity stake in the future of these businesses. Not dissimilar to Amazon/Ebay take chunks of fees down from any seller using their platform. The future or retail, whatever it may be, is impossible to exist, without Simon. Lenders will have to work with them, they are almost too big to fail. Should be interesting. Ive been adding reasonably last couple weeks.

https://seekingalpha.com/article/4336550-pure-cycle-corporation-pcyo-management-on-q1-2020-results-earnings-call-transcript Good stuff here. This is an insulated powerhouse in the making who's timeline for development renders the current virus situation immaterial.

I guess a better question is why buy SELF when you can buy Laaco which pays a 5.7% yield and is only paying out 50% of the FFO. Thats where I would insert one of those emojis(if I knew how to) with the shoulder shrug lol. Really just preference is likely the answer. LAAco is a good one too and fits the same profile(with some variances of course). Smaller companies(think GRIF vs Prologis) also are somewhat restrained in their ability to access capital. Growing companies is like smoking crack, or so Ive been told. Highly addictive or deadly for most. Sometimes I take comfort in knowing that resources are a little more precious for the smaller guys and thus I'm not going to have to worrying about excessive buying binges at the wrong time. The flip side is, one or two bad purchases can really impair you. Fundamentally I like Laaco better, but I really just hate the OTC listing. Stupid reason, I know.

Neat idea and hardly(to my knowledge) a crowded institutional idea either. How do look at structuring this in a cost effective manner? I gave it a quick glance and put it on the "take a look at" reminder list for later. But briefly, couldn't you construct a cheaper expression with an outright short and some calls to hedge? Or is this a "big expected downside so go really far out of the money" situation?

The net figure on the lots is complicated, to say the least. Again referring to the accounting aspect. The company has cited this figure as basically your "after adjustment" margin once reconciling the reimbursements. The raw margin on lots for phase one was mid single digits, which was misleading because it didn't include consideration for the reimbursement. Total ballparks based on phase one have been $100k per lot broken down but $30kish tap fee, $70k lot value. Cost to prep to the company has been about $50k per. My understanding is that these figures will definitely improve on phase two now that theres demand and much of the infrastructural stuff in place. Mentioned on the call they've got 7 builders vying for a piece of it, and likely won't be able to accommodate all of them. As the build out furthers, the companies leverage increases. On the accounting front, the company also just hired a CFO, previously an EY Denver Partner.

Simplicity is another one. SELF has vastly outperformed VNO during the plunge.

Hi Gregmal - Is my understanding correct on revenue from SkyRanch excluding the water/wastewater tap fee of around ~$$30K and recurring annual revenue of ~$1500. As per their latest 10Q, the initial 506 lots will require capital of $36m which includes $28m of reimbursement cost, so net capital cost of $8m generating $37m of revenue, so net revenue ~$57K/lot (SFE). Does that mean income of ~$285m from 5000SFE Skyranch in next 3 years plus ~$150m of tap charges? The accounting gets a little complex with some of this, for instance listen to the Q1 call explaining the muni bond breakdown. But generally speaking, there are a few ways to look at it. Of the $28M reimbursement, they've gotten $10M and until the next muni sale, the outstanding reimbursements accrue interest IIRC at around 6% or so a year. The net on the lots comes to about $20k per for phase 1 and is expected to rise substantially for phase 2. I think you are counting the entire 5000 SFE MPC however this will not occur over 3 years. 506 homes basically wrap phase one by August. What I'd expect is phase 2 you're looking at 2500-3000 SFE and potentially 2 million square feet of commercial with time lines of 3-5 and 4-7 years respectively. Each SFE generates a $30k one time tap and $1500 per year following. The commercial is generally 4-5x that number, maybe even higher. They are also starting to work on providing non company owned developments, a further boost. So for a 3 year model I'd probably look at the delivery of last phase one lots, so about 125, plus maybe 1500-2000 new lots on phase two, although keep in mind phase one came in two years ahead of scheduled so you could also see these numbers higher. But at 1500 and I'd figure $80-100M on the lots plus tap fees around $50M-$60M and then the massive compounding of the recurring revenue base.

Agree, and only thing further I'd add to what we've already discussed is that storage units typically hold up better than expected during downturns. Live's disrupted, people moving, etc. Non payment here isn't an issue. These guys specifically mentioned several steps they took to mitigate any of this. Incentivizing pay by credit card instead of debit/check. Non payment of unit fees is mitigated by ability to sell contents of unit. The figure quoted was that usually one can expect at least 4-5 months worth of value. IE a $200 a month unit should hold at least $800 worth of goods. So someone misses a couple payments, its no big deal. Downturns also kill new development. The business is very robust. Just needs to be managed properly. They've got a solid little business here. And generally speaking, Ive been pleased with Mark's discipline. Only ? was the Tuxis deal, but you also kind of have to be realistic with your expectations in respect to stuff like that. Same with the compensation.

I think it's a secular trend and why I hate office space based real estate companies. But it won't go away overnight. Think malls, except nobody actually likes going to work. People still like going to the mall. But logistically, its not really great. So many people have told me how their biggest problem during this shut down is getting anything done with their spouse/kids constantly interrupting them. Maybe some wealthy folks have real home offices, but not most normal workers. Good luck getting your spread sheets done in your 2000 sq ft home with your wife and 3 kids... Finance professionals should be able to no problem. But the egos need to be caressed with wasteful corner offices and trophy pictures on display for clients, so those will stick around. But really, anyone in accounting/finance should be able to. I work from home, and have several small offices in different cities for the purpose of accommodating folks and getting out of the house. Total luxury though as they arent needed one iota. Need to meet a client? Take the client out for a nice meal and write off the $500 and the experience will be better than wasting thousands on an office.

Lol 100% this. They’ve lost it. Remember, NY elected officials are doing a heroic job overseeing the biggest Coronavirus disaster hub in America despite months on inaction, but Trumps response is the worst in history. Maybe Burry owns stocks he thinks are good values(value investing, you know?) and can also have an opinion. Maybe he thinks if the situation is handled right, things work out? How horrific he voice that or have money invested anywhere! The only opinions that matter are the ones from the circus crew. Who peddle fear and refuse to be transparent about anything, refuse to make ANY trackable projections or commit to ANYTHING...who run their mouths consistently but “don’t owe anyone anything”... yup

Excellent stuff on the earnings call. Worth a listen for those interested here. Much talk about "pent up demand" which was an area brought up in another thread. Commercial optionality sounds very exciting. Biggest take aways was "0" contract cancellations to date and continued robust demand for Sky Ranch phase 2.

Viking, I don’t disagree. There’s blame to be had pretty much everywhere. I’ve said as much. It’s typical of pretty much any situation; something goes wrong and people feel the need to point fingers. My greater point was to highlight how ridiculous we can get, on both sides, if we really want to engage in deliberate cherry picking, misrepresentation, and peddling of partisan propaganda.

This comedy just keeps getting better! So Cuomo, who did what exactly in January and February to "prepare" is a hero and did a great job now. While his brother Fredo sits around peddling fear and laying it on thick "ooh me tummy hurt, I see dead people!".... meanwhile, Trump, did an awful job managing the entire country; forget the fact that if it wasn't for disaster NY, the country's numbers would look significantly better. Got it! Again on a logical basis, a total failure. NY is by far the biggest mess in the country. It was(maybe LA gives it a run for the money) even before coronavirus. Cuomo picked up the slack big time and did a great job starting about a month ago. But to claim he did great while Trump did terrible is just so laughable. But thats how it works in leftyville. We do our own thing and when it turns into a mess blame Republicans, while also turning to Uncle Sam for help(where did most of NYs PPE come from)? Oh I forgot, they had it on hand and didn't need any right. Cuz they were just so well managed and prepared because Cuomo and De Blasio, your elected leaders, really nailed this thing!

Bingo. The line from Ben Rickett in big short comes to mind. “For every 1% uptick in unemployment, 40,000 people die”. Or something to that effect when the kids are cheering the market crash. Let’s hope that isnt the case because this major overreaction could have been massively more costly than this super-flu with a social media following.

It’s The NY Times, what do you expect? I’m just shocked you got to this bad boy of an article before Liberty or Dalal.

Which is true, but the flu is not the same every year either. Sometimes it’s a really bad strain, sometimes it isn’t. How many times have we heard “make sure you get your flu shot, it’s supposed to be pretty nasty this year” or some variation of that? Sure covid19 is a significantly nastier virus, but holy fuck is this now a far cry and a major walk back from all the folks who manufactured and spread stories and narratives scripted for a Hollywood movie.

Amusing logic here. The flu has a vaccine and still kills the number of people it does. Covid19 has no vaccine and no shortage of folks bitching and screaming about how badly mismanaged and how late our government was dealing with it, and yet the numbers...

On the subject of cars, is there any incentive for anyone to buy a car right now? Between record number of leases coming due and the current economic situation, it seems like a no brainer to wait 6-12 months if you're looking.

LOL, now! He wants to talk investments! Can’t make this shit up. How’s your city, with your elected officials doing “leading the charge”?

Well lets answer that question! Personally, as a mid 30s(yuck) dude, do I look at stocks(specific ones of course) as attractive relative to the alternatives? You bet I do. If you have 5+ year time horizon, how isn’t this the case?

Yea no swipe at anyone intended. Made the same misfortune myself many a years back on this one. This epitomizes investing in this space.

If at first you dont succeed, try, try again. If you fail again, then what? Someone just needs to end this disaster of a company. Seems like just yesterday Icahn was going to save the day. Seems like just two yesterdays ago, Watsa, Cooperman, and Pickens found the value investment of the decade. Seems like last week Tom Ward was God.

I wager there’s going to be some in the areas hit worst. Maybe we get another AMRQ.

http://archive.fast-edgar.com//20200406/AEZ2T622H222VZZ2222K2ZZETRSVJ22SV222/ Total animal this guy is. Bought tons of shares from the previous largest shareholder and now is filing every week on open market purchases.

Not a nice move by the US. But also, Canada should have been stockpiling in Jan/Feb. Yea, its an interesting narrative and application of responsibility from some here. The US/Trump should have foreseen everything months ago and had massive stockpiles of everything one would be able to think of after the fact. Everyone else who is unprepared is the victim of Trump being an asshole.