BVD.un - Boulevard Industrial Real Estate Investment Trust

[yader]

Snowball,

 

Just trying to see negatives...

 

Mr. Hayes, CEO, has a 6% interest in the company.  He owns 2,350,000 units currently.  I am assuming these are from HHT and were purchased at 0.10.  This means his outlay is $235,000.

 

His yearly salary is $100,000 with $67,000 in options.  It does not seem his interest lies as much with stockholders as it does keeping the company running (finance and acquire!) to collect a paycheck.

[snowball82]

Respectfully, his work to build a new company deserves more respect, just my humble opinion. Do you have considered his previous salary and how it is demanding to start a new business ... and work for a year to get the REIT status?

[yader]

Snowball,

 

I don't know how hard that is.  Does it not stand to reason that if the long term rewards are great then why pay so much in fees to the manager (Hayes, Hogan, others)?  Net income for the REIT properties ended March 2013 was $968,160 (pg 61).  Now lets back out management fees. 

 

The Manager will be entitled to the following fees pursuant to the Asset Management Agreement:

(a) Base annual asset management fee (the “Asset Management Fee”) calculated and payable on a

monthly basis in arrears on the first day of each month equal to 0.25% of AMA Gross Book Value

of the REIT.

 

(b) An acquisition fee (the “Acquisition Fee”) equal to:

 

  (i) 1.0% of the AMA Purchase Price paid by the REIT or any Affiliate of the REIT for the

  purchase of a Property on the first $100,000,000 of Properties acquired by the REIT and

  its Affiliates collectively in each Fiscal Year;

 

  (ii) 0.75% of the AMA Purchase Price paid by the REIT or any Affiliate of the REIT for the

  purchase of a Property on the next $100,000,000 of Properties acquired by the REIT and

  its Affiliates collectively in each Fiscal Year; and 

 

  (iii) 0.50% of the AMA Purchase Price paid by the REIT or any Affiliate of the REIT for the

  purchase of a Property on all Properties acquired by the REIT and its Affiliates collectively in

  excess of $200,000,000 in each Fiscal Year.

 

Notwithstanding the foregoing, the Asset Manager and the REIT have agreed that the Acquisition Fee in

respect of the Initial REIT Properties shall be limited to $75,000 and that for calendar 2014 only, an additional

$75,000 shall be added to the Asset Management Fee payable to the Asset Manager monthly in arrears for the

balance of the year.

 

The expenses are the sum of the Asset Management Fee (AMF) and the Acquisition Fee (AF).

AF has been limited to $75,000 for the first year.

AMF is 0.25% of $15,000,000, (gross book), monthly = 37,500.  Yearly = 450,000.

+ 75,000/month through 2014 (call it 8 months) = 600,000

Total expenses = 1,050,000

Net Income from above = 968,160

Actual = (81840)

 

If I could buy stock in the Asset Manager I would, but not the REIT.

[snowball82]

I suggest to confirm your numbers with management, for now they aren't owner. So it doesn't make sens to think they won't buy others assets and have a different structure fee than competitors. I respect your opinion not to buy shares of this company. It is important to buy stocks when we are 100% confident ... there are so many other alternatives :) Good luck

[snowball82]

According to the document commercialisation made ​​public friday, the dividend distribution could be 0.023 when gross asset will be 100 M$. If you paid 0.11 it's 21 % dividends per year with monthly distribution. If you are in the private placement it could be 14 %.

[snowball82]

The company announced friday the completion of its Qualifying. "The Arrangement was approved pursuant to a final order issued by the Ontario Superior Court of Justice ....but remains subject to receipt of final approval of the TSXV through the issuance of the TSXV’s final exchange bulletin regarding the Qualifying Transaction, which is expected in the next few days". Last trade 0.11, won't be a surprise for me if stock price reach 0.30 over next year... if dividends is 0.023 !

 

[snowball82]

BVD.un and debenture start trading tomorow.

[Guest ajc]

BVD.un and debenture start trading tomorow.

 

Thanks for the heads-up, snowball82.

[ourkid8]

Closing today at $0.15/share.  Was it a straight 1:1 conversion from HHT.P.V to BVD.un?  If so, that was a very nice 36% move to the upside!

 

Tks,

S

[snowball82]

Yes, 1:1, + 36 % today

 

Again, won't be a surprise if stock price reach 0.30 over next year... if dividends is 0.023 !

If you buy and the stock is baggers 1-2 years from now,  just say thanks here lol + please don't forget charity in your community for people who need it at the end of the year.

[snowball82]

I changed the subject for "BVD.un - Boulevard Industrial Real Estate Investment Trust ", the new name.

[snowball82]

Insider buying yesterday. We have to wait for the next acquisition.

[bizaro86]

 

(a) Base annual asset management fee (the “Asset Management Fee”) calculated and payable on a

monthly basis in arrears on the first day of each month equal to 0.25% of AMA Gross Book Value

of the REIT.

 

 

That's 3% per year on the GROSS assets, if they lever up even to 50% debt to GBV, which is likely, you're paying 6% per year in asset management fees on your equity.

 

Thinking about it another way, cap rates on their acquisition was ~9%, a 3% per year fee is 1/3rd of the economics flowing to the management team. Seems pretty steep to me.

 

I like pure industrial model much better (AAR.UN) they internalized management once they hit scale at no cost to the public shareholders.

 

 

[gary17]

Insider buying yesterday. We have to wait for the next acquisition.

 

how do you find out if the insider was buying yesterday... I can't seem to find anything....  :o

[snowball82]

Insider buying yesterday. We have to wait for the next acquisition.

 

how do you find out if the insider was buying yesterday... I can't seem to find anything....  :o

 

The stock price is + 31 % this morning, Mr Market feel good today about BVD.UN Maybe not tomorow.

http://www.tmxmoney.com/TMX/HttpController?GetPage=InsiderTradeMarker&Market=V&Language=en

 

[snowball82]

Mark Hogan, President, announced today he acquired 133,500 trust units at a price of $0.18.

 

New website launching soon ?

 

www.boulevardindustrialreit.com

[snowball82]

Snowball,

 

I don't know how hard that is.  Does it not stand to reason that if the long term rewards are great then why pay so much in fees to the manager (Hayes, Hogan, others)?  Net income for the REIT properties ended March 2013 was $968,160 (pg 61).  Now lets back out management fees. 

 

The Manager will be entitled to the following fees pursuant to the Asset Management Agreement:

(a) Base annual asset management fee (the “Asset Management Fee”) calculated and payable on a

monthly basis in arrears on the first day of each month equal to 0.25% of AMA Gross Book Value

of the REIT.

 

(b) An acquisition fee (the “Acquisition Fee”) equal to:

 

  (i) 1.0% of the AMA Purchase Price paid by the REIT or any Affiliate of the REIT for the

  purchase of a Property on the first $100,000,000 of Properties acquired by the REIT and

  its Affiliates collectively in each Fiscal Year;

 

  (ii) 0.75% of the AMA Purchase Price paid by the REIT or any Affiliate of the REIT for the

  purchase of a Property on the next $100,000,000 of Properties acquired by the REIT and

  its Affiliates collectively in each Fiscal Year; and 

 

  (iii) 0.50% of the AMA Purchase Price paid by the REIT or any Affiliate of the REIT for the

  purchase of a Property on all Properties acquired by the REIT and its Affiliates collectively in

  excess of $200,000,000 in each Fiscal Year.

 

Notwithstanding the foregoing, the Asset Manager and the REIT have agreed that the Acquisition Fee in

respect of the Initial REIT Properties shall be limited to $75,000 and that for calendar 2014 only, an additional

$75,000 shall be added to the Asset Management Fee payable to the Asset Manager monthly in arrears for the

balance of the year.

 

The expenses are the sum of the Asset Management Fee (AMF) and the Acquisition Fee (AF).

AF has been limited to $75,000 for the first year.

AMF is 0.25% of $15,000,000, (gross book), monthly = 37,500.  Yearly = 450,000.

+ 75,000/month through 2014 (call it 8 months) = 600,000

Total expenses = 1,050,000

Net Income from above = 968,160

Actual = (81840)

 

If I could buy stock in the Asset Manager I would, but not the REIT.

 

If you like asset manager, maybe you should look Parkit enterprise (pkt.v). See other investment idea nav .60 and stock price .35

[snowball82]

I saw this text on the new website. Good text to learn about the vision. Managers should do alot acquisitions.

 

BOULEVARD INDUSTRIAL REIT AIMS TO BE A CONSOLIDATOR

Posted on May 8, 2014 at 9:23 pm by admin / News

Fresh off its qualifying transaction in late  March, Boulevard Industrial REIT (BVD.UN-X) chief executive Scott Hayes sees unlimited potential ahead for his Toronto-based venture.

 

“The business plan is to be the institutional consolidator of industrial properties in primary and secondary markets across Canada,” he said.

 

That game plan, however, does not sound dissimilar to every other real estate outfit with a focus on industrial. Doesn’t everyone want to be a consolidator?

 

Not at the small end, apparently.

 

“It occurred to us that there are fewer people that are consolidating these one-off assets, these $6-million, $8-million and $12-million one-off buildings of which there are thousands across Canada,” he said. “We look at the fundamentals around the real estate, good tenants, well-located, the price per square foot is an important metric, we are buying these assets for below replacement cost, we like that.”

 

Veteran team

 

Hayes, an industrial real estate veteran (he was previously CEO and president of Dundee Industrial REIT and Pure Industrial REIT prior to that), sees a sector with an extremely diverse ownership base that makes it a buyer’s market.

 

“There are a lot of different owners of industrial. It ranges from pension funds to lifecos to other REITs, high-net worth families, a lot of owner-occupied space, some private deals,” Hayes said.

 

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Clearly, that huge host of owners have different priorities and agendas and some are willing sellers regardless of where the market is in the cycle.

 

“A bunch of different people own the asset class, which is good,” he said, “and a lot of it is in the hands of one-off individuals or companies and the properties might be valued at $5 million or $6 million.”

 

The REIT’s roots date back to last July, when the venture started out as capital pool company HHT Investments, with the initials standing for the three principals. Besides Hayes,  there is Mark Hogan (a director and former vice-president, business development and general counsel) and Heidi Tibben, (former vice-president of operations with Pure Industrial) who has the same role with the new REIT.

 

Six-million-dollar man

 

While Hayes acknowledges there is competition in the industrial sector, he is banking on Boulevard being able to prosper in the sub-$10-million niche where the big guys can’t (presumably) bother to tread.

 

“Despite the fact that there are competitors in the space, many of them are also looking for the larger, call it $20-million to $30-million or larger, deal, where the yields get a lot tighter. So we think that we can make some money in the smaller space . . . I think it is pretty safe to say that H&R (REIT) is not going to go and buy a $6-million industrial building.”

 

Hayes expects it can do between $60 million and $100 million worth of acquisitions across Canada over the next year.

 

“If I were to look out a couple of years to when our portfolio was much larger, I think it is going to mirror pretty closely the way industrial is laid out nationally.”

Of the 1.7 billion square feet of industrial property nationally, about half is situated in the GTA, so he expects that ratio to be similar in Boulevard’s future holdings.

 

“We do like the Maritimes, it is sort of our business strategy magnified, where there is much lower institutional competition there. Certainly, if you like Canada, you have to like Alberta. Winnipeg is a market we like and very, very selectively in the province of Quebec” with its political risk and generally older industrial stock.

 

Go east

 

Boulevard’s $15-million qualifying transaction of three properties in New Brunswick, acquired in an off-market sale from an institutional investor, illustrates the new REIT’s acquisition strategy. The trio of properties, at 1070 St. George Blvd., 1180 St. George Blvd. and 205 Commerce Street in Moncton, comprised more than 236,000 square feet of gross leaseable area in “modern and well-maintained facilities” featuring high shipping and ceiling heights.

 

“The vendor had recently spent a considerable amount of capital on the buildings, so that is not on our ticket, and we bought them at very, very attractive yields,” said Hayes. The deal also forced the REIT to go back to the market for more capital, which he said was not necessarily a bad thing.

 

An easy sell

 

Hayes has been spending plenty of time in front of would-be investors and has his pitch down pat for those who may not be too familiar with the ins and outs of industrial real estate.

 

“When we are talking to non-REIT investors, we paint the picture of another industry. I say, what if you could buy oil for less than it costs to get it out of the ground or buy cars for less than it costs to make them, that is where we are.”

 

A factor the REIT evaluates before doing a deal is market rents near the potential target. It carries out a third-party study of the rent of the prospective property as well as the surrounding area. For its qualifying transaction, it purchased the properties at a 14% discount to market rents, the REIT CEO noted.

 

Hayes is bullish about the industrial sector and the Canadian economy in general, which should be no surprise given he expects to buy $100 million worth of properties over the next year. What is different is he has a shop-floor view of the economy rather than a boardroom perspective.

 

“When we acquire properties, we go into a property tour and do tenant interviews. Generally tenants today are saying, ‘You see that $8-million machine over there? I have another one coming from Germany and I am running three shifts now and if the space next door became available, I would take it.’ So the fundamentals of these little businesses that occupy our properties are pretty good.”

[snowball82]

I think it's the first coverage.

 

http://www.boulevardindustrialreit.com/analyst-coverage/initiating-coverage/

 

http://www.boulevardindustrialreit.com/analyst-coverage/investor-demand-for-industrial-real-estate-remains-strong-supporting-investment-thesis-on-boulevard-reit/

 

Now 15 M$ assets... they target 500 M$ assets over next few years. I expect the company should accelerate acquisitions soon.

[snowball82]

The first time an analyst speaks about the company on BNN.

 

"BVD.UN-X   2014-06-18 BUY Jerome Hass

The industrial space is his favourite sector in the REITs, and this is his favourite play in that. At the end of the day, it first comes down to the business model and secondly to management. He likes this because it is very similar to the early days of industrial REITs, where instead of buying large portfolios, they are able to cherry pick and buy individual buildings. As a consequence, the cap rates that they get have been higher. The first buildings that they brought in had a cap rate of 9.5% and their borrowing rates are less than 4% giving you a very wide margin between those. They have a lot of ambitious growth plans. Good management."

 

[gary17]

The first time an analyst speaks about the company on BNN.

 

"BVD.UN-X   2014-06-18 BUY Jerome Hass

The industrial space is his favourite sector in the REITs, and this is his favourite play in that. At the end of the day, it first comes down to the business model and secondly to management. He likes this because it is very similar to the early days of industrial REITs, where instead of buying large portfolios, they are able to cherry pick and buy individual buildings. As a consequence, the cap rates that they get have been higher. The first buildings that they brought in had a cap rate of 9.5% and their borrowing rates are less than 4% giving you a very wide margin between those. They have a lot of ambitious growth plans. Good management."

 

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