Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

Disproportionate Sell-Off Of REIT Preferreds Creates Substantial Opportunity

The Creation of Opportunity

Fixed coupon investments should trade down uniformly in a marginally higher interest rate environment, but the low trading volumes of many REIT preferreds made the sell-off disproportionate. As it stands today, certain preferreds are overvalued while others sold off far more than they should have. This is a temporary condition as fixed income instruments will usually return to equilibrant pricing. This article will demonstrate the Northstar Realty Finance preferreds to be mispriced and show how to obtain capital gains in the return to normalized pricing.

The Opportunity

I posit that the Northstar Realty Finance (NYSE:NRF) series of preferreds A, B, C and D are vastly superior investments compared to other REIT preferreds. In fact,...

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