That is precisely the reason that Im short O as a hedge to my ARCT long. O is also aggressively acquiring new properties and has to do so in much larger size.
70% of ARCTs tenants are investment grade while 20% of O's tenants are investment grade. O has a plan to bring that number up to 50% over the next 5 years so it seems O is trying to be more like ARCT in that respect.
The average remaining lease term for ARCT is 13 years while for O it's 11.1 years.
If ARCT trades at the same valuation as O it would need to go up 30%
70% of ARCTs tenants are investment grade while 20% of O's tenants are investment grade. O has a plan to bring that number up to 50% over the next 5 years so it seems O is trying to be more like ARCT in that respect.
The average remaining lease term for ARCT is 13 years while for O it's 11.1.
If ARCT trades at the same valuation as O it would need to go up 30%
The following quote is from the most recent O conference call: "and again, I’ll allude to what I just said, which is some of the things that aren’t investment-grade will be cut, and if they have very high cash flows, we’ll be happy with that.
But right now, we’ve gone from zero to close to 20% in between 15 to 20 today, and in just a couple of years, and we’d be very happy five, six years down the line if that was 50% to 60%."
In essence O wants to become more like ARCT in five years
ARCT has better quality tenants and trades 30% cheaper. Being a landlord is not rocket science and its hard for me to accept that O's management is deserving of a 30%+ premium.
The AFFO is the adjusted funds from operations. This is the metric that is used with REITs, similar to EPS. I used the guidance the companies have given. Its on their earnings transcripts.
ARCT is a relatively new company and acquires properties with long term triple net leases, typically well over 10 years. O is a more seasoned company so they have older properties where the leases have ended or the tenants have gone bankrupt.
A REIT That Could Yield 30% [View article]
A REIT That Could Yield 30% [View article]
A REIT That Could Yield 30% [View article]
A REIT That Could Yield 30% [View article]
The average remaining lease term for ARCT is 13 years while for O it's 11.1 years.
If ARCT trades at the same valuation as O it would need to go up 30%
A REIT That Could Yield 30% [View article]
The average remaining lease term for ARCT is 13 years while for O it's 11.1.
If ARCT trades at the same valuation as O it would need to go up 30%
A REIT That Could Yield 30% [View article]
But right now, we’ve gone from zero to close to 20% in between 15 to 20 today, and in just a couple of years, and we’d be very happy five, six years down the line if that was 50% to 60%."
In essence O wants to become more like ARCT in five years
A REIT That Could Yield 30% [View article]
A REIT That Could Yield 30% [View article]
A REIT That Could Yield 30% [View article]
A REIT That Could Yield 30% [View article]
ARCT is a relatively new company and acquires properties with long term triple net leases, typically well over 10 years. O is a more seasoned company so they have older properties where the leases have ended or the tenants have gone bankrupt.