URFPA: Now a speculative buy, page-85

I'm not sure this is "no brainer". I'd say URFPA is trading well below $100 because people are worried that the CPUs will be converted to URF units. It's not clear to me that URF will be FFO positive, even after conversion of the CPUs. Their long-term debt is priced at 4%; the gross yield on their investment properties is 3.39%. Factoring in G&A expenses (not finance costs), there's a much lower yield. Finally, there's $465m of long-term debt and $673 of investment properties (gearing 69%). I'd say there are objective reasons to be concerned. I know there's cash on the balance sheet, so gearing is not actually 69%, but a substantial portion of that money is likely held to pay off the bridge loan and make the CPU distributions.

I think the only way URF can clearly become FFO positive is to refinance the long-term debt to 3%, after CPU conversion (and closing out the bridge loan). That might be a possibility. The two closest REITs to URF borrow at circa 2% (e.g., NYSE: AMH), but the properties they buy tend to have gross yields of 5%. They also have much lower proportional G&A expenses than URF.