I've spent the Christmas break doing some work on URF and keen...

I've spent the Christmas break doing some work on URF and keen to hear any opposing views.

Even if we ignore all of the articles in the AFR on the historical shenanigans involving URF and Evan's Dixon, the one thing which has amazed me is looking at the truly incredible decline in Asset value of these purportedly respectable NY residential properties.

These are meant to be defensive assets which provide an essential service in one of the most happening cities in the world.
Yet URF's NTA has declined more than 50% in the past two years!! More concerningly in the space of a month they have just announced the post tax NTA has declined a further 12%(!!). This is despite NY property prices having Increased materially over the last few years (wtf!). Think about that for a second, It's a bit scary.

There is the chance they have aggressively capitalised a lot of costs into the accounting values, hence the constant write-downs.
One thing which is apparent is that they have definitively geared it up significantly. This has the obvious effect of greatly increasing the risk profile and volatility of equity returns (in this case to the downside). It creates great Instability and risk for investors.
The issue is that with so much gearing, small declines in the underlying asset create large declines in NTA/equity value. Given Covid is running rampant in NY, unemployment is high and the population is shrinking for a litany of reasons (WFH, lost jobs and a preference for more space), this has implications for URF's NTA moving forward as they look to sell more assets in challenging circumstances.
For instance, in the past 3 months they've been selling their best assets at a 7% discount to BV (including sale costs). If you apply a 10% discount to their assets this would reduce their NTA by ~50%. Now that is a mental amount of leverage. This makes It difficult to place any weight on the theoretical NTA which is often discussed and personally was why I looked at it in the fist place.

Given URF's business model isn't currently sustainable from a cash flow perspective (which means the NTA will naturally decline anyway due to negative FCF) and then its asset base is also incredibly challenged and has been consistently overstated, leaves this as one stock where the odds don't really seem to be on your side at all.

I would encourage DYOR. Particularly looking at how NTA per share has moved in the past few years, how much free cash flow has been lost in the past year and how much assumptions around asset values dictate how much theoretical equity is left.