unencumbered assets, page-32

asteroider wrote
"And who do we have to thank? The CB's for the FIRST EVER GLOBALLY CO-ORDINATED interest rate hikes which triggered the deflationary collapse, which ironically, has led to calls for further globally co-ordinated economic measures"

Havent Central banks (CBs) been droppping interest rates and freeing up the money supply to me that is not causing any "interest rate hikes"

I agree though with your assesment asteroider that Interest rate cover (ICR) (earnings /interest repayments) is probably in many cases a more important metric to use in accessing the viability of a REIT.
RNYs ICR is around 1.7 before management fees, not great compared with GJT at 3 but their still is some leeway.

WIth the ICR it is necessary to look at what interest rate loans are likely to be refinanced at. Several Reits have recently broken covenants but have refinanced successfully however the banks have tacked on 200 basis points (2%) to the new loan fortunately the CB interest rates have dropped around 2% recently so its a zero sum game.
However if the Weighted average cost of capital (WACC) goes up due to inflation then companies like RNY will be hit with a double wammy with higher central bank interest rates (base rate) with a higher LIBOR rate as well.

Other factors to look at with ICR are vacancies, length of tennacies and square foot lease rates renegotiated, these affect cap rates also. Personaly I feel these have had little relevance to RNY as occupanices have remained high, the number of leases coming up for renewal is low due to long leases.


As an aside "SL Green" jumped 20% last Thursday their propeties are in Mew York City not in the surrounding area like RNY but its a good sign and most likely due to Wells fargo earning results, (many of SL Greens tennants are in the financial sector )
SL Green seem to have a similar LTV to RNY (low 60%) but their PE is twice that of RNY so RNY seems to offer good arbitrage.

My famous last words
RNY has around 18 months to turn it self around as thats when the next major refinancing needs to occur. There is some corprate refinancing necessary in october also but that should not be difficult to do due to RNY having unencumered properties that act as a backstop and can be use to refinace then,