|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
|
DLC Realty Trust (DLC) |
$848 |
n/a |
n/a |
2.0 |
2.0 |
|
Excel Trust (EXL), REIT retail |
$180 |
n/a |
n/a |
0.9 |
1.0 |
|
IPO April 22 @$14, off 18% |
|
|
|
|
|
|
Simon Property Group (SPG) |
$27,270 |
n/a |
n/a |
5.9 |
5.9 |
|
VALUATION |
|
. Simon is one of the big elephant industry leaders and yields 2.6%. DLC is no Simon Properties
. DLC is more like Excel Trust, valued about 1 times book, but Excel’s distribution potential is not as clear as DLC’s. |
|
. Because DLC is a new ‘up-reit’ and because competitors to Excel Trust that are listed at Google Finance mostly yield over 5%, DLC appears overpriced at $16 with a 4.3% estimated distribution target |
|
UP-REIT |
|
. Formed as a Maryland corporation on March 8, 2010. |
|
. Acquiring properties for the purpose of the IPO |
|
DISTRIBUTION POLICY |
|
$.70 annually |
|
4.3% return at price range mid-point of $16 |
|
Payout ratio based of 2011estimated cash available for distribution as of March 31, 2011: 108% |
|
BUSINESS |
|
. 13th largest private owner of shopping centers in the United States as of December 2009, according to Retail Traffic magazine
. As of December 31, 2009, portfolio consisted of 86 shopping centers totaling approximately 13.4 million square feet of gross leasable area, or GLA, located in 24 states
. Portfolio was 88.3% leased as of March 31, 2010, with approximately 1.6 million square feet of GLA available for leasing. |
|
ACQUISITION CRITERIA |
|
DLC targets acquisitions that may have significant upside through one or more of the following: |
|
. Vacant space for immediate lease-up,
. Below-market rents in the existing tenancy,
. Expansion opportunities,
. Reducible cost structures,
. Economies of scale and/or repositioning or redevelopment opportunities. |
|
DLC believes its focus differentiates it from many competitors, who frequently target core, stabilized properties.
DLC also seeks to acquire assets in opportunistic off-market transactions |
|
USE OF IPO PRODEEDS |
|
$500mm |
|
Repay debt & IPO expenses |
