Long-term Interest rates continue to rise following the election. This is already bad for real estate values. But it's doubly bad for O, whose tenants are heavily indebted brick-and-mortar retailers. More problems for tenants lead to more store closures, more vacant properties, and lower book value for O. I've been bearish on this name forever, and until management comes clean, I'll keep holding puts.
O Family Dollar/DollarTree today announced that they will close 600 of their 8k+ stores this year, and another 400 over the coming years, as leases expire.
O owns more than 1,200 Family Dollar/DollarTree stores. Losing a NNN tenant usually reduces a retail property's value by at least 75%. But, hey, no worries! The dividend is increasing, amiright?!
OSRC combination brings to mind Jack Welch, the legendary former GE CEO, who once commented on a similar business combination that "you can't build a race car from the parts of two wheelchairs".
O Total clients have increased each year since 2020. Total leased space increased from 998.1 million sq ft in 2020 -> 1.02 Billion square feet. Occupancy rate increased from 99% to 99.2%. Long term history of growth, just zoom out. We aren’t worried about short term volatility in this stock.