I have been eyeing this stock for awhile now and have recently pulled the trigger on this stock. It has been a flaming piece of garbage since 2014? ish IPO, but I cannot wrap my head around it not being underpriced at this number.
Overview: PGRE is a reit that has existed since 1970s and owns 8 buildings in midtown manhattan and 6 in San Francisco. They are all class A buildings that are desirable and have long term value IMO.
Reasons for low price: Everyone hates office space, tenants included both SVB and first republic bank, 2 big tenants moving out (credit Agricole and Clifford Chance), high rates, have not been growing FFO since IPO, 87% ish Occuopancy.
Thesis: The company is not overleveraged with less than a 50% debt to-asset ratio and only owns Class A office buildings in midtown Manhattan and Market street San Francisco. Their debt maturity is not going to be overwhelming and is mostly in 2026 or later. I have faith in the office markets long term and think that its just currently out of fashion. It also is trading at 4.60 a share with 2 a share in cash and 16 a share in equity (mind boggling).
Market Cap – $1b
Cash on book – $400M
Assets – 8B (including depreciation)
Liabilities 4B
Therefore 4B in equity in their real estate!
Someone please tell me what I am missing
Leave a Reply