Bill Chen

Bill was buying Camden aggressively in Q4 as shares traded cheaply, approaching a roughly 7% cap rate. He highlights that Camden bought back $50 million in Q3 and wants to see if Q4 buybacks rise to $100-150 million, which would be a strong signal because REIT buybacks are a high hurdle due to rating-agency and leverage concerns.

Bill sees Whitestone REIT as the last remaining sub-$3 billion enterprise value grocery-anchored shopping center REIT and a high-quality takeout candidate. It trades around $14, while a $15-20 private-equity bid and cap rates implied by Blackstone's purchases of Retail Opportunity Investments Corp and Alexander & Baldwin suggest $20-21 per share. It also received over $50 million of litigation assets into cash, deleveraged by about half a turn, is growing NOI around 4% annually, and has high household income in its trade areas. Potential buyers include Blackstone, KKR, Regency, Kimco, and InvenTrust.

Bill is long Alexander's because the December 29 debt restructuring on the Bloomberg retail condo effectively cut a non-recourse mortgage to about 44 cents on the dollar, saved roughly $17.2 million of annual interest, gave Alexander control of the retail condo, and left a sum-of-the-parts value around $340 per share versus a $240 share price. The main asset is the Bloomberg HQ triple-net lease through 2040 with contractual escalators: $78.7 million now, $88.3 million in 2028, and a 2030 reset between $85.7 million and $104 million. The other assets, including the Alexander apartment building, Rego Park II, and the Rego Park I development site, are effectively free at today's price. Governance concerns are mitigated because Roth and insiders own about 46% of ALX versus about 10.3% of Vornado and are more aligned through ALX ownership and dividends. The short thesis looks stale after debt maturities were refinanced, dividend coverage should approach 100% after the 2028 step-up, and high short interest plus a potential special dividend create squeeze risk.