Name: Bill Chen's follow up on REITs and $ALX
Uploaded: 2026-02-05T14:44:37+00:00
Duration: 2975 s

Speakers

Bill Chen — Co-founder, Sina Finance

Andrew Walker — Host, Yet Another Value Blog

Summary

Bill Chen returns to discuss Alexander's Inc. (ALX) after its recent debt restructuring, arguing the complex Bloomberg retail-condo deal cut debt, saved interest, and left the company undervalued on a sum-of-the-parts basis. The conversation covers ALX's Bloomberg HQ lease escalators, insider alignment with Vornado, dividend coverage, short interest, and a possible special dividend from a Rego Park I sale. Bill also remains bullish on grocery-anchored shopping center REITs, names Whitestone REIT as a takeover candidate, and discusses REIT buybacks as a signal, including his aggressive Camden buying.

Bill Chen explains Alexander's December debt restructuring and its impact on ALX.
ALX's Bloomberg HQ lease runs to 2040 with contractual rent escalators.
Bill argues ALX trades below sum-of-the-parts and shorts lack a clear thesis.
Governance concerns are weighed against strong insider ownership alignment at ALX.
A potential Rego Park I sale could fund a large special dividend.
Bill is bullish on grocery-anchored REITs and sees Whitestone REIT as a takeover candidate.
REIT buybacks are framed as a high-signal event; Bill bought Camden aggressively.

Ideas

Bill Chen Co-founder, Sina Finance 3:15

Undervalued REIT with debt-restructuring upside.

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.

Bill Chen Co-founder, Sina Finance 37:17

Grocery-anchored REITs benefit from consolidation.

Bill remains very bullish on grocery-anchored shopping center REITs as a theme. Blackstone bought Retail Opportunity Investments Corp and then Alexander & Baldwin, validating private-market demand for the sector. With few sub-$3 billion grocery-anchored REITs left, public valuations may be too low and the remaining names are consolidation candidates.

Bill Chen Co-founder, Sina Finance 38:15

Whitestone is last sub-$3B grocery REIT target.

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 Chen Co-founder, Sina Finance 41:25

Camden buybacks signal undervaluation.

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 Chen Co-founder, Sina Finance 44:29

REIT buybacks are strong management signal.

Bill argues that REIT share buybacks are an unusually strong signal because REITs manage their cost of debt and rating agencies may react negatively, so when conservative REIT management teams repurchase stock it implies they believe the discount is too wide. He will watch Camden and other REITs for buyback price and capital deployed.

Bill Chen's follow up on REITs and $ALX

Summary

Ideas

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