No single ticker was named. Real estate ETFs are one way for retail investors to get exposure. Not a recommendation.
Armada Hoffler trades at deep NAV discount
The guest argued that real estate developer Armada Hoffler (AHH) is an attractive micro-cap value play trading at a 40% discount to a conservative estimate of its net asset value.
The argument
Despite facing balance sheet pressure from adjustable-rate loans and COVID-era retail headwinds, the company maintains high occupancy rates (including 96% in its office portfolio) and is actively selling multifamily assets to pay down debt. The speaker noted that investors are paid a strong dividend yield while waiting for the balance sheet deleveraging to reflect in the stock price.
The thesis, stress-tested
✓ What validates it
- ✓Successful reduction of debt ratios in upcoming quarterly reports
- ✓Stabilization or growth of funds from operations (FFO) post-asset sales
▸ Risks discussed
- ▸Historical over-leveraging and exposure to adjustable-rate debt
- ▸Weakness in the broader multifamily real estate market where they are selling assets
Hear it yourself
"And that's one where I think you're buying it at 40% discount to a conservative estimate of their, net asset value. And you're gonna get good dividends while you're waiting."
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