Some further analysis.
The long term debt is at variable rates of interest. Thus swings in the interest rate will effect a swing in cashflows due to interest paid. Thus the paying down of debt reduces the gains/losses to this variable.
The largest customer [NHC] who lease 41 properties, reached agreement to extend the leases through 2021
Increased diversification through customer base; this is important as when this REIT was started in 1991, NHC was the sole customer and constituted 100%. Currently NHC constitutes 14.1% of the portfolio.
Hidden value. When the assets were purchased [transferred via non-taxable exchange] the properties were valued at net depreciation book value, after 20+yrs of depreciation. Thus the actual values [land] will have appreciated at 4% compounded to provide increased [undervalued] assets.
No value is provided, but we can use some arbitrary numbers;
Assume $10 Million Book value in 1991 depreciated @ 5% but actually rising in value by 4% compounded we then have a starting value of $26.5 Million in 1971 with a value circa $104.5 Million today. These figures are not actual figures, so it is not yet possible to ascertain whether the value is recognized and priced in, or unrecognized, and thus represents some hidden value.
