BTB gets bigger
On August 11, BTB Real Estate Investment Trust released it's second quarter results and it continues to impress.It's net operating income rose 4% over the same quarter in 2013.It had an increase in lease renewals and occupancy.The mortgage loan to value ratio dropped from 60% to 56% and it's payout ratio dropped slightly from 77%to 75%.And in this quarter BTB bought a larger retail complex with 226,000 square feet near Quebec City.In fact, BTB did so well that it raised it's dividend from $.40 per share to $.42 per share.
Financially speaking
BTB's financial metrics are quite strong.After raising it's dividend it's yield is around 6%.It has been on a buying spree of late and has used most of it's cash;so it needed to refinance with a new secondary equity issue.So it sold 4.8 million units with a 600,000 over allotment .The price was only at $4.55 a share which diluted the stock somewhat.It raised $23 million;some of which will be used for their new building they purchased recently.BTB got a new line of credit with Laurentian Bank for $15 million at a 2% interest saving.Now they have shareholder's equity of $155 million and are growing quickly.
The new building
BTB has been very proficient at buying small industrial and retail complexes and improving them. Some they sell and some they keep and lease.They have in the past used high ratio mortgaging and not gotten very good interest rates.They have experienced relatively low margins in selling.They own 70 properties with an asset value of around $580 million;this means their buildings on average are $8 to $9 million in value.But their new building may be start of a new trend;it is in St. Jean sur Richelieu and has a value of about $32 million.In addition,the mortgage is only for $21 million.This is for about 70% of the value and would not be considered a high ratio mortgage.The interest rate is at 4.4% which is quite good.
If BTB continues on this path they will get better interest rates and maybe place a debenture series.This will also lead to better prices on their new equity issues as this blog finds that $4.55 is too low for any new issues.
BTB was trading in the $4.75 area for awhile and dropped to around $4.40 (probably around the time of the last equity issue) and now it is in the $4.85 price range . It has been as high as $4.98 recently and will probably crawl back to this area with the new dividend in place.BTB could be at $5.25 to $5.30 by December but is not likely to be at $6.00.Still it is conseratively managed and is showing new trends to increase it's margins.Lastly the dividend increase was appreciated by all it's shareholders(including me).
Financially speaking
BTB's financial metrics are quite strong.After raising it's dividend it's yield is around 6%.It has been on a buying spree of late and has used most of it's cash;so it needed to refinance with a new secondary equity issue.So it sold 4.8 million units with a 600,000 over allotment .The price was only at $4.55 a share which diluted the stock somewhat.It raised $23 million;some of which will be used for their new building they purchased recently.BTB got a new line of credit with Laurentian Bank for $15 million at a 2% interest saving.Now they have shareholder's equity of $155 million and are growing quickly.
The new building
BTB has been very proficient at buying small industrial and retail complexes and improving them. Some they sell and some they keep and lease.They have in the past used high ratio mortgaging and not gotten very good interest rates.They have experienced relatively low margins in selling.They own 70 properties with an asset value of around $580 million;this means their buildings on average are $8 to $9 million in value.But their new building may be start of a new trend;it is in St. Jean sur Richelieu and has a value of about $32 million.In addition,the mortgage is only for $21 million.This is for about 70% of the value and would not be considered a high ratio mortgage.The interest rate is at 4.4% which is quite good.
If BTB continues on this path they will get better interest rates and maybe place a debenture series.This will also lead to better prices on their new equity issues as this blog finds that $4.55 is too low for any new issues.
BTB was trading in the $4.75 area for awhile and dropped to around $4.40 (probably around the time of the last equity issue) and now it is in the $4.85 price range . It has been as high as $4.98 recently and will probably crawl back to this area with the new dividend in place.BTB could be at $5.25 to $5.30 by December but is not likely to be at $6.00.Still it is conseratively managed and is showing new trends to increase it's margins.Lastly the dividend increase was appreciated by all it's shareholders(including me).
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