Certainly it is much quieter around here. Always still miss REITnut who was irreplaceable. Actually miss the regular dust-ups which used to occur here and eventually apparently drove Ralph’s pal YodaOrange away from the board
While I’m off down memory lane, I want to bring up a name that almost makes me gag, Colony Capital. I lost more money on the North Star/Colony Capital debacle then on any other single investment!
So why bring back up terrifying nightmares? Colony Capital has finally gotten rid of Tom Barrack (in my mind complete not-to-be-trusted leader), and transformed itself into Digital Bridge. This Seeking Alpha author explains his positive spin on the “new” company:
I am not that excited about more mid stream cell tower and associated digital provider assets. I have some exposure already in Crown Castle which I have had for several years and is getting close to a double but is way below its high for the year. It currently pays around 3.6%.
But I digress, back to the Digital Bridge strategy. DBRG has several preferred which the company announced have or will be called, DBRG-H and DBRG-I. Both are currently selling below par and pay above 7% dividend. As a short term spot to place cash these seem like decent relatively low risk investments. Jim Royal on his board has discussed these preferred and seems to feel similarly but I am curious what the wiser REIT investors here think.
Hello David, I have posted the idea of DBRG preferred specifically H for short-term place to park cash sometime back. However, I want to highlight a risk, which is sometimes, short-term end up being very long-term. They have cash, but they also have lot of growth plans, even if their model is managing external capital for fee, still it requires DBRG to bring some cash to the deal. The liquidity is trying up in the market. So, while management keeps saying reducing their cost of capital is a strategic priority, but they are not moving aggressively.
So there is that risk. I am expecting they may announce some redemption in Q4 earnings call next week, if not we will get some color on where their current thinking is.
If someone going to initiate a position, I will wait until the earnings call.
I have given some thought to the fact that they might not redeem the H and I preferred, despite call dates and announced plans. I decided I would be happy to hold shares for a longer period if I was going to get 7+%. Not sure where else I could get that and at least at this point DBRG doesn’t look like it’s going to go under. So I am somewhat prepared for it to be not just a short term spot to park cash. I think it was the I that was down to $24 last week…
I own a bunch of H preferred, primarily hoping that they will redeem and deploying that cash is preventing me from buying something. But I don’t want the cash to be tied up forever. I think there are lots of growth names that are getting attractive. So I need my cash back.
In fact, after many years, I may reduce my REIT holdings below 15%