The attachment below explains the reasons why Pershing Square is shorting Realty Income Corp. I don’t really agree that, with a 7.50% drop in NOI and a Cap Rate of 9.50%, the price should be 14 dollar per share. The company is currently valued with a very conservative Cap Rate, around 11%, which accounts for all the risks and unknowns. In my previous post, I wrote that 26 dollar per share is a fair price for the Company at this moment. I don’t see 40% premium to NAV as Pershing Square indicates. It’s also interesting how, during the Q1 and Q2 earnings call Q&A, the Company Representative wouldn’t even talk about the name of the tenants. I agree with the fact that the SEC may require to disclose the name of the lessees, which is another catalyst for a large drop in value. Well, enjoy the reading.
If you enjoyed this post, make sure you subscribe to my RSS feed!