Andrew MoffsNorthWest Health Prop Real Est Inv TrustNWH.UN.TODON'T BUYNov 30, 2023

Healthcare property business not performing as well as anticipating. Floating rate debt very hard on business with rising interest rates. CEO has since resigned. Would recommend holding going forward. 

Cut dividend. Healthcare properties around the world. Over-levered in a rising interest rate environment. Valuation imploded. Steer clear. Other distressed real estate ideas out there have more catalysts.

Over-levered. Properties aren't performing as well. Geographic distribution requires them to be experts globally, which is a problem. CEO resigned, change in management. Whole sector's under stress, low quality gets hit harder.

Recent cut in dividend. Not expecting any more dividend cuts going forward. Does not own shares at this time. If already own shares, would recommend keeping. 

Messy. Cut dividend by 55%. Good lesson on chasing a too-high dividend yield. 97% occupancy, but not enough to keep them out of financial difficulties. $4B of debt, more than 1/3 at floating rates. Giant "For sale" sign on it. Insider selling in January. Facing tax-loss selling if things don't turn around.

Lots of debt, operating in jurisdictions with currency risk. Bought stable, UK and US assets, but got caught offside with variable-rate debt cutting into cashflow. Cut distribution. Execution risk. Sold off, but don't add.

The distribution cut was needed, but of course was fairly large (55%). The asset sales are a good start but challenges remain. The strategic review is only seven weeks old, but reading between the lines it sounds like there has not been huge interest yet. It is hard to endorse this right now. With higher rates and lower assets (from sales), growth will be hard to come by. We might be reluctant to sell it on the first trading day of this news, but we certainly think it can be 'targetted' for elimination from an investor's portfolio and used as a source of cash for other ideas. The stock will likely be in the penalty box for some time for multiple disappointments over the past year, with a business that is supposed to be more reliable and more predictable. We would not see solvency as an issue but it is just hard to like right now. 
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Got on the wrong side of managing its debt. Now it's trying to figure out how to service it, with some success. But risk/return is not best way to deploy your capital. Too risky for him.

Problem with company includes floating rate debt (higher interest rates).
Owns large array of health care real estate assets.
Capital structure and dividend policy not in a good position.
Concerned about potential of dividend cut.

Pounded along with a lot of real estate. Quality company. There will be some carnage across real estate, and it's hard to predict the knock-on effects. Be cautious. If you own it, you're not in peril. Otherwise, wait till interest rates have peaked, and you might get it even cheaper.

We would consider results OK. Cash flow per share of 16c did miss estimates of 17c, but revenue of $135M beat estimates of $122M. Payout ratio has risen but on an annual basis was 68% in 2022. Operating income increased, offset by higher rates.  Occupancy is good at 97%, leases are long and many are indexed. The convertible issue, the institutional investor and the planned asset sales should add a lot more financial flexibility. The proof will be in the pudding but the comments we think make the point that management knows that leverage and recession concerns are hurting their valuation. We are not sure the corned has been turned, but are more optimistic than pessimistic, largely because of its already-low valuation. 
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Heading down and continues to make new lows. Moving opposite to the TSX, which has turned and is heading higher. Lower lows and lower highs, the definition of a downtrend. Sell your losers.

Tough. Heavy debt load with variable rate exposure. Good business. Reworking portfolio. Should be stable once they right-size balance sheet, which they're working on. He's watching it. He's not tempted to bottom-fish, wants to see a few better quarters first.

Global assets. In a tough spot. Challenges to earnings from interest rates and currency. Great assets. Not for the faint of heart. Not for him today.