Comments on: Stifel: Piedmont Office REIT Transition “Will Take Years” http://reitwrecks.com/2010/05/stifel-piedmont-office-reit-transition-will-take-years.html High Yield REITs And Commercial Real Estate Wed, 08 Feb 2012 18:27:43 -0700 hourly 1 http://wordpress.org/?v=3.1.2 By: REIT Wrecks http://reitwrecks.com/2010/05/stifel-piedmont-office-reit-transition-will-take-years.html/comment-page-1#comment-2417 REIT Wrecks Thu, 03 Jun 2010 07:50:07 +0000 http://reitwrecks.com/?p=984#comment-2417 Great commentary. In fact, as you correctly point out, the $174 million was in shares, not cash, and Leo didn't take all of the shares for himself - some of his employees got a piece of the cake too. Aside from that, he's indefensible. I have zero sympathy over his $170 million windfall turning into a $130 million windfall. Shareholders paid for it, and it amounts to another 3% load - on top of the 16% upfront load they paid in the beginning. In return, shareholders got a 2% return on their investment. In my experience (with all due respect), most managers would be fired over results like this. Great commentary. In fact, as you correctly point out, the $174 million was in shares, not cash, and Leo didn’t take all of the shares for himself – some of his employees got a piece of the cake too.

Aside from that, he’s indefensible. I have zero sympathy over his $170 million windfall turning into a $130 million windfall. Shareholders paid for it, and it amounts to another 3% load – on top of the 16% upfront load they paid in the beginning. In return, shareholders got a 2% return on their investment. In my experience (with all due respect), most managers would be fired over results like this.

]]> By: Rational Realist http://reitwrecks.com/2010/05/stifel-piedmont-office-reit-transition-will-take-years.html/comment-page-1#comment-2411 Rational Realist Thu, 03 Jun 2010 05:25:11 +0000 http://reitwrecks.com/?p=984#comment-2411 I think Leo Wells' internalization value of $174 million was in shares, not cash, and was based on the par value at the time of internalization of $8.38 share price (net of a return of capital to shareholders from an earlier portfolio sale that lowered the par value from the original $10 per share). If you triple this based on the pre-listing reverse split, you get an adjusted par value of $25.14. With the Piedmont stock at 18.71, this is a 25.5% discount, so isn't Leo Wells payment now worth about $130 million? I think his stock is restricted for at least a year after the PDM listing, so in a kind of perverse sense his interests are aligned with investors. I am sure Wells is getting dividends on his holding, which I estimate at 20.7 million shares, and with a $.31 per share dividend is $6.4 million per year, which is a big number as he waits for liquidity. I think Leo Wells’ internalization value of $174 million was in shares, not cash, and was based on the par value at the time of internalization of $8.38 share price (net of a return of capital to shareholders from an earlier portfolio sale that lowered the par value from the original $10 per share). If you triple this based on the pre-listing reverse split, you get an adjusted par value of $25.14. With the Piedmont stock at 18.71, this is a 25.5% discount, so isn’t Leo Wells payment now worth about $130 million? I think his stock is restricted for at least a year after the PDM listing, so in a kind of perverse sense his interests are aligned with investors. I am sure Wells is getting dividends on his holding, which I estimate at 20.7 million shares, and with a $.31 per share dividend is $6.4 million per year, which is a big number as he waits for liquidity.

]]> By: REIT Wrecks http://reitwrecks.com/2010/05/stifel-piedmont-office-reit-transition-will-take-years.html/comment-page-1#comment-2214 REIT Wrecks Fri, 28 May 2010 14:56:12 +0000 http://reitwrecks.com/?p=984#comment-2214 gman - you are correct! Thank you. 20 is now 12. gman – you are correct! Thank you. 20 is now 12.

]]> By: gman http://reitwrecks.com/2010/05/stifel-piedmont-office-reit-transition-will-take-years.html/comment-page-1#comment-2213 gman Fri, 28 May 2010 13:29:38 +0000 http://reitwrecks.com/?p=984#comment-2213 You need to check your facts a little more carefully REITWrecks. Wells REIT I sold its first share in 1998, which would make it 12 years old, not 20. You need to check your facts a little more carefully REITWrecks. Wells REIT I sold its first share in 1998, which would make it 12 years old, not 20.

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