Company News

With earnings season finished this is normally a quiet time for REITs, but the news just keeps flowing in.

Core Civic obtained a new contract with the Commonwealth of Kentucky Department of Corrections which is expected to generate incremental revenues of $15mm-$17mm annually after a brief ramp up period.

Sotherly Hotels had an electrical issue at the Whitehall in Houston which caused some property damage and a couple weeks of the hotel being shut down.  While they anticipate full coverage by insurance, the claim benefits will not be received until 2018 meaning 4Q results may come in weaker.

The new FCC chair Ajit Pai deregulated the outlay of fiber networks as a replacement for existing copper.  This is unequivocally good for Windstream as it will reduce capex and potentially churn as well.  Windstream closed today up about 10% on the news.  The impact to UNIT is a bit less clear.  Indirectly, it will benefit UNIT as WIN is now stronger, but there may also be a component to the ruling that will make retirement of copper easier.  This could, if taken to its limits, reduce Windstream’s reliance upon UNIT.  We will continue to dig into this issue in an attempt to ascertain how it will shake out.

Iron Mountain materially increased its presence in China with an acquisition of physical data storage facilities in major MSAs.  Not enough information was provided in the press release to calculate accretion, but we like it directionally.

Jernigan Capital is developing a new facility in Miami.  While there are concerns about self storage supply at a national level, this particular submarket is undersupplied with only 4 sq. feet of storage per capita in an area that is primarily apartments which have less internal storage than houses.

Commentary may contain forward looking statements which are by definition uncertain.  We retain no obligation to update or correct forward looking statements should the available information change.  Actual results may differ materially from our forecasts or estimations.

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