We are updating our position monitor to account for a few key items:
- Moving EQC from the Short Bias list to the DMZ. Last night the Board of MNR reiterated its support for the merger with EQC at $19/MNR share, in lieu of Starwood Capital's revised net cash offer of $19.20/share. There is a special meeting scheduled for 8/31 for MNR holders to vote on the merger, with the vote likely to remain contentious given a top MNR shareholder's dissenting view and activist approach. At this point, however, as we mentioned on The Call yesterday the risk/reward has changed on EQC and we are going to book some gains on the short. If EQC were to somehow lose out on the deal and receive its termination payment, it would likely be a positive catalyst for the stock
- Adding UHAL, ELS and SUI to the monitor. We have Black Book presentations for UHAL and COLD scheduled post-Labor Day, and plan to do a presentation on the Manufactured Housing names thereafter (timing TBD)
- We are actively looking for Best Idea Shorts despite that section of the monitor being empty currently. Candidly, it is difficult right now to be short REITs. However, we have moved COLD to the Short Bias list as we continue to do more work and following a disappointing 2Q21. More to come in September
Figure 1: Hedgeye REITs Position Monitor
Please call or e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
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