Here is a snapshot of historic Modified Funds from Operations (or MFFO) growth: Here is a snapshot of historic revenue growth: The REIT has a broad range of alternative exit strategies - selling a new home, a finished lot or land to be developed.Īs noted above, UDF was once a non-traded REIT so unlike a traditional IPO, proposed UDF investors can assess the company's track record of revenue and earnings growth. The value proposition is unique in that this REIT is the only platform that is focused exclusively on single family residential finance. UDF provides an investment alternative to regional banks and homebuilders for investors to participate in the continuing U.S. UDF's differentiated business model is now an attractive public REIT alternative and one in which I have a strong interest to become a shareholder. Notwithstanding the improving trends and strong fundamentals in housing, local and regional banks remain unable or unwilling to significantly increase lending to developers and homebuilders. The remaining exposure (1%) is in Florida.Īccording to FDIC data, during the housing recession, banks significantly reduced their portfolios of construction and development loans and have only recently begun to increase their construction and development lending. Most (99%) of the company's loans are in Texas: Dallas/Fort Worth (67%), Austin (13%), San Antonio (9%), and Houston (9%). UDF's loan portfolio consist of development loans (66%), finished lots (19%), homebuilder credit lines (11%), ad reimbursement notes (4%). The company currently has no credit defaults in its portfolio. The company's average loan duration is 33 months and with an average loan-to-value of 85%. UDF has 120 loans in its portfolio (as of the listing) with a portfolio size of $544.8 million. ![]() UDF targets the largest US markets where single family building permits are the strongest.Īccordingly, UDF focuses on the Top 20 CBSAs with the highest housing permit volumes. Here is a snapshot of the company's target loan markets: To address these needs, UDF loan offerings range from equity and land asset holdings to mezzanine and debtor-in-possession financing to secured first lien loans, giving the company the flexibility and agility to structure and quickly execute effective transactions. ![]() UDF operate in select markets across the country where capital requirements inherent in land acquisition and development and the scarcity of favorable financing options present a desirable solution to builders and developers. UDF commenced its capital formation as a non-traded REIT, one of 6 public REIT products incubated on RSC Capital's (RSCC) wholesale/retail broker-dealer platform. The Grapevine, Texas-based REIT provides financing for acquisition and development of land in supply constrained markets by providing loans to developers and homebuilders for finished lots, as well as homebuilder lines of credit for construction of single-family homes. UDF is a mortgage REIT with a differentiated model that provides debt and equity capital solutions to leading developers and home-builders. Shares remained flat on the second day of trading and closed at $19.60. On the first day of trading, UDF opened trading at $21.04 with around 212,000 share traded. ![]() The company started a tender offer to purchase up to $35 million in value of common shares for a purchase price of $20.50 per share, net to the seller in cash. On June 4 United Development Funding IV ( NASDAQ: UDF) listed its common shares on Nasdaq under the ticker symbol UDF.
0 Comments
Leave a Reply. |