I'm guessing many sellers probably don't understand the interest rate swap valuation is a non-cash accounting trick and doesn't affect the Trust unless the swap is broken early. The swap valuation will bounce around and will be negative so long as variable rates are below the fixed rate they are currently paying on the CMBS. When rates rise and the swap goes positive you may see some misguided buying and a SP rise.
The accounting standards are distorting the actual financial position of the trust, and coupled with long term leases on Kent St and Norwest, I can't see WBC and WOW moving out and causing rental income problems any time soon.
Predicatble cash flows, predictable interest costs, decent yield, the trust is well undervalued and should be rerated. Maybe the directors should be promoting the Trust amongst analysts a bit more - you never see it mentioned in broker reports on REITS. They've got a decent track record now, so the coverage should be increasing.
WOT Price at posting:
75.5¢ Sentiment: LT Buy Disclosure: Held
