They are only cash-flow and contingent liabilities while the equity is alive. True RE Leases are recovery rate options. So they are really contingent leverage. But to be sure in workout you’d need the docs. Most public market investors are ill-equipped to deal with this.
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You’d think it would be lots of fun when looking at badly-run melting ice cubes with long leases on good locations. But you have to find them. If they’re big, everyone will know about them. And one assumes locals always know anyway.
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Have you taken a look at
$GME... the leases rolling off in 2 years make it screen overlevered -
I haven’t in any detail.
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It is for overextended retailers

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And
$MCD too, right? After all it’s actually a real estate company so by logic it’s really actually just a debt portfolio.
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Yes. Bring a “landlord” is a less secure position than it seems, and it usually comes with its own set of liabilities. Conversely, owning a lease might be more valuable and less of a lability than it seems. Even before bankruptcy, tenants often manage to renegotiate leases.
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For a going concern PV understates the liability (will go on for longer than the lease term if you are to make the associated revenue). For a melting ice cube, it overstates it.
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