AMC, Big Movie Chain is more than just stocks for real estate bond investors



“There is no special place. I’ve always wanted to go there, ”he said. Gene Wilder Character A film in Mel Brooks’ 1979 parody Western “Glittering Saddles.” NPR Credit We set the “gold standard” for interracial comedy with pals and “racism and the best jabs in Hollywood.”

As more Americans break out of the blockade and Westerners try to escape Extremely high temperature – Increased the appeal of going anywhere, instead of being “special somewhere.” But are you going to the movies with strangers? Commercial real estate fixed-income investors weren’t always attracted to the large rectangular structures of these buildings, even before the pandemic.

“Basically, I didn’t like cinemas,” said Dave Goodson, head of investment securitization at Boya Investment Management, reflecting on what changes would be required to attract them. Earlier, he added that maintenance costs can be high. Another type of tenant if the theater chain goes bankrupt.

“The uncertainty around space is heightened by COVID,” Goodson told MarketWatch. “It makes us be more careful.”

Looking at the commercial mortgage market in the United States, according to data provider Trepp, the top five tenants in approximately $ 34 billion in mortgages are movie theater operators.

Trep estimates that this puzzled AMC Entertainment Holdings.
The popular memorandum ranks highest in real estate, with 20 sector operators (37%), followed by Legal Cinema and Cinemak Holdings Inc. from 22%.


Cinema exposition


“At AMC five times between April 2020 and January 2021, within months or weeks after the money runs out,” AMC’s forecast suggests more theaters will open during the pandemic. Etc. “Fundamentally improved.”

As part of its income statement, Cash-Burning AMC said it raised about $ 2.95 billion in new capital through equity or debt provision and received about $ 1.2 billion in landlord or lender concessions.

AMC’s share price fell 2.4% on Friday, but while the S&P 500 is up, it is up nearly 2,700% year over year.
+ 0.33%

It fell 1.3% on Friday but still rose 8.8% in 2021. The number of bookings decreases every Friday, About eight months after the Federal Reserve Board of Governors unveiled a small hawk policy update, it saw the Dow’s worst weekly decline, which also led to benchmark 10-year Treasury yields.

Acrobatics 5 consecutive weeks.

AMC did not immediately respond to requests for comment on this article.

AMC boss Aaron took me to Twitter

This week we are calling on shareholders to vote to sell 25 million new shares in about six months.

Aaron Raised a bright subscription He also has extensive experience in real estate and commercial real estate finance in the meme community and social media, but as a former CEO of Starwood Hotels & Resorts.

Wall Street has been an important source of finance for owners of shopping malls, hotels, office buildings and other types of commercial properties since the late 1990s, when the speed of batch loans for fixed income transactions began.

A typical commercial mortgage transaction can be as high as $ 1 billion, and in theory, this is a feature that helps protect investors from a recession that hits a specific region or asset class, coastline. Includes loans to approximately 70 buildings of various types of real estate from coast to coast.

For bondholders, this also means a movie theater, but large tenants are only a fraction of the tenants of most properties, including $ 34 billion in mortgage debt associated with AMC and similar networks. Works often.

Jen Ripper, Mortgage-backed Securities Investment Specialist at Penn Mutual Asset Management, said: “Anyway [bond] In trading, theaters are generally quite small in the big picture of varied conduit trading. “

Nonetheless, Ripper said the cinemas deserve “attention.” Moreover, it is unclear for what, for how long and whether it is possible to take a place in the cinema at the level of 2019.

“There is a lot of competition with streaming services,” she said. “But I think people like going to the movies for impressions. Star Wars fanatics will probably go to the theater. “

Empty shopping malls pose unique challenges for investors, but Goodson believes that owning a mall with multiple movie theaters increases risk.

“Consumers need to recognize that they are in the process of changing the way they consume, be it services, goods or clothing,” he said. “In general, if your mall has a theater, you expect a lower recovery rate.”

see also: There are winners in the streaming war – in this real estate sector.

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