Wednesday, May 21, 2008

10-Q Release
The 10-Q for Wells' Timberland REIT was released last week. A quick read confirmed my previous conversations with Wells. Timberland should have enough offering proceeds to make its first $40 million payment on the mezzanine debt at the end of June. I estimate that Timberland needs to raise over $14 million a month in investor equity to get the mezzanine debt down to $60 million by mid-October 2008. This would extend the mezzanine debt to February 2009. If Timberland's equity effort comes up short, the entire outstanding balance of the mezzanine piece is due in mid-October 2008.


Anonymous said...

The June 30 principal payment may be reachable. The real challenge will be making the payment at the end of August. The stock sales will need to accelerate over the current pace. Would an infusion of capital from additional preferred stock sales to Mr. Wells be considered?

Rational Realist said...

I don't expect any infusion of capital from Wells from either preferred or common shares. A sale of the property would not surprise me - and may be the best outcome for investors. An infusion of more equity would likely be harmful to investors as a preferred position would be required, diluting and subordinating current common share holders.