Is Cedar Realty Trust (CDR) A Buy Under $1?

Is Cedar Realty Trust (CDR) A Buy Under $1?

Like most real estate investment trusts (REITs), Cedar Realty Trust (CDR) was hit hard as the Covid-19 lockdown went into effect. This was particularly true given its natures as a retail-focused REIT concentrating on anchored shopping centers.

Cedar Realty Trust currently trades at a market capitalization of $84.9 million based on the share price of $0.95/sh. The company offers a 4.2% annual dividend yield based on the $0.01/sh quarterly dividend. What is interesting is that unlike most distressed REITs which fully cut their dividend, CDR actually continued to pay a dividend despite a hefty cut.

It remains far too early to tell if the company will be able to emerge from this crisis, but thus far albeit hindered Cedar appears to be able to continue collecting on much of the rents due. In June 2020, they announced that they continued to collect upon 72% of based rents through May 2020. (http://ir.cedarrealtytrust.com/file/Index?KeyFile=404197130). While far from ideal, the ongoing collections continue to keep the lights on and suggest a far from dire picture at hand.

From a technical standpoint, it might still be too early for the company's share price to have a stable recovery picture. A look at the anchored VWAPs suggests that the bears still remain in control, although it does appear that the company is beginning to form a sturdier base. I would be more comforted to see the shares trade above the green line below before finding confidence in the current share price.

That said, Cedar Realty continues to trade at a pretty steep discount. This is especially true considering its current valuation relative to what it used to fetch (as noted by the previous quarters to the right of the circled section below). While book value is questionable given the current seismic shifts now underway in retail real estate, to be priced a quarter of stated book value appears to be harsh discount to what is likely to be the case.