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small-cap

Update on One NYSE- Listed REITs- BRMK

Mar 23, 2023 | Team Kalkine
Update on One NYSE- Listed REITs- BRMK

Broadmark Realty Capital Inc.

Broadmark Realty Capital Inc. is an internally managed commercial real estate finance company. The company specializes in guaranteeing, financing, holding and managing a portfolio, which, as a rule, consists of short-term first installation loans that finance the construction and development of residential or commercial premises or investments.

Key Recent Business Updates:

  • Declared Monthly Dividend for March 2023 (March 15, 2023): Broad mark Realty Capital Inc. announced that its board of directors has declared a cash dividend for March 2023 of USD 0.035 per common share. The dividend will be payable on April 14, 2023, to stockholders of record as of March 31, 2023.
  • Ready Capital and Broadmark Realty Capital Announced Definitive Merger Agreement (February 27, 2023): According to a final merger agreement that Ready Capital Corporation and Broadmark Realty Capital Inc. announced their signing, Broadmark will combine with Ready Capital. A pro forma equity capital base of USD 2.8 billion is anticipated for Ready Capital following the transaction. Each share of Broadmark common stock will be converted into 0.47233 shares of Ready Capital common stock, for a total of around 63 million shares of Ready Capital common stock, in accordance with the provisions of the merger agreement. According to Ready Capital's and Broadmark's respective closing stock prices on February 24, 2023, an offer price of USD 5.90 per Broadmark share would be implied, which would be a 41% premium and roughly 0.85x the tangible book value as of December 31, 2022.
  • Broadmark Realty Capital Announceed Fourth Quarter 2022 Results (February 27, 2023):

Current Highlights of the full year of 2022 include:

  1. For the entire year 2022, the company sales were USD 108.9 million, with a net loss of USD 116.4 million, or (USD 0.88) per diluted common share. 
  2. Distributable earnings of USD 68.7 million, or USD 0.55 per dilutive common share, before realized loss on investments, whereas new originations and amendments of USD 551.1 million. 
  3. USD 83.4 million in interest income and USD 22.7 million in fee income. As of December 31, 2022, there was USD 250.4 million in total principal still owed on 40 loans that were in default, with USD 22.8 million still owed in construction holdbacks for the expected expenses to finish the defaulted assets.
  4. As of December 31, 2022, the Firm possessed foreclosed properties worth USD 87.9 million and had recorded USD 7.6 million in impairment losses.
  5. The four sites included townhouses, luxury apartments, and residential lots; as of December 31, 2022, 78% of the luxury apartments were occupied.
  6. The Company had USD 190.0 million in total liquidity as of December 31, 2022, consisting of USD 55.0 million in cash and cash equivalents, USD 135.0 million in undrawn credit facility, and USD 452.7 million in unfunded loan commitments, of which USD 22.8 million relates to capital expenditures on loans in default that the Company is not contractually required to fund.

Annual Technical Chart:

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 23, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Note 4: The report publishing date is as per the Pacific Time Zone.