Latest news with #AlgomaCentral
CTV News
7 days ago
- Business
- CTV News
Group looking for buyers for Sault mall ‘excited' about the opportunity
While it's been a tough few years for the Station Mall in Sault Ste. Marie, the real estate group seeking buyers says it's an attractive property for many prospective owners. While it's been a tough few years for the Station Mall in Sault Ste. Marie, the real estate group seeking buyers says it's an attractive property for many prospective owners. Since 2017, the mall lost two of its anchor tenants – Walmart and Sears – and struggled with many other malls as shoppers worldwide increasingly went online, particularly during the COVID-19 pandemic. sears Liquidation sales begin at 54 locations across the country, including at the Station Mall in Sault Ste. Marie. A sale to SM Holdings in June 2022 for $30 million floundered when the group failed to pay $18 million of a take-back mortgage due in June 2024 to Algoma Central Corp., the original mall owners dating back to the 1970s. 'A court order imposed a deadline of Jan. 16, 2025, for the full mortgage amount, including accrued interest, to be paid,' Algoma Central said in an update to shareholders. 'The repayment deadline was not met and the court has ordered commencement of receivership proceedings to recoup the mortgage.' B. Reilly Farber was appointed receiver. In turn, it selected CBRE, a commercial real estate firm, to take the lead in lining up potential buyers for the mall. Station Mall has around 475,000 square feet of space that can be leased on 35 acres of downtown property on the waterfront along the St. Marys River. Station Mall announced $60M redevelopment In an interview with CTV News, CBRE vice-chairman Mike Czestochowski said while building new commercial properties right now is a major challenge because of costs, finding buyers for older retail is a much easier sell. Properties such as the Station Mall are more attractive because the infrastructure is in good condition. 'All that's happened has strengthened older retail,' Czestochowski said. 'The mall itself is in really good shape. It's being managed by CBRE and when we walked through it, I was pleasantly surprised at how good everything looked -- it's in really good shape.' The mall also has zoning in place to allow for redevelopment opportunities, including residential and commercial uses. Lauren White, an executive vice-president with CBRE, said the property has been on the market for a couple of weeks. 'We haven't set an offer date yet – we'll probably do that in the coming weeks,' White said. 'It's early in the process, but we are happy with the level of activity so far.' 'The mall itself is in really good shape. It's being managed by CBRE and when we walked through it, I was pleasantly surprised at how good everything looked -- it's in really good shape.' — CBRE vice-chairman Mike Czestochowski Once an agreement is in place, she said the sale would have to receive court approval. Czestochowski said that usually the likely buyer emerges as the process unfolds. 'In most cases, it's pretty clear,' he said. 'By the time you go through the process, multiple rounds of offers, generally, someone stands out. By the end of it, we know who is best suited and is one to pay the best price for the mall.' Currently, almost 54 per cent of the mall is vacant, but that figure is largely driven by the absence of the two anchor tenants, Sears and Walmart. Czestochowski said when dealing with potential tenants, it's often easier to rent large spaces than smaller ones. 'When I see big chunks of empty space, I'm not as worried – I'm more worried about 1,000 square feet than I am about 50,000 square feet,' he said. 'Fifty thousand doesn't come along very often. So the tenants that would fill that space … really take note when space like this comes up in a mall that's so well located.' Station Mall The owners of Station Mall in Sault Ste. Marie are keeping tight-lipped about their plans for the former Sears store. (Mike McDonald/CTV News) While CBRE wouldn't sign leases on behalf of the mall, they are speaking with potential tenants about the opportunity to lease. 'We're not as concerned about that vacant space,' Czestochowski said. 'We feel that with proper marketing and discussions, we can fill it.' White added that they're having ongoing discussions with potential tenants interested in the Station Mall. And Sean Comiskey, a senior vice-president with CBRE, said with strong ownership in place, he's confident in the mall's prospects. 'Tenants, you know, in the past may not have liked the partnership and therefore may have bypassed the space for another piece of space in the market,' Comiskey said. 'With a good operator in place. We don't see this vacancy lasting too long.' For his part, Czestochowski said they are happy to have the opportunity to help revive the mall. The company has a history in the Sault, and on a personal level, he has family who live in the city. 'I can tell you, when I got the call from the receiver to put forth a proposal, I was excited,' he said. 'I knew that it would generate a lot of interest … So at this point, we're very happy with the activity level and we're happy to have the listing.'
Yahoo
26-05-2025
- Business
- Yahoo
A Look At The Intrinsic Value Of Algoma Central Corporation (TSE:ALC)
The projected fair value for Algoma Central is CA$17.15 based on Dividend Discount Model Current share price of CA$15.86 suggests Algoma Central is potentially trading close to its fair value The average premium for Algoma Central's competitorsis currently 9.8% How far off is Algoma Central Corporation (TSE:ALC) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by projecting its future cash flows and then discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Don't get put off by the jargon, the math behind it is actually quite straightforward. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. Our free stock report includes 2 warning signs investors should be aware of before investing in Algoma Central. Read for free now. We have to calculate the value of Algoma Central slightly differently to other stocks because it is a shipping company. In this approach dividends per share (DPS) are used, as free cash flow is difficult to estimate and often not reported by analysts. Unless a company pays out the majority of its FCF as a dividend, this method will typically underestimate the value of the stock. The 'Gordon Growth Model' is used, which simply assumes that dividend payments will continue to increase at a sustainable growth rate forever. For a number of reasons a very conservative growth rate is used that cannot exceed that of a company's Gross Domestic Product (GDP). In this case we used the 5-year average of the 10-year government bond yield (2.5%). The expected dividend per share is then discounted to today's value at a cost of equity of 7.2%. Compared to the current share price of CA$15.9, the company appears about fair value at a 7.5% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. Value Per Share = Expected Dividend Per Share / (Discount Rate - Perpetual Growth Rate) = CA$0.8 / (7.2% – 2.5%) = CA$17.2 The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Algoma Central as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.2%, which is based on a levered beta of 1.077. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Algoma Central Strength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings and cashflows. Weakness Earnings growth over the past year is below its 5-year average. Dividend is low compared to the top 25% of dividend payers in the Shipping market. Opportunity Annual revenue is forecast to grow faster than the Canadian market. Current share price is below our estimate of fair value. Threat Paying a dividend but company has no free cash flows. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Algoma Central, we've compiled three important elements you should further examine: Risks: Every company has them, and we've spotted 2 warning signs for Algoma Central you should know about. Future Earnings: How does ALC's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every Canadian stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
