Friday, May 12, 2023

Interview of Trinity Place Holdings CEO Matt Messinger $TPHS

Trinity Place Holdings ($TPHS) is a storied company I originally wrote up in its prior iteration as Syms. The basic story at the time was that the company's retail operations were struggling and MIGHT turn around, but mainly that the real estate was worth a lot. If the company went bankrupt, shareholders would do well, even if the company's turnaround didn't work out... The price just seemed too low. A few months later, Syms declared bankruptcy, and the stock made some good returns for its shareholders. My timing was much more luck than skill. 

Fast forward a little more than 12 years, and I believe that the company has again been (wrongly) left for dead. I recently took a position in the company and yesterday, interviewed TPHS's CEO- Matt Messinger. That interview is at the bottom of this post- but here is a link directly to the YouTube video. 

At a glance, Trinity Place looks like it is in less than great shape- they even recently discussed in a press release that they have a "going concern" paragraph in its risk factors. However, this risk factor is due to pending debt maturities- I believe these will be worked through in a rational way where the company and its lenders can win. 

Additionally, TPHS is presently exploring strategic alternatives that could lead to a radical transformation of the company. If this happens, there could be potential monetization of its ~$500 million in federal and state net operating losses. There are lots of different forms a transaction could take. I will anxiously await to see what happens with regard to this. 

For assets, the company's current real estate holdings consist of:

237 11th St, Brooklyn, New York


 330 Rte 17N, Paramus New Jersey

77 Greenwich St, Lower Manhattan, New York City


The Greenwich location is a new build tower close to Wall St, the World Trade Center, and Battery Park. It has a lot of large luxury condos for sale- more about them can be found here. It seems that the residential real estate market in New York City is holding up well, and that the problems are largely in the commercial area.

Additionally, the company has high inside ownership and other significant shareholders, such as the Michael Price estate. The company seems to be very well connected to get positive outcomes. This is pointed out by @expectedvalues on Twitter. The CEO also owns a nice amount of stock and has also over time made open market purchases. I believe that he is incentivized to do well for the company and its shareholders because of this.

Assets worth considering:

*Desirable commercial space in New Jersey

*A condo tower in New York that has very nice units for sale

*105 units in Brooklyn that were recently re-zoned to have substantially more air rights valuable to other developers or potential future owners of this building. @retails_edge wrote on twitter that the building alone may be worth $67m. I think that the cap rate he used was a bit low, and that the value of the building is probably more than this. 

*A multi-million dollar lawsuit against the GC and seller of the Brooklyn apartments for defects in the workmanship of the newly build building.

*Around $500m of federal and state Net Operating Loss carryforwards (some of the state losses are in Florida)

*NYSE listing

* A well-connected shareholder base and a CEO who is Chairman of the Board of the Children's Museum of Manhattan


*Rapid and dramatic deterioration of the residential and multifamily real estate market in New York City

*Lenders not being willing to work with the company

I think that $TPHS stock, which currently has a share price of $0.48 and a market capitalization of ~$17.85 million is undervalued and has been left for dead. Because there are a very wide array of outcomes I could see happening, pinning down a target price on this stock is difficult. This said, I think that $TPHS is a very interesting and compelling bet. 

Below is my interview with Matt Messinger- I hope that you enjoy it. :D


 Disclosure: I own shares of TPHS

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