Wherever there is money it is worthwhile to ask; is there a opportunity here for investors?
Lets examine this further. Why would Fortress back away from the current deal, is it a ploy to refinance a better deal with the city and therein create an interesting buy opportunity on its stock?
What possible reasons would Fortress back out:
- Unhappy with the interest payment? Unlikely, the deal had a strike price set before the interest rates really began unwinding so they are receiving fair dollar value- rumors are that it was somewhere in the neighborhood of 8%.
- Better Opportunities for Fortress to spend on? Unlikely,with the current economic condition there does not appear to be high number of viable options available.
- Belief that the construction will not finish? Impossible, the City of Vancouver signed a deal promising to see the project through to completion.
- Fortress does not have the capital and is using a loophole to escape. Now we are getting somewhere.
Is there a buy opportunity here, unlikely. I see the likely results of this being any of the following:
- The city/province will finance the project to its completion.
- The city will sell the site at a deep discount to another developer with the promise that they will complete the site on time.
- The city will find one of the few fiance companies left out there to carry the project through to completion.