Land & Buildings sets crosshair on Six Flags in Q4'22

Land & Buildings Investment Management LLC set its target on theme park operator Six Flags Entertainment Corp. in the fourth quarter of 2022.

In December 2022, Land & Buildings issued a presentation to the public pushing for Six Flags to explore a sale-leaseback for its theme parks, as the investment firm believes the underlying real estate is worth more than the implied equity value of the company. The activist investor mentioned VICI Properties Inc. as a potential buyer, adding the REIT expressed interest in real estate related to theme parks in the past. The firm noted other potential purchasers include Gaming & Leisure Properties Inc., Realty Income Corp., EPR Properties, Blackstone Inc., or another private equity fund.

Simultaneously, Land & Buildings nearly tripled its share count in Six Flags during the fourth quarter, raising its stake in the theme park operator to approximately 3.1%, according to the firm's most recent Form 13F filing.

Position increases

Including Six Flags, Land & Buildings increased its share count in seven of its existing positions during the fourth quarter of last year.

The firm nearly tripled its share count in homebuilder D.R. Horton Inc., boosting the value of its position to approximately $11.5 million as of Dec. 31, 2022.

Land & Buildings also more than doubled its stake in SmartRent Inc., an enterprise software company that provides integrated smart home operating systems to residential property owners and operators.

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Aimco remained the firm's largest holding by market value, at $62.6 million as of the end of 2022. Land & Buildings upped its share count in the residential REIT by 19.9% during the recent quarter, while also pushing for change at the REIT's board. During the quarter, Land & Buildings nominated two candidates to Aimco's board, in which Jim Sullivan was elected via a shareholder vote. As of Dec. 31, Land & Buildings held a 5.8% stake in the REIT.

Industrial REIT Rexford Industrial Realty Inc. marked the newest position in Land & Buildings' portfolio. During the fourth quarter, Land & Buildings purchased 638,958 shares in the industrial REIT, a stake valued at $34.9 million at quarter-end.

Position decreases

Conversely, Land & Buildings decreased its share count in eight positions, in addition to exiting stakes in Prologis Inc., Park Hotels & Resorts Inc. and the Vanguard Long-Term Treasury ETF.

The firm sold roughly half of its share counts in shopping center REIT Retail Opportunity Investments Corp. as well as communications REIT SBA Communications Corp.

Other notable share-count decreases included Public Storage, AvalonBay Communities Inc. and Alexandria Real Estate Equities Inc.

Highest exposure remains in residential REITs

By sector, Land & Buildings continued to hold the highest exposure to residential REITs as of 2022-end, aggregating $174.4 million. Within the residential sector, the firm's multifamily REIT positions accounted for $117.4 million, while its holdings in manufactured home REITs and single-family rental REITs summed to $28.6 million and $28.5 million, respectively.