The Sahm Adrangi led Kerrisdale Capital took a short position in St Joe Company’s $1 Billion Florida real estate development deal. With the deal, St. Joe hopes to transform a chunk of desolate land into an attractive residential homes investment for retirees and commercial property for businesses near Panama City Beach. But Sahm doesn’t believe that the longtime real estate developer has the capacity to transform this desolate land into the $1 Billion valuations.
According to Sahm Adrangi, St. Joe’s recent acquisition is nowhere near its previous land acquisitions. Unlike most beachfront that the company specializes in, the Panama City land lies in a swampy and desolate and remote area. Most importantly, it would require the developer to sell about 2700 residential homes and four hundred thousand square feet of office space consistently for 50 years in order to hit the $1 billion valuations.
Sahm points out that this would make this new development the top selling market in America. It would also mean that the new district sells more housing units annually than were absorbed by the entire panhandle region in 2017. Sahm Adrangi further mentions that the achievement of this remote area heavily relies on the development of the districts interior lands.
However, the fact that the company has done little in terms of filing for permits proves that it is struggling with the monetization of the Panama project. Additionally, the fact that no meaningful developments have been yielded despite St. Joe coming up proposing these developments over a decade ago is a testament that their investors should only continue to wait longer for the monetization.
More about Sahm Adrangi
Sahm is the founder and the current Chief Investment Officer (CIO) for the New York-based Kerrisdale Capital Management. Prior to founding Kerrisdale, Sahm Adrangi worked with different alternative investment institutions like Longacre Fund management as an investment analyst as well as Chanin Capital Partners where he served in their bankruptcy restructuring department. The alternative investment professional also holds Bachelors of Arts in Economics from Yale University. He is constantly advising the market on both the most and least attractive investment options of the time.