Investment Q&A

Q: Which would you prefer, IDR, ZRE, or RIT, and why?

Q: Good morning
I am looking to add some REIT to my portfolio. I'm moving to a income portfolio as I'm retiring soon and would like to increase my overall divide payout . Can you recommend some REIT for a long term hold?

Q: Thank you for your response to my previous question. I still find the issues involved puzzling. Stating the apparently conflicting issues i) while the same store growth is expected to be modest at around 2% the overall revenue growth appears to have been closer to 20% (for 2019) and ii) while analyst share price expectations have been rising notably of late that has occurred in the face of reduced earnings expectations; according to First Call these have been declining modestly but consistently for at least the past year.
The rationale for investing in this company was at least in part based on its competence as evidenced by the share price growth and its participation in an industry sector that offered significant opportunities for growth as a result of substantial sector fragmentation, to which they appear to be willing and able to respond. I subsequently see that COLD also has substantial industry participation both in the US as well as overseas, and promotes its competence in its management and operating systems. I also see that the REIT sector is currently under pressure and, or perhaps despite, that the cost of capital should be low as a result of all time low prevailing rates of interest. The obvious question is whether the current valuation represents a significant entry opportunity for a company which is doing well but still sorting out the bugs resulting from its growing interests. I would be interested in your response.

Q: How do you view this company's prospects and current valuation? While analysts expectations appear to have been on the rise in recent weeks the price has been soggy for some while, and I cannot determine the basis for the share price appreciation seen beginning in early 2018 through Q3 2019. The company's prospects seem now in question despite apparent growth in the underlying demand for their services.

Q: Hello 5i Team
A new IPO was announced on September 04 for Flagship Communities Real Estate Investment Trust, a Canadian REIT for US Manufactured Home Communities (proposed TSX symbol MHC.U).
Other than a press release, a marketing presentation, the preliminary prospectus and an appraisal report (all available on SEDAR), I could not find any other information.
The estimated price range will be US$15 - US$17 as per my broker's IPO center.
What are 5i's thoughts on this issue?
Given the scarcity of information, would it be better to wait for the issue to start trading, before initiating a position?
Thanks

Q: Hi Guys

I see Morguard Corporation has hit a 52 week low and has issued a new $175 million dollar debenture. I guess the weighting it has in retail, hotel, and office real estate continues to weigh on its cash flow? What does the rating of the debenture tell us about the financial health of Morguard and is there anything here to worry about?

Thanks Stuart

Q: Please give me your updated opinion. Thank you.

Q: Peter; I jus saw that Brookfield GROUP and Simon are buying JC Penny. Can you tell which actual of Brookfields is involved? Thanks. Rod

Q: I own some BPY in my RSP and had been looking at adding more on the strength of Brookfield management, however am taking pause after learning of their intentions to acquire and operate retail companies.
How do you view this approach and how secure do you think their distribution is ?

Q: What is your view on BTB.UN.
Should I ride it out or sell/move on? Currently down 37%. 1% of porfolio.

Q: A market call guest suggested that BAM may look to take BPY private if the share price doesn't recover. Do you agree? Could the recent share buy back be the first step? What type of premium might be gained? Thanks

Q: REITs are beaten down. For a long term investor who wants real estate exposure, is this a time to get in? Can you suggest (1) two or three REITs or other entities and (2) an ETF for this? Thank you!

Q: A number of Canadian REITs are spinoffs of the properties of big Canadian companies. How do I, as a potential REIT investor, have confidence that the bigger parent (i.e. Magna, Loblaws, Canadian Tire etc.) will not strong-arm the REIT when it comes to rent negotiations etc. ?

Q: Excuse the question as it's not directly tied to Canadian stocks, but the Canadian Real Estate Market. Do you see a drop in prices coming, in light of Covid, the upcoming end of Mortgage Deferrals and CERB payments?

Q: Hi, I have sold CSH and would like to buy some industrial real estate. What do you like better between WIR and DIR and why? Are they similar in price and growth/what are the metrics you would use?

Q: Is there any point in holding on to American Hotel Income Properties or take the loss and move on?

Q: Hi, I am the sole owner of a rental property that amounts to 25% of my
total assets. My existing equity portfolio consists of another 25% of
my total assets. The other 50% consists of my principal residence and
cash. I am about to turn 65 (widowed), and am thinking of selling the rental property and using the balance to buy REITs for income. I'd
like to get your thoughts on:

1) The financial tradeoff between owning a physical rental property
and owning REIT shares. Over the past few months in Toronto, property
prices have gone up as much as 15% but REIT prices have decreased
drastically on the TSX. Does it make sense to keep physical real
estate when REITs are discounted (or maybe they're actually priced
appropriately for the future?) Being a landlord requires a fair bit of
work and I'd like to take it easy in retirement.

2) The optimal percentage of total assets in the stock market during
retirement. If I sell the rental property and invest those proceeds
for a total of 50% of total assets invested in the stock market, do
you think this makes sense, or is that too risky? I have very low/no
exposure to bonds.

Thanks in advance.
Esther

Q: on Sept 1st , 2020, Donald asked if you still see CAR.UN as a premier reit. I couldn't tell from your answer if you do. Do you still see it as a premier reit?
thanks
Mary

Q: I really liked your answer about 'dead money' to Jason's question about riocan today. I'd like to get your impression of other reits: IIP.UN, BPY.UN, CAR.UN, and DIR.UN. Are they like dead money for a while? Are they good buys considering their book value per share is lower or close to their market value or do you think they can go down further? Are there any in this list that you would not recommend?
thanks!

Q: Any value in Riocan? I know retail is extremely challenged, but the Company is diversifying into multi family through purpose built rentals and condos. Has the stock come off enough to make it interesting. It would be for a long term good in my RRSP.

Thanks,
Jason