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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Bought ZRE in a non-registered account just weeks before COVID. Down 33%. Yikes. Would you suggest waiting it out? And if so - looking at your trusty crystal ball - when would you see share prices for this ETF rising to pre-COVID levels (a year...two years)? Alternatively, is it time to cut my (considerable) losses and invest in another sector (tech, consumer cyclical?) which would have a better chance of seeing a faster recovery? Thanks.
Read Answer Asked by Maureen on May 13, 2020
Q: I picked some of FCR.UN today at $11.90/share for my TFSA. I am looking at this trust and thinking it is very cheap now - NAV around $18 and they did OK in April with 74% of rents collected plus they have tenants like Walmart, Canadian Tire, Liquor stores - and located in the bigger cities (GTA). Seems like they would do good long term at this price with a nice yield? I am looking at a 5 year hold at minimum.
Read Answer Asked by Kevin on May 13, 2020
Q: Hi - Can you update me on your thoughts about Allied Reit. I am long but am concerned about pressure on commercial real estate (eg companies looking for less space than before due to remote work spaces/office sharing). So I guess it boils down to would you be buyers, sellers or holders of AP.un leaving gain/loss for taxes out of the consideration?
Read Answer Asked by Doug on May 12, 2020
Q: I am looking to purchase another REIT or two for my TFSA. I currently own AP.UN. I have been following the discussion about car.un and dir.un as two of your favourite reits. My question is; do you think that they are currently overvalued compared to bpy.un which morningstar indicates is undervalued by 53%. would you not buy bpy.un? any other suggestions are greatly appreciated
thanks
Read Answer Asked by Mary on May 12, 2020
Q: I would like to reduce my exposure to REITs and reallocate to other sectors. Considering selling some of these 6. I have a long term focus - 5+ years, looking at total return over that time. May I have your opinion of these in order from best to worst for total return for a long term hold. I'm assuming all will get through this economic disruption OK. AP.UN, GRT.UN, HR.UN, PLZ.UN, REI.UN, SRU.UN. Thanks.
Read Answer Asked by Dan on May 12, 2020
Q: Following are your comments from Nov 2019

November 05, 2019
5I RESEARCH ANSWER:
STWD is priced well at 12X cash flow; BRX is cheaper at 11X. O is twice as expensive, at 24X. O has had much better growth in cash flow, the question is whether its premium valuation is worth it. BRX wins the momentum contest this year. With a 61% payout ratio, we would consider it for one with a good valuation, 'some' growth and good momentum.
..............................................
Please comment on your current view of BRX.
What is the payout ratio.
How do you view the "integrity" of the dividend.
How do they compare with STWD and O.
Thank you
Read Answer Asked by JACK on May 11, 2020
Q: What are your thoughts on BAM's move to help retail with a 5B investment. I'd imagine its only helping companies that are its tenants so that it may prevent some large vacancies. Are they taking equity in these retailers for lending them money? Didn't BAM do this in 2016 with Rouse and 2018 with GGP and both were bad moves? Struggling to see how this is a good move, retail is a nightmare and for good reason.
Read Answer Asked by Adam on May 11, 2020
Q: On 8 May in your response to a question from Louisa you stated "the sector is going to continue to face some challenges". Were you referring to REITs in general or just to seniors residences like SIA? Thank you.
Read Answer Asked by Dennis on May 11, 2020
Q: Hello 5i Team
I am comparing the retail REITs and the two distinct groupings in the sector:
Group 1 - REITs majority owned by parent operating company and the majority source of the REIT's income. These would be Choice Properties REIT (CHP.UN), Crombie REIT (CRR.UN) and CT REIT (CRT.UN).
Group 2 - REITS with a large diverse portfolio. These would be First Capital REIT (FCR.UN), Riocan REIT (REI.UN) and SmartCentres REIT (SRU.UN).
The questions I have are:
1 - What would be your ranking of the REITs in Group 1 and your ranking of the REITs in Group 2?
2 - Which is the better Group to select from Group 1 or Group 2?
3 - Any other retail oriented REITs I should be looking at?
Thanks
Read Answer Asked by Stephen on May 08, 2020
Q: My daughter's mortgage is up for renewal in December. The bank called and offered to renew early. She is currently paying 2.64% (5 yr fixed) and they offered 2.87%. She was asking my thoughts on what rates might do over the next 5 years and whether to take their offer?

My initial thoughts are a) USA-Cdn rates will probably go lower (and possibly negative) to stimulate the economy; b) the bank is calling now to try to lock in her mortgage at a higher rate as opposed to in December when rates will most likely be lower. My guess is to decline the offer.

What does your crystal ball show regarding interest rates over the next 5 year period?

Thanks...Steve

ps We bought our 1st house at 20.25% and our lowest rate was 8%. So from that perspective, at sub 3% who cares?
Read Answer Asked by Stephen on May 08, 2020
Q: I am underwater on these and would like to harvest the losses and re-buy after 30 days (or not). Can you suggest temporary replacements for each? Any of these names you would not buy after the 30 days and just add to others?
Please deduct as many questions as appropriate.
Thank you.
Read Answer Asked by Carlos on May 08, 2020
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