Investment Q&A

Q: Hello,
I read your response on June 24 on Allied REIT and was wondering about your specifics concerns on the company. You mentioned debt, vacancy and payout as main concerns for these office REIT. Allied reports a debt to GBV ratio of 36%, 87% occupancy, 2.8X interest coverage. The payout ratio is probably too high. Allied reports a book value per unit in the mid $40s and it’s trading at about $16. Obviously, Allied reported Cap Rates for their book is too optimistic. Their unsecured debt was downgraded to junk, it seems because of high debt level. What do you think is the main factor explaining the stock price (sentiment towards office or fundamentals)? Their leverage seems to be reasonable but likely higher than investors would like. Occupancy level are better than average. Your general comments are appreciated. Thank you.

Q: During the last month two BNN analysts provided the following comments for this REIT:

1. Don’t Buy
2. Sell

Do you agree with these recommendations or you have another opinion. ?

Q: How safe do you feel the dividend is for Allied, and the reasoning.
Thank You

Q: What is your opinion about open-ended vs. closed-ended REIT's? AP.UN became open-ended last year, and I'm wondering if this might change the potential for unit value or distribution level improvements.

Q: AP.UN recently issued a second T3 for a phantom capital gain of $5 per share. Do we have to pay tax on it now, or only when when we sell?

Q: Hello
A general question.
Are any REITs such as AP.UN, Royalty Funds such as AW.UN or any ETF's eligible to claim the dividend tax credit?
Thank you
Jeff

Q: Thoughts on this company? Thank You

Q: I am hearing investors piling into commercial real estate. I am looking for office real estate REITs in Canada that are beaten down, will not go down but have a potential price appreciation when environment improves. I am more looking for capital appreciation and not necessarily dividend.

Q: I don't really understand what happened to the $5 special distribution. I know it was consolidated into the existing share count, but I do not see any benefit. Can you please explain. Thanks

Q: I was surprised by the drop in share price today. Can you please provide me your opinion on the reason and if it is a good time to buy more, hold existing or sell. Thank you.

Q: You recently provided me with your top two picks in the industrial REIT space- thank you. Could you please do the same for the CDN office REIT space. Again looking for a focus on share price appreciation over dividend yield. Thank you.

Q: Given the numbers in Friday's news release, is Allied Properties a good buy today?
Thank you.

Q: Hi Peter and Staff

Long time holder of NWH.UN as a small part of my REIT basket. Been thinking i woukd just hang on (in my RRSP so no tax loss benefit ) but reading more on AP.UN that I used to own and wondering if that would be a better albeit still risky option than NWH.UN going forward

Thanks for all you do
Dennis

Q: Peter; Slate Office just cut their payout - could AP.UN be inline to do it too?!My wife holds AP.UN in her TFSA - no tax benefits- would you move on and into saybDIR.UN? Thanks.
Rod

Q: On October 30th. Peter asked you about the recent results is AP.UN.
In your response you indicated that AP.UN increased the distribution by 11%
Is this an increase over and above the $1.80 dividend indicated now ? Is the new dividend $1.80 + 11% of $1.80. ?
Thanks.

Q: Can you comment on their Q3 earnings?

Peter

Q: Hi 5i,
I'm mindful of your answers to recent questions about AP.UN (lukewarm response at best) but I do wonder;
Employers are said to be insisting more and more that employees get up, get showered, get dressed and get in to work at the office.
Pre-pandemic AP.UN was in the $50.00 range, and even in the midst of COVID it didn't drop as low as it is now - presently units are selling for $20 just as they were a decade ago. If it's accurate that working from home is on downslope, is there an upside for AP.UN that's not reflected in its current price - was it worth $50/unit in early 2020, or was that unsustainable even without COVID - and do you see any scenario where it might get back to, say, 2/3rds of its early 2020 value?
And just generally speaking - do you think office REITs are out of the woods if current trends continue (and if interest rates come down over the next year or so)?
Thanks,
Peter

Q: Hi 5i,

I believe in management and the long-term prospects of AP.un, so I want to hold on long-term.

On a couple of conference calls management has indicated there will be a large taxable event for unit holders because of the data center sale. I assume this will be a capital gain which may be a ROC of just a plain taxable capital gain. In any event, would it make sense to sell my units now resulting in a large capital loss and then buy the units back after 30 days. The loss will more than offset any gain the company would declare. If it’s a return on capital, I would use the loss to offset other gains in 2023. Your thoughts would be appreciated.

Do you anticipate much change in the unit price over the next 45 days? What do you think of this REIT long-term (3-5 years)?

Thanks for your opinion.
John

Q: Trying to reduce my number of stock holdings. Have identified these 11 as small positions that can be eliminated. Intending to use the cash to add to stronger holdings. I try not to think of a stock as a "hold". There are lots of high quality names you can invest in that look better than a "hold". If you were doing a portfolio clean up, and held these as roughly 1% positions, are there any that you would be reluctant to sell?

Q: Hi,

Your comments on Allied's latest results ?

Thanks