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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: just a comment about your comments. I am in the real estate business and affordability is not always the driving force in prices. It is demand from offshore money, investors, both locally and from abroad. In Toronto, there is a lot of money that can afford these investments and a collapse in the housing market would mostly hurt the working people who if they had to sell or refinancing would be stressed. If investors have lots of money, they are investing with the risks. they do not need these investments to pay for their own food and accommodation. I have worked through the housing price correction in 1974,1989,2001, 2008 and it was brutal for some people but an opportunity for investors with money. Now we have the additional overseas money which even at 5-10% is paying up for real estate in an already tight housing supply market. Who would want to sell and have no place to live. There may be a correction in Toronto but the investment fundamentals have to change. Keep waiting.....
Read Answer Asked by john on March 08, 2017
Q: I am considering adding pure play "Industrial" REITs to my REIT allocation. I currently have sufficient representation in the apartment and office/commercial sectors of the Canadian REITs

Please rank in order of preference the 5 pure play industrial REITs on the TSX. Am I missing any other names?

The market capitalization of the REITS are: Pure Industrial ($1.42B); Dream Industrial ($499M); WPT Industrial ($436M);Summit Industrial ($101M); and Edgefront ($68M).

Is Edgefront REIT too small to invest in?

Given Pure Industrial has Canadian and US holdings is it better than a 50/50 split of Dream (or Summit) and WPT which would give the same proportion of Canadian and US real estate holdings.

Please confirm whether WPT is traded in US dollars on the TSX.

Thanks for the excellent service.
Read Answer Asked by Stephen on March 08, 2017
Q: Good afternoon guys,

Please take the necessary number of credits..... My first question is about AX.UN. From what I have read, they seem to be managing the downturn in Western Canada fairly well - partially by diversifying in the States. Your thoughts on its prospects at this point in time? Does the distribution look (relatively) secure?

Second question pertains to Dream Office. Michael Cooper indicated that he thought the dividend at Dream Office would be lower within 2 years - likely due to their downsizing/rightsizing/upgrading their portfolio. Would you be inclined to wait for the stock to fall further before dipping your toes in?

Final question - Dream Industrial's payout ratio is getting too high. Do you see them cutting the distribution? It just seems that every time they report things look a little worse than they did in the previous quarter.

Thanks again for all you guys do. Great service.

Aaron
Read Answer Asked by Aaron on March 03, 2017
Q: Your report on Altus Group stated “One of the noteworthy risks at AIF is that 42% of the Canadian cost practice is from rental and condominiums in the multi-residential segment. Impairment in this sector could hurt the Canadian revenues as could a general decline in the Canadian housing markets.”
I would have thought that their revenues in this segment would depend more on sales volume as opposed to actual housing prices. Can you please comment on this. Essentially, if an investor believes that housing prices (condos in particular) will decline but turnover will remain strong, would this negate any of the declining revenue risk outlined in your report?
Read Answer Asked by Steven on March 02, 2017
Q: I was wondering if you could expand on exactly what it is Tricon does. Apparently, their new deal will mean that they are primarily in the rental home business. Does this mean that they own thousands of actual stand-alone houses that they rent for the long term and earn rental and perhaps management fees on? Are these houses rent to own or does the term "house" also mean apartment buildings and/or condos? Is there a comparable Candian company that would help me to understand their business model better or is large scale home rental more applicable only to the US?

Paul F.
Read Answer Asked by Paul on March 01, 2017
Q: I see chartwell has been a bit weak since the Q4 earnings report. I noticed that AFFO only increased by one cent (5%) in Q4, although 10cents (approx 13%) for the whole year, perhaps suggesting that growth is slowing? In addition, I was disappointed that they only increased the dividend by 2.5%, which is much less than AFFO growth. Does this suggest to you that growth is going to be minimal for 2017? The yield is not high as I think investors (myself included) were buying into the growth story. Do you see meaningful growth going forward?
Read Answer Asked by arnold on February 28, 2017
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