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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: 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. ?
Read Answer Asked by Kevin on September 08, 2020
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?
Read Answer Asked by Michael on September 08, 2020
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
Read Answer Asked by Esther on September 04, 2020
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!
Read Answer Asked by Mary on September 03, 2020
Q: I bought DIR.un and WIR.un , the industrial REITs based partly on NAV, FFO, and dividend growth and because I had hardly any Canadian investments. However , on the said REITs , perhaps my calculations were incorrect. Both are down significantly notwithstanding that eCommerce has grown rapidly. I also have COR and COLD on close watch. I expected industrial warehouses and logistics to have a reasonably good growth trajectory. Do you think that growth in this type of company will be flat for the next year or two? To what would you attribute the weakness evident in the valuation of these companies that should, one would think, behave very differently from , say apartment REITs? Would you favor COLD or COR over the Canadian-listed ones and if yes, your reasons other those obvious in financial metrics?
Read Answer Asked by Adam on September 02, 2020
Q: Hi 5i team.

Any news today causing even the highest regarded apartment reits to sell of significantly? CAR.un, IIP.un, and MI.un all down close to 5%.

Thanks.

John
Read Answer Asked by john on August 31, 2020
Q: I was listening to someone who was saying that industrial is the new retail (because of the supply chain to online sales) and that it makes sense to invest in COLD and PBW (US). What are your thoughts on this thesis, and if you agree, what companies would you recommend? It seems that TFII has benefited from this theme.
Read Answer Asked by Maria on August 26, 2020
Q: I am intrigued by this company's business model of owning ground leases and working cooperatively with the owners of the business on top of that land. They say they collected 100% of payments during COVID and are essentially COVID and recession-proof.

In Geoff's previous question, he noted that it was "...likened it to a hundred year bond, yet if they can achieve their goal of increasing the distribution at twice the rate of inflation that is obviously better than a bond, safety comparisons aside."

Safety comparisons not aside, I'm interested in your views. It seems like raising capital and debt would be the main concerns. They seem to raise capital by offering more shares. How sustainable is that model?

All in all, can you assess the company in terms of safety and their claim to be more in the fixed income category than in the equity category. I actually like that they conserve dividend payments as it seems to justify this claim.
Read Answer Asked by Kevin on August 25, 2020
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