Investment Q&A

Q: I had felt very comfortable owning shares of Car.un - then, I read an article in the Globe written by David Milstead The gist of his article was that some REIT payouts are deliberately not accurate, they are manipulated to look healthier than they really are. He elaborates on I'll use the term "Doctoring" maintenance capex and growth capex and ultimately suggests that investors are being misled with what the company reports and what it does not report. His article concerned me. Car.un seems like a very good investment to me, but after reading his article, I ask myself, IS IT?" Please advise/comment. Thank you.

Q: Hi - I have an additional $50k to add to my real estate portion of my portfolio and would like the best reits in the following spaces: a) Low cost residential b) High end residential c) non-retail commercial d) Utilities and Heavy duty industrial e) Non-North American Commercial

What would be your top 5 picks for a long term hold (8 -10 yrs)

Q: In terms of portfolio sector allocation, is it legitimate to consider Canadian Apartment REIT to be a consumer staple; Pure Industrial REIT to be an industrial; and Chartwell to be healthcare? I have 5% in each of these equities -- is it a mistake to be over-concentrated in REITs ? I have a good gain and a good dividend in each of these holdings, but am interested in your perception of interest rate risk and diversification ? Thank you, Tim

Q: I understand that CAR.UN has better overall assets than MRG.UN, but the difference in valuation seems ridiculous. MRG is trading at 80 percent of NAV and 14 times 2018 AFFO, while CAR is 105 percent and 21.8 times , respectively (all per TD). It seems to me at this valuation, Morguard should just take over the chunk of MRG it doesn't own. Thoughts?
Thanks.

Q: are there any reits with good yields and low valuations? thanks

Q: I am a long retired (10 years plus) conservative investor with a portfolio largely based on your income portfolio with a few holdings from the balanced portfolio.
The somewhat unexpected capital gain in this security (CAR.UN) of about 30% in just less than 2 years and the consequent relatively low (for a REIT) yield of about 3.4%, has given me some concern that this security is over bought and due a significant correction. To-day, there is an article in the Globe and Mail that questions the validity of the AFFO calculations used by this company and in particular how capex and maintenance expenses are applied to the AFFO.

What are your views in this area and do my concerns that this security may be over bought have any validity?

Thanks

Q: Hi Peter and Staff
Always listed as one of your favoured REITS and I have done well on appreciation with lower yield than some and a touted low payout ratio.
Please comment on the Globe article yesterday regarding questionable ratios re: capital versus expense
They lumped it up there with Boardwalk with unsustainable payouts
Thanks for all you do
Dennis

Q: Hi - I am looking to invest in a real estste reit/etf that has income but low debt. - Any suggestions?

Q: I have a well diversified RRSP account with focus on income and of course some growth. The only real estate holding I have is BYP.UN and would like to add another. I am trying to decide between AAR.UN or CAR.UN. Which would be your chose, if either. I am open to other suggestions.
Thanks

Q: Hi Team,
In your response to Joanne, Nov 14 regarding comparison of BEI.UN and CAR you state :
"and we would much prefer CAR, and would have concern on CAR's distribution." Did you really mean you have a concern with CAR's distribution?
Also in light of BEI's announced distribution cut starting Jan 1, 2018 and their new growth plans do you believe the bad news is now priced in and this is a good buy currently considering down to $40 this am?

Thanks for your sevice,

Steve

Q: I am looking to replace HR.UN with a REIT that has minimal, or no retail exposure. Can you suggest a couple with comparable dividends, and better potential upside? Thank you.

Grant

Q: hello 5i:
Looking at CAR.UN, I see present AFFO is 22.3 vs a normal AFFO of 17.1. I note you're still recommending it when looking back at past questions. I'd like to add to my holdings; can you help justify the valuation?
thanks
Paul

Q: What would your recommended REIT asset allocation be for a growth-oriented 33 year old who does not own a house? Currently own some Chartwell in a margin account. Would CAR.UN be your next choice? Is it advisable to own REITs in non-tax advantaged accounts?
Much appreciated

Q: In what order would you rank these residential reits for a long term hold (5 plus years)? Would you agree that you should have one or two as part of a core holding in a portfolio? Thank you .

Q: You expressed a little concern on Tuesday with reits that had little or no exposure to retail space. Could you suggest a few top picks that avoid retail?

Q: Hi 5i team, I'm looking to add one more name in the real estate sector. I currently have BTB Reit, Artis Reit and the etf XRE. Could you please suggest a few ideas. What are your favourite reits at this time and would you replace any of my current holdings? Thanks. Mario.

Q: In these times of rising interest rates, I am wondering if it is better to own rate reset prefs or perpetuals? Also are all REITs better on the back burner for now, or are there some that still look attractive?
Thanks

Q: Hello 5i Team

I have equal dollar amounts in Boardwalk REIT (BEI.UN) and Northview Apartment REIT (NVU.UN). The REITs are held in a taxable account.

After release of the 2nd quarter results last week and the resulting change in share prices, I am down 5 % in Boardwalk and up about 1 % in Northview (after a long 2.5 years).

Should I sell my Northview and invest in Boardwalk for the long term or invest in Killam / Canadian Apartment to diversify my apartment REIT holdings from a apartment location strategy (i.e. Boardwalk is concentrated in Alberta, versus Killam is more eastern Canada and Canadian Apartment is more Ontario focused).

Thanks again for the great service.

Q: Further to my Aug 2 question, I did consider XRE but RIT seems the better choice as it has superior returns for all time periods, admittedly at more than double the MER. In case I decide that increasing my company count is OK would you please recommend your top 5 choices for direct company investment.

Q: My real estate exposure consists of CAR.UN. To increase diversity I am considering selling CAR and buying RIT. The MER is on the high side but the short and long term performance, relative to other REIT ETFs or mutual funds, seems justified. Volatility is also relatively low. What is your opinion on my plan and on RIT as a long term hold? Are there any other mutual Funds or ETFs I should consider. The percentage of my portfolio devoted to REITs is not high enough to obtain the diversity I seek by direct investments. I also do not wish to increase my security count by 3 or 4.