STOCKCHASE

26.910

‘Wal-Mart’ REIT. Did a capital raise recently. Most of growth will come from earn outs (partner on developments with Smart Centers) and development portfolio. The assets they are developing have a higher payout than they are trading at and this will be accretive. A nice core holding.

2011-12-05

TOP PICK

Dundee REIT

D.UN-T

32.700

Commercial diversified name. Worth $34-$35. Material upside to get it over that hurtle. Good quality name and a great management team.

2011-12-05

PAST TOP PICK

Morguard Real Estate Inv Trust

23.250

(Top Pick Nov. 17/10, Up 27.27% Total Return) Externally managed and management is compensated according to assets under management. One concern is that they ventured into the US and got a large asset on Long Island.

2011-12-05

WEAK BUY

InnVest Reit

INN.UN-T

4.240

Cut distribution. Were excluded from REIT status at first when they converted. They are going to re-structure into a taxable corporation. Will take a 30% cut to yield and so stock took the same hit.

2011-12-05

HOLD

MRT.UN-T

16.070

Commercial diversified name. Is at full and fair value.

2011-12-05

HOLD

RioCan Real Estate Investment

REI.UN-T

25.340

It is not cheap. Closed two acquisitions this week. Largest REIT in Canada. He would not be adding aggressively at this level but is a core position in his portfolio.

2011-12-05

PAST TOP PICK

10.920

(Top Pick Nov. 17/10, Up 15.41% Total Return) Has done everything he expected. Surprise was the number of apartments in Ontario. On the cusp of calling it a core holding.

2011-12-05

N/A

0.020

Market: The overriding problem across the globe is that there is too much debt incurred for the countries or people to services them. We are tracking on par with other financial crisis since WW2. He looks for REITs with good management, low payout ratios, etc. You would like to see strong robust growth in the economy so there is a demand for commercial real estate, but the interest rates are low and credit spreads are low and ‘pretty good’ demand, so things are pretty good for REITs.

2011-12-05

Comment

0.020

REITs are something that Canadians do much better than American based on total return from REITs in both countries. It is function of their distributions. Best REITS are dividend growers. Add tax efficiency because a lot do some payout in return of capital.

2011-12-05

STRONG BUY

BTB Real Estate Investment Trust

20.600

Was considering as a top pick today. Trading around its net asset value. Has been puzzled over the last 6 months why it has not broken out. He is happy to continue to allocate capital to it. 14-15% total return.

2011-12-05

WEAK BUY

Hungtingdon Capital

HNT-T

7.910

Debenture. It is slightly under collateralized. No distribution. But this debenture offers pretty good security. It is far from a core holding. Would not go near the stock but debenture was ok.

2011-12-05

DON'T BUY

Extendicare REIT

EXE.UN-T

7.080

He has been consistently negative on it. US nursing facilities and long term care facilities in Canada. US has cut reimbursements on some procedures buy as much as 11%. They can mitigate with lower refinancing, but nothing is going to replace that 11% of revenue. This has weighed on the stock. You are exposed to volatility with this one. Payout is sustainable.

2011-12-05

SELL

BTB.UN-X

0.880

He bailed, cutting losses. There are far better quality REITs out there with a clear path to growing.

2011-12-05

WEAK BUY

General Growth Properties Inc.

14.000

About 108%-110% payout ration and Q4 next year it will be sub-100% payout. Bough assets in clusters. Would be concerned about one-up assets they bought. Worries about variable rate debt but interest rates are going nowhere soon.

2011-12-05

DON'T BUY

GGP-N

1.050

Emerged out of bankruptcy. Strong sponsorship. Huge rally in B-Quality malls today and this one trades in line with them. Exited this name in downturn earlier this year. 10-12% total return but he is more comfortable with domestic names.

2011-12-05

PAST TOP PICK

Northwest Healthcare Property REIT

4.100

(Top Pick Nov. 17/10, Up 21.15% Total Return) Did everything he expected. Long-term lease4d industrial properties. They internalized at no cost so no balloon payment. Happy with this name and he is the largest unit holder of this name.

2011-12-05

BUY

NWH.UN-T

11.200

Probably worth $12-$12.50. 12% total return. Management has done a better job than he expected and will consider owning this one.

2011-12-05

SELL

CANMARC REIT

CMQ.UN-T

15.940

Old Homberg REIT. Subject of a hostile bid. He would tender or sell now. Doesn’t expect a higher bid. Don’t step in at this point.

2011-12-05

TOP PICK

TransGlobe Apartment REIT

TGA.UN-T

11.390

He is the largest unit holder on this name. Apartments, national portfolio. Did very good job of leasing up apartments they bought that had high vacancy rates.

2011-12-05

TOP PICK

Amica Mature Lifestyles

ACC-T

7.700

Very high-end senior’s housing. 15% discount to asset value. Raised dividend twice this year and still more room. Good rent growth. Management owns 20%. He added to portfolio very recently.

2011-12-05

SELL

Chimera Investment

CIM-N

2.660

Mortgage REIT, focused on mortgage-backed securities. They have been hit by some of the things in their portfolio including defaults. This is not his preferred vehicle in this space. The yield is probably good. It could drop from 20% to 16%.

2011-12-05

BUY

Dundee International REIT

DI.UN-T

9.850

Slight discount to net asset value. Post offices and banks in Germany. Great management team. Payout ratio is sustainable and debt ratio is low.

2011-12-05

TOP PICK

Dundee REIT

D.UN-T

32.480

Commercially diversified. One of the best management teams. A lot of exposure to Calgary. Trading at under 15X free cash flow, which is cheaper than the sector as a whole.

2011-10-21

PAST TOP PICK

First Capital Realty

FCR-T

16.370

(A Top Pick Aug 20/10. Up 23.01%. ) Continuing to do a great job in managing and growing cash flow. Probably fairly valued at these levels.

2011-10-21

TOP PICK

7.440

Doesn’t like seniors housing but this one is very cheap. Trading at around 14X free cash flow. Probably worth $8.50-$8.75.

2011-10-21

DON'T BUY

Retrocom Mid-Market REIT

RMM.UN-T

4.180

They own B and C quality retail assets. Leverage is too high and distribution is not sustainable at its current level.

2011-10-21

Comment

0.020

REITs. Structurally people are shifting away from investing for growth to investing for income to fund their retirements. This is accelerated with interest rates being low. Aconomic growth is pretty anaemic for most of the developed nations.

2011-10-21

PAST TOP PICK

Allied Properties REIT

AP.UN-T

23.700

(A Top Pick Aug 20/10. Up 18.07%. )

2011-10-21

BUY

Brookfield Properties Corp.

20.250

Regional malls, in generally secondary markets in Saskatoon, Regina, Toronto, Guelph. NAV is about $20.50, so one of the few Canadian REITs that you can buy at a discount.

2011-10-21

TOP PICK

BPO-N

14.920

(A Top Pick Aug 20/10. Up 5.79%. ) Trading back at 2007 levels. Cash flow has done nothing but grow and cash flow is higher. Merrill Lynch is leaving their Manhattan offices giving them about 2 million square footage that they will have to lease. NAV is about $18.50. Very cheap and worth about $20.

2011-10-21

HOLD

13.290

Diversified commercial. Focused in Western Canada, a little bit in Ontario and a growing portfolio in the US, particularly Minnesota. Wouldn't be an aggressive buyer at this time. Trading around its NAV. Over distributing at about 110%.

2011-10-21

Comment

Northwest Healthcare Property REIT

4.020

The only pure industrial play in the country. Was down dramatically when one person sold 250,000-300,000 units. Stock is now recovered to $4. NAV is probably around $3.80.

2011-10-21

Comment

NWH.UN-T

11.400

Hasn’t owned this one but is looking to meet with management. Has done pretty well since its IPO. Would like to own it in the low $11’s or high $10’s at the most.

2011-10-21

BUY

TransGlobe Apartment REIT

27.700

Mortgage REITs, which are not available in Canada. Owns agency mortgages, which are agencies that are insured by Fannie Mae, Freddie Mac and Ginny Mae. Yield more because they utilize more leverage. A lot of noise and if you can deal with the volatility, the distribution is sustainable and you’ll do well.

2011-10-21

Comment

TGA.UN-T

11.300

Came out in May/10 and has tripled in size. Some good apartment assets in the Atlantic region. Likes to buy in the $10 area.

2011-10-21

Comment

Timbercreek Mortgage Investment

TMC-T

10.440

Timbercreek Mortgage (TMC-T). Invests in short-term loans, 9-18 months. If you own, you have to stay on top of the portfolio Because it turns over relatively quickly. 9% yield.

2011-10-21

HOLD

Canadian Apartment Properties

CAR.UN-T

19.250

He prefers it materially below $19. Good quality name.

2011-08-04

STRONG BUY

24.780

Offers you about a 20% return from this point. Great management team and great assets. Low payout ratio.

2011-08-04

PAST TOP PICK

First Capital Realty

FCR-T

16.380

(A Top Pick July 15/10. Up 25.1%.) Community shopping centers, big 6 markets across the country and great management team that owns 52%. At these levels this would be a Hold.

2011-08-04

BUY

20.950

Recently purchased a $400 million office building in Long Island with a long-term lease. Compelling value at these levels.

2011-08-04

TOP PICK

Northern Property REIT

NPR.UN-T

29.670

The only purchasers of apartment buildings and commercial real estate in Yellowknife and Rankin Inlet so can pretty much dictate what price the transaction will take place at. Lower leverage and low payout ratio.

2011-08-04

Comment

10.050

This quarter came in flat as they had a little higher repairs, maintenance expenses and property taxes. Utilities got hit by the rise in oil prices. Great quality, core name. Multiple is a little high at 18-19 times free cash flow. Normally would buy at these levels, but with a volatile market will wait and see how it shakes out.

2011-08-04

TOP PICK

7.200

Very cheap because it has been selling off in sympathy with Extendicare REIT (EXE.UN-T) but this one has no skilled nursing facilities in the US. Good opportunity. Expecting a 30% total return.

2011-08-04

BUY on WEAKNESS

Boardwalk REIT

BEI.UN-T

48.300

One of the better performers. Hardly moved at all today. Feels it is worth around $50-$51 and if you are buying at current levels, you are looking at a 5%-6% total return. If you are comfortable with that then it's a buy but if you are looking for a 15% return, you want to get it in the $46 range.

2011-08-04

DON'T BUY

Retrocom Mid-Market REIT

RMM.UN-T

5.160

Tier 2 or Tier 3 retail REIT in Canada. Significantly over distributing and are over levered. Strong management. There are better places to be.

2011-08-04

Comment

0.020

Skyline Private REIT. Because this is a private REIT, they don't report and are not publicly traded so he doesn't know how they are doing operationally. They tend to have smaller apartment buildings, spread out in southwestern Ontario in the secondary and tertiary markets such as St. Catherines or Goderich.

2011-08-04

TOP PICK

Brookfield Properties Corp.

20.130

Just reported and was in line with expectations. Lots of value creation historically and lots of value going forward. About 97% occupied. A lot of good things going on with this one. Selling at NAV, so it's cheap.

2011-08-04

DON'T BUY

Whiterock REIT

WRK.UN-T

11.450

Has a fundamental difference with management on how the REIT should be managed. Assets are very good but the leverage is way too high and the distribution is not sustainable. Income is not as secure as in other REITs.

2011-08-04

DON'T BUY

Lanesborough REIT

LRT.UN-T

0.350

Convertible debenture maturing 12/11. You don't get the balance sheet protection that you think you are getting. This is a company that you do not want to get the equity of.

2011-08-04

SELL

Extendicare REIT

EXE.UN-T

7.980

Have huge legislative and political risks. Center for Medicaid services announced they were going to cut reimbursement rates for some procedures by 11% going forward. 3rd or 4th time this stock has been down 10%-20% in the last 2 years. (See Top Picks.)

2011-08-04

PAST TOP PICK

BPO-N

17.030

(A Top Pick July 15/10. Up 22.32%.) Great quality portfolio. AAA luxury offices in Toronto, Ottawa, Calgary, Manhattan and Washington. This would be a strong Buy now.

2011-08-04

BUY

13.210

Trimmed his holdings when it went over $14 but was one of a few names he was purchasing today because of a big hit it took today.

2011-08-04

DON'T BUY

Temple REIT

TR.UN-X

4.350

He is not a fan of lodging REITs. Duration of cash flow is very short. Very volatile and economically sensitive. Sponsorship and management of this REIT has not been very consistent.

2011-08-04

DON'T BUY

Partners REIT

PAR.UN-X

1.760

Owns smaller retail centres in secondary markets but thinks the game plan is the owners to monetize its commercial portfolio into this REIT.

2011-08-04

PAST TOP PICK

Brookfield Real Estate Services

3.990

(A Top Pick July 15/10. Up 20.05%.) The only pure play industrial name in Canada. 100% occupied portfolio. Good quality cash flow that is fully covered.

2011-08-04

DON'T BUY

BRE-T

13.020

Directly tied to the housing market. Cash flow is a function of real estate agents across the country. With the housing market destined to slowdown and home prices destined to pull back, he wouldn't step in to this one at this time.

2011-08-04

BUY

Plazacorp Retail Properties

28.160

Mortgage REITs are not as simple as people think. There are a lot of things that the average investor cannot stay on top of. This is a good quality name. 19% yield at current prices.

2011-08-04

BUY

PLZ-X

4.050

Good quality name, but too small for him to own. Good management. Great value added model mainly in Quebec and Atlantic provinces.

2011-08-04

BUY on WEAKNESS

Amica Mature Lifestyles

ACC-T

7.100

Too small for him to own but likes the name. Wouldn't buy at this price but would prefer in the $6’s. Great management team.

2011-08-04

DON'T BUY

Chimera Investment

CIM-N

2.990

Primarily commercial mortgage backed securities. Got hit hard because of volatility and questions about funding sources and the sovereign banks in Europe meeting leverage for this company has gone up and the risk premiums being charged have also gone up. Would prefer Annaly Capital (NLY-N) instead.

2011-08-04

DON'T BUY

Dundee International REIT

DI.UN-T

10.030

Portfolio of German banks and post offices. Just started trading so there are no operations that he can comment on.

2011-08-04

BUY

Timbercreek Mortgage Investment

TMC-T

10.400

Mortgage investment. Good, stable cash flow. Yield of about 9%. The average term on their mortgages is 8-12 months. Construction and short-term financing. Good management. Strictly a yield play for him and he is not looking for capital appreciation.

2011-08-04

PAST TOP PICK

Cominar Real Estate Inv Tr

CUF.UN-T

22.700

(A Top Pick April 28/10. Up 28.13%.) One concern is that they have around 30% of its market cap in convertible debentures, 10% of which are in the money. Theoretically their units could grow by 10% in the next quarter so the next 10% is already spoken for.

2011-05-26

BUY on WEAKNESS

25.840

Big box tower centres. Had a good quarter. Good quality core name but would like to see it pull back in price to the $24 range.

2011-05-26

TOP PICK

Dundee REIT

D.UN-T

33.470

Have done a great job of reassembling the portfolio and getting back over a market cap of $1 billion. Exposure to Calgary, which is now the best office market in Canada. Upside to about $34-$35.

2011-05-26

PAST TOP PICK

Canadian Real Estate Investment

21.900

(A Top Pick April 28/10. Up 35.48%.) Good quality name.

2011-05-26

BUY

Northern Property REIT

NPR.UN-T

29.770

Primarily apartments but also some commercial real estate and located in northern areas of Alberta, BC and St Johns. Have increased their dividends consistently. Feels it’s worth about $32.

2011-05-26

TOP PICK

REF.UN-T

33.600

Lowest payout ratio. Great management team. The only criticism is their conservatism in making acquisitions. Upside to probably $35-$36.

2011-05-26

BUY on WEAKNESS

RioCan Real Estate Investment

REI.UN-T

25.520

Largest REIT in Canada. Target just announced that they will be taking around 18 or 19 of their Zellers stores. Good balance sheet and lots of cash. US expansion strategy is working out very well for them. Will probably buy Cedar, a retail REIT in the US. Try to get in the $24’s.

2011-05-26

BUY

10.770

Apartment REITs and manufactured home communities, mainly in Atlantic Canada but also in Ontario. Increased their dividend this year. Concerned that they have gone into the luxury apartment market in Ontario.

2011-05-26

BUY on WEAKNESS

8.770

At this price there isn’t a ton of upside left. (Worth about $9.25-$9.50). Offers a very compelling yield and is 100% return of capital, so you don’t pay taxes on proceeds. Try to get it at around $8.

2011-05-26

BUY

Boardwalk REIT

BEI.UN-T

47.700

Apartments in Edmonton and Calgary as well as Montreal. Bit of a misstep in Q1 but going forward significant upside in terms of rent growth as some of the concessions they are offering burn off..

2011-05-26

TOP PICK

Crombie Real Estate Investment Trust

20.730

(A Top Pick April 28/10. Up 35.53%.) NAV is about $20.50 so you are buying for what the assets are worth and not pay for any upside or growth. Tons of upside. Lots of cash for accretive acquisitions. Great management.

2011-05-26

Comment

CRR.UN-T

13.100

Primarily a retail REIT. Based in Atlantic Canada with a huge exposure to Sobey’s. Good quality name that you can park capital in. Won’t generate a lot of outperformance for the long term. Sound management and good assets. It’s fine, but prefers others.

2011-05-26

Comment

Annaly Capital Management Inc.

14.400

Office, Industrial and Retail properties. Basically western Canada but last year expanded into Ontario and US. Strong portfolio. Purchased a couple of one-off assets that he is not thrilled with. Thrilled with what they have done in Minnesota. Can’t see a ton of upside from here but ok for a long term yield play.

2011-05-26

BUY

NLY-N

18.050

Larger than all its other competitors combined. When he owns this, he usually sells when it hits $17-$19. At this price you will get about a 14%-15% yield. US housing market is still in dire straits and likely to be so for quite a long period of time.

2011-05-26

BUY

Leisureworld Senior Care Corp

4.110

The only pure industrial name in Canada. Stock slipped recently when they did an equity raise at $4.10 to finance some acquisitions. Trading at a good premium to NAV and has ability to grow rapidly.

2011-05-26

DON'T BUY

LW-T

10.830

Long term care housing so operating margins will be thinner. Long term care requires professional help such as nurses so expenses will be higher. Will have to relocate some of their class C assets.

2011-05-26

DON'T BUY

Brookfield Residential Property

30.200

Doesn’t own real estate but owns pools of residential mortgage backed securities. The mortgages it owns are insured by Fannie Mae, Freddie Mac and Ginny Mae. Prefers to buy in the low $28s or when they do an equity raise and Sells at around the current price. Very complex product.

2011-05-26

Comment

BRP-T

10.340

Land developer and home builder, primarily in Calgary Alberta with some Colorado, California and Washington DC. US housing market is still in dire straits and likely to be so for quite a long period of time.

2011-05-26

Comment

Amica Mature Lifestyles

ACC-T

8.330

Luxury seniors housing. Primarily independent and assisted living. Has a lot of respect for the CEO.

2011-05-26

BUY

Brookfield Properties

BPO-T

18.150

Tremendous name. Some of the best quality assets in North America. Also expanded with a little toehold in London UK and a big Australian portfolio. Great quality office portfolio, mainly Toronto, Ottawa, Calgary, Manhattan Washington and Houston. Worth about $20. 3% yield.

2011-04-20

Comment

Canadian Apartment Properties

CAR.UN-T

18.680

Apartment REIT with exposure to Montreal and Toronto, which have rent controls. Historically hasn’t been a big fan of this one but are warming to the name because the distributions payout ratio has declined below 100% and the quality in the portfolio is improving. Got hit this year with utility costs, HST and property taxes. Wants to see how this filters through on cash flow generation. Good quality core name.

2011-04-20

PAST TOP PICK

Cominar Real Estate Inv Tr

CUF.UN-T

22.360

(A Top Pick April 28/10. Up 24.75%.)

2011-04-20

TOP PICK

25.100

Retail. May benefit from Target (TGT-N) coming in. Big unenclosed power centres, mainly in the big 6 market. Close relations ship with Wal-Mart (WMT-N). A couple of $’s upside from here.

2011-04-20

BUY

First Capital Realty

FCR-T

16.260

High quality neighbourhood shopping centres that are grocery or drug store anchored. At these levels probably offers a 10% total return. Management owns 52% of the company. Great assets. Stand to benefit a little bit from Target (TGT-N) coming in to Canada but Zellers isn’t a huge tenant for them. Good quality name.

2011-04-20

TOP PICK

Morguard Real Estate Inv Trust

21.070

(A Top Pick April 28/10. Up 27.64%.) Office and a little bit of industrial. Probably worth $20-$25. One of the best quality names. Long term leases. Long term debt.

2011-04-20

BUY

MRT.UN-T

14.700

Are earnings likely to catch up to the distribution? Likely never. In the case of REITs there is very poor earnings quality. Cash flow generated is very different from cash flow generated. Ignore earnings and focus on distributable cash flow. This company’s distribution is sustainable. Good quality name with good quality assets, but there is nothing overly special about them. At these levels you are probably going to get a 12%-13% total return. Commercial/diversified.

2011-04-20

TOP PICK

10.750

Multi-family. Apartments and trailer parks, mainly in Atlantic Canada but increasingly in Ontario too. Worth $11.50-$12. Some headwinds on property taxes and utilities. Good quality name. Very safe and secure cash flow.

2011-04-20

PAST TOP PICK

Leisureworld Senior Care Corp

20.450

(A Top Pick April 28/10. Up 31.04%.)

2011-04-20

SELL

Temple REIT

TR.UN-X

4.500

A lodging REIT with a huge concentration in Fort Mac. Doesn’t like this one. On a risk adjusted basis, it’s kind of like walking across a minefield. There are other larger caps with similar returns, but without the risk.

2011-04-20

Comment

CANMARC REIT

CMQ.UN-T

12.260

Bought on the IPO because of the heavy discount. There was a big overhang because of management. Sold out in the $11 range. Did a slightly better job of acquiring assets than was expected. Doesn’t expect any danger of the 7.7% distribution being cut any time soon.

2011-04-20

DON'T BUY

LW-T

10.600

Long term care facilities in Ontario. Not a big fan as he feels it was overpriced on the IPO. About half the portfolio (“A” quality assets) is fairly valued at about an 8% cap yield and the rest, B and C, were probably fairly valued at 12% to 13% but brought it all out as an 8% cap yield. Feels distribution is sustainable for the next couple of years. Expect investors will be left behind by some of the better quality REITs. 2 new acquisitions will improve their quality.

2011-04-20

BUY

Cominar Real Estate Inv Tr

28.600

US mortgage REIT so they don’t own real estate but own pools of residential mortgages. Think of it as an investment in a levered US mortgage portfolio. Relatively safe. Buy below $29, which gives you a 20% yield. When it gets above $30, he tends to trim his position. You own solely for the income as there is very little upside.

2011-04-20

PAST TOP PICK

Brookfield Properties

BPO-T

17.120

(Top Pick Jan 19/10, Up 43.88%)

2011-01-07

TOP PICK

CUF.UN-T

21.000

Great job of delivering inline results each quarter. 14-15% (all in) from here. Very conservative management. Own a lot of stock themselves so they are on the same page.

2011-01-07

TOP PICK

RioCan Real Estate Investment

REI.UN-T

22.080

Biggest name in TSX. Less than 5% in US and moving to 10-15%. Successful in the US.

2011-01-07

BUY

Brookfield Office Properties Ltd

BOX.UN-T

21.830

Toronto, Calgary, Ottawa office properties. Cheap right now. Should be at $22-$23. Fully occupied.

2011-01-07

PAST TOP PICK