STOCKCHASE

Brookfield Properties Corp.

14.190

Grocery, drug store and retail anchored. Rock solid cash flow. Did very well in the downturn. 5.73% yield.

2010-08-20

TOP PICK

Allied Properties REIT

AP.UN-T

21.020

Buy Class I office buildings (brick and beam) in Toronto, Montreal, Quebec and Calgary. Great management and great assets and a very strong cash flow. This quarter and next will be rocky because of occupancy issues. Under $20 is a great buying opportunity.

2010-08-20

TOP PICK

BPO-N

14.120

Good assets, good management, low payout and lower leverage. Entering into Australia. Divesting their residential business. Will be the global landlord for major companies.

2010-08-20

PAST TOP PICK

22.180

(A Top Pick July 20/09. Up 83.69%.) Still likes but a little expensive right now.

2010-08-20

PAST TOP PICK

29.800

(A Top Pick July 20/09. Up 31.34%.) Still likes but a little expensive right now.

2010-08-20

PAST TOP PICK

9.070

(A Top Pick July 20/09. Up 61.93%.) Still likes but a little expensive right now.

2010-08-20

BUY

Primaris Retail REIT

PMZ.UN-T

18.730

Rumours of takeover are not correct. Great company. Purchased 3 assets recently and with their history they should do great things with them.

2010-08-20

BUY on WEAKNESS

Northwest Healthcare Property REIT

8.120

Historically has not like this name but they changed management, de-levered balance sheet and cut distributions twice. Assets are good, so stepped in after 2nd cut and has done very well. Try to get in the $7’s.

2010-08-20

BUY on WEAKNESS

NWH.UN-T

11.430

Medical office buildings in GTA. Didn't get in on IPO because of concerns of underwriting, cash flow and occupancy. In 2 quarters following IPO the concerns occurred but not to any great extent and were ignored by the market. Currently re-evaluating. Too rich so try to buy in the $10 area.

2010-08-20

DON'T BUY

A Comment -- General Comments From an Expert

A Commentary

0.020

REIT convertible debentures? Generally not a fan of either the debentures or the companies that issued them. Basically they guarantee dilution in the future. 2 companies, Cominar (CUF.UN-T) and Dundee (D.UN-T) have almost 30% or more of their equity market cap in them.

2010-08-20

Comment

A Comment -- General Comments From an Expert

A Commentary

0.020

As trusts in other sectors convert to corps and investors turn to REITs, is there danger of a REIT bubble? A lot of capital is flowing into yielding securities such as treasuries, bonds, bond funds, etc. Currently they are trading at 14.2X free cash flow, which is slightly rich so he has been exhibited in cash.

2010-08-20

BUY

Annaly Capital Management Inc.

NLY-N

17.590

Mortgage REIT. Essentially they buy agency residential mortgage backed US securities that are levered 6 times. Last quarter and next quarter will be a little rocky because curve is flattening and spread will tighten. Expect stock price to be flat for the next year or so. 15.5% yield

2010-08-20

TOP PICK

Pure Industrial Real Estatetrust Trust

AAR.UN-X

3.590

Occupancy has slipped from 100% to 99.8%. Didn't cut distributions during the downturn. Payout ratio of about 95%. 8.6% yield. Looking for over 20% return.

2010-07-15

TOP PICK

Brookfield Properties Corp.

BPO-N

14.650

Premier office portfolio, Toronto, Los Angeles, Manhattan and Ottawa. Great management, great balance sheet and low payout ratio.

2010-07-15

TOP PICK

13.740

Looking for 12% equity return. Worth about $15.25. Great tenant roster including Tim Horton's, banks, Loblaws, Sobeys, etc. with 96% occupancy.

2010-07-15

PAST TOP PICK

21.690

(A Top Pick July 20/09. Up 76%.) Roughly 30% of cash comes from Wal-Mart. There was no movement in their occupancy. Cash flow quality has been maintained. A little expensive at these levels.

2010-07-15

PAST TOP PICK

29.250

(A Top Pick July 20/09. Up 28%.) Probably the best REIT in Canada. Great management, low payout ratio and low debt. Buy under $28.

2010-07-15

PAST TOP PICK

8.630

(A Top Pick July 20/09. Up 57%.) Primarily in Atlantic Canada with some exposure to Ontario and Alberta. Apartment buildings and some mobile homes. Still cheap at these levels.

2010-07-15

BUY on WEAKNESS

11.380

Good quality name. Recently made a very accretive acquisition in Minnesota. Try to buy at around $10.50.

2010-07-15

BUY

Northern Property REIT

NPR.UN-T

23.670

Primarily apartments. 6.2% yield.

2010-07-15

BUY

Annaly Capital Management Inc.

7.700

Seniors housing. Attractively priced. 6.9% yield.

2010-07-15

BUY on WEAKNESS

NLY-N

17.620

Mortgage REIT, which is very unique. Doesn't own commercial real estate but own pools of agency mortgages instead which are residential mortgages that are insured by Freddie Mac, Fannie Mae or Ginny Mae. 15.5% yield.

2010-07-15

Comment

Temple REIT

TR.UN-X

2.310

Limited service hotels with a big exposure to Fort McMurray and tied to oil sands activity. As oil prices go, so will occupancy in their hotels. Not a fan of lodging REITs, as he prefers longer-term cash flows that are more stable. 17% yield. If you are comfortable betting on the oil sands, you're probably okay.

2010-07-15

BUY on WEAKNESS

17.550

Cut their distribution in half a couple of years ago and have released a schedule on the increases from $.72 to $1.06 over the next 2 years. You can buy at this level for single-digit returns.

2010-07-15

Comment

Homburg Canada REIT

HCR.UN-T

10.210

The real estate is not the greatest of quality. Payout ratio of about 100% and the leverage is pushing the high-end with what he would be comfortable with. 9.5% yield. Distribution has a very good tax-advantage.

2010-07-15

DON'T BUY

Lakeview Hotel REIT

LHR.UN-X

0.330

Not a fan of lodging REITs for the duration of the cash flow and the visibility. A lot of exposure to Western Canada. Expect it will be sleepy for some time.

2010-07-15

Comment

Extendicare REIT

EXE.UN-T

8.620

Long-term care and skilled nursing facilities in Canada and US. Doesn't like the model they are built on because he can't quantify the risks. Good management. 9.7% distribution is safe.

2010-07-15

Comment

InnVest Reit

INN.UN-T

6.120

Restructured so that the ownership of the hotels is in one trust and the Corp that is stapled to it, manages the hotels and earns the taxable income. Expect they will structure the Corp with enough debt so that there is no taxable income in it. Q3 and Q4 tend to be strong.

2010-07-15

BUY on WEAKNESS

Boardwalk REIT

BEI.UN-T

41.570

Great blue-chip name with a tremendous balance sheet. Multifamily apartments with big exposure to Edmonton and Calgary with some assets in Montreal. Try to buy at under $40.

2010-07-15

HOLD

Cominar Real Estate Inv Tr

19.610

Great management and great assets and very low leverage but they are over distributing. Doesn't think they will grow into their distribution this year or next but should be able get there in 2012. Making acquisitions in the US. Distribution is probably safe.

2010-07-15

TOP PICK

CUF.UN-T

18.920

(A Top Pick June 3/09. Up 22.9% excluding distributions.) Have some excellent opportunities going forward. Just purchased Overland Realty, which exposes them to Atlantic Canada. Also have a very accretive development pipeline.

2010-04-28

TOP PICK

Primaris Retail REIT

PMZ.UN-T

16.380

Assembled a land parcel on Yonge Street in Toronto where they can potentially do some redeveloping and create significant value. Have done this successfully in the past.

2010-04-28

TOP PICK

16.900

Developing Encana (ECA-T) head office in Calgary. They have the option to sell half. There are rumblings that they could increase their distributions later this year.

2010-04-28

PAST TOP PICK

Allied Properties REIT

AP.UN-T

20.650

(A Top Pick June 3/09. Up 45.5% excluding distributions.) Still a Buy.

2010-04-28

PAST TOP PICK

8.400

(A Top Pick June 3/09. Up 45% excluding yield.) Focuses on apartments and trailer parks. Great cash flow and very stable. Still cheap.

2010-04-28

DON'T BUY

Whiterock REIT

WRK.UN-T

15.210

Just acquired a number of properties on the Hwy 427 corridor in the Toronto area. Don't own the entire asset, which enables them to boost returns by charging asset/management property fees. He would like to see a couple of quarters of them operating. Too much over distributing and over leveraging for him.

2010-04-28

BUY

Brookfield Office Properties Ltd

11.600

Probably over distributing slightly at about 110%. They'll come on side late this year or early next year. Feels the distribution is safe. 9.3% distribution.

2010-04-28

BUY on WEAKNESS

BOX.UN-T

20.400

Converting from a corporation into a REIT and will own all the Canadian assets and developments of Brookfield Properties (BPO-T). Expected to cash flow $1.07 for 2010-2011, which would be 19X free cash flow. This is pretty aggressive on a valuation standpoint. Try to buy under $19.

2010-04-28

BUY

18.810

Good for a long investment horizon.

2010-04-28

DON'T BUY

Temple REIT

TR.UN-X

2.860

Has never been a big fan of lodge/inn REITs because the duration of the cash flow is very short. Leverage is about 74% but should be 40% maximum. Recently cut distributions so they're probably sustainable now.

2010-04-28

BUY on WEAKNESS

Dundee REIT

D.UN-T

25.300

Reduced their exposure on Calgary offices and increased exposure in Toronto and Ottawa area. Good management. Try to buy at around $24.

2010-04-28

BUY on WEAKNESS

Northwest Healthcare Property REIT

20.910

Unenclosed power centres and anchored by Wal-Mart. This is a great core holding for a portfolio. Try to buy closer to $20.

2010-04-28

Comment

NWH.UN-T

11.050

Medical office buildings. Generally suburban and lowrise that have either been retrofitted or built specifically to house doctors’ offices that require more power for lighting, etc. He had concerns on valuations and what was included in cash flow. Has potential to be an out performer over 5-10 years but he couldn't gauge the risk of the cash flow.

2010-04-28

BUY

Boardwalk REIT

BEI.UN-T

41.040

One of the best REITs in the country. Fantastic management, which owns 24%. Exceptionally low leverage that allows them to refinance their assets and pull out about $190 million in cash plus another $250 million. Low payout ratio. Has potential to buy back units, reduce leverage or do accretive acquisitions.

2010-04-28

Comment

Extendicare REIT

EXE.UN-T

8.940

Was being investigated by the department of health services in the US, for potential violations of the Social Securities act. In the long run, he thinks it will turn out to be overblown so this could be an opportunity.

2010-04-28

HOLD

Crombie Real Estate Investment Trust

CRR.UN-T

11.660

Suffers because it is in the retail space in Canada, which has strong competition that tends to hog most of the capital and the limelight. Good quality portfolio and the distribution is very sustainable.

2010-04-28

BUY

15.880

Offers the best forward one-year return. Worth about $17-$18 right now. Yields about 4%-5%.

2010-04-28

DON'T BUY

InterRent REIT

IIP.UN-T

1.470

Prefers others instead.

2010-04-28

BUY on WEAKNESS

7.300

Own primarily independent living and assisted living residences. Really not geared for aging demographics. There is a huge spread between the cash flow and financing costs. Distributions have been cut to a level that are sustainable. Try to buy at around $7.

2010-04-28

TOP PICK

15.250

Class A office buildings in Toronto, Montreal, Calgary, Washington and Houston.

2010-03-17

TOP PICK

11.450

Office, industrial and retail properties in Western Canada. Just reported with good results. Expect Q2 and Q3 will be good.

2010-03-17

TOP PICK

19.470

Payout ratio soared in Q4 and they have to do a lot of acquisitions to back fill their distributions.

2010-03-17

PAST TOP PICK

28.000

(A Top Pick March 17/09. Up 47.01%.) Still likes.

2010-03-17

PAST TOP PICK

Boardwalk REIT

BEI.UN-T

40.930

(A Top Pick March 17/09. Up77.51 %.) Still likes.

2010-03-17

PAST TOP PICK

22.100

(A Top Pick March 17/09. Up 44.07%.) 5.5% convertible debentures maturing 2017 and priced for an 11% yield.

2010-03-17

BUY

Allied Properties REIT

AP.UN-T

20.850

Brick and beam office buildings in Toronto, Montreal and Quebec city. Distributions will not be increased in 2010.

2010-03-17

DON'T BUY

InterRent REIT

IIP.UN-T

1.460

Have gone through a lot of drama. New CEO is going to focus on turning the assets over and releasing them to tenants who pay their rent on time. Also looking to upgrade quality of the property. This will be a tough slog for him.

2010-03-17

BUY

Dundee REIT

D.UN-T

25.470

Offices/industrial properties with a tremendous amount of exposure to Calgary offices, which they are actively reducing. Purchasing in Toronto and Ottawa now. Payout ratio just under 100% with a yield of 8%+. Doesn't expect an increase.

2010-03-17

Comment

Holloway Lodging REIT

HLR.UN-T

0.560

Limited service hotels. Huge exposure to Grand Prairie Alberta, a gas town. If you expect gas to recover, this is a name that will benefit. Need more drilling activity and drilling crews staying at their hotels. Quite a bit of debt outstanding that needs refinancing. If a long-term investor and comfortable owning small caps, you'll make some money going forward. Better names available.

2010-03-17

HOLD

21.630

Unenclosed power centres, primarily anchored by Wal-Mart. If you are an income investor, this delivers a very steady stream. If interest rates start going up he would expect all REITs and risky assets to pull back.

2010-03-17

BUY on WEAKNESS

Northern Property REIT

NPR.UN-T

22.900

Has a small operating business of furnished hotel suites, which does not qualify for the REIT tax exemption so management is going to scale back this part in order to qualify. Great name. 1st half of 2010 is going to be weak because of turn over, giving them a chance to spend CapX to maintain their apartments so growth should continue in the 2nd half.

2010-03-17

Comment

Canadian Apartment Properties

16.530

Qualifies as a REIT under current regulations so will not have to convert. Worth $17 now but if they sell 50% of the Bow tower in Calgary this could change.

2010-03-17

Comment

Lakeview Hotel REIT

LHR.UN-X

0.400

Limited service hotels with central and eastern Canadian exposure. Potentially will do well in the long-term. There are better places to be. Consider selling for a capital loss.

2010-03-17

WEAK BUY

CAR.UN-T

14.590

Never owned a lot of it. Management turnover recently. Disclosure has improved since. Problem is capital expenditures. It’s a large number, but on a per unit basis it is comparable with their piers. It’s approaching fair value.

2010-01-19

DON'T BUY

Scott's REIT

SRQ.UN-T

8.190

Quick service restaurants such as KFC. Moving into small strip malls. It’s a wait and see.

2010-01-19

Comment

A Comment -- General Comments From an Expert

A Commentary

0.020

Will all income trusts other than REITs be taxed in 2011? Business trusts, oil and gas trusts, and the infrastructure trusts will all be taxed in 2011. Tax does not apply just to distributable cash, it applies to their taxable income. The actual tax will vary depending on the taxable income they generate. Tax will not apply to REITs as along as they meet the guidelines to be qualified as REITs. Seniors housing and lodging will not quality.

2010-01-19

TOP PICK

Primaris Retail REIT

PMZ.UN-T

16.210

Retail REIT. Discount to net asset value (6-7%). Great balance sheet, ton of cash, finally deployed some recently, adding about $1 to the stock. Still have good cash balance. His Top, Top Pick.

2010-01-19

TOP PICK

7.470

This name had tones of turnover – asset sales, management, restructuring and 2 distribution cuts. Access to CMHC financing (4% or better). It’s a consolidation play. They did a good job of managing debt maturity profile. Trading below net asset value.

2010-01-19

TOP PICK

13.240

Great Portfolio, good management team, sustained payout ratio and low leverage. Largely exposed to Manhattan and Calgary offices. They have weathered the storms. Cashed up for certain. Great Name, worth $14, he would buy at $12.50. Trading below net asset value.

2010-01-19

HOLD

8.470

Apartment building and trailer parks in primarily Atlantic Canada. He was impressed how Atlantic Canada weathered the downturn. Fairly valued at these values. It’s a wait and see as to whether they can grow cash flow. Talked about entering Ottawa and Toronto markets.

2010-01-19

HOLD

16.340

Building is 30 stories out of the ground, to be completed in 2011/12. It’s fairly valued at these levels. Distribution increase expected in 2011.

2010-01-19

BUY

Cominar Real Estate Inv Tr

19.800

Historically they have made up for their 125% payout ratio through the sale of assets. They went on record that they expect to cover their distribution by the end of the year. They are one of the best teams on the street.

2010-01-19

BUY

Dundee REIT

D.UN-T

25.720

Top holding in his fund. Shied away because of Calgary office exposure. Most recently purchased office towers in downtown Toronto, so he has stepped into this issue. Would like to buy in the $24 at the most. Company is marketing across the country and will be in the US next week or month. Don’t buy as a short-term position.

2010-01-19

DON'T BUY

Whiterock REIT

WRK.UN-T

15.640

Sold this position. Bearish about this name. He sold at half this price. He continues not to like it because of the excessive leverage. Juicy yield (over distributing).

2010-01-19

BUY

CUF.UN-T

19.750

Not in his top 10 on valuation. Today, bought Overland Reality Corp. in Nova Scotia with small portfolio of offices, industrial, retail and multi-family. In the past they bought asset from a Quebec REIT and did a tremendous job of leasing the assets and he would expect no less from this transaction. Distribution is sustainable, but they have a number of convertible debentures issues outstanding. As you grow free cash flow and unit price goes up, you trigger these converts and you issue a lot of equity.

2010-01-19

PAST TOP PICK

11.710

(Top Pick Feb 12/09, Up 102%) Had tremendous exposure to Calgary so it sold off dramatically before he recommended it. They have done a good in that their offices are not so downtown, single tenant and now they are selling assets at gains and redeploying. Great job of managing balance sheet.

2010-01-19

PAST TOP PICK

Northern Property REIT

NPR.UN-T

22.670

(Top Pick Feb 12/09, Up %45) Multi-family in northern geographies. Loves it. Management is tremendous. Fully priced at these levels.

2010-01-19

PAST TOP PICK

Simon Property Group Inc.

28.360

(Top Pick Feb 12/09, Up 34%) The only REIT that increased their distribution every year despite the financial crisis. The best REIT in the country.

2010-01-19

DON'T BUY

Lakeview Hotel REIT

LHR.UN-X

0.450

Hotel REIT. Diversified. Limited service hotels. If recovery takes hold and there is an up tick in tourism and wages and GDP, the lodging space should to well.

2010-01-19

BUY

SPG-N

74.880

Favorite US REIT. Great balance sheet, sustainable payout ratio, and great mall assets. Done tremendous job of retaining tenancy. Not a lot of exposure to co-tenancy. Family run.

2010-01-19

DON'T BUY

Retrocom Mid-Market REIT

RMM.UN-T

3.700

CEO of Smart Centers (24% stake in Calloway REIT) sold assets to RMM and took back a stake. Thought was he would transform RMM. But it does not have same quality of assets, diversity or mass as Calloway. He is skeptical. He bought the convert.

2010-01-19

BUY

Brookfield Real Estate Services Fund

BRE.UN-T

12.550

(Market Call Minute) Buy in $10-$11 range. Good name.

2010-01-19

BUY

Crombie Real Estate Investment Trust

CRR.UN-T

11.320

(Market Call Minute) Buy in $10 range.

2010-01-19

HOLD

InnVest Reit

INN.UN-T

5.800

(Market Call Minute) Wished he had held on longer.

2010-01-19

WAIT

Duke Reality Corporation

DRE-N

12.960

US REIT. US REITs are pricing in a pretty strong recovery. If recovery was 3% GDP growth, REITs would still be trading at about 10% premium. Look for it to pull back 5-10% before buying. They’ve sold assets and cut distribution recently. They’ve cut back on merchant development. When the dust settles, there will be an opportunity to buy 5-10% lower. Buy in the 8’s

2010-01-19

TOP PICK

23.950

(A Top Pick Aug 13/08. Down 12.82%.) Sustainable leverage levels and payout ratios. Did equity issue which recharged the balance sheet. Very conservative management team. Would buy under $24 and accumulate in times of weakness.

2009-07-20

TOP PICK

13.300

(A Top Pick Aug 13/08. Down 25.67%.) Potentially has a $1 billion development pipeline with concerns on whether it is accretive or not. Payout ratio of 100% is questionable. 27% of tenants are Wal-Mart. Average age of property is about 7 years.

2009-07-20

TOP PICK

6.070

Apartments, primarily in Atlantic Canada where he economies have held in relatively well. Recently did an equity raise. Almost full occupancy. Access to CMHC financing.

2009-07-20

PAST TOP PICK

7.540

(A Top Pick Aug 13/08. Down 43.74%.) Have done a tremendous job of building a high-quality portfolio and continue to recycle assets. Still a Buy.

2009-07-20

BUY

16.900

Owns about 17% of a US REIT Equity One plus interests in a number of operating companies. Entities under this company that own these are going to be spun off to existing shareholders. Regarding this company, they are cleaning up the balance sheet to give a clean play on Canadian shopping centres.

2009-07-20

Comment

Royal Host Real Estate I.T.

9.230

Class A office towers in larger cities. Overhangs are 1) Merrill Lynch, largest tenant in downtown Manhattan will probably leave in 2013 and 2) have a large debt maturing in 2011 in their US office fund that will need financing. Payout ratio of about 67%. Cheap right now but you will have to deal with a lot of headline news and write out a wave of volatility.

2009-07-20

SELL

RYL.UN-T

2.910

Limited service hotels with big exposure to Western Canada. Will be affected by tourism. Expect it will be a 2 to 4 year turnaround for limited service hotels. Feels distribution is in serious jeopardy.

2009-07-20

DON'T BUY

Northstar Realty Finance Corporation

NRF-N

2.940

Really a real estate hedge fund. Be very careful with this type of name. Business is in 3 different areas. 1) Own triple net lease properties 2) originate mortgage debt and 3) buy mortgage securities.

2009-07-20

HOLD

Firm Cap Mortgage Investment Trust

FC.UN-T

9.950

As close to a mortgage REIT as you get in Canada. Essentially underwrite a portfolio of construction financing, mezzanine loans and commercial real estate. Average loan term is probably about 1 year. Payout ratio is sustainable. Limited competition. 9% yield but very little growth.

2009-07-20

STRONG BUY

11.620

Payout is about 50%. Distribution is very safe. Very cheap. 6.3% yield.

2009-07-20

Comment