Pure Industrial Real Estatetrust Trust (AAR.UN.TO)

A value play and an income play. The biggest spread between real property and REITs. 7.09% yield. Up 1% since last year.

Right now, this is value. He is seeing great opportunities in the industrial space. On leasing, rental increases are not quite there but there are signs of firming. Much of the Canadian industrial markets of their tenants are selling products into the US. As the US sees strength coming in, the Canadians benefit. This one has the highest quality portfolio of industrials that is available in the public markets. Yield of 7.04%.

A big fan of this one. Great company and in a great sector. Gives exposure to the Canadian economy but also tends to do well when the US is doing well. Solid 7.3% yield. Good growth with possibilities of 2%-3% NOI.

(Market Call Minute) One of 3 pure play industrial REITS and it could get taken out. Really good value. There could be consolidation in that sector and this could be a candidate.

This is going to trade along with all the other REITs. The current situation is a multiple compression story. Dividend is probably safe, but he feels you should worry about further capital loss if we ever have a further rise in interest rates. He would advise that you diversify away from REITs.

Operating in the mid-90% in occupancy. It was 99% but they bought some assets that had some vacancies. They are being very successful in leasing of these vacancies. 7% yield.

Like many other REITs, this is going through a bit of a correction. Likes this one very much. You are exposed to the Ontario and Alberta industrial markets. The Alberta market especially is a good place to be, going forward. It might be about 6 months early on a real recovery based on US growth spilling over into Canada but is something that will play very well in the industrial space. Has a very safe, steady cash flow. Yield of 7% is very safe.

(A Top Pick April 23/13. Down 4.54%.) Likes this company. Sold off with a lot of the other REITs.

A very stable business. Holds a variety of properties that are very light industrial or warehouses. Has very long-term leases with the average being 9 years. There tends to be a lot of single tenant occupancies. Yield of 6.16%.

REITs seem to be consolidating and including this one. We are in a flat period. It is pretty normal for this kind of stock. Stock is safe as long as support at around $5 holds.

Management team has done a great job. Sustainable capital structure. Grew portfolio greatly over the last few years. Increased free cash flow. Above NAV because there is a strong demand for industrial assets. Going forward they could be a takeout candidate.

If there was a mini-recession this year or next, would this be hurt? In any recession all REITs are going to be hurt. This REIT was absolutely hammered in 2008-2009 during the last turndown but on an operational basis, they did very, very well. Occupancy remained at 99%. He would prefer to buy it $4.75-$5 to get a 15% total return. If you’re happy with 10%, you should get it with this.