Greg A. Taylor, CFA, BBA Allied Properties REIT AP.UN-T WATCH Jul 17, 2024

Really likes. Only part of the office space that's any good is luxury. For example, high end in New York is booming. Allied owns buildings that are top level and edgy. Huge conglomerate, giving tenants lots of choice. Unique position. Wonderful development opportunities.

Good business, solid financials, great properties, stock's cheap. Dividend's not hugely well covered, but it is covered; doesn't think it will be cut.

Very high yield. Office market's gone through a lot of pressure post-Covid. Pressure on rents and earnings. Hasn't cut dividend. Wishes they'd cut dividend during Covid, but didn't, and they're not going to cut it now (so they say). It's a waiting game of when will the office market recover? He doesn't think it's going to get worse in the main cities. It'll be a year or two of slowing improving numbers. He can handle flat when he's getting that almost 12% yield. Yield is 11.90%.

Tough space for investors, office has had a tough time since Covid. Looking for the turnaround for a long time, and it's been slow. Now trades at 9x PE for 2026, but no growth. Balance sheet is fair. Yield is 11.7%, which they can make.

Don't buy just yet; you have to try to anticipate that "magic moment" when it's time. Hold if you own it. If economy turns down, so will this. If economy's OK, then stock's probably in a bottoming process.

Office buildings. Big yield, and he thinks they'll be able to keep paying it. Most buildings are in Toronto, with vacancy at 20%. Long time before it can raise rents again.

It has high quality properties. Essentially its income passes through to shareholders and therefore it has to issue shares for growth. He prefers real estate operating companies with more flexible capital structures, eg. storage companies.

Contrarian play. Office sector had a sharp downturn with Covid, vacancies skyrocketed, financial pressures. Stepped in when it was unduly discounted to NAV.

Really likes AP.UN and its management, but the fundamentals are not looking so great. Vacancy numbers are worrisome. Not sure if they'll be able to meet lofty expectations for rest of this year. Hasn't cut dividend, while others have. Likes jurisdictions it operate in, nice core asset historical buildings. 

One to look at once we get to trough occupancies and see what the rental rates are.

Maintained its 10% dividend, icing on cake was re-rating higher. Still more in the tank. Selling non-core assets, occupancy has stabilized, deleveraging. Renewed push for return to the office.

Return-to-office mandate picking up. Stock's benefited due to that sentiment, but hasn't translated to operations. Now trading ~10% above consensus NAV. He looks to buy stocks trading at discount to NAV. Fundamental supply/demand picture still not great. Doesn't believe on track to meet occupancy or debt target by year's end. 

Better office opportunities elsewhere, perhaps in the US.

Attracted by the dividend yield, over 10% when she looked at it a year ago. Likes the downtown locations of its unique assets. Not convinced the worst is over for office space. Back-to-the-office momentum doesn't really encompass Allied's tenants. 

Expectations for the last quarter are really high; more than likely they won't be met, guidance will come down, and so will the stock.