Paul Gardner, CFABTB Real Estate Investment TrustBTB.UN.TODON'T BUYApr 08, 2021

Most exposure is in Quebec. Lots of office space exposure. But could see a business turnaround. Would recommend buying and holding. 

Smaller cap. Income focused, with a yield around 8.5%. 50% office, 25% retail, 20% industrial. Goal is 60% industrial over 4-5 years. Issue will be having to sell assets to get there. Office space is difficult right now, both operationally and to sell. 25% discount to NAV. Pretty safe.

Dividend safe? He owned BTB.UN a few years ago as they held light industrial and commercial real estate around Montreal. The issue going back 3-4 years ago was they had issues meeting financial metrics, which he feels was due to them over distributing earnings. He would prefer to hold WPT and GRT.UN.

REIT that specializes in eastern Ontario and Quebec. He initiated the position in 2010. When you do the math he made 13.5% annualized. Problem is they are over distributing. They got to a point f exhaustion. It is a great exit point.

Chart hasn’t moved. Stock is mistreated because not institutionally owned. Management is good, and are upgrading their portfolio. Debt’s in a good position. He doesn’t expect anything more than the yield. Consistent business. Retail/office in Quebec and Ontario, but he can look through this because it’s so cheap.

(A Top Pick June 1/17, Up 13%) He's held this for 7 years. It owns properties in Quebec and their properties cross retail, light industrial and commercial. Good management, but has an issue getting its story out. They're repositioning by selling poorly performing properties. It's still small cap which he seldom buys, but performs consistently with little volatility. A long-time hold.

He likes this company although it has retraced in price somewhat. If you are not worried about Quebec separating, the 9.5% yield is great. It has about 75 properties. As a more senior REIT, they are able to acquire debt at much lower rates. The dividend is not at risk. He would buy it on this dip. Yield 9.5%.

A small, mid-cap REIT that he has owned for quite a long time. It has given him an 8%-9% distribution. This has not moved for 3-4 years. They basically buy assets in Eastern Ontario and Québec. Have had vacancy issues and are repositioning their portfolio by selling down a lot of retail properties and focusing on industrials. Dividend yield of 9.1%. (Analysts’ price target is $4.65.)

An investment in this is an investment in Québec, so you have to be favourable to the Québec marketplace, which he is. One of the struggles he has with this is that when you are a small REIT, you can have high debts or a high yield ratio. In this case, it has both. However, they know the real estate market very well. If you think the Québec economy is going to continue to improve, this is a good way to do it. Dividend yield of 8.6%.