Choice Properties REIT (CHP.UN.TO)

Predominantly Loblaw’s (L-T) anchored properties. Low leverage and a low payout ratio. Doesn’t expect there will be a lot of growth. 6.3% distribution is extremely safe. He prefers other names that are going to be able to generate 6%-8% free cash flow growth.

(Market Call Minute.) Not a lot of growth. The leases are structured so that no growth comes in for about 4-5 years.

6% yield is sustainable. But short term there won’t be much growth. Not much room to increase rents next year. Will rely on increasing occupancy.

Brand new IPO that was spun out of Loblaw’s to hold the majority of their real estate. Better quality real estate than he anticipated, the payout ratio was excellent and the leverage was very low. Experienced management which he likes. Didn’t like some of the aspects of the strategic alliance agreement between Loblaw’s and this company. It limited some of their ability to create value and growth one forward. Also, in a rising interest rate environment, they are only going to generate 1.5% growth 5 years out from now.

Very stable company. Has a great covenants in Loblaw’s (L-T) but there isn’t a lot of rent growth going forward. However, if you are happy with the yield, that is fine and that yield is very safe. He prefers companies with a little more growth so you could combine this with another company.

Didn’t buy this one when it came out. Has some pretty good real estate but he doesn’t see the growth. Pricing was fair, but not particularly advantageous. If this came down to $8.75, he would probably give it a very serious look.

Day 1 of trading was Friday. This is day 2 of trading this REIT. A decent REIT and he participated in the IPO. Great properties and top quality tenants but they are single tenant properties. Decent dividend 6.5%. 1 to 1.5% operating growth. Lots of stability. It is very bond like.