Chartwell Retirement Residences (CSH.UN.TO)

Story's played itself out halfway. Accretive acquisition in June, which enhances quality and lowers age of its portfolio by about 3 years. Still bullish on seniors housing. Further gains from occupancy and rent increases. Not cheap (17x) versus other REITs, but he still models 27% growth rate. So on price to growth, still very much works.

He does not own real estate - it is interest rate sensitive. There are a couple of office real estate companies that they're watching for a bottom. He has been looking at this company but is concerned about the cost structure part due to patient care which can be tough on expenses.

Neutral. Valuation's OK. Right point in the ecosystem. Retirement residences are a structurally growing part of the market. But you're more beholden in the short term on individual capital allocations, which are fine for this name.

It's more a question of do you want to be in REITs in the first place? Instead, you probably want to focus on utilities.

Good place to be. One of the top-performing REITs in the space. Lots of tailwinds in the sector, especially after Covid. High on the list of companies that pensions or private equity may take private.

Falling interest rates makes dividend stocks like this attractive. Also, the populating is aging and will need retirement residences, which are undersupplied. CSH's occupancy rate is high-80's% and he predicts around 95% in a year. They pay a near 5% dividend yield and have growth as they build 3-4 homes.

Does not own shares, or any real estate REIT companies. Rising interest rates, and Covid-19 pandemic have been very hard on REIT companies. Retirement homes continue to rise in demand, but not investing at this time. 

Upscale to mid-market retirement homes. Premier operator. Demographic wave. 80+ age cohort in Canada will grow 4.3% per year for the next 20 years. Limited new supply of 1%, and there's already a deficit of housing. Occupancy of 86%, on path for 95% by end of next year. Every 1% of occupancy equals over $8M in revenue. Great path to increase NAV. Compelling supply/demand backdrop in favour of landlords. Yield is 5%.

He's shifted investments from multi-family units to retirement. Canadians are aging and will need home. There's a shortage. It's in an unregulated sector, so rental rates can increase. Likes this because CSH makes homes, not long-term care. Occupancy rate is now 86%, and he predicts 90% by year's end, then above 90% in 2025. This organic growth will increase cash flow.

Demand/supply is what stands out, and recovery in demand. Over-supply of retirement homes going into pandemic, almost non-existent today. Finally seeing baby boomers as prime renters for its homes. Next decade will see big demand growth. Occupancy finally at 85% on road to 95%, compared to peak of 93%. Big 18% discount to NAV. Operates quite well. Yield is 5%.

People are once again feeling comfortable going into retirement homes. It now has close to a 90% occupancy rate. He is looking for a price target of $14.

Homes not only for seniors, but also for those transitioning from owning their own home. Flexible format for this is key. Good job of providing support through the living transition. Fell during Covid, doing better since then. Quality is very good.

One issue is the risk of an event such as Covid. Good story. Good dividend. REIT sector, but in a niche area that has demographic tailwinds over the next several years. We need more of this housing.

It has a lot of liability as seen during the pandemic. The demographics are good with an aging population but their occupancy rate is still below Covid levels. She prefers Savaria because people want to stay in their homes.

Rebounding since interest rates have started to stabilize and fall. A name he likes in the REIT space. Name makes sense based on low vacancy rate, demand for this type of housing. Attractive dividend yield 5.1%, looks very secure. 

If interest rates go down, will be good for business (real estate in general). Would wait for share price to fall before buying. Expecting strength going forward. Balance sheets protected. 

Pandemic hit hard with lower occupancy and higher expenses. Still hasn't recovered to level of earnings in 2019. 15x multiple, attractive for a demographically strong business. Still upside on occupancy and operating income. Still attractive today. An income pick.

One knock is 75% payout ratio, but very well supported. A fair amount of leverage, which is standard for real estate companies. Just over the border into investment grade credit rating, and cost of funding is their biggest expense, so they work to keep that manageable. Reasonable outlook for growth.