Dream Industrial REIT (DIR.UN.TO)

Industrial play that had a nice little run. He likes it, but it is fully valued and he sold. He still likes it. It would be good for a long term hold, though.

A pretty well run company. Good management.

Likes REITs in general but prefers industrial REITs and Dundee is one of them. These are going to be able to get rental increases quite nicely. DIR.UN have the ability to build out the industrial space in Canada. They have a slight discount to NAV. Going forward ability to increase dividend.

Owns a little. At these levels it is looking a lot more attractive, especially considering the 7.7% dividend, which he feels is sustainable. Likes the industrial sector in Canada. There hasn’t been much construction during the last 2-3 years. Supply growth has been 1%-2%. Looking forward to a possible increase in manufacturing activity and the weakening Cdn$ should benefit the industrial sector. Occupancy and rents should start moving higher. Right now occupancy is in the mid-90s, so if that moves higher you really are going to get some leverage with respect to rents. Externally managed so tends to be put in the penalty box for this.

(A Top Pick Sept 24/13. Down 4.3%.) $8.90 was at a trimming point so as it touched those levels he has been trimming a little. Still likes the industrial sector very much.

(A Top Pick Sept 24/13. 4.45%.) He is a big believer in the industrial markets where there is stability on the rent side and, especially on the valuation of cap rates, there has hardly been any rise at all. This was an opportunity to take a stock that was beat up. Still likes it at this price.

Industrial properties. Less affected by Alberta markets as it is more Ontario and Québec, but the 22% decline was crazy. You’re getting exposure to a US recovery, you’re getting a Canadian recovery, and you still have 30% Alberta exposure. Seeing great movements in rents with a little bit of increase coming through. 8.43% yield.

Got some of this when it was spun out of Dundee REIT (D.UN-T), a pure office REIT. This is pure industrial. If you are expecting weak economic growth, industrial real estate tends to not be the best performing asset class. More exposed to export, particularly in Ontario with the auto market. Thinks you can get in and realize some value here.

It trades about 10% more than NAV so it is not cheap. Assets are almost recession proof. But he finds it hard to get excited about it. He is neutral on it.

A focused industrial REIT. Has a soft spot for industrial real estate. Typically it is steadier through good and bad times than most people believe. This one will be growing through acquisition over the next 12 months.