First Capital Realty (FCR.UN.TO)

Very high quality business. Management team is very well aligned. Asset quality has improved. Payout ratio and leverage that are almost the best in the business. The valuation is very undemanding. There is an overhang because of an equity issue done recently. NAV is about $18-$18.25. It is a core position in his opinion. He would add to it right now.

They realize the market is expensive so they are lightening up on their acquisitions and are sweating their assets. The chance to grow their earnings is in Toronto. They are deleveraging their balance sheet. They should outperform because of their defensive aspects. He owns the bonds.

(Top Pick Sep 24/13, Up 15.24%) Continues to have this as a core holding. He is looking for them to increase cash flow.

This is a retail REIT, typically anchored by national tenants, focused on people’s everyday needs, grocery stores, banks, drugstores, etc. They have an excellent portfolio of very high quality real estate. The only problem is that they haven’t really benefited much from AFFO growth as some of their peers have, because they have tended to be more focused on growth by acquisition and turned a bit of a blind eye to the multiples they pay for some of the assets. If you own this, you need to have a very long term time horizon of probably 5-10 years. Very high quality assets with a good management team.

There seems to be a fear that rates are going to rise, but he thinks not for some time. Many investors think interest rates will affect large cap REITs negatively, but he thinks they are a little too concerned. He loves the properties, but has been taking profits at these levels.

Had a nice move. Occupancy is 95.3%. Renewal spreads are up 13% higher than expiries. It is pricy but is a high quality name. Buy at $17.50 or below.

A very stable company. High end retail. Strip centers in really good neighbourhoods. The dividend is high enough.

One of the highest quality real estate businesses that he owns. Have moved to more of an unsecured debt structure, which allows a large proportion of their assets to be unencumbered. Also, brought down their payout ratio which allows them to give consistent dividend increases. The most important thing to him is the “value add”. There is a large development and redevelopment program that is underappreciated by the market. Dividend yield of 4.76%.

Likes this REIT. This is one of the best ways to play the very strong urbanization trends that we are seeing, particularly in the big markets of Toronto, Calgary and Vancouver. This one tends to have a longer timeframe in some of the things they do and they tend not to pay dividends in the short term. If you are a long-term shareholder, you ultimately do get the benefit. 4.87% yield.

(Market Call Minute) Highest quality resale properties.

Great set of assets and well managed. Recommendation in the oil services sector but right now you don’t need to be here.

A corporation, but essentially runs the same as a REIT. A very good quality company. Dividend payout is slightly lower. They manage their business for the long-term, so when they are making investment decisions, they are looking out over a 10-15 year period. She really likes the urban focus and the urbanization trend and this one is well-positioned as any of the REITs to capitalize on this. Great quality real estate and great real development opportunities and intensification opportunities, which she thinks is important. Dividend is absolutely sustainable.

Got rid of most of his holdings. He is trying to focus more on the multi residential and seniors sector. Doesn’t like retail longer-term because he sees e-commerce taking significant share away from retailers in the US. This one will be protected because it owns some of the highest quality real estate in his portfolio.

(A Top Pick Sept 24/13. Down 1%.) This is a defensive play. Still likes it a lot at this price. Trades at a premium to its peers because it is the most defensive and has the best balance sheet and has access to different sources of capital. Have great properties that are in desirable locations.

A defensive name. High-quality and urban concentrated. Has the kind of stores that people want in any sort of economy. Decent growth. Likes it, but it is trading at 18X which, in this environment of higher bond yields, he wants REITs with above-average growth and below average payout ratios. It’s fine but he wouldn’t Buy at these levels.