Granite REIT (GRT.UN.TO)

Both are quality. Likes both sectors. Likes both, but if he had to choose, he'd pick GRT.UN.

In Quebec and BC, but CAR.UN is mainly a play on Toronto, a fantastic multi-family market, but there is rent control. Great supply/demand fundamentals, but hard to get the cashflow. Outperformed peers, so pullback is understandable.

Industrial warehouse sector continues to do quite well. GRT.UN focuses on Canada, US, and Europe, trading at a nice discount to NAV. Underperformed, not warranted. Concern about oversupply in US, but he thinks they're in a good position. 

Holds a nice, diverse portfolio of industrial real estate, not office buildings or malls. Pays a good yield. Is less levered than other REITs, so it has a lot of dry powder to buy companies and less effected by higher interest rates. Trades far lower than its NAV, maybe 80%.

Will continue to hold.
Solid dividend that is dependable.
Expecting a $85 share price in 2024.
Excellent business.

Large selloff in share price given rise in interest rates.
Industrial real estate not as strong as Covid-19.
Not many barriers to entry within industrial real estate. 
eCommerce growth will help demand for storage. 
Current share price a "hold". 

It is much less exposed to interest rates than other REIT's and its leverage is only 33% of the balance sheet, less than other REIT's. Also it has little exposure to office towers. With more manufacturing there is more need for wholesale warehouse space so it is priced at a premium. It's interesting that the older warehouses have 14 and 18 foot ceilings whereas new ones have 30 and 60 foot ceilings due to robotics and stacking. Older ones are being retired.
Buy 11  Hold 0  Sell 0

REITs have been punished because of interest rates staying high. Opportunity to buy. Nothing wrong with the fundamentals. Likes it. Still huge demand for industrial properties with growth in e-commerce. Pricing power plus inflation-protected contracts. Yield is 4.3%.

Likes fundamentals of industrial real estate business.
Large customers like Amazon not going away.
Demand for manufacturing very strong with shift back to North America (away from China).
Long term leases with predictable revenues. 

It trades at a 15% discount to NAV which is close to $100. Has a 99% occupancy rate and 80% of its leases in 2023 have been renewed at a 20% increase in rent. It is a high quality REIT with good real estate and industrial exposure. Besides Canada it has global exposure with the U.S. and Europe. E-commerce is coming back because on-shoring is happening now and land is needed for chip plants, EV production facilities, etc. Therefore industrial REIT's should do well. There is risk in office REIT's  but Granite has only 1% exposure to office space.
Buy 11   Hold 0   Sell 0

Consistently raises distribution. Safe, stable. Warehouse sector.

The question was on both Granite REIT and Cap REIT. They are both very different companies and he likes them both. Granite REIT is in the industrial warehouse sector in Canada, the U.S. and Europe, which he's bullish on. It has good management and trades at a good discount to NAV. Cap REIT is in the multi-family sector with great assets, exposure to Ontario and Toronto and good management. There is an overhang re apartment rents which are under government discussion. There are a number of bad owners in the news but this does not apply to REIT's