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Opinions John O'Connell, CFA
H&R Real Estate Inv TrustHR.UN.TOCOMMENTSep 06, 2013
John O'Connell, CFAStock price when the opinion was issued
As of Jun 11, 2026. Market Open.
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Classic value stock. Just completed a plan for strategic alternatives, which didn't result in a sale of the company as hoped. Instead, realistic plan to sell down non-core parts of the business.
Refocusing exclusively on multi-family in the US and industrial assets in Canada. Decent plan, has to execute. Sun Belt in US is seeing a lot of pressure on new supply. Paid an attractive yield to wait. Never know when there might be a value-maximizing transaction.
Diversified REIT that doesn't work very well anymore, as it tends to trade at the multiple of the least-liked sector it owns, and it has a lot of office. If you own, hold on, as today's press release indicated interest from multiple parties (and so a higher bid may come forward).
Large apartment portfolio in US, as well as industrial. Selling down its office properties. As they get closer to that clean story, there should be some catalysts perhaps even this year. Dip in US building will give them an opportunity, especially in the Sunbelt. Fine on the financing side.
Would recommend holding. Majority of portfolio in sunbelt states like Arizona and Texas. Would expect income to increase as more people move to warmer Southern areas. Good balance sheet that allows company to maintain dividend payouts. Expecting better times for company ahead.
Great properties, but diversification means it doesn't get a great valuation from the market. Sunbelt properties are over-supplied. Owns office properties and retail. Transforming to multi-family and industrial. Trade action starting to pick up. Secure yield of about 6.7%. Growth will be a while, depends on your time horizon. Better names in the meantime.
Doing its best to diversify into multi-family residential apartments in US Sunbelt, where supply is high, so operating income will be challenged. Execution story in a difficult environment for selling or transitioning assets. A hold. Discount to NAV, but headwinds to fundamentals. Still, prefers it to AX.UN.
Too diversified: retail, office, residential, US, Canada. He likes focused REITs that do just one or two things. Cut distribution. Doesn't care for management. Offloading assets at not-great prices. Significant discount to NAV, 16x AFFO. In this uncertain environment, gravitate to the highest quality.
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Premium contentOur PAST TOP PICK with HR.UN has triggered its stop at $11.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 9%, when combined with the previous buy recommendation.
Premium contentWe reiterate, HR-UN, one of Canada's largest REITS holding $11.4 billion in assets in North America, as a TOP PICK. Its strategic plan is refocusing on growth orientated residential and industrial properties. It trades at 4x earnings and under book value. The yield is good and backed by a payout ratio under 20%. We recommend trailing up the stop-loss from $10.50 to $11.50, looking to achieve $15.75 -- upside potential of 26%. Yield 4.3%
(Analysts’ price target is $15.75)Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Repositioning property portfolio for growth. Good yield of 4.4%. Reduced debt balance. Repurchasing units at a discount to NAV. Unlock Premium - Try 5i Free
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Repositioning property portfolio for growth. Good yield of 4.4%. Reduced debt balance. Repurchasing units at a discount to NAV. Unlock Premium - Try 5i Free
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REITs in general have been sold off quite a bit recently. This company has gone through a re-organization where the management team had their management contract bought out by the Corporation. Felt that the price paid was exceptionally high for the length of time that it existed. Stock is in the penalty box. Good yield and they have good properties and good assets. $24 in the next year would be reasonable but you have 2 headwinds. 1.) If the economy continues to improve, rates are going to continue to creep higher. 2.) Management is going to have to do a really good job of convincing people and regaining their confidence and trust.