H&R Real Estate Inv Trust (HR.UN.TO)

This is a bit of a bond proxy. A bit of a yield play because they have maturities on their rents that are so far out. Sees the nice 6% dividend supported by an 89% estimated 2015 payout ratio. Reasonable growth of 3.6%. 98% occupancy.

REITs are attractive given that interest rates will not go up any time soon. These are fairly safe investments. Likes this one among others. Sees no issues with owning these companies. Yield should not go higher, however. He prefers these to bonds.

They are diversified. They are very transaction-based and that is one of his criticisms. Their numbers were hurt last quarter. It is hard to figure out what they are doing, especially in the US. They are about 70% leveraged and so it is something he would stand away from.

He is underweight on this one right now. Long term leases and financing. They expanded into retail from industrial & office. They have done well, but now are building apartment buildings on Long Island. He prefers a clean, focused strategy. They are large and safe, however.

(A Top Pick Sept 19/13. Up 15.33%.) Not much volatility in this. Sold his holdings in order to move on to other things. Doesn’t see a lot of growth in REITs any more. 5.8% dividend yield.

Represents very good value, especially is one of the largest diversified REITs in North America. Management has been internalized. You are getting a very attractive dividend. A long weighted average lease term, over 10 years and a long weighted average debt term to match it. This is definitely a core in any real estate portfolio.

Well diversified and well-managed. Has some problems in 2008 with their Alberta buildings, but that is all done and out of the way. His company has a $24 target on it. The current yield is 5.8%.

A wonderful company. Owner operated. Has claimed they are going to buy back stock if it goes any lower. Generating a lot of free cash. Fully occupied. 6% dividend yield.

He has never seen a stock move so much on a proposed buy back in shares. He does not think that is what is really moving the stock. There was confusion when they bought up Primaris. They since showed that transaction was an excellent one. Announced a large residential development on Long Island, NY. He wants to see them mature, so until then thinks they will be range bound.

(A Top Pick July 15/13. Up 12.99%.) Likes this because of its size, its stability and its basic business practice, i.e., you buy a big building, rent it out for 20 years, mortgage it for 20 years, and live off the spread. Feels the stock is worth $25-$26.

Have transformed themselves over the last year from an asset as well as management perspective. They brought down occupancy and lease terms a bit. The Primaris portfolio they acquired should drive growth. Their assets are internally managed now, which has attracted more investors.

(Market Call Minute.) Trading around its BV. Like most REITs, it is just sitting there. They won’t grow, but they have decent yields.

Owns a lot of secondary office, and some of that could be under a bit of strain. Also, bought secondary malls, and he thinks the consumer is under some strain as well. However, they’ve been selling off 50% portions of their secondary assets, which is a brilliant strategy, as they keep the property management, and pass half the risk over to partners. There could be a bit of a pullback.

5% maturing December 1/18. (Top Pick May 6/13, Up 3.51%)

Dundee (D.UN-T) or H&R Real Estate (HR.UN-T)? She would recommend this one, which is a little bit more diversified. She is a little less favourable on office properties, but these tend to be high-quality class A properties. They tend to have long-term tenants in place so have less sensitivity to some of the vacancy issues.