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

This is a great investment. It has a reasonable dividend yield of about 6%. Well-managed. Basically office properties. It has exposure in Calgary, but the good news is that oil prices seem to be on the rebound. The bad news is that we are starting to see more development for office space coming up, so there may be a little bit of pressure. Thinks this is going to be a steady Eddie performer on a go forward basis.

(Top Pick Jan 5/16, Up 24.07%) It is a steady Eddie with a nice, tax effective dividend. It was down last year because of their Bow building in Calgary. They are smart operators. They build and lease them for the long term.

(A Top Pick Dec 18/15. Up 21.32%.) This expanded into the US in the last year, so it gives you a diversified play. At the time, it was trading at a significant discount, and that discount has narrowed somewhat. He is also a little concerned as it acquired Primaris Retail REIT, so they have retail exposure. Yield of about 6%.

(A Top Pick Nov 18/15. Up 14.78%.) Everybody says REITs are interest sensitive and that when rates go up, REITs are going to get killed. The key to this on is its high-quality buildings, high quality tenants, and matching its lease terms to its mortgage rates. He still likes this very much.

H&R Reit (HR.UN-T) or Canadian Apartment Properties (CAR.UN-T)?On REITs, it is not the front-page story that kills you, but the story you don’t know that kills you. Everybody knows interest rates are probably going to go up, which may already be priced into some. A lot of them benefit from rising interest rates because it means the economy is improving. These are 2 of the best along with RioCan (REI.UN-T). These are great investments, but are not his best investment idea. If he had a list of 30 stocks, 29 and 30 would be a REIT. You don’t get a lot of dividend increases or capital appreciation. You own them for the income. A younger person’s portfolio should not have a REIT.

It is a good value pick. The yield is sustainable. It is a diversified portfolio. They have office space in Canada and the US. They have apartments in the US now. They have debt equating to 10 years. Higher rates should not affect them much. Only about 10% of their debt is up for renewal in any particular year.

A diversified portfolio. They’ve made some sales of the Trans Canada property in Calgary. They also own a large US portfolio. A highly liquid, very stable REIT that tends to trade at a little higher yield than its peers. At this level, there are more compelling buys.

This is kind of a weaselly way to play oil recovery. The bad news is that there is not a lot of growth there right now as they are doing so much asset sales, but it is very cheap. A bit of a play on long duration leases. Their net exposure in Calgary, once you X out long-term leases, is about 12%-13%. If things get a little better there, this should benefit. It shouldn’t be trading at the discount it is now. Dividend yield of 5.92%.

For a REIT, this is actually quite volatile, from $18-$24. You really have to check your risk appetite if you want that yield, given the big volatility. At these levels, he would not Buy, but would wait until around $20. Dividend yield of 6%.

She likes this REIT. This does commercial as well as shopping centres, but mainly commercial. They provide a very attractive yield of 6.0%. She feels the distribution is very safe. Their tenants are very blue-chip under long-term contracts. They have very high occupancy and long-term leases.

REITs are listed in the TSX under financials and they are bringing them out into their own sector. For the larger ones, it will bring around some new buying. That is a temporary thing and he would use that as an opportunity to Sell. These are stocks that have benefited hugely by low interest rates and people searching for yield. As soon as interest rates start to go up, they get hurt by 1) people who start looking at other things and 2) when cost of capital starts to go up.

Of the Top 5 REITs in Canada, this has the highest yield. It’s a diversified name. A safe payout of 5.79%.

REITs are really cheap and have upside potential. This one had nice increases in price since the beginning of the year. It all depends on interest rates. If they stay where they are then perhaps REITs can move higher. They are eager to get out and talk right now. They had the first analyst call in 20 years recently. They may start to get more attention. They are good value, cheap and have good yields.

Has a terrific, sustainable yield with a history of high occupancy. They are conservative operators of the real estate. The yield is fully taxed so you may want it in a registered account.

REITs. H&R or Slate? They are creating a new sector at the end of the month. The incremental demand should support share prices. He prefers H&R to slate. Even if it has exposure to Western Canada, there are 10 years to the leases and to their debt. It is a very well diversified REIT and you get a great yield.