Northwest Health Prop Real Est Inv Trust (NWH.UN.TO)

Sold his holdings a good year ago. The company could never put the puck in the net. Believes they’re merging the Canadian and international divisions. He doesn’t know if the yield is safe, but 10% seems like an outlier.

He sold it quickly after buying it in 2010. They had a global health care REIT. They were running two different businesses. Should you worry about the global side or the Canadian side. The end result has been that it is down $2. They just merged Brazilian/German assets into one entity. He would avoid this story.

The largest owner of medical office buildings in Canada. Recently consolidated Northwest International, which was really comprised of medical office buildings in Germany, New Zealand and Brazil. This is now a hodgepodge of medical office buildings in different parts of the world. There is some currency risks. Likes the Canadian assets, but it is a little difficult to discern the growth potential in the International market. Payout ratio is around 100%, but he thinks the dividend is safe.

There was a merger of two related companies and he feels it was not handled in the best interests of the investors. The management know their sector. The governance is not quite there.

They had sponsored an international vehicle with hospitals in Brazil, New Zealand and Germany. This is being blended into the Canadian vehicle, which owns medical office buildings in Canada. There is a bit of a concern on the merger because it is now a strange vehicle with assets spread all around the world. Operationally this is a challenging space. Not an area that he likes at all, and until they sort out the merger and their operations, there are other office type vehicles which would be a safer investment.

He likes the medical office space. They are merging with Northwest international. There is currency risk now, but the German properties are really great.

This was an IPO with only Canadian assets in medical office buildings that catered to healthcare tenants. There has recently been a transaction where this company and NorthWest Health Care International are now coming together. This is probably the reason for all the volatility in shares recently. The Canadian entity has been poor over the last few years because suburban office in Canada has struggled in terms of attracting tenants. Cash flow has been relatively weak. Although the growth prospects might look greater, he also thinks the risks increase.

Doctors’ and dentists’ offices. Have some very nice buildings near hospitals. However, some of their assets such as testing etc. are not the highest quality, but are very stable assets. This stock has had trouble operationally. It has never really met its occupancy and rent growth targets. Until they do, he is not going to be there.

Canadian REITs have not kept up with their US counterparts. This one has substantially underperformed. There is a perception by the market that they will get hurt because they are centered in Alberta and North West BC. You should consider REITs without that overhang. REIT values here are relatively cheap. The spreads today are about 560 basis points so they are on the cheaper end of the range. REITs should be trading higher this year.

Largest owner of medical office buildings in Canada. Have a lot of great properties. He sees better value in other parts of the real estate sector. Occupancy is in the low 90%’s and there is potential for them to push that up to 200-300 basis points on a normalized basis. They haven’t quite executed, but you are getting an attractive dividend and he thinks there is very little risk of it being cut. Also, this is a very defensive business.

Largest REIT in Canada that specializes in medical properties. They are economically insensitive to changes in the economy. The resilient business model means the distribution is reliable.

(A Top Pick Nov 28/13. Down 6.92%.) Sold his holdings 2 weeks ago. Was not happy with the last quarter. He had bought this as a growth company and there is no growth. Still thinks it’s a good company and something he will probably revisit. Used this for tax loss selling.

(A Top Pick Nov 28/13. 0.62%.) He is completely flabbergasted why REITs have not done better in this environment. Some of these REITs are getting 7%-8%. This company has no oil exposure and is fully funded. Still a Buy.

Medical office buildings. You are not seeing any operating income growth. This is because of vacancies. Trades at a discount to net asset value. Dividend is sustainable. This is a roll up story which means growth by acquisition and it means issuing stock and when you trade at a discount this is not good. He sold and stays away from it.

A smaller REIT that focuses on medical office buildings. Has really under performed for the last 18 months. Everyone was concerned that interest rates were going to go up last summer and this really got hammered. 8% decline on the stock, but has an 8% dividend. Better times are ahead.