Retirement Residences REIT (RRR.UN.TO) Buy,…

Retirement Residences REIT (RRR.UN.TO)

0.00

-0.00 (0.00%)

8 watching

BUY

Had been over distributing and with a change in management brought the distributions back to a more reasonable level. Ultimately the residences will get filled up over time and this will become very profitable.

HOLD

An oversupply of residences which will take a couple of years to use up. A practical kind of a business that uses most of their net free cash flow. Feels that the level they are at now is sustainable until the surplus of residences is used.

DON'T BUY

In long term care facilities. Demographics show that age 70 plus are growing at 2 X the general population. Since 2001, they have had steady declines in occupancy rates. Payout ratio is very aggressive. A lot of risk in this name.

DON'T BUY

Earnings have dropped and had to cut distributions. Was the victim of Ontario government changes which encouraged a lot more building of retirement residences resulting in too many retirement homes for the older population. The situation will probably clarify itself over the next 3/4 years.

DON'T BUY

The enemy of real estate is excess development. In the Ontario market, the government created a 10 year requirement for beds in a 2 year period, so margins are being squeezed by overcapacity. Have cut their distributions once and it will be a challenging environment going forward.

HOLD

Getting pretty cheap at $9. Payout is $0.84 which should be secure for '05. Payout ratio is under 100%. New management identified some problems with older homes and corrected. Ontario government introduced about 20,000 new nursing home beds in the last couple of years which really affected occupancy rates. As we get through '05, most of that wll be gone. Business should improve in '06.

TRADE

What has hurt is the perception of a higher degree of leverage and what would happen if interest rates go up.

HOLD

Likes the demographics in the senior housing sector. Facing some operational issues with 1) the competitive landscape in Ontario 2) changes in some of their senior managent 3) relatively inferior physical product. Distribution should not be at risk in the near term. Trading at a bit of a discount to net asset value. Sell into strength.

BUY

4th quarter results weaker then she expected, but has it rated as outperform.

HOLD

Earnings were disappointing. Outlook for retirement homes, on a demographic basis is positive. Preferred the debentures rather than the actual stock. Wouldn't sell at this point, but would wait and see what management does.

HOLD

There are 3 plays in the "Seniors' Living" sector, this, Chartwell (CSH.UN-T) and Sunrise (SZR.UN-T). This one (more in nursing homes) has been hurt by Ontario government competition. Somw of their residences are getting old and refurbishing will be required. "Retirement' trusts have a place in portfolios and they own all 3.

BUY

Retirement home business is very fragmented so it's an area where there is the opportunity to make accretive acquisitions. Likes all 3 of the plays in this space including Chartwell and Sunrise Senior. Had surplus capacity and a high yield, so cut its distribution, so it's a good turnaround story.

BUY

Has recently lowered their payout. Had been over-distributing. Because of the demographics, feels this is a very gool long term growth story.

BUY

Have upgraded this REIT following its recent pullback. Cut back their distribution significantly to a sustainable amount. Balance sheet is very solid.

TRADE

This sector is going to be very competitive. Did the right thing by cutting their distribution.

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Retirement Residences REIT (RRR.UN.TO)