Allied Properties REIT (AP.UN-T)

Not entirely clear to him what future of back-to-the-office is. Not sure we'll have the same office boom we did pre-Covid. Lower 10-year yield in Canada is helpful, but other sectors in the space are preferable.

Would recommend holding shares. Payout ratio is high, but appears to be able to manage. Occupancy numbers will be interesting to watch. As Toronto grows, will be good for business. Just takes time. 

Thinks rates are heading higher, so REITs are going to come under pressure. If the S&P 500 real estate sector is down 2%, perhaps the Canadian sector won't be hit as hard, but it'll still head lower. If his call is correct about a bigger correction later on, it'll be a better opportunity.

Look to energy names instead for a strong dividend yield.

Doing the best it can, but fundamentals have been really difficult. Vacancy rates are quite high. Sold off data centre assets to build up balance sheet, but then acquired more assets. Distribution coverage not what it once was. Yield is ~10%.

In his dividend growers mandate. Very high dividend yield, over 10%, and is sustainable (though may not grow in near term). Debt to capital ratio ~40%, selling non-core properties. Closing deals will add cash this year. Vacancy rates should stabilize. Private market value is significantly higher. Needs patience.

Dark horse candidate. Former market darling. Trades at 0.4x book value. Office and retail in Toronto. 6M square feet of space in Montreal; 3M across Vancouver, Calgary, Ottawa and Kitchener. 17% compound growth rate total return since IPO, until their Covid fall. Yield is 10%, very sustainable.

Lots of "brick and beam" properties, very beautiful. Redevelopment of those heritage buildings is much more difficult. Smaller square footage actually hurt them more from Covid, as many decided they didn't even need an office. Rental dynamics have changed since Covid.

Office has suffered since the pandemic, supply/demand are out of balance everywhere. Occupancy has slipped to lowest level in 2 years. Leverage is quite high, while net operating income is down this quarter. An execution story. Some wonder if distribution can be sustained.

They rank among the top REITs in Canada and the U.S. They have a history of buying and spending well and adding a lot of value. They were a darling until Covid hammered the office market. Now, AP.UN faces a tough office market. Toronto remains a major city that hasn't returned to the office, so vacancy rates remain high. He doesn't know if this huge wave will return. But AP's dividend is sustainable, though it should be cut to do things like buyback stock and paying down debt.

Starting to see strength in REIT's with lower interest rates. Would wait for trend to head up before investing. Breakout would be above $20/share. 

Deep value, turnaround story. Gentrifies warehouse and industrial corridors in Toronto. Also in Montreal, Calgary, Vancouver and Kitchener. Getting some love and accolades for The Well, multi-use residential & commercial & office. Former darling, compounding at 17% annual pace from 2003-2019. Trading at less than half book value. Yield is 9%, which he feels is sustainable.

People returning to office. Debt refinancing, construction financing. Macro tailwinds with interest rates falling. In its new first inning.

Likes real estate in general, sector will benefit from lower interest rates. In particular, likes those that are building their businesses; not the ones that are just collecting rents, paying dividends, and going sideways. A good business run by good people. Yield is 10%, sustainable, won't get cut.

Incredibly tied to a lot of the big issues going on. Lots of exposure to office throughout Canada, especially to The Well in Toronto. Return-to-office has been slower to pick up. REITs tend to really suffer with higher interest rates. 

The worst might be priced in, could be time to sharpen your pencil and take a look. Good operator, great assets. If you feel that interest rates have peaked and fear around office is waning, will benefit as those sentiments start to reverse.

He's not an expert in the payout ratio for REITs and whether dividend can be maintained.

Is not buying into REIT sector yet. Waiting for interest rates to fall. Vacancy rates still high with "work from home" trend. Not cheap enough to buy. Would rather growth sector (A.I., data centers, healthcare, energy).