Canadian Apartment Properties (CAR.UN-T)

The REIT world is very interest-rate sensitive, as is your house. Watch your real estate exposure across your net worth. If you didn't own a house, an excellent play. Low vacancy, largest Canadian provider.

Generally, caution is warranted in apartments. Stocks are now coming into interesting levels. Great population growth, but could turn negative next year. Very good portfolio. Selling older buildings and buying new from developers. So cashflow growth should improve -- buildings won't need such extensive repairs, plus new buildings are not subject to rent control.

Sale of manufactured housing communities business will give them lots of cash. Look for share buybacks. Long term, feels good about multi-family residential. Just sit through the mid-term volatility.

It is in a sideways, tradable pattern and tried to break out but failed. It is stuck in a range so trade on the pullback.

In his balanced portfolio to provide income rather than growth. Not the greatest ride for REITs the last few years. Not seeing the pickup in turnover needed in multi-family residential, people need to leave so you can get higher rents. Lots of buildings are under rent control. Yet maintenance costs keep going up.

Cleaned up balance sheet, sold some assets. Future depends on more turnover, which won't happen until interest rates are at a more attractive level (which encourages more people to start buying houses).

Long-term, yes, for residential REITs, like apartment ones. They also benefit from more immigration. This leads to higher rents. InterRent, Minto and CAP are his preferreds in this space. CAP is the biggest, and they hold a super-quality portfolio that they've been upgrading in recent years. All these are focused in Ontario. but they benefit from lower interest rates. A caveat: Ottawa is slowing immigration to Canada, which feeds demand for apartments. Expect choppiness, but these are good holds.

The pay around a 3% dividend, so considers this an income stock. The private apartment rental market they're in is very tight. Half their apartments are in Ontario which has a rent increase cap, so rent rises only 2.5% upon renewal, but over 20% if a tenant leaves. So there's room to raise rental rates to market rates. Also, they're good at selling pre-2018 properties and buying post-2018 ones which don't have rent control.

Exposed to rising interest rate payments on debt used to buy properties. Good yield is in competition with no-risk bonds. Multi-family housing. Tailwinds from immigration and housing shortage.

REIT sector has lagged with interest rates going up. Largest in Canada. Feels rental market will stay quite strong and robust. Good demand with immigration. Shortage of multi-family housing across Canada. 50% exposure in Ontario, which has rent control. Selling older properties, investing in newer and refurbishing. Yields only around 3%, but very safe, good potential for increases. Buys back stock instead of a high dividend.

Press report of offloading manufactured homes, accounts for only 5% of its business. If came through, capital would be deployed into capital recycling program to invest in more modern units.

Very good operators. Stock's done well. Muted new supply, greater demand every year. Canada's one of the leaders in population growth, and immigrants will need this type of rental. Most expensive among peers, 5% discount to NAV. Better value elsewhere, see his Top Picks.

Rental market in Canada is tight with new immigration and challenged supply. Housing market remains less affordable, so people are more inclined to rent. Interest rate headwind, but starting to stabilize. Selling mature properties to reduce rent control caps. Well positioned.

Took profits and redeployed. Not enough apartments in Canada. Threat to mess with the REIT tax structure has gone away. Rent market is very tight, with rents going up at least 6-8%. Only issue is rent control in Ontario.

It has pulled back with interest and bond yields.The apartment rental space is tight and demand is high. Since it is very difficult to buy a home now, there is less incentive for people to stop renewing so they are not getting double digit rent increases. However there are still good fundamentals in the Canadian market with the huge immigration flow into Canada. It hasn't been increasing its dividend for a while but is buying back stock.

Both are quality. Likes both sectors. Likes both, but if he had to choose, he'd pick GRT.UN.

In Quebec and BC, but CAR.UN is mainly a play on Toronto, a fantastic multi-family market, but there is rent control. Great supply/demand fundamentals, but hard to get the cashflow. Outperformed peers, so pullback is understandable.

Industrial warehouse sector continues to do quite well. GRT.UN focuses on Canada, US, and Europe, trading at a nice discount to NAV. Underperformed, not warranted. Concern about oversupply in US, but he thinks they're in a good position. 

Rents are rising like crazy. CAR.UN holds a blend of rent-controlled and not-controlled apartments. They can also build units. He expects city governments will face enough pressure to chance zoning laws and allow apartment buildings. Pays a decent dividend and run by superb managers.