InterRent REIT (IIP.UN-T)

Once he realized interest rates weren't going to stay at zero, he scaled out of real estate from 22% down to 5%. He held onto industrials, but sold this one. Really likes the company, but is waiting until interest rates tick down again. Very interest-sensitive investments.

You won't go wrong with either. Thinks highly of management for both. Both are concentrated in Ontario. IIP.UN is smaller, more nimble, with a focus on Toronto-Ottawa-Montreal and a growing presence into Vancouver. CAR.UN gives exposure to GTA and across Canada. If he had to choose, he'd pick IIP.UN with its 25% discount to private market value, lots of value in the portfolio.

There is lots of value here due to a supply and demand imbalance leading to big growth in rents. There are 400 to 500 thousand new Canadians arriving annually in the next couple of years with not enough space for them. Also foreign students who stayed away during the first two years of the pandemic are returning

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Reducing debt levels over time. Payout ratio at a sustainable rate. Risk of no rent raise policy to continue. Primarily focused on Toronto and Montreal. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Positive Same-Property Net Operating Income(SPNOI). Peers reported negative SPNOI. Rising financing costs, but better than peers. Low interest rates locked in. Current environment represents high barriers for the supply side given the increase in interest rates and operating costs, making existing apartment profiles such as IIP valuable. Unlock Premium - Try 5i Free

There are other ways to do real estate. He likes Tricon. He thinks there might be a continued setback for student residences. Tricon has housing in the US where there is demand for their houses.