Brookfield Property Partners (BPY.UN-T)

He does invest in some selective preferred shares for some clients with balanced mandates. Unique because BPY.UN used to be a separate, publicly traded company, so you got full transparency. But then Brookfield privatized it, so you don't get the same transparency. But Brookfield has always been a fairly good corporate citizen and stood by their issues, and they typically repurchase their own preferred shares in the market, making sure unitholders are not disadvantaged.

If you own it outside a registered account, collecting north of 10% on the dividend yield, it's a very tax-advantaged way to collect income. If you can get 10-12% here, versus 5% on a corporate bond where you're going to pay 50% tax on, the arbitrage is quite huge. Buy, or consider adding to your position. Whereas in a registered account, relative to bond yields, that kind of tax arbitrage isn't there, so not as attractive.

Thrilled when BAM came to bump out the stock. The market, after the initial offer came in, went up expecting for a hire offer. This is where he sold his stock. Took the money and invested elsewhere. He would recommend others to do the same.

There are three options: get the preferred stock, cash, or to get BAM.A stocks. He would chose the option to get BAM.A stocks. It really works. It will take them a long time to turn around retail and commercial property portfolio. However, these guys buy things at good times. 80% of their business is working really well. A great engine for growth.

It is subject to a take-over offer. He also owns the parent. He initially took none of the offers. He waited for them to sweeten the offer which they did. He thinks that will be the final offer. You should tender your shares for BAM.A-T so you participate in the recovery of their assets. The draw back is that you may not be able to crystallize losses, if that is a consideration.

Re the recent offer. Don't take the preferred share option. Taking some cash and some portion of BAM makes some sense. He finds it all expensive, but the franchise continues to grow. If you just want yield, look for other alternatives. If you want to participate in the recovery, do this through the parent, BAM.

BAM has been a saviour with its takeover offer. For REITs, he zeros in on two areas: multi-residential and industrial. Look at IIP.UN. It's a pretty good place to park capital for the long term. Industrial REITs are still attractive, even with their bounce off the lows.

Not just retail, there are offices and industrial. But it's getting tarred with the retail brush. BAM feels assets are mispriced. Bid may be sweetened. He's prepared to let go whatever the eventual offer price. Very unlikely to be another outside offer.

Subject of a takeover by parent. Do you wait for a better offer, or sell now? He'd sell. You could switch to BAM. Thinks highly of WPT Industrial REIT, which has more upside than BAM.

Brookfield buying BPY He expects BAM to take it over and it's a good thing to keep BPY within Brookfield/BAM. The deal is accretive for BAM which he really likes. About BPY, you don't want to own these assets (offices, large retail) during this pandemic. Better to own apartments and industrials. BAM fell 5% on news of the takeover, but investors don't understand how accretive this deal is. BAM is a fantastic asset allocator; he wouldn't bet against them.

The 3 different Brookfield offer is destined to appeal to different segments of investors and the reason they own it. For opportunistic traders, there is the cash buyout. For long investors, they are offering BAM.A shares. For income investors, they are offering preferred shares that still offers some dividends, although it is not as high as BPY paid. The best option depends on who you are.

Shares were undervalued. Skepticism because they have significant real estate exposure. The offer to go private will probably be supported by a majority of shareholders who want the cash. The smarter choice would be to accept the share exchange for BAM shares. Sit tight, as the offer might be sweetened.