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Stock Opinions by Jeffrey F. Olin

COMMENT
He's constructive about real estate, seeing supply-demand balance in most geographies, and things are better than a year ago with more stability in the trade environment. There's less market risk and the real estate market is solid. REITs were strong in 2019, solid; he had a 20% return. He likes the US sunbelt, apartments, and e-commerce-related real estate. There are land constraints in Vancouver and Toronto, so no surprise that single-family homes are going up. Affordability is an issue here and in condos. Also factor the strong influx of 350,000 immigrants yearly, plus students, plus overall high population growth across Canada. That's why he likes apartments.
Unknown
DON'T BUY
Very competent managers, but he doesn't like this REIT because they are externally managed--hit with external management fees. They manage public and private fees; he prefers internally managed REITs.
REAL ESTATE
STRONG BUY

Loves this. They're in Ottawa, Montreal, and the GTA, benefiting from strong population growth. They buy undermanaged apartments, invest capital and fix them up. So, they can increase rents. They've done this for a long time. A darling that he's long owned. They're developing land with Brookfield around Burlington.

property mngmnt / investment
DON'T BUY
It was a core holding for years, but it continues to trade at a discount and the owner is very unpredictable. He isn't big on office and retail and MRC is. There's great long-term value here, though, but short-term, there are better places to invest.
property mngmnt / investment
BUY
Knows this well--he toured their properties recently. They focus on Dutch apartments, the third-densest country in the world. This is a core holding. There was a recent equity issue (he bought). You will hear big things about this REIT.
0
DON'T BUY

No question this is deep value. Their NAV is likely $27-28US (for the US BPY stock). But it'd been deep value for many years, and he doesn't see a catalyst to service that value. Some shareholders have lost patience. They're challenged because they own a lot of high-end malls. Some questioned them buying GGP Inc. last year. They have office buildings in New York and London, decent assets. Not great governance, a given Bermuda limited partnership. Buy BAM instead, which owns BPY. Nice dividend, but this is likely a value trap.

REAL ESTATE
DON'T BUY
Strong, experienced managers, but investors don't like the wide diversity of real estate assets this contains. Also, they have a lot of exposure to Alberta that they are selling down. They have decent U.S. exposure. Artis is okay. But managers are too responsive to activists.
property mngmnt / investment
BUY

Defensive REIT that pays income. Nursing and retirement homes, mostly in Ontario (where there is a bed shortage of 35,000) and BC. Strong managers and good dividend. He expects the Ontario government will solve this shortage by mid-2020 (allow more nursing homes) that will benefit Sienna and CSH.UN-T. This is very defensive. You can sleep at night owning this.

other services
PAST TOP PICK
(A Top Pick Jul 31/19, Up 7%) Few real estate stocks have a moat, and this does. They are the biggest player in temperature-controlled warehouses worldwide. Great managers. It's still early, so there's room to run. Still likes it. Also a top pick.
REAL ESTATE
PAST TOP PICK

(A Top Pick Jul 31/19, Up 14%) Super managers. The oldest, biggest REIT around. They are diversified. They own ERE.UN-X. They can easily build 10,000 apartments on land they currently own. Canada suffers from very low vacancies and strong demand for apartments in cities like Toronto, driven by immigrants, students and Boomers who are downsizing.

investment companies / funds
PAST TOP PICK
(A Top Pick Jul 31/19, Down 8%) Should be at $175. It's a corporation, not a REIT, so not in REIT indices. Pays no dividend. They're completely self-funded with their own money. Outstanding world-class assets. They just announced a strategic review. Rumours of a sale inflated the stock, but the company didn't sell after all. So, investors dumped the stock. It has since recovered 80%.
0
DON'T BUY
A granddaddy among Canadian REITS. Solid managers, but have struggled because they are a diversified REIT. Their retail holdings of secondary malls have struggled. They own office buildings in Calgary, which is economically struggling. They also own retail in Toronto, plus a small holding number of attractive apartments in the US. They haven't yet fixed their problems. At least the dividend is safe.
property mngmnt / investment
COMMENT
Which percentage of REITs should I hold in a balanced portfolio? 20% is decent. Retail investors are increasing their real estate holdings. There are many advantages to owning real estate on the stock market than directly, including liquidity, diversifying holdings easily (around the world) and not fixing plumbing late at night. Also, you can buy real estate cheaper in the stock market than in the property market.
Unknown
DON'T BUY

He likes it for being in multi-family rentals. It's challenged because it's controlled by Morguard Corp. Diversification is 43% in Canada, 57% in the United States. Nice dividend. Probably worth $22/share. But there's better value elsewhere like CAP REIT or BSR.

REAL ESTATE
BUY
Fine managers (who is also a major shareholder), but PLZ is in a challenge sector. Solid dividend, though, and reasonably valued. He likes it.
REAL ESTATE
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