Markets. REITs have held up well in this market downturn. The 10 year bond in the US fell 60-70% this year when people thought it would go up. REIT fundamentals continue to be strong: above average free cash flow growth from occupancy increases, rent increases, interest savings on refinancing, acquisitions and development. We saw a number of things that derailed global growth projections. The US recovery will remain, but it will be a slow recovery. We have an environment right now where the economy is improving, but rates are not rising. Occupancy increases don’t happen overnight.

A newer REIT. All their assets are in the US. They are one of the better performers. High quality assets and in the higher rent range. Payout ratio in around 85% and sustainable. They just bought assets in Denver and he saw that as attractive. The dividends are sustainable also. They see strong free cash flow growth out of the portfolio.

Trading at a larger discount to NAV than REI.UN-T. But you get a slightly lower growth. Sustainable payout ratio as well as a sustainable leverage. 99% occupancy level with Wal-Mart stores as tenants. Will grow free cash flow at a higher level than in the past since new CEO came in and is looking to provide value for investors.

Office assets across Canada. Has been in a range because sentiment around the office sector is very poor right now. There is supply coming on in both Toronto and Calgary and the market fears lower rents and lower occupancies. It is trading at a 10% discount to net asset value.

Magna is the main tenant. They are trying to reduce that concentration to 50% from 85% now. They sold some non-core assets. He will not allocate capital here because he does not like the long term prospects. Payout ratio and leverage are low enough that there is not a lot of risk if you hold it for the distribution.

Real estate arm for Brookfield asset family. Office properties. It continues to trade at a discount. They are trying to make it their global real estate entity and to diversify the portfolio. He used to own it, but exited as it went up. Prefers BAM-T.

A new REIT, trading in and around where it came out and he thinks the NAV is around $11. One of the higher quality REITs that have IPO’ed. Assets are in and around key distribution states. Payout ratio and leverage are sound. He would own if it was larger. They may have trouble raising equity for acquisitions.

Sobeys is the largest tenant. Over the last few years they grew outside of their Atlantic Canada focus. They also tried to improve their payout ratio and leverage. He would like it lower, however. But they substantially improved their asset quality and they diversified outside of the Atlantic region. The free cash flow growth still does not screen as well as others.

Limited service hotel industry in the US. A large part is crew-oriented occupancy – contracts with rail companies. They are trying to diversify outside of that. This is a volatile market. He is not a huge fan. Their leverage and payout ratio are sound. It is okay to hold it for the distribution.

Smaller cap REIT invested in retail assets, no longer just in Atlantic Canada. The recent acquisition increased their leverage and payout ratio and in his opinion reduced the quality of their assets. Management knows they need to right-size the leverage by selling assets. It is probably at a 7-8% discount to NAV.

The US housing market is treading water. TCN went into single family housing and manufactured housing. Sentiment surrounding the housing market in the US has caused it to underperform recently. You have a very well aligned management team. Stock is worth $8-$9. They need to deliver on free cash flow growth.

Largest single family home rental owner in the US. Assets across the country. They have an operating platform to manage single family rental homes and he likes it for this reason. Thinks you will see consolidation over the next few years.

Very high quality business. Management team is very well aligned. Asset quality has improved. Payout ratio and leverage that are almost the best in the business. The valuation is very undemanding. There is an overhang because of an equity issue done recently. NAV is about $18-$18.25. It is a core position in his opinion. He would add to it right now.

The largest global industrial REIT. Majority of assets in North America, but they have exposure to Europe and Asia. They had a 12 quarter plan that they achieved in 10 quarters with respect to their leverage, quality of assets and the land they have on their balance sheet. Thinks the market is not recognizing the quality of business and the upside to free cash flow growth. This is a unique opportunity to buy this one.

Large proportion (20%) of their assets are in the US and the rest in the four western Canadian provinces. Took advantage of very open capital markets to grow its portfolio on the asset side accretively. They brought down the payout ratio and the leverage. The distribution is over 7%. Thinks the NAV is approximately $17.

Markets. 2014 has been much better than 2013, when the market was focused on tapering. In 2014 fundamentals remain strong, occupancy and returns remain strong. Interest rates were supposed to go higher in 2014, but they pulled back which was good for REITs. This year any rise in rates won’t be a surprise. People try to direct you to economically sensitive lodging because they can grow cash flow rapidly, but all he looks for is free cash flow above average. Investors should be cautious. Returns will be more normalized for the balance of the year. The sector is no longer undervalued, but rather it is fairly valued. He doesn’t see the sector going lower.

Similar to Tricon, but more diversified. AMH-T is focused on buying single family homes and renting them. 20-25 different cities and are a strong operator. They have to maintain and lease single family homes all over the city. Believes they will be a consolidator as home prices have appreciated in the US. There is an opportunity to build a business based on this through acquisition. The industry is fragmented, but can consolidate over time.

Diversified REIT that invests in office, industrial and retail. Management team is focused on reducing leverage and payout ratio. 50% leverage right now. Going forward the key is to make sure they have a laddered maturity profile for their debt. They should be just fine.

Owner/operator/ developer of apartments. One of the keys for them is to drive rental growth and manage operating costs. The high price of gas in the Atlantic provinces has been their problem and how it hit operating expenses. Trading at a substantial discount to their NAV. People are worried that a ship building contract through the government will not be as beneficial to KMP as previously thought.

Owned for some time. Announced they were going into home building. Is an asset management company turning into a play on US housing and recovery. He reduced his position because he feels returns will slow. A solid management team that are well aligned.

Done a very good job and focused on balance sheet and payout ratio, reducing it to 80% last year. You may not see a distribution increase this year as they use cash on the balance sheet for growth. They have projects on the go that will contribute to free cash flow. Anyone owning seniors residences could be in play as a result of changes in the US.

Retail REIT and majority of assets are leased to Wal-Mart. Saw 5% funds from operations growth last quarter.

Owns and operates high quality retirement properties in Canada. It has not done well. There was some development land that was to be sold and add liquidity to the company, but that did not happen. He has confidence in the management.

(Top Pick July 9/13, Up 12.67%) They spun off some of their lower quality assets so the remaining portfolio will be very powerful in terms of sales per square foot. They now provide exposure to higher end consumers. 5% free cash flow growth going into 2015.

(Top Pick July 9/13, Up 12.65%) Has traded at a premium historically because of low leverage and payout ratio. This is a core holding in his portfolio.

(Top Pick July 9/13, Up 12.55%) Largest REIT in Canada. Done a good job of using capital markets to lower leverage and payout ratio. They are going to focus on urban assets that they can develop apartment buildings on. This is uncommon for retail landlords.

Focused on health care properties across Canada as well as medical office buildings. One of their focuses has been increasing occupancy to 93% but it stayed at 91%. This is a risk in specialized office space. They are facing difficulties in leasing at some of their properties. The sentiment in the office market is poor so people are avoiding this one.

Dream REITs are not knew, just renamed. In 2016/17 is when a lot more supply comes on and is only 50% pre-leased. He continues to own it because it trades below NAV, leverage has lowered over the last few years and the distribution is stable.

Has an external management structure. Invests 100% in Germany. German post office is only 30% of their portfolio now. It is going to be somewhat difficult to replicate what they did over the last couple of years. The payout ratio is currently above 100%.

Work with REI.UN-T in a JV. The largest landlord for shopping centers in the US. Their focus over the last few years has been shedding non-core assets. They are 60-70% of the way through simplifying their business. Demand for their properties is starting to pick up. Is turning into a very high quality business.