Diversified REIT, even more so after their acquisition of 27 Primeris’ enclosed malls. This was a good purchase for them. Diversified their cash flow stream and as they integrate the portfolio with their other assets, it should give even stronger stability in their free cash flow. This one has got hit very hard over the last few weeks. Trading at a $3 discount to where he feels their NAV should be. Can see $25 in 12 months.

Majority of their apartment assets are in Eastern Canada, which has seen a little bit more supply than what you’ve seen in the apartment sectors outside of Eastern Canada. Because of that, a couple of their markets have seen a drop in occupancy. In addition, the company has done some development and their yields have come in slightly below where they anticipated them. This is trading well below its NAV which he feels is around $13. Doesn’t anticipate that the next couple of quarters are going to be great. The 4^th quarter and the 1^st one in 2014 should start to look better. They should be a beneficiary of the Halifax ship building contract, over the long-term.

To what extent does it suffer from a holding company type discount to the value of its assets? Is that discount stable relative to earnings growth and growth in the value of its assets and, in which case, does it really have an impact on the value as an investment? One of the largest asset managers in the country. Recently spun off their real estate holdings into Brookfield Property Partners (BPY-N). Brookfield Asset Management on its own does have a percentage of holdco discount. If you look towards the entities like BPY, the holdco discount is even larger. His choice is to owning this because as a holder, he is aligned with the management team 1 for 1. Going forward that is his preference in terms of ownership. This one has held up very well in terms of this downturn and is trading just slightly above its NAV.

An owner of industrial assets in Europe and North America. 90% of their assets are leased to Magna (MG-T). Many of those assets are pretty intense-use assets and have specific uses that only Magna would find useful. Going down the road, diversification of assets is going to be their biggest challenge. He would be concerned about lease expiries that are going to occur in 2013 and 2014 and what Magna plans to do with those assets. The single-tenant nature of their assets doesn’t appeal to him. Leverage is very low and their payout ratio is stable so he feels they will be able to navigate through any tough environments or downtime in assets.

Has not owned this because its payout ratio was well above 100%. But he gives them credit for acquiring a number of assets over the last 2 years that has increased their market cap as well as brought down the payout ratio. 105%-110% payout ratio which is still a little bit too high for him. 8.7% yield and he doesn’t think there will be a dividend cut anytime soon.

Operates in the retail sector and has a very high occupancy rate. Wal-Mart (WMT-N) is one of its largest tenants. Even during the financial crisis, occupancy only fell to about 97%. Leverage and payout ratio are in check. Yield will be strong and you will probably see 2%-3% free cash flow growth going forward.

Didn’t participate in the IPO but continues to follow this very closely. Management has done a very good job in trying to tackle the hurdles that it would take for him to invest in this. Hasn’t been many buying opportunities as it has continually traded above NAV, but today it is trading below NAV. Payout ratio is in the 90s so yield should be stable. Occupancy is sitting around 91% and management is trying to get it up to 94% but he is not confident they can. If you Buy today, you are getting a stable yield and at well below what the assets are worth.

This was an IPO last year and he did not participate because of differences with management on their strategy of growth. Have apartment assets both in Canada and US. They require access to capital markets because they need to grow. The deals they are going to do if they raised equity today, would be much less accretive to its investors to free cash flow than when the units were trading house to $12.

(Market Call Minute.) Management has done a great job of bringing down leverage and payout ratio and you can see occupancy gains in their portfolio.

(Market Call Minute.) Management team has not proven that they are going to be able to integrate $2.6 billion of assets that they bought over the last 2 years.

(Market Call Minute.) Has done a great job of diversifying outside of Atlantic Canada. With Empire’s purchase of Safeway he thinks there could be a large equity raise down the line to purchase those assets.

(Market Call Minute.) If you own, be very careful with regards to the lease terminations that Deutsche Post is going to announce on August 31.

(Market Call Minute.) World-class management team. A capital structure that has been improving over the last 2 years in addition to an asset base that has been improving as they have been recycling from suburban assets more into urban assets.

This is sitting at about a 10% discount to NAV. Historically has not traded at that kind of level. A world-class REIT. Shopping malls, predominantly in the US, but also in Asia and Europe. Have a 30% interest in a European REIT called Kleppierre. These are high quality malls that are operating anywhere from $500-$600 per square foot in terms of sales. They have seen 8% increase on average in the last 6 quarters in a sales per square foot number, which means consumers are starting to spend a little in the US and are heading to the high quality malls. 2.8% yield but free cash flow yield is in the double digits. Very low payout ratio.

Has done a great job in bringing down its payout ratio which is now sitting at about 80%. Have been one of the best REITs over the last 2 years at taking advantage of the environment of open capital markets. Raised equity, brought down leverage and purchased acquisitions that have been accretive to free cash flow. In addition they have created intensification in development opportunities that are going to add to free cash flow. They are not going to the capital markets to cooperate with them in order to generate free cash flow growth.

Has done well over the last 2 years in improving the quality of their portfolio, but as well, their capital structure. Their balance sheet leverage has come down. Payout ratio is now at a sustainable level. Trading close to its NAV while historically has usually traded at about a 5%-10% premium to NAV. Going forward they are going to have strong access to the capital market and attractively priced capital and will be able to take advantage of opportunities. Could see this trading at $27-$28 in 12 months.

Markets. Management, assets, payout ratio and leverage. 3 of 4 of these need to be favorable before he will allocate capital to the business.

Assets are all across Canada in the retail sector. For the long term is a solid hold. First distribution increase in 2012 reflects that assets are starting to pay off. Going forward you will see more of the same. But instead of issuing assets, they will recycle lower quality assets to acquire new ones. He doesn’t think interest rates are going higher but if you saw this because of stronger economic growth then he wouldn’t worry anyway.

Apartments. Canadian apartment sector is fragmented and it is hard to acquire assets. Look for their ability to grow by adding free cash flow per unit. Management did a good job of acquiring assets and going forward they will continue to do so. Distribution is safe and going forward payout ratio and leverage will come down.

Is comfortable with strategy of purchasing single family homes in the US. Strong attractive yields and investment appreciation. Management owns a fair bit and it makes him comfortable. Going forward you should expect strong growth. They stick to required returns when they go out to acquire properties.

Very high quality seniors housing across Canada. Lots of them located in urban core. First rate management. Looking for 4-6% cash flow growth. Improvements in the portfolio through rent increases and occupancy as well as consolidation of some of the partial ownership in some assets plus development. Just under 5% yield, 80% payout ratio. Expects distribution to increase within 12 months.

A real turnaround story. Over 2-3 years management has done a great job in improving assets, leverage came down and payout ratio came down. Payout is 80%, safe. As assets improve in terms of occupancy and rents, this could be a takeover candidate. It is trading over net asset value but growth going forward justifies this valuation.

First class office properties. High quality name. Balance sheet and payout ratio are best among peers. Occupancies have stabilized so that rent increases have passed through to tenants. The acquisition program will continue.

Management team has done a great job. Sustainable capital structure. Grew portfolio greatly over the last few years. Increased free cash flow. Above NAV because there is a strong demand for industrial assets. Going forward they could be a takeout candidate.

(Top Pick Jan 10/13, Down 0.98%)

(Top Pick Jan 10/13, Up 0.02%)

(Top Pick Jan 10/13, Up 1.77%) Their cash flows are very steady. Generated strong free cash flow even through the financial crisis. 4-6% increase in cash flow over the last 7 years. Parents have to co-sign leases. Operate at campuses with high student retention rates.

A core position. Unique opportunity right now. Normally trades at a premium to NAV but at a discount right now. Going forward estimating 8-10% free cash flow growth. Capital structure is one of the best with 70% payout ratio allowing for distribution increase.

Owned for quite some time. Management team does not get enough credit. Brought down payout ratio below 100%. 6.75% yield. 20% of assets are in the US and have likely appreciated. Talking about increasing US assets to 30% or portfolio.

Owner/operator/developer of apartment buildings in coastal areas of US. Class ‘A’ apartments buildings. 5% discount to NAV compared to 10-15% premium in the past. Will generate strong free cash flow growth and he sees a distribution increase.