Andrew Moffs

This is the first year where we've seen publicly traded real estate really outperform the broader markets. The question is why?

There are some tailwinds to property fundamentals. Falling new supply, as new construction has really fallen off a cliff ever since interest rates spiked. They have access to capital, which is in stark contrast to the liquidity crunch in private credit markets. Offer resilient cashflows, meant to be beneficiaries of inflation. M&A is alive and well.

Finally, we came into the year with the widest historic earnings multiple spread between US REITs and the S&P 500. That setup was last seen after the dot-com bust. REITs then went on a 7-year run, outpacing the S&P. 

Tech is easy to own, and we're in one of the most exciting times with prospective growth in AI. It's easy to look at the real estate market and paint it as not exciting.

But we're definitely seeing a rotation from growth to value today. Not only do the US names present value, but they have a growth element as well. Think of the data centre space in REITs, poised to take advantage of growth in AI. Grocery-anchored shopping centres -- very defensive, but operating at record occupancy levels and record rental rate levels.

The REIT sector is made up of 16 different asset classes. Lots to choose from.

Not actually a REIT, but a corporation. Offers a nice blend of both capital appreciation and income. Half its portfolio is government-funded, long-term care; other half is private-pay retirement homes. Stability of government funding + tremendous growth from aging baby boomers. Well-covered, safe yield of 4.1%.

Sometimes investing is about keeping it simple. 

Also see his Top Picks.

Great grocery-anchored shopping centres nation-wide. Defensive. Banners:  Farm Boy, Empire, Sobeys, Longo's. Sweet spot today. Lack of distribution growth until last year, but thinks growth can continue because some brands are growing market share. Safe 5.3% yield.

Defensive, lower growth. About 25% of rents come from WMT. Don't expect much growth. Hiccup last year from tenant bankruptcies. Trades in a range, and it's at the higher end. Stock could consolidate after the run it's had. Yield is very safe.

Challenging story, balance sheet pressure. Question is were moves taken enough to right the ship? Answer is out of management's hands. Needs to sell assets to get leverage back to manageable levels (and investment-grade rating retained). 

Just raised equity at $10, which means market's saying that's fair value. Higher risk name. Really needs to execute. For those with higher risk tolerance, you can hold for now.

Not a REIT, doesn't pay a substantial yield. Management owns a large percentage. A store of value -- owns a lot of land that can be developed over many years, and becomes cash windfall. Large discount to NAV, perhaps 50%. 

Good hold for the long term. Accumulate on market weakness, be nimble enough to sell on appreciation.

Multi-family REIT. Operates in only a handful of select coastal markets, increasingly in US Sun Belt. Very large market cap. High-quality management and portfolio. 

Space has struggled since a lot of new supply came on. Through Covid a lot of people moved, and then it settled down. Very low pricing power in the space.

Doesn't see a lot of appreciation. Stock's cheap. Implied cap rate is in low-mid 6% range. You're paid to wait, but he wouldn't enter till later 2026 or into 2027.

High-quality. 25% is leased to auto-part maker MG. Great job navigating tariff noise, geopolitics, and inflation. Warehouse activity had really slowed, but leasing now bouncing back. 

Now trying to orient its portfolio to Tier 1 markets. Midpoint of its valuation range. You'll do well riding out warehouse recovery into 2027.

Thinks highly of management. Used to own. Sold simply due to multi-family backdrop in the US. Focused on US Sun Belt. Navigating well in its markets, but markets suffering from lack of pricing power.

Healthy discount to NAV. Probably a year away from inflection on pricing power. Nice 4.6% yield while you patiently hold and wait.

(Recently announced takeover.)  The 25th takeover in his fund. If you buy at a discount, you never know when that gap will close up higher. Expects more M&A in the sector.

Stock's moved up and down. Still likes that 75% of portfolio is not subject to rent control. National population growth declined, but it increased in the space that BEI.UN operates in. Taking advantage of its implied cap rate and buying back stock.

Stable, defensive. Actively buying back stock in mid-$125s. Great internal growth.

Likes the space, which he owns for its growth. Nice portfolio with a focus on secondary markets where it can be competitive. Attractive distribution of just under 8%, but high payout ratio. Any slipup in earnings could mean distribution is unsustainable.

Higher leverage. He prefers more defensive, investment-grade balance sheets. Bit of a show-me story. Lower-growth profile. Better choices elsewhere.

See his Top Picks.

Blue chip, high quality. Largest REIT in Canada, as the owner of Loblaw and Shoppers Drug Mart across the country. Very stable, and so it trades around NAV. He usually prefers REITs that trade at a discount.

He's very excited by recent acquisition of half the assets of FCR.UN, which are defensive and high quality. Brings higher leverage than historically, but on an easy path to reduce that. 

Near term, will suffer dilution. Over long term, you'll be fine owning for the yield. If you want to add, do so on pullbacks.