Andrew Moffs

Canadian REITs are down 15-20% in the last 12 months, US REITs down 25%. Public real estate world has experienced quite a bit of volatility with the volatility in markets and interest rates. Reality is quite different in the private real estate markets in those sectors that have positive supply/demand fundamentals. He's more focused than even on defensive sectors, those that have growth, and companies with great balance sheets. The sectors that make sense today include manufactured housing, single-family rental houses, industrial warehouse, and grocery-anchored shopping centres.

In 2022, private REITs were up by high single digits. In the publicly traded world, real estate was down 20% last year. Who's right, or are we somewhere in the middle? It all comes down to the asset class and the balance sheet. Today there's a wonderful opportunity in publicly traded real estate. Typically, public trades at a premium to NAV compared to private, but today the discount is 20-30% to NAV. Over time, that leads to increased M&A activity. That environment should come back once we have a bit more stability in financing.

Newer REIT. Apartment buildings in the US. Rents are lower, assets are older. Small. Trades at a nice discount. Pretty attractive cap rate of 7.7%. Other REITs are larger, more liquid, with more institutional-quality real estate. Decent hold, but better opportunities elsewhere.

Smaller cap. Income focused, with a yield around 8.5%. 50% office, 25% retail, 20% industrial. Goal is 60% industrial over 4-5 years. Issue will be having to sell assets to get there. Office space is difficult right now, both operationally and to sell. 25% discount to NAV. Pretty safe.

Likes it. Corporation, not a REIT, so it's able to retain cashflow instead of paying a distribution. Has grown well without issuing any equity. May have traded off because it reached NAV. Solid operator. Keep holding.

Netherlands has a housing shortage and is densely populated. Top-down, it's quite attractive. Great assets. 20% discount to NAV. Rent control legislation has brought clarity, European economic concerns have passed. Wouldn't be surprised if CAR.UN sold it off.

Great job on its portfolio, which focuses on 35-39 year olds who've chosen to rent. Likes the sector. Very wide discount to NAV, so it's a buy. High rates on high debt has prevented new asset purchases. Lower rates would be a positive, and would eventually open up the spigot to new purchases.

Listed in Canada, owns properties across the US. Likes the sector of grocery-anchored shopping centres. Low growth, but steady. Only 1% growth expected this year, so no distribution increase anticipated. Above-average leverage.

In very different sectors. Both trade at wide discount to NAV. Neither has catalysts on horizon. CSH.UN at risk of cutting distribution, which is not being covered due to lower occupancy. CSH trustees see growth coming, but can it recover occupancy levels lost during Covid? He's watching that, as it's hard to invest in the face of a possible cut. D.UN is in an extremely tough sector. Office space, globally, has suffered with work from home. Office sector is not dead, but vacancy rates are in high teens and climbing. A good operator, Dream still owns good office buildings, especially in Toronto. 

In very different sectors. Both trade at wide discount to NAV. Neither has catalysts on horizon. CSH.UN at risk of cutting distribution, which is not being covered due to lower occupancy. CSH trustees see growth coming, but can it recover occupancy levels lost during Covid? He's watching that, as it's hard to invest in the face of a possible cut. D.UN is in an extremely tough sector. Office space, globally, has suffered with work from home. Office sector is not dead, but vacancy rates are in high teens and climbing. A good operator, Dream still owns good office buildings, especially in Toronto. 

Consistently raises distribution. Safe, stable. Warehouse sector.

Great example of a company with the ability to increase its distribution. Apartments across Canada, with a focus (2/3 of its portfolio) on Alberta. Alberta has become the affordable market in Canada for both new Canadians and inter-provincial migration. Growing cashflow. 

Quite bullish on it. Still lots of runway, with stock trading at 20% discount to NAV. Occupancy has increased over 98%. 10% in leasing spreads. Foresees 8.5-12.5% income growth this year.

Behaved like the market, but that's cold comfort. Remains one of his largest positions. Manufactured housing, the most stable class there is in real estate, with healthy rent growth of 6.5% this year. RV parks are experiencing robust growth, with 8% rent growth. Hit with 50% increase in insurance costs. Never had a year of negative net income growth. Recession resilient. Double-digit discount to NAV, usually trades at double-digit premium.

Acquired. Takeover validates the value that's out there today.