Andrew Moffs

No shortage of negative headlines on commercial real estate. Office space was hit because it had capital expenditures rising faster than rents, and then the pandemic changed how we all use office space. 

Other headlines revolve around transactions that occurred in a different rate environment, and how they're working out today. Fundamentals in data centres and industrials are quite strong. With interest rates peaking, you're starting to see more bidders come to the table, construction activity go down, and financing become more available. Interest rates are in line with historic averages.

He's quite optimistic about real estate transactions occurring in the private market. Definitely bullish on valuations of publicly traded real estate.

They do, and they've been quite open about it. Yesterday, a spokesperson said they have $64B of dry powder ready to invest in real estate. They've already privatized 2 real estate entities in the past 6 months; TCN was taken out at a 30% premium. They see private markets as fully valued, but public markets as being on sale. It's an opportunity to put lots of capital to work in a very short timeframe, and to be able to finance it.

He's been doing this a long time, so he's seen a few movies. Any time you see interest rates peak, and fundamentals bottom, is the right time to be buying. Blackstone said that when sentiment is at its most negative, that's the time to step into the market.

We've seen this before: after the 2001-2002 recession, the great financial crisis, and March 2020. When values dislocate, real estate becomes such a great store of value. People look at it as a great inflation hedge. Great opportunity to be buying.

Yes. Almost as if third-party logistics companies thought they could supply patio furniture forever. Reality is that industrial real estate is down 17% from peak pricing. When he looks at public markets, industrial REITs are down 30-40%. Over-discounting what is really a temporary slowdown in decision making by tenants. Spread between in-place rents and market rents is quite wide, ability to capture a lot of cashflow.

Great to have a tenant like WMT, as it makes the cashflow very dependable. Being so defensive means not a lot of internal growth, really lags compared to peers, bottom line cashflow not increasing. Higher leverage than peers. Muted earnings growth. 

Higher distribution yield around 8%. Could own for the yield. Dividend secure. Payout ratio below 100%.

Squarely within definition of growth for next 5 years. 42 LTC (97% occupied), 40 retirement homes (85% occupied, with goal of 95%). If goal is met, high single-digit internal growth over next several years. Yields around 6.7%.

Quite a discount to NAV, attractive. Lower yield, 3.5% range. Strong management, CEO is now internal. Looking to grow bottom line. Fixed balance sheet. On a good path. Political risk from rent control, but that's not imminent.

Very stable. Sleep at night with an investment-grade tenant like Canadian Tire. Discount to NAV. Not a lot of upside in terms of growth, which would come from acquisitions. Sees no current risks. Distribution yield is 6.8%.

Great properties, but diversification means it doesn't get a great valuation from the market. Sunbelt properties are over-supplied. Owns office properties and retail. Transforming to multi-family and industrial. Trade action starting to pick up. Secure yield of about 6.7%. Growth will be a while, depends on your time horizon. Better names in the meantime.

Challenged. Office sector is difficult. Secular change of using less office space. Portfolio consists of non-trophy buildings. Struggles to maintain occupancy. Distribution suspended.

20% discount to NAV. Very good portfolio. Originated in eastern Canada, has moved west. Comfortable owning, but better opportunities elsewhere. See his Top Picks.

He focuses on supply and demand, and then goes bottom-up looking for discounts. Fundamentals in industrials in Canada and Europe are far superior today to US multi-family, especially in the Sunbelt. 

It's a new construction supply problem, and demand won't be able to keep up. DRR.UN owns an older portfolio in key Sunbelt markets. Wide discount to NAV. Low liquidity, so no premium.

DIR.UN has stellar internal growth prospects. Spread between in-place rents and market rents gives them an advantage. He'd choose this one. New construction will fall off 15% into next year, and empty space will be absorbed.

He focuses on supply and demand, and then goes bottom-up looking for discounts. Fundamentals in industrials in Canada and Europe are far superior today to US multi-family, especially in the Sunbelt. 

It's a new construction supply problem, and demand won't be able to keep up. DRR.UN owns an older portfolio in key Sunbelt markets. Wide discount to NAV. Low liquidity, so no premium.

DIR.UN has stellar internal growth prospects. Spread between in-place rents and market rents gives them an advantage. He'd choose this one. New construction will fall off 15% into next year, and empty space will be absorbed.

Quite challenged on supply/demand. At 17.2% for Q1, downtown Toronto vacancy rate is higher than in suburbs, the biggest change in vacancy in 3 decades. Muted earnings growth, limited organic growth, higher debt load than before. Distribution may not be fully covered. Better opportunities elsewhere.

The original operator in the industry. $50-60B in size. Sophisticated use of technology. Rapid growth and demand during Covid, has now come off quite a bit. Extremely defensive, best balance sheet. Its spinoff in Europe is improving on European fundamentals. Discount to NAV.