Predominantly office REIT. Got hit over the last 6 months or so because they have done a fair bit of acquisition, raised equity to do so and in combination with that there are some fears about supply in the office markets, most notably in Calgary and Toronto. This drove the units down in comparison with some of their peers. Have actually improved their asset quality over the last 2-3 years, have lowered leverage and their payout ratio is very sustainable. Trading at about a 10%-12% discount to NAV. 7.8% yield.

An apartment REIT with majority of assets in south-western Ontario and Ottawa. Has a firm belief that management is going to drive value over time, both through acquisitions and redevelopment and repositioning of assets they have in their portfolio. Recent quarter was somewhat of a disappointment relative to the consensus numbers because of the repositioning of one of their key assets they purchased in Ottawa. With low leverage and a low payout ratio and a management team that is well aligned in the incremental growth you are going to get from redevelopment from some of the assets, he sees this as a core holding. Dividend yield of 3.6% and there is room for distribution increases from free cash flow growth.

Owner of very high-end retirement homes across Canada. Trading around the 10%-12% discount to what the assets are worth. Fall of this stock price has befuddled many in the investment community. The only thing he can think of is that they have come out with some increased disclosure looking through to some of the assets where they own partial equity ownership and the leverage looked a little bit higher than most people anticipated. Also, they have a large proportion of their assets in lease-up, whereby they are not fully stabilized so some investors might be a little bit concerned as to whether those assets are going to be stabilized sooner rather than later. He has confidence in this company.

Owner of diversified assets such as office, industrial and retail. Probably trading close to a 10% discount to its NAV. A unique story now because they have internalized asset management which was previously an issue. Also, announced a large buyback of shares because they believe their units are undervalued. He would look at how they are able to create value going forward. This is going to provide you with a stable yield and 2%-3% of free cash flow growth. To drive any outperformance versus the REIT sector, it is going to need to undertake either further acquisitions or joint ventures. Doesn’t think their capital price right now is going to allow them to raise equity. Have been talking about joint ventures to raise equity.

One of the smaller retail REITs in Canada. Have done a very good job over the last 2-3 years of using their cost of capital to improve the quality of their assets as well as trying to improve their balance sheet and payout ratios. Payout ratio is still above 100% and will remain above 100% this year on adjusted funds from operations. Doesn’t believe there will be a cut in distributions, but he would like to see more sustainability in their payout ratio before getting involved.

Orange Capital purchased over 10% and attempted to implement some changes with regards to internalizing asset management down the road, as well as finding a new CEO and changing the terms of the property management agreement. These are all positive things. With ownership of hotels, this has historically been more volatile when it comes to cash flow compared to other REITs. Had to cut the distribution a couple of times. Believes the current distribution is sustainable as long as the fundamentals in the lodging sector hold up. Before purchasing, he would like to see execution in many of the things that have come out with respect to the strategic plan. Thinks the yield is sustainable.

(A Top Pick April 4/13. Up 0.65%.) Owns, operates and develops apartment communities in the US. Apartment assets have done well from a free cash flow perspective, but unfortunately, they face the headwinds of increased supply as well as the fear from many investors that people that are renting are going to start moving into single-family homes. From his perspective, this is one of the highest quality apartment owners in the US. Have a large development pipeline which is going to differentiate themselves from their peers and will allow them to deliver above average free cash flow growth going forward.