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In a rising rate environment, real estate will get hit hard. This one will get hit less because of their defensive asset class and they have premier tenants. Great management. He likes their properties. They are conservative, good operators and they will outperform the class. He doesn’t expect much even then, next year.

You are good to own US real estate. His only complaint is that several board members are on the boards of other, similar companies. See his Top Picks tonight.

TFSA. Keep your preferred shares outside of the TFSA because of preferred tax treatment of the income and put REITs in the TFSA.

Management is solid. It is a western story. It is about 20% in the US. They had a hiccup related to a lease termination there. Their occupancy rate went down from 96 to 94% and it affected their AFFO. It is just a matter of timing and they will lease it back up. The payout is not too heavy. Thinks it will continue to grind higher, but it is late stages.

(Top Pick Feb 11/14, Down 2.76%) Their earnings came out light so it didn’t pop. This is the best company in a bad industry. Thinks we see earnings released in the next week. You are finally going to see the integration with The Brick and you will see the cost savings start. They also have a bunch of real estate that some day they might sell off. He still likes.

(Top Pick Feb 11/14, Down 1.17%) It trades cheap now relative to its NAV. They lend out short term loans to builders. They keep getting repayment quicker than they expect and they have to take that money and keep trying to find better mortgages.

(Top Pick Feb 11/14, Up 9.93%) Very little vacancy. Apartment buildings out west where there is net migration there, there are no rent controls and there are low vacancies. A lot of assets in Edmonton. Trades at a significant discount to its NAV.

They have to go to the federal reserve to ask if they can bump the dividend. They have to worry about capital ratios. They have to go through stress tests. They are selling assets and becoming a smaller, more profitable bank. They are primed for dividend increases now.

One of his biggest positions, held since day 1, about 11 years. Their US expansion should start trickling down money soon. Their capital ratios are high and it only trades at 10 times forward earnings. Expects 8-12% rate of return.

2018 & 2020 Bonds. They missed earnings and cut jobs. He has held the bonds for a long time. He exited about a year ago because they sold off their Saskatchewan coal assets. You would have always had the ability to grab the Saskatchewan assets if things went wrong so he sold the bonds since they sold the Canadian assets. He exited the stock as well.

He thinks there is an overreaction of the market selling this down. Thinks they will continue to be gushing cash flow. 4 times cash flow and sometimes it has been as high as 6 in the past. Their retail margins are holding up.

The largest cap REIT out there. Has done a good job of extracting value out of their properties. The problem is in these late stages of this real estate cycle, if the economy ever deteriorated then they would get hit hard. They are almost paying out more than they earn. He owns the bonds, not the stock.

They made a large acquisition in Ontario. It was accretive. The share price has not participated in the lift, however. The problem is their difficulties out East. He would prefer to invest in apartments out West, not out East. It is fine, but it is not one of his favourites.