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COMMENT
WeWork is the largest user of Manhattan office space. If that IPO is unsuccessful it could have a major impact on the real estate market there. Who would back-fill the commitments to the space. It is not so much of an impact in Canada however. The multiples applied to WeWork are high.
Unknown
COMMENT
WeWork is the largest user of Manhattan office space. If that IPO is unsuccessful it could have a major impact on the real estate market there. Who would back-fill the commitments to the space. It is not so much of an impact in Canada however. The multiples applied to WeWork are high.
Technology
COMMENT
Embassy Office REIT is India's first REIT IPO, backed by BlackStone. His company was asked to help anchor this high quality holding of assets and it is up 40% since the IPO in March. It trades on the Mumbai exchange -- difficult for Canadian investors to access.
Unknown
COMMENT
A new GTA REIT Continuum REIT is his single largest holding in their Real Estate fund -- a private fund that just launched its prospectus last week. It holds apartments in the GTA area of Ontario. They are exploring an IPO -- a pure play exposure in this very hot market. Rent controls in the market actually caused other rents to spike as people held onto their apartments. This REIT will take advantage of the opportunity to raise rents on the units available. This shows rent controls are not the answer to keeping rent affordable. You need to increase the supply.
Unknown
BUY
The Starlight buy allowed TCN-T to expand apartment rentals in the US to be added to their single-family for rental portfolio of holdings. They were able to issue stock to the Starlight holders at very high values to bring them in -- a very smart strategy. This created a large overhang of shares that could hurt share prices. Recently TCN-T removed the overhang to allow them now to sell those shares unrestricted. Investors on the sidelines appear to have sopped up the surplus. The only reason it was not a Top Pick, is that he was blind sided by the share announcement. His discussions with the management team about the US acquisition is solid, he thinks. He likes the valuation of the company, he thinks it could be worth $13 per share.
REAL ESTATE
HOLD
A small Canadian REIT focusing on US middle market apartments. He likes these specific markets because they less risk around the affordability and the ability to raise rents without regulatory issues. They are trading at a discount to NAV, which confused him why they issued at a discount. Yield 4.4%
REAL ESTATE
HOLD
REITs in general have done well and are now fairly valued -- there are no desk pounding deals out there. You want to own them as they prove they hold their value in the late stages of the bull cycle. As we get more into uncertainty in growth, political turmoil and trade wars the income they generate is good. Don't expect a ton of growth, however, due to the required capex. Yield 5.4%
property mngmnt / investment