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Clear that people are using their office space differently. Also clear that the office is necessary. His firm is in the office 5 days a week. Some companies have mandated a return, others have been slower. As well, there's been new supply.
So demand is challenged, yet tenants have more choice than ever. That's the biggest question mark. Some markets favour landlords (such as Manhattan), but Toronto is not one of them.
One of his largest holdings. One of the highest-quality grocery-anchored shopping-centre portfolios globally. Trades at upwards of 25% discount to private market value. Management seeking to increase value by selling non-core properties and reducing debt. Yield is 4.8%.
(Analysts’ price target is $20.30)Tremendous job filling units since pandemic, occupancy back to near 90%. Leading edge of baby boomer population starting to access this type of product. Discount to NAV. Making great accretive acquisitions, so he expects NAV growth. Great product, high-margin business. Yield is 3.9%.
(Analysts’ price target is $16.96)Primarily office buildings across New York City, as well as retail and a bit of multi-family. Revenue: office (60%), retail/multi-family (10-20%), and Empire State Building Observatory (~25% net operating income). The iconic Observatory recently voted #1 attraction in the world.
Likes the Manhattan office market, seeing increasing leasing volume. It's a market of haves (lots of capital) and have nots (not well capitalized). ESRT is well capitalized. Attracting tenants with value. 28% discount to NAV. Listed as the #1 globally sustainable REIT. Yield is 1.3%.
Office environment continues to be challenging. B-team assets. Lots of work needs to be done on leasing. To invest, you have to be positive on the Toronto office environment, these assets, use of capital, and these operators. He's not there yet for Toronto.