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any love for REITs?

nottyboi

Well-known member
May 14, 2008
22,447
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They have corrected significantly. Yes I know rates are gonna rise, but by how much and for how long. Any opinions if this is a good time to get in. I am more concerned about divy then capital gains.
 

oil&gas

Well-known member
Apr 16, 2002
12,220
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Ghawar
My outlook is that real rate--interest rate adjusted for inflation--is going
to stay low in the coming years. There is little merit in parking your
money in a money market fund and government T-bill fund other
than for the purpose of capital preservation. The one risk you have to
watch out is a spike in U.S. treasury yield as a result of tapering. If you
believe any tapering if it transpires will be short-lived then REITs in general
are good buys for stable source of income.

Here is a list of my favourite Canadian REITs and non-REIT
real estate stocks and their yields.


Crombie REIT CRR.UN 6.8%

Northern Property REIT NPR.UN 5.6%

Chartwell Retirement REIT CSH.UN 5.4%

Northwest Healthcare Prop REIT NWH.UN 7.8%

Temple Hotel TPH 8.1%

Killam Properties KMP 5.4%

Boardwalk REIT BEI.UN 3.3%

Partners REIT PAR.UN 8.3%
 

babyfinsta

Well-known member
Jul 2, 2005
2,372
31
48
On top of yo mama!
Calloway REIT at 6.1% yield. all new properties so no foreseeable major cap expenditures. Majority of rents come from AAA tenants including a big chunk from Walmart.
 

nottyboi

Well-known member
May 14, 2008
22,447
1,325
113
D.un 8% no good? They seem to have premium properties. If rates go up it means the economy is doing well and they should see rents rise, if rates stay low that will mean the economy is weak and their borrowing costs will stay low to offset some vacancies..
 

oil&gas

Well-known member
Apr 16, 2002
12,220
1,618
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Ghawar
IMO the prices of shares of REITs in general already factored
in a rise of interest rate. So if Fed holds off tapering for another
quarter we may see a major rallying of REITs and other income
stocks.
 

oil&gas

Well-known member
Apr 16, 2002
12,220
1,618
113
Ghawar
REIT bonds offer alternative real estate exposure

Rob Carrick, G&M
Dec 31, 2013

The big decline in REIT prices in 2013 has alerted investors to the risks of holding these popular income-focused stocks.

But there’s another way to invest in real estate investment trusts with somewhat less risk – through their bonds. The Canadian corporate bond market is far from stellar in the variety of offerings for investors seeking yields well above government bonds. But there’s still a decent selection of REIT bonds available through online brokerage firms, and the yields are attractive.

A search of one broker’s online bond database found bonds from such REITs as Cominar, Calloway, H&R, RioCan, Dundee, Choice Properties, Granite and Morguard. All are investment grade, with credit ratings of BBB (high), BBB or BBB (low). An example of a BBB (high) rated bond is the RioCan 2.87 per cent bond maturing March 5, 2018. The yield in mid-December was 3.15 per cent, which compared with 1.8 per cent for a five-year Canada bond.

With the incrementally higher risk of the BBB-rated 4.9 per cent H&R bond maturing Feb. 2, 2018, you get a yield of 3.34 per cent. Rated BBB (low), the 3.42 per cent Dundee bond maturing June 13, 2018, offers a yield of 3.54 per cent.

If the economy holds steady, the risk of outright default on REIT bonds like these is minimal. But there’s certainly a risk of price declines if interest rates keep rising. Rising rates happen to be the big reason why REIT stocks fell sharply in 2013; REIT bonds are vulnerable, too, but not as dramatically.

Frankly, price declines on individual bonds that will be held to maturity of no real consequence. In fact, the very conditions that send interest rates higher are actually good for REITs. More vigorous economic growth means lower vacancy rates and more leverage for landlords to raise rents.

Don’t overexpose yourself to REITs, though. If you have a significant position in REIT stocks, go easy on REIT bonds. And never hold the bonds of a REIT whose shares you own. You don’t want the fixed income and equity sides of your portfolio to both go down because of problems with a single company.
 

oil&gas

Well-known member
Apr 16, 2002
12,220
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113
Ghawar
Canaccord predicts double-digit returns from Canadian REITs in 2014

Darcy Keith, G&M
Jan. 08 2014

Real estate investment trusts were a major disappointment last year for investors, as a spike in long-term interest rates brought an end to several years of impressive returns. The S&P/TSX Capped REIT index fell 5.5 per cent.

But Canaccord Genuity believes the poor performance won’t be repeated in 2014 and is advising clients not to abandon the high income-producing sector.

It expects most REITs to post double-digit total returns this year, pointing to four factors in particular for its bullish view:

1. Valuations for real estate investment trusts and real estate operating companies (REOCs) are more attractive than they were earlier in 2013, before their steep sell-off;

2. Units appear to have already priced in further interest rate increases;

3. Yields are extremely attractive and generally well funded through cash flows; and

4. Property market fundamentals remain healthy.

A major risk is that Canadian long-term interest rates could rise significantly, without corresponding economic growth in Canada. So the Canaccord analysts, led by Mark Rothschild, believe investors should look for REITs and REOCs with stable and predictable cash flow.

“In particular, there are certain REITs/REOCs that are well positioned to drive cash flow growth organically through increases in same-property net operating income, completing development projects, and refinancing debt at lower rates,” they said in a
research note.

Among those firms with a market capitalization of over $1-billion, Canaccord recommends CAP REIT (with a $23.40 Canadian price target) and Canadian Real Estate Investment Trust (with a $45.65 price target). Among the smaller caps, it likes Amica Mature Lifestyles (price target $10), InterRent REIT ($6 price target) and Pure Industrial Real Estate Trust ($5.25 price target).
 

Phil C. McNasty

Go Jays Go
Dec 27, 2010
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PinotNoir

Fast Cars and Hot Women
Mar 6, 2015
188
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The World
I would say residential, yes. But commercial (shopping plazas, malls.....etc) NO!!!!
Thats just my silly opinion though, I could be wrong.

https://www.cnbc.com/2018/01/04/sears-is-closing-more-than-100-more-stores.html

Reason why I dont like commercial REIT's is because of emergence of Amazon, froogle, Ebay.....etc...etc.
Why bother going to a mall when you can go Amazon or Ebay???
I am not worried about this as many shopping malls are making plans to build condos on site. There are also a number of business income trusts worth considering such as Brookfield, The Keg, Boston Pizza and Pizza Pizza
 

Carvher

Well-known member
Apr 13, 2010
889
600
93
I love reits. I trade them. They move within a much larger range than they should. Worse case scenario is your caught holding one longer than planned and collecting a fat monthly dividend with the drip. I don't toch retail but and residential will be difficult this year but I expect industrial will still be ok to trade. Haven't done much this year yet as im trying to figure out what the new ranges will be.
 

danmand

Well-known member
Nov 28, 2003
46,353
4,776
113
I have some REITs, but I prefer their debentures.

I am also worried about sopping malls being decimated by Amazon etc. I know I buy more and more stuff online.
 

onceaday101

New member
Feb 6, 2018
21
0
0
Pick 1 per Sector: NVU.UN CAR.UN BEI.UN / DIR.UN SMU.UN AAR.UN / CSH.UN EXE.CA

Edit: I notice Oil & Gas picked many excellent names back in 2013. Had those been purchased on a DRIP they would have been an excellent foundation for any portfolio + a high yield DIV INDEX ETF.
 

danmand

Well-known member
Nov 28, 2003
46,353
4,776
113
Pick 1 per Sector: NVU.UN CAR.UN BEI.UN / DIR.UN SMU.UN AAR.UN / CSH.UN EXE.CA

Edit: I notice Oil & Gas picked many excellent names back in 2013. Had those been purchased on a DRIP they would have been an excellent foundation for any portfolio + a high yield DIV INDEX ETF.
I prefer NWH.UN and CSH.UN over EXE.
 

danmand

Well-known member
Nov 28, 2003
46,353
4,776
113
I hold all three + SIA in that space. NVU.UN and AAR.UN have been particularly strong. Rate environment bullish REITS. G/L
I avoid EXE, because I once owned a company that was cheated by the family controlling EXE.
 
Ashley Madison
Toronto Escorts