Reviewing ALL Canadian REITs

Today I will do something incredible, something that, up until recently, I thought was impossible to do: I am going to review ALL Canadian REITs. That’s right: every single REIT on the list.

REITs are interesting because they have a few uniques characteristics: first, they pay a distribution every month. That’s a monthly check in your accounts, yours to enjoy! Second, they don’t pay a dividend, but a “distribution.” In some cases, it means the distribution isn’t taxed at all until you “sell” the stock. This means that you are in effect receiving a TAX-FREE paycheck! Third, if they respect some conditions (which they always do, obviously), they themselves do not pay taxes at all! Thus, there is real benefit to owning REIT as they are super tax-efficient entities.

Truth be told, I really love REIT. I hold far more REITs that I like to admit - although I am about to admit it as I disclose all my positions in all those REITs. I also include a general recommendation (strong buy, buy, hold, do not buy) as well as a general rating, plus a rating for security. Some bonuses and maluses are added to the score depending on the REIT’s particular circumstances.

Good reading :)


First, let us start with a key question:

“I want to evaluate a REIT, what should I look at?

In order: NOI (per share), occupancy rate, AFFO per unit and then payout ratio and THEN the NAV (far behind). NOI is the best important because this is the absolute basis for evaluating a REIT. NOI is basically rent minus mortgages/fees, with a few things adjusted. Obviously, a negative NOI means the REIT is losing money. Remember that whether or not the building is rented, the REIT must pay the mortgage, fees and taxes.

AFFO per unit is also critically important because this is the amount from which the distribution can be paid. A REIT can overpay, meaning it will distribute more than its adjusted funds from operations, but it means it will have to take the money somewhere, whether it’s a debt or by selling assets.

The payout ratio is basically the distribution/AFFO. Don’t bother studying the FFO ratio; the adjusted includes many more elements that help better define a REIT, such as special income, one-time expenses, etc.

There is no “good” payout ratio. Some REITs are comfortable with a ratio of 95% while some other stress out as soon as the ratio goes above 60%. Overall, it depends on the REIT itself, the quality of the properties (and thus maintenance/repair/upgrade cost) and the specific market they are in. One REIT (TSE:ONR.UN), previously “Retrocom REIT” (TSE:RMM:UN) had a payout ratio at 140%-180% for several years.

Then, look at the NAV after; NAV stands for net actual values of its properties. Technically, if you take the NAV and remove the mortgage and debt, you should obtain the market value of the company, i.e. number of shares times price of a share. If the firm trades below (NAV - debt), then it means the market considers its assets are worth less than their theorical values, and vice versa. If you believe that the market is getting that wrong, for instance if a REIT trades 20% below its Net Value, then you can in effect grab some assets on sale.

The rest is still important, but it’s less relevant. You should also look at the loans to GBV ratio, meaning how much of its assets are in debts (mortgage, convertible, hybrids and all), but it is almost always between 45-55%. Too high and the firm could run in financial problems if there is any bump on the road; too low and the REIT doesn’t have enough properties and will thus underperform.

Now, let us bring the REITs:



Boardwalk REIT - TSE:BEI.UN - Residential

One of the top REITs in Canada along with REF.UN. There isn’t much to say about BEI.UN: it’s a phenomenal REIT, a legendary company. Don’t even bother looking at financial sheet: the management of this company is one of the best in the world.

Expect the 4.23% distribution to grow every year. An apartment REIT that is very well diversified and has an outstanding balance sheet. If you could buy just one REIT in Canada, it should be this one, especially given its current ridiculously-low price. At $40, it was the bargain of the century and at $50, it’s still a strong buy.

VERDICT: STRONG BUY. A core holding. Outstanding long-term hold.


SAFETY: 5/5. This is BEI.UN. Nothing else needs to be said.

DO I OWN IT? Yes, a medium-sized position as I prefer stronger yields. Added during the downturn.

CAP REIT - TSE:CAR.UN - Residential

Extremely solid apartment REIT. Again, there isn’t much to say here: after BEI.UN, it is the best apartment REIT in Canada. It buys apartment and rents them. Extremely well-managed. Less exposed to Alberta. Buy it and enjoy a raise every year. Slightly overpriced right now.


RATING: 4.5/5. A superb company

SAFETY: 4.5/5. Apartments are very safe. They require a lot of work, but they are very safe. Very well diversified. Low payout ratio.

DO I OWN IT? Yes, a small position. Wish I could get more for cheaper.

InterRent REIT - TSE:IIP.UN - Residential

Not a premium REIT (it is too small for that), but certainly trading like one. Just look at the graph of this one.

The low yield alone will keep me out of this one (3.25%). I’d rather get a larger REIT with a proven track record like AP.UN or BEI.UN. Low payout ratio and mostly Ontario/Quebec. I could see someone investing in it for some exposure to very good eastern canadian markets, but this is just not what I’m looking for in a REIT.

VERDICT: A buy could be justified, but there are better options. Sort of overpriced. Nice growth ahead.

RATING: 4/5 (+0.5 for small size and great possible growth ahead, -0.5 for low payout ratio)

SAFETY: 4.5/5 (+0.5 for super low payout ratio)

DO I OWN IT? No, not the kind of REIT that interests me.

Killam Apartment - TSE:KMP.UN - Residential

Slightly below “top tier” REITs like BEI.UN, yet has fared far better than some of those “blue chips” REIT. Previously not a REIT; converted from KMP to KMP.UN. Wish it paid a higher distribution; BEI.UN’s distribution is 1% lower, yet I feel BEI.UN is a far better long-term bet. Payout ratio 88%.

More eastern than BEI.UN, so less risk with lower oil. Still not considered one of the “top” REIT in Canada, but I think it should be. Would be my third or fourth top pick in this sector after BEI.UN, perhaps a millimeter behindof CAR.UN.


RATING: 4.5/5

SAFETY: 4/5 (wish the payout ratio was a tad lower and wish it had more growth)

DO I OWN IT? Yes, a medium-sized position.

Morguard North American Residential - TSE:MRG.UN - Residential

5.17% distribution, 71% payout. Great growth. What else can I say? It’s a great REIT, around 40% canadian (98% occupancy) and 60% usa (94% occupancy). Good quality name. Slightly expensive.




DO I OWN IT? No, I  think others in the sector are more interesting. Wish the distribution was higher. A perfectly fine REIT to hold.

Milestone Apartments REIT - TSE:MST.UN - Residential

US apartments. For some reason, MRG.UN doesn’t have a withholding tax, but this one does. Lower distribution, but excellent growth. Distribution hasn’t been increased, but the payout ratio is a razor-low 49%. The distribution could be pretty much doubled without any problem, but the firm prefers to keep more money to reinvest. Were it not for the damn cursed withholding tax, I would seriously look at this one. Still, an excellent REIT for US apartment exposure. Distribution is paid in USD, which is even better.


RATING: 4/5 (+0.5 for excellent NOI growth)


DO I OWN IT? No, but I wish I did. Feels it is slightly expensive now.

Pure Multi-Family REIT - CVE:RUF.UN - Residential

US withholding tax + Listened on the Venture Exchange + 5.17% = no thanks.

But other than that, it’s a solid REIT that buys condo building/houses and rent them. In the sunbelt. In my opinion, there is an easy 5-10% growth per year minimum to be made, on which you can add perhaps the same amount of growth in acquisitions. That’s 10-20% in growth plus 5% distribution

VERDICT: Weak buy, if you like growth and US houses.

RATING: 4/5 (+0.5 for growth, +0.5 for quality of management)

SAFETY: 3/5 (-0.5 for being listened on the CVE)

DO I OWN IT? No, not really interested.

Northview Apartment REIT - TSE:NVU.UN - Residential

The best apartment REIT after BEI.UN and CAR.UN. GREAT yield. Very safe, very well-managed, this one is interesting just because shorters crashed it so low. It now offers an amazing distribution that can easily be increased for the years to come. Extremely well diversified. Wish management was a bit better; certainly not as well managed as BEI.UN et al.



SAFETY: 4/5 (+0.5 for diversification and low payout)

DO I OWN IT? Yes, a very large position.


Allied Properties - TSE:AP.UN - Office

Office REITs are not popular right now, but this is perhaps the best Office REIT in canada. The yield is meh at  4.47%, but this is the kind of REIT that you beleague to your grandchildren. The payout ratio and the firm is well diversified with A-grade properties, with a stronger presenhce in Montreal and Toronto. Cheap and while not a core holding, it’s an excellent 25+ year hold that will give you 4.5% growing at 3-4% per year plus capital appreciation.

VERDICT: BUY as a legacy REIT. Excellent very long-term hold.

RATING: 3.5/5 (yield too low to justify higher)

SAFETY: 4.5/5 (very safe)

DO I OWN IT? Yes, albeit a small amount. Not buying more.

Brookfield Canada Office Properties - TSE:BOX.UN - Office

Brookfield, in Canada, is synoymous with quality. Calgary and Toronto offices, which means it struggled during the oil downturn. Still, it’s Brookfield, which is an ultra-premium name. These guys know their stuff. The company comes at a premium. 4.23% distribution and around a 85% payout ratio. Not really what I’m looking for, but a buy is justifiable just because of “Brookfield” in their names. Not much growth short-term, but long term you are OK.

VERDICT: DON’T BUY. Not my favorite office REIT.

RATING: 4/5 (+0.5 for the name)

SAFETY: 4.5/5. (+0.5 for the name)

DO I OWN IT? No. I already have enough office REIT

Dream Office REIT - TSE:D.UN - Office

I wrote two articles on this one already. Was very disappointed in the distribution cut, which I feel was unwarranted, but they had to do something with their stock trading at half their fair value. I do not like this one nearly as much as I did when it was at $15. I still have a large position in it, but would not add more. The distribution is very sustainable and this one still trades far below its book value.

VERDICT: Weak buy

RATING: 4/5. Good properties, no one likes the “dream” family anymore apparently. The low payout (now below 70%) combined with the aggressive share repurchase, cancellation of DRIP (distribution reinvesting plan) contribute to a +0.5)

SAFETY: 3.5/5 (+0.5 for diversification, -0.5 for the bullshit short attack)

DO I OWN IT? Yes, much more than I’d like to admit. Lost tens of thousands when it crashed, but I should be break-even once it reaches $26 (I do not count distributions in this)

Dream Global REIT - TSE:DRG.UN - Diversified, mostly office

Europe REIT. Almost entirely in Germany. Great properties. Great yield. Reduced its risk significantly in the last 2 years. Good growth opportunities. Overall, a great REIT, held back by its “Dream” brand (which I feel is unwarranted). A buy.


RATING: 4/5. The diversification in Europe is awesome. The yield is awesome.

SAFETY: 4/5. Much safer that it was two months ago. Less dependant on a few key tenants. Great company.

DO I OWN IT? Yes, a rather large position.

Slate Office REIT - TSE:SOT.UN - Office

An office REIT with a lot to like. Maritimes offices are not something I hear about often, but people there still have to work. With this one, you get a little bit of growth and an amazing 10% distribution. Recently had a new acquisition that is leased long-term. Payout ratio at 96% but I feel the distribution is safe. Don’t like the management fee however.


RATING: 4/5 (+0.5 for the huge distribution!)

SAFETY: 4/5 (+0.5 for the big contract with MTS and getting their payout ratio down. Don’t think distribution will get cut.)

DO I OWN IT? Yes, a large number.


Dream Industrial REIT - TSE:DIR.UN - Industrial

Another member of the “dream” family, which people hate for pretty much no reason. 8.75% distribution, payout ratio 85%. 95% occupancy. Well-managed, but not the highest quality of properties. Mostly small spaces. Still, way oversold, amazing yield. Not much growth for the future, but I feel it’s quite safe as well. Decent Alberta exposure.


RATING: 4/5 (+0.5 for the yield)

SAFETY: 4/5 (safer than most people think)

DO I OWN IT? Yes, a major position. A great industrial REIT.

 Edgefront REIT - CVE:ED.UN - Industrial

I have no idea what this is. The $1.60 stock price, which has barely moved in 2 years (except down), tells you pretty much all you need to buy about this one. Seriously though, I have no idea what this is.

I looked at the results and, quite honestly, they aren’t doing bad. 80% payout ratio and 10% yield. 50.5% debt to GBV. In fact, looking at their financial sheet, I was shocked to see a quite decent company. If it was a bit bigger and on the TSE, I’d look at it more closely. The problem with companies listed on the CVE is that they can fall to $0 tomorrow morning for no reason and there is nothing to do about it.

But honestly, it’s too small.


RATING: 2.5/5 (+0.5 for doing surprisingly good)

SAFETY:  1.5/5 (+0.5 for actually… existing. But with small companies you never know what’s going to happen)

DO I OWN IT? No, not interested.

Pure Industrial REIT - TSE:AAR.UN - Industrial

Perhaps the best Industrial REIT. 6.7% yield and quality properties. Some alberta exposure. 83.2% estimated payout in 2016. A solid industrial REIT and a solid REIT in general


RATING: 4/5 (+0.5 for the yield)

SAFETY: 4/5 (+0.5 for the yield)

DO I OWN IT? Yes, a small position

Summit Industrial Income REIT - TSE:SMU.UN - Industrial

A small industrial REIT. 8.30% yield and 85% payout ratio. Around 1/7 as big as Pure Industrial. I also really like this one. I really like industrial REITs in general because renters do not want to move all their machinery and chains, even at the end of a lease. Also, the increases are predictable and stable. Still, a huge bankruptcy (only way to break a lease) can really hurt them.


RATING: 4/5 (+0.5 for high yield)

SAFETY: 3.5/5 (slightly smaller than AAR.UN)

DO I OWN IT? Yes, a mid-size position

WPT Industrial REIT - TSE:WIR.U - Industrial

Mostly US industrial and you know what this mean: the dreaded withholding tax. 82.5% payout ratio and 7.28% yield. Has a little big more growth since it is mostly warehouse. Feels it’s quite safe, but prefer the two above.


RATING: 4/5 (+0.5 for US exposure)

SAFETY: 3.5/5

DO I OWN IT? No, but I might buy some in a Registered account (which are not subject to withholding tax).


OneREIT - TSE:ONR.UN - Retail

Used to be RMM.UN, a horrible company. Now called ONR.UN, but still a horrible company. However, it crashed so much that even as a horrible company, it’s starting to get interesting.

Distribution was cut from 3.75c a month to 2.5c a month and is now sustainable. Still, it’s medium/low-quality properties. Why invest into that when you can invest into actual good REITs with actual good properties?

At $3, I would grab some just for the yield, but for now, I feel even the 9% yield isn’t all that safe, and definitely not good enough to pay for a company like that.

VERDICT: Do not buy.

RATING: 2/5 (+0.5 for high yield)

SAFETY: 2.5/5 (+0.5) for recent development. Think the distribution won’t be cut.


Plaza Retail REIT - TSE:PLZ.UN - Retail

I hate this REIT because it’s not going anywhere, but it’s actually quite a decent REIT. Distribution has been increased every year for the past 13 years or so. Then again, the yield is kind of “meh” at 5.65%. This is mostly mid-qualities properties, like dollar stores. Still, these guys are great managers and can naviguate through tough situation. Overall, I prefer larger cap REITs.

I consider these guys “survivors” because they can go through almost anything almost totally unfazed. Their stock moves up and down, but the actual business is not affected. They do not panic or let themselves go in any situation. Somehow always manage to increase the distribution. Slow, stable growth that is hard to slow down.

VERDICT: Weak buy

RATING: 4/5 (+0.5 for being survivors!)

SAFETY: 4/5 (+0.5 for being survivors!)

DO I OWN IT?  Yes, a small position.

Slate Retail REIT - TSE:SRT.UN - Retail

Super-low payout ratio. Mostly grocery-anchored properties, meaning there is at least one grocery store on their properties. 7.22% distribution is awesome.

100% US and the distribution is paid in USD, converted to CAD. Great management. Really nothing else to say.

VERDICT: Buy, although in the retail sector, there are possibly better options. The withholding tax is ewww too for us canadians.

RATING: 4/5 (+0.5 for super low payout ratio)


DO I OWN IT? No, but I am looking at it. I don’t think I will invest in it as I already have a lot in REIT retail. Might be better options in that sector too.

Smart REIT - TSE:SRU.UN - Retail

Anciently Calloway, a very good, but not an excellent, REIT. Mostly Wal-Mart (meaning most of their properties contain at least a Wal-Mart), but definitely not a single tenant owner. 81% payout ratio, but “meh” 5.17% yield. Nevertheless, a very well-managed company. If the yield was higher, I’d get more. I consider this one an “elite” cominar, meaning it has better properties, but pays a much lower yield. When you buy this one, you buy growth - the yield is really a plus.

Look at that:

VERDICT: Buy; an excellent retail reit

RATING: 4.5/5 (+0.5 for the crazy growth and excellent management)


DO I OWN IT? Yes, a medium sized position.

True North Commercial REIT - TSE:TNT.UN - Diversified

I really wished I could love this company more. It seems everyone hates this company for some reason. Has the “true north” moniker, which is considered below-average quality in terms of properties, but above in terms of management. The Residential part of True North (tse:TN.UN) just merged with another REIT, which people hated.

As for TNT, it seems nobody likes this company. I have a small position, but really wish I had more. Great yield, great results and OK payout ratio at 88%.


RATING: 4/5 (+0.5 for the yield)

SAFETY: 3.5 (-0.5 for the low cap and low trade volume)

DO I OWN IT? Hell yes!

RioCan REIT - TSE:REI.UN - Retail

Everyone is tripping balls about this REIT, but I can’t understand why. 5.27% yield is OK, but nothing more. Probably the highest quality Retail Reit in Canada and the best-managed one. Was once considered as “blue chip” as BEI.UN and REF.UN. In many ways, it still has its excellent properties. Still, kind of ovepriced. It increased its distribution once in the last 7 years - by 2.3%, nothing less. Is selling its US operations, a decisions I understand perfectly. Payout ratio of 90%. Long-term, you cannot go wrong with this.

Overall, while I do recognize the quality of this stock, I have to admit there are better options, no matter what your goals are.

VERDICT: Weak buy

RATING: 4/5 (+0.5 for the name)

SAFETY: 4.5/5 (+0.5 for size)

DO I OWN IT? Yes, a medium position. Might add at some point.


Agellan Commercial REIT - TSE:ACR.UN - Diversified

This is a solid REIT to hold for the yield. Payout ratio is 76% and it still offers a very generous 8.93% yield. With Agellan, you get a good mix of commercial, industrial and retail, yet they like to “flip” properties (buying and reselling quickly) which makes their results less stable and harder to forecast. If they get a bad year, for instance, the stock price can quickly plummet. Overall, you are taking a gamble on the quality of its managers. Don’t like the external management contract. Still, cheap, below NAV and a pretty safe distribution. Not my favorite, you won’t get much growth, but I won’t lie, the yield is awesome. The yield is relatively safe on a forward basic and I would give it a 90%+ chance of being maintained and even increased every 2-3 years.

The diversification between three sectors, all over Canada, helps drag this one from a low 3 to a decent 3.5. Don’t expect it to break the $10 mark anytime soon.

VERDICT: BUY, for the yield mostly. 9% per year is nice!

RATING: 3.5/5 (+0.5 added to the score for the awesome distribution)

SAFETY: 4/5 (it will take many bad decisions to force them to cut the distribution)

DO I OWN IT? Yes, albeit a small amount. Might buy more.

Artis - TSE:AX.UN - Diversified

I don’t consider Artis to be a core holding in the REIT section of my portfolio, but it is certainly not far from it. An excellent REIT with an excellent yield of 8.54%. Diversified, but half of it is office (25% industrial and 25% retail). It has been active in the US market, which is why the stock is doing relatively OK. An excellent yield to have in any portfolio, but not one of my “top picks” as the distribution has been $0.09 for as long as I can remember. AFFO hasn’t gone up a lot in the last 4 years and I don’t think this one is going to grow much, but the yield is awesome and very safe with a 82% payout.

VERDICT: BUY, for the yield.


SAFETY: 4/5. Great diversification, not enough growth.

DO I OWN IT? Yes, a significant part of my portfolio. Not adding.

BTB REIT - TSE:BTB.UN - Diversified

For some reason, I really like this REIT. They do so many things right and there is so much potential that this is one of my top holdings - probably around my third or fourth biggest position. A Quebec-based REIT that is not big (only $158M!) but has been so good  that I cannot look away. Diversified REIT, but mostly retail/office. Very good at buying new properties, but has slowed down a bit recently. Excellent yield that is very safe, payout ratio in the low 80%.

I think I like this one so much because it is so small and could keep growing so much. Every single financial report is amazing. Their payout ratio goes down very quarter. They seem aggressive about raising the distribution. Excellent at buying properties. Buy it.

VERDICT: STRONG BUY, both for yield and growth.

RATING: 4.5/5 (+0.5 just because I love them so much)

SAFETY: 3.5/5 (-0.5 for the small size)

DO I OWN IT? YES! A core holding and my 3rd or 4th biggest position. Wouldn’t buy more just because I have so much already.

Canadian REIT - TSE:REF.UN - Diversified

This is it: the best REIT in Canada.

There is nothing else to add about this company: it’s the God of REITs. An outstanding long-term hold that should be in every portfolio. Amazing, safe long-term growth. Very, very safe. 4.14% yield. Just look at that:

All you need to know.

VERDICT: BUY. Core holding along with BEI.UN. Slow, safe growth.



DO I OWN IT? Hell yes. Medium-sized position. Not adding.

Cominar REIT - TSE:CUF.UN - Diversified

A legendary REIT in Quebec. Didn’t like their acquisitions. Cominar is a massive REIT on the east coast that should do just fine. A core holding of mine, but not by choice: I kept buying it as it crashed. Today I own a lot of it, but I’m comfortable holding 5+ years.

Not the best managers and I feel they really slowed this company down. I think it has bottomed out however and it should be fine for the next couple of years. Massively oversold. Some crappy properties I feel they bought for too much, but at the same time, their ratios are not so bad. I think the distribution will be maintained. Analysts don’t like this one as it has some average-quality properties; also, they have some properties that have been “for rent” for a good while. Payout ratio of 92%


RATING: 4/5. Slightly risky.

SAFETY: 3.5/5. Made so many mistakes, also payout ratio has crept up.

DO I OWN IT? Yes, a strong position, no longer a core holding for me.

H&R REIT - TSE:HR.UN - Diversified

This is a few millimeters below BEI.UN and REF.UN in terms of quality. Used to be considered a top REIT in Canada, then it started dropping down and today, people see it as a high - but not very high - quality REIT. I still like it a lot and it barely fell 25% from its top, so I am not sure where the “this is a second-tier REIT” idea comes from. Probably from Alberta exposure. Occupancy is at 95.9%, significantly down from 97.7%, but fully explain from Target leaving Canada. Payout ratio at a very respectable 71%. Overall, the days of high growth are gone, but it remains a premium quality REIT that is underappreciated by the market. A massive position of mine, although I would really like to see some distribution growth soon. 6.55% is not that great in a world where CUF.UN offers 10% (albeit at a far higher risk)

VERDICT: STRONG BUY, one of the best REITs in Canada, only inches below REF.UN and BEI.UN. Higher yield.

RATING: 5/5. I couldn’t justify anything else.

SAFETY:4.5/5. Extremely safe, but not as safe as the top REIT, and less growth.

DO I OWN IT? Yes, a core holding. Not adding.

Lanesborough REIT - TSE:LRT.UN - Diversified

$867,000 market cap. Enough said.




DO I OWN IT? Hell no. I wouldn’t even take those shares for free. This should be the definition of “how to destroy a REIT.”

Morguard REIT - TSE:MRT.UN - Diversified

A Morguard name, which is a premium name. Great yield at 6.72%, great payout ratio at 75%. I call this one “diversified” but it’s mostly commercial.

Aside from that, there isn’t much more to say: I really feel Morguard is a “boring” name but boring can be good when it comes to stocks. Overall, it’s a fine name to hold, but I would much rather invest in either a higher yield, safer or higher growth REIT. Feel this one won’t grow as fast as some of the others.




DO I OWN IT? A small position

Inovalis REIT - TSE:INO.UN - Diversified

Europe office, mostly, but also some industrial. 8.5% yield for a 90% payout ratio. They are doing good things and are great managers. They seem committed to the distribution and it is easily sustainable, although I don’t expect a raise in the nearby future. Overall, I feel this firm could do a bit more in communicating with shareholders; also, with a REIT this size (meaning small), you never know for sure what is going on. The distribution is amazing and it’s doing fairly well overall. A great REIT to hold. Really love Europe real estate in general, especially France/Germany which are powerhouses.


RATING: 4/5 (+0.5 for Paris/Germany exposure)


DO I OWN IT? Yes, a rather large position

Melcor REIT - TSE:MR.UN - Diversified

9.2% distribution, but a lot of Office in Edmonton, which are not doing great these days. This explains the higher distribution perhaps. 80% payout ratio, which actually improved in 2015. A good reit with good properties. 93.6% occupancy, which is impressive. Would have to look at a more detailed views of tenants before I invest in it, but there is a lot to like here. The yield is great and could even be increased in a few years. Overall, I need a long analysis of this one before I would consider investing in it, which I might do one day.


RATING: 4/5 (+0.5 for excellent 2015 results)

SAFETY: 3/5 (-0.5 for Western Canada exposure)

DO I OWN IT? No, but I’d love to. Maybe eventually.

Nobel REIT - CVE:NEL.UN - Diversified

It went from $11 to $2. Its distribution went from 8 cents to 0.25 cents. That’s not $0.25, it’s a quarter of a cent. At least shareholders still get a paycheck out of this one, I guess. This shows the problem with investing in terrible companies. I’m not even going to waste my time on this.

If you really want an analysis of this one, just look at this nightmare:

Is there deep value to be found here? Perhaps, but I’m not going to dig for it.

VERDICT: Don’t buy.

RATING: 1/5. I suppose at least it still pays out money.

SAFETY: 0/5. Just look at the graph

DO I OWN IT? Hell no.

DO I OWN IT? Lol no.

Partners REIT - TSE:PAR.UN -Diversified

7.5% yield REIT, but again, a very painful graph:

Payout ratio of 67% is very interesting. Good tenants, but mostly small properties. Has recently recognized a loss in fair value, meaning their properties lost value. Overall, low-quality properties all around and with a graph like that, it would take a lot more than a 7.5% distribution for me to consider investing in it. This is a black box as far as I’m concerned and it would take be hours to determine the quality of this REIT, something I just will not do for a company valued at $108M.

Better options out there.

VERDICT: Do not buy


SAFETY: 1.5/5 (-0.5 for that graph that basically screams “stay away,” we have no idea what we are doing)


Pro REIT - CVE:PRV.UN - Diversified

Another below average REIT. Everything Pro REIT does, another REIT does it better, and sometimes several times better. I fail to see why anyone would ever invest into this when you have so many better, bigger, safer REITs with higher yield and better growth ahead (and less risk).

Mostly retail. Most rents are not due until after 2020. That makes it significantly safer than normal and, quite honestly, than what I expected. 11% yield, but 91% payout ratio.

I would almost consider investing in it was it not for this graph. This is what pain looks like:

VERDICT: Do not buy.

RATING: 2.5/5 (+0.5 for the high yield)

SAFETY:2.5/5  (+0.5 for long term expiration)

DO I OWN IT? No, not interested in REITs that small with that kind of graph. I could understand why someone would take a shot at it, however. This could be a gamble, because if the distribution is maintained, you could earn a steady paycheck for a while. I’d have to take a longer look at it, but honestly I have better things to do.


Chartwell Retirement Residences - TSE:CSH.UN - Healthcare

The best senior houses in Canada. Superb growth opportunities. Great distribution.

There is nothing more to be said about them. Not the best managed senior houses manager, but near the top. Great growth, great growth opportunities and great balance sheet. A must have for long term.


RATING: 4.5/5. A key yield+growth company

SAFETY:  4.5/5. Great senior houses, great diversification.

DO I OWN IT? Yes, a medium position. Not adding more.

NorthWest Healthcare Properties - TSE:NWH.UN Healthcare

Oh I love this company. It holds some health facilities all over the world. It seems too small for what it holds, but it’s a very interesting mid-size REIT to hold for both growth and the great distribution.

With a 100% payout ratio, it is slightly more risky than the average REIT, but it has some interesting projects in the work. Also, some of the properties they hold are really, really safe. Feel the payout ratio will drop down every quarter from now on. Their properties in Brazil are doing great. Overall, the analysts are right on this one: it’s a really tough business to value with lots of parts. Kind of risky, although it is currency-hedged for 3 more years. Payout ratio is kind of high.

VERDICT: Buy, for the yield

RATING: 4/5 (+0.5 for the awesome yield, diversification and the Brazil properties)

SAFETY: 2.5/5 (-0.5 for all the properties all over the world, -0.5 for nearly 100% payout ratio, +0.5 for future projects)

DO I OWN IT? Yes, a decent position.


American Hotel Income Properties - TSE:HOT.UN - Hotels

Everyone loves this stock, yet I can’t get my head around it. Very well managed, but the distribution is taxed at source for me (as a Canadian), so I cannot justify holding it. The 8.65% distribution falls to 7.26% after the cut, which sucks. This one is in the US by the way, which means it’s helped by a low Canadian dollar as revenues are in USD and the distribution is in CAD. Many of their hotels are close to railways I’ve been told, which makes it safer as those are long-term contracts. I would rate the distribution as “very safe.” Kind of high payout ratio (87.5%) but very good growth. Overall, I don’t like hotel REITs and the “withholding at source” annoys me too much to actually hold it.


RATING: 2.5/5 (extra 0.5 for great management, -0.5 for withholding tax)

SAFETY: 4/5 (+0.5 for being close to railroads, where it’s the only form of housing available for workers)

DO I OWN IT? No. Not buying.

InnVest - TSE:INN.UN - Hotels

Like HOT.UN but more risky; yield is about the same after the stupid tax is removed from HOT.UN, yet somehow, I like it even less than HOT.UN. Canadian hotels. Extremely low payout ratio at 40%, but of course this doesn’t tell the whole story: hotels have high fixed costs and equity can be wiped out in a second. Hotels REIT have to be actively managed and are vulnerable to lower occupancy rates. I really feel hotels are going to get hit by the Airbnb wave, but this one is high quality hotels (Hyatt, Marriott, etc). It has around 14,500 rooms for rent. Good diversification

Still, I admit I was pleasantly surprised when I read their financial statements (I had never heard of this REIT before starting this article). Management does a great job and they have some great name hotels. I think it’s far safer than I believe it could be and, honestly, I’m interested. However, given the field, I don’t think I would invest in it. Lots of risk and I know nothing about how hotels are managed.

VERDICT: Hold. I could justify a call here, I just feel there are better opportunities elsewhere. I would have to look at all of its financial statements in great depth before I actually considered investing in it, which I won’t do because hotels managers are not something I want to invest in anyway. If this is your thing, go ahead though.

RATING: 3.5/5 Honestly, far better than I expected when I first saw “hotel REIT” as the category

SAFETY: 3.5/5 (+0.5 for low payout ratio). So many things can go wrong

DO I OWN IT? No, don’t like hotel REITs (see: HOT.UN)


Canadian Tire REIT - TSE:CRT.UN - Retail

What can I say about this one? It owns the lands and buildings for Canadian Tire stores. Canadian Tire is a great company, but I don’t like retailers. But Canadian Tire is possibly one of the top chains in Canada. Definitely a good place to park money for safe growth. Kind of underpriced and distribution should grow at moderate 3-4% per year.

A great buy, but don’t expect more than 10% per year in total. Very, very safe. 4.67% distribution.

VERDICT: Weak buy. Safe place to park money.

RATING: 4/5. A little low on the distribution side for what it is and its below-average growth prospect.

SAFETY: 5/5. This is Canadian Tire.

DO I OWN IT? No, I could buy under some circumstances. Would immediately buy at $12.

Choice Properties REIT - TSE:CHP.UN - Retail

Similar to CRT.UN, except with Loblaws instead of Canadian Tire. Canadian Tire > Loblaws in my opinion, but this one has a more generous yield at 5.47%.

VERDICT: Weak buy.

RATING: 4/5 (+0.5 for higher yield than CRT.UN)

SAFETY:  4/5 (distribution is 99% safe I think, but won’t grow as much)

DO I OWN IT? No, but I am considering opening a small position in it.

Crombie REIT - TSE:CRR.UN - Diversified

47% owned by Sobeys, which is a great, but not an excellent, company. Going to be hard to lose money on this one. 6.51% is okay.

VERDICT: Weak buy

RATING: 3.5. (+0.5 for yield, but truly, there are better choices out there.)

SAFETY: 4.5 (+0.5 because of the Sobeys (EMP.A) backup)

DO I OWN IT? Yes, a small position.

Granite REIT - TSE:GRT.UN - Diversified

Like CRT.UN and CHP.UN, this is another spinoff, this time of TSE:MG. Magna is a fine company. This is a fine REIT to park money in. Less growth than CRT.UN, but a higher yield. If I had to place it somewhere, I’d place it below CRT.UN, but above CHP.UN




DO I OWN IT? Yes, I opened a small position recently.


Automotive Properties - TSE:APR.UN - Diversified

Honestly, I hadn’t heard of this one before writing this article. The newcomer in the “Canadian REIT” market. A recent IPO, it opened at $10 and currently sits at $9 after hitting a $8 low.

This… This is a very interesting REIT. Very different from the rest.

It holds the land and buildings of auto retailers. You know, the place  you go to when you want to buy a new car. Right now, it pays a 9% distribution. Perhaps more strangely, the distribution is very very safe because its leases are called triple net lease, meaning the renter pays the repairs, maintenance and taxes on the building. In other words, this REIT literally has nothing to do - it can just sit there and collect rent.

Even funnier, the rents will go up by 1.5% per year automatically. And the REITs don’t expire for the next 11 years. Rent agreements are one of the safest products you can have as only bankruptcy will allow a renter to stop paying it; therefore, I simply fail to see how the distribution could be cut, barring a major crash in Canada. Auto retailers are always going to pay their rent unless they go bankrupt, period, and I can think of very few auto retailers that actually do go bankrupt.

One quick note however: the REIT offers very specialized buildings. You cannot “transform” one of their building into something else because it’s very specific to the market. In other words, when the lease ends, it kind of has to rent to an automobile retailer and this could be a problem if several retailers choose not to renew their lease in 11+ years. This also limits the rent increases they can put at the end of the lease. I don’t see that happen as auto retailers, once established, are very happy to stay where they are (with a given, stable market).

With that in mind, this company offers little growth. From time to time, it will buy another retailer. You can expect a 1.5% (rent increase) + 1.5% (new purchase)=3% distribution increase per year on average.

VERDICT: BUY, for the yield, again.

RATING: 3.5/5 (-0.5 since it’s an IPO)

SAFETY: 3.5/5 (-0.5 since it’s an IPO)

DO I OWN IT? No but I am absolutely opening a small position into it. 9% that is very safe AND very different from all other REITs? A chance to buy at below IPO prices? Yes!

Fronsac REIT - CVE:GAZ.UN - Diversified (gas stations and fast-foods!)

Even smaller than ED.UN. I’d pick ED.UN before GAZ.UN. This one owns a few gas stations on some highways. It’s not bad, in fact, it’s far better than what I would have expected, but it’s still way too small. I couldn’t justify it even as a “gamble.” With a company this size, you have no idea what can happen; you basically stand a 50%+ chance to lose 100% of your money, even if the firm does well. Since it is so small, investing in GAZ.UN is purely a gamble on the managers’ skills and this is not a bet I am ready to make - not when you have many great REITs at discount prices that are FAR safer.

Also, this is just a company that holds a couple of truck stops. I mean, come on.


RATING: 2/5 (+0.5 for good results and actually being worth something, which is rare for 90%+ of small cap)

SAFETY: 1.5/5 (surprisingly good financial sheet)

DO I OWN IT? No, not interested.

4 Responses to Reviewing ALL Canadian REITs

  1. Riz March 15, 2016 at 8:27 pm #

    Excellent job FS. I am a huge fan of REIT’s and as a canadian we have quite a few good selection of them as you mentioned. Currently holding some of the top picks you mentioned.

  2. Anonymous March 19, 2016 at 11:28 am #

    Awesome article. I’ve just started studying REITs and this really helps. Thanks.

  3. zerotrucksgiven March 20, 2016 at 8:27 pm #


  4. DoubleOhDiv March 21, 2016 at 9:27 am #

    Always like reading your articles FS but you really outdid yourself here.
    I think this is something I’m gonna have to keep referring back to from time to time.

    Great article, and thanks for all the work!

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