I do agree with a lot of what you have said except for the warehouse space. I believe that will continue to expand and grow as society continues to move/prefer online shopping. The thing about office space is that downtown central locations will always be coveted.shplad wrote: ↑ This probably won't be helpful, but...I can't see the value in office/industrial REITs in the near and medium term. The trend is going to be more and more towards work from home, with exceptions/limitations, of course.
Business is going to slow greatly, if you read the tea leaves of the economy. Companies will be under pressure to both cut costs and go more green. One of the easier solutions to achieve both goals will be to rent less office/warehouse space.
Rising interest rates means when the REITs refi their mortgages, they may be paying a lot more interest on those properties.
Finally, REITs haven't had that much capital gains in the last few years, you mostly just get the monthly distribution. And for a 5 or 6 % yield, you can invest in other things with a lower risk profile. So, I just don't see it. What do others think?
Of course, I'm probably wrong, but that's my 2c worth.
It could already be priced in considering most people have the same opinion.shplad wrote: ↑ This probably won't be helpful, but...I can't see the value in office/industrial REITs in the near and medium term. The trend is going to be more and more towards work from home, with exceptions/limitations, of course.
Business is going to slow greatly, if you read the tea leaves of the economy. Companies will be under pressure to both cut costs and go more green. One of the easier solutions to achieve both goals will be to rent less office/warehouse space.
Rising interest rates means when the REITs refi their mortgages, they may be paying a lot more interest on those properties.
Finally, REITs haven't had that much capital gains in the last few years, you mostly just get the monthly distribution. And for a 5 or 6 % yield, you can invest in other things with a lower risk profile. So, I just don't see it. What do others think?
Of course, I'm probably wrong, but that's my 2c worth.
Dream REIT is a decent option and I have my eye on it. I'm looking at NWH.UN and will probably buy when the dividend hits 8%. CAR.UN is also another one on my radar.
The trend for retail space still on the upswing. Canada seem to be a really old school place and going to shops is still the preferred way to buy stuff. Not so for the US.BananaHunter wrote: ↑ I think it depends on the REIT.
Take Smart Reit for example, they are commercial but their biggest client is Walmart. That sounds pretty safe to me. Rio is a mix bag of commercial and shopping spaces.
There is indeed a trend towards work from home but most employers maintain a hybrid policy (like 3 days in office, 2 days from home. These arrangements still requires the business to pay the full rent. Yes there are some companies going pure WFH but that's not the norm yet. Trends take time to happen. If you buy now, it's not like the next month everybody tries to cancel their lease.
Some REITs are not even focused on commercial office space. Some are into rental properties or warehousing spaces. I think every REIT is a little different and deserves its own discussion.
Personally I would probably buy REITs over utilities at the moment.
it depends how fast/easy they can transition their office space into commercial (or even residential)..so for like AP.UN...i'm not optimistic at least in short/med term though they are more into residential sector now.shplad wrote: ↑ This probably won't be helpful, but...I can't see the value in office/industrial REITs in the near and medium term. The trend is going to be more and more towards work from home, with exceptions/limitations, of course.
Business is going to slow greatly, if you read the tea leaves of the economy. Companies will be under pressure to both cut costs and go more green. One of the easier solutions to achieve both goals will be to rent less office/warehouse space.
Rising interest rates means when the REITs refi their mortgages, they may be paying a lot more interest on those properties.
Finally, REITs haven't had that much capital gains in the last few years, you mostly just get the monthly distribution. And for a 5 or 6 % yield, you can invest in other things with a lower risk profile. So, I just don't see it. What do others think?
Of course, I'm probably wrong, but that's my 2c worth.
Allied Properties recently increased their dividend (shout out to @numismatic for the post) but at the same time I'm reading they are looking to sell assets to reduce debt load. Those two things don't necessarily go hand in hand.EasyCompany251 wrote: ↑ Started small positions in AP-UN.TO and SRU.TO earlier this year. Not really concerned for either.
AP-UN owns real estate in highly coveted downtown cores. Personally, I think the WFH narrative doesn't hold true. As we move away from the pandemic, I would expect to see more and more companies encouraging more work from the office.
2022-canadian-dividend-increases-2516834/16/#p36947312Allied Properties Real Estate Investment Trust (TSX: AP.UN) increases monthly distribution by 2.9% (from $0.1458 to $0.15) for 2023
I bought Dream Office over the past couple months, very close to the bottom. Dream's CEO Michael Cooper was buying in the $30s, Artis REIT is still buying in (10%+ holder) and Dream Office is still buying back shares although they seemed to have paused. It is one I've been adding to in small amounts. A medium size position. They have prestine office space in Toronto. I love the office space is dead narrative, it reminds me alot about the oil narrative, look at oil stocks now!
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