H&R Real Estate Investment Trust T.HR.UN

Trying to Become another Brookfield is not the Right Answer

[DeanEdmonton]

A REITs job is to own quality properties that it rents out and then distributes the cashflow to shareholders. They are our proxy so we don't need to own and manage property ourselves. I don't own Brookfield because it is so heavily financially engineered that no one can understand the real structure. I hold H&R specifically becasue it is a diversified REIT, relatively simple in structure, with quality properties in a wide range of class A markets. If they futz around and mess that up I will need to go looking for a diversified play to replace them. The whole point of being diversified is some proeprty classes will be hot and others cold at different times. Selling off all the hot category markets is not helping and I can tolerate the hit to SP vs NAV for that diversification. Just keep the dividend stream coming and growing.

[RetiredCEO]

This post has been removed in accordance with Community Policy

[materialsgirl]

Very well explained. Several years ago several investors thought that  a diversified REIT was the way to go for reasons  explained by DeanEdmonton. While the reasoning is based on business reality the problem is that investors like simplicity and  purity. While HR REIT cover 4 broad segment descriptions the asset base is much more scattered. The Apartment collection is quite pure

[compsys68]

Jaxk likes it simple in Texas too.... ;

[DeanEdmonton]

That is very well explained, and that is in fact how I understand one version of a potential spinout could work. There are however a significant number of other permutations and combinations. If it works like you have laid it out, that would be a fairly benign outcome, and yes the aggregated share prices would be higher right now, but if all of a sudden say Industrials tanks for some reason then

[materialsgirl]

Dean As you understand well, history usually repeats itself. Industrial properties belong in a cyclical segment. It is inevitable that boom days for Industrial properties will end one day, Noneteless, the chance of the current momentum  stalling in 2021 or 2022 is less than 1% in my opinion. Just slightly above zero per cent. All properties are effectively fully leased in Canada except in

[BlueJay2020]

The interesting thing about this stock. though, is that it performed as badly as the office/retail pure plays when COVID struck.   If you don't want a pure play but be diversified in Real Estate, why not just buy an ETF?   

[DeanEdmonton]

For the same reason I don't buy a Bank ETF. You end up with the best and worst performers. RBC and TD, over the last 25 years, have dramatically outperformed the other banks. I want to own those two, and have.  Ido not want to own CIBC, BNS etc. If you had bought $10,000 worth of RBC in 1995, it would be worth $640,000 today if you had reinvested the dividends. You would also be

[BlueJay2020]

I do take your point, although I am not sure it would be quite as easy to pick REIT winners all the way back to the 1990s (and even with the banks, we have the benefit of hindsight - there are plenty examples of companies that were best of breed that eventually lost their way).

[born2trade]

It is lot easier to connect dots looking backwards .  In 1900 , there were 2000 carmakers in the world  and a century later we just have handfuls (Warren Buffer in 2001) .   likewise post 2000 , there were thousands of internet companies and few years later most went belly up. 

[DeanEdmonton]

Obvious but not the whole story, see below. That is what everyone likes to tell me EXCEPT I started buying RBC and TD shares in 1985. I have only ever traded CIBC on short term, up to 24 month holds, no long term holds, and I have never owned BMO, Laurentian etc in 35 years. That wasn't hindsight. As far as the comment re Tech stocks etc. I have said many times before, long term buy and hold