First Capital Realty (FCR.TO)

(Market Call Minute) Highest quality resale properties.

Great set of assets and well managed. Recommendation in the oil services sector but right now you don’t need to be here.

A corporation, but essentially runs the same as a REIT. A very good quality company. Dividend payout is slightly lower. They manage their business for the long-term, so when they are making investment decisions, they are looking out over a 10-15 year period. She really likes the urban focus and the urbanization trend and this one is well-positioned as any of the REITs to capitalize on this. Great quality real estate and great real development opportunities and intensification opportunities, which she thinks is important. Dividend is absolutely sustainable.

Got rid of most of his holdings. He is trying to focus more on the multi residential and seniors sector. Doesn’t like retail longer-term because he sees e-commerce taking significant share away from retailers in the US. This one will be protected because it owns some of the highest quality real estate in his portfolio.

(A Top Pick Sept 24/13. Down 1%.) This is a defensive play. Still likes it a lot at this price. Trades at a premium to its peers because it is the most defensive and has the best balance sheet and has access to different sources of capital. Have great properties that are in desirable locations.

A defensive name. High-quality and urban concentrated. Has the kind of stores that people want in any sort of economy. Decent growth. Likes it, but it is trading at 18X which, in this environment of higher bond yields, he wants REITs with above-average growth and below average payout ratios. It’s fine but he wouldn’t Buy at these levels.

A fantastic company. Specializing in urban development. They are able to go into areas, take a broken piece of real estate and maximize its true potential and develop the neighbourhood as they do it. Great balance sheet and redevelopment potential in its core urban portfolio. This has pulled back 7% so you are getting it at a discount to NAV of about 5%. Dividend yield of 4.91%.

5% sustainable dividend. Shopping centers, drug stores, banks. Discount to NAV. Hard to sell now because they are all down. Could be a little more downside. Ride it out. REITs outperform in the US 2/3rds of the time. Interest rates were previously at a depressed cost of capital and now they have normalized.

In the short term, you are in for volatility but over the medium term he expects it will get to $20-$21 based on the value creation they have in the portfolio. Have an active disposal program where they raise hundreds of millions of dollars. Have an active redevelopment program where they are going to add tremendous value. Relentlessly improved the quality of their balance sheet through terming out their debt, injecting more unsecured debentures to the point where 43% of their assets are unencumbered.

Just reported and he was really pleased with their earnings. An example of what a good core management team should do. During the good times, you prepare for the bad times. They have the best real estate corners and locations. Have a lot of portfolios that have no leverage on them at all. Have a large credit line that is completely untouched. This is a company that is built to weather storms.

(Market Call Minute.) World-class management team. A capital structure that has been improving over the last 2 years in addition to an asset base that has been improving as they have been recycling from suburban assets more into urban assets.

This is like every other interest-rate sensitive stock in that it did break the upward trend line. There is some support coming in at current levels for a lot of these interest-rate sensitive stocks. This one is showing signs of possibly bouncing off of that. As a long-term buyer, you will probably be okay. Pays a really good dividend of about 4.5%. Probably a little oversold.

Thinks it is a great company to be defensive. Done a great job of taking assets and adding accretive value. They are shrinking their balance sheet. Doesn’t trade too expensively. He just increased his exposure. It is best in class.

Great company with a great management team. One of the best out there. The problem is the valuation risk with the recent rise in interest rates. Wait for a pull back that allows you to get in when they are undervalued.

(Market Call Minute) He would pick away around $18.