dream office reit
Dream Office REIT is a Canadian real estate investment trust (REIT) that focuses on owning and managing high-quality office properties in urban centers, particularly in downtown Toronto.
It owns approximately 4 million square feet of office space across various locations in Canada.
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Demand for office space continues to improve as more businesses end their work-from-home policies. That should support the current distributions from these two REITs. However, we prefer Dream Office for your new buying as Allied’s high debt load adds risk.
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $8.95 is a hold. The REIT (Toronto symbol AP.UN; Cyclical-Growth Dividend Payer Portfolio, Manufacturing sector; Units outstanding: 184.0 million; Market cap: $1.6 billion; Distribution yield: 8.0%; Dividend Sustainability Rating: Average; www.alliedreit.com) owns 179 office buildings in Canada’s major cities; its occupancy rate is 86.7%.
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $8.95 is a hold. The REIT (Toronto symbol AP.UN; Cyclical-Growth Dividend Payer Portfolio, Manufacturing sector; Units outstanding: 184.0 million; Market cap: $1.6 billion; Distribution yield: 8.0%; Dividend Sustainability Rating: Average; www.alliedreit.com) owns 179 office buildings in Canada’s major cities; its occupancy rate is 86.7%.
These two REITs had to cut their distributions as demand for office space dropped due to the pandemic-inspired shift to remote work. They are also selling their less-appealing buildings, which cuts their risk. However, Dream Office’s rising occupancy rate makes it the better choice for your new buying.
Long-time readers know that we are constantly reevaluating our picks. Here’s a REIT that faces problems that will weigh on it for the foreseeable future. We now see it as a sell.
DREAM OFFICE REIT, $17.33, is a now a sell. The REIT (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (www.dream.ca/office; Units o/s: 16.4 million; Market cap: $283.7 million; Dividend yield: 5.8%) owns 26 office properties.
DREAM OFFICE REIT, $17.33, is a now a sell. The REIT (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (www.dream.ca/office; Units o/s: 16.4 million; Market cap: $283.7 million; Dividend yield: 5.8%) owns 26 office properties.
We can be wrong on any of our stock or REIT recommendations, of course. That’s why we feel that investors should build a portfolio of 10 to 20 mainly well established, dividend-paying stocks, including REITs, chosen mainly from our Average or higher ratings; you must also spread your holdings across most if not all of the five main economic sectors. That way the overall gains in the portfolio will offset declines in one or two holdings.
The unit price for Allied Properties has dropped over 25% given the REIT’s plans to sell additional units to pay down its high debt. That’s likely to dilute value for existing investors. In terms of these two REITs, we prefer Dream Office—enjoying rising demand. We now see Allied as a hold.
The unit price for Allied Properties has dropped over 25% given the REIT’s plans to sell additional units to pay down its high debt. That’s likely to dilute value for existing investors. In terms of these two REITs, we prefer Dream Office—enjoying rising demand. We now see Allied as a hold.
Dream Office REIT offers prime downtown Toronto office assets with a sustainable 5.8% yield while trading at just 6.9 times its forward per-unit cash flow forecast.