These REITs weather the COVID-19 storm

Article Excerpt

Despite COVID-19’s impact on REITs, we continue to like the outlook for these two trusts. Their high-quality properties should continue to attract tenants without having to offer them deep discounts on rent. That should let them maintain their attractive distributions for investors. CHOICE PROPERTIES REIT, $12.50, is a buy. Canada’s biggest REIT (Toronto symbol CHP.UN; Units outstanding: 700.4 million; Market cap: $8.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.9%; www.choicereit.ca) creates value for investors through its 724 properties with a total of 65.6 million square feet of retail, industrial and office space. Its occupancy rate is a high 97.5%. Many tenants had to shutter their businesses due to the COVID-19 pandemic. The REIT also sold 30 of its properties in September 2019 for a total of $426.3 million. As a result, the trust’s revenue fell by 4.4% for the quarter ended September 30, 2020, to $309.0 million from $323.3 million a year earlier. Cash flow fell 2.9%, to $147.6 million from $152.0…

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