Is Real Estate Dead Money? This Investor Says Absolutely Not

Rising interest rates have punished real estate stocks and left investors wondering: Is real estate dead money? Jeff Olin, President & CEO and Portfolio Manager at Vision Capital Corporation, says absolutely not. While higher rates matter, he argues that supply and demand ultimately matter more—and that today’s disconnect between public and private real estate markets is creating opportunities. With billions of dollars of private capital still looking for deals, Olin expects the wave of M&A in real estate to continue. Olin explains why Vision has increased its net long exposure, where he sees the best supply-and-demand fundamentals and why investors need to stop treating real estate as one homogeneous sector. He breaks down the strength in grocery-anchored retail, why he’s becoming more constructive on industrial real estate again and where he sees opportunities in apartments, seniors housing and data centres. In the Mailbag, Olin tackles the controversial proposed transaction involving H&R REIT (HR.UN) and GO Residential REIT (GOR.UN), including why both stocks fell after the deal was announced, the potential value he still sees in GO and the questions surrounding H&R’s process and governance. He also revisits Allied Properties REIT (AP.UN) after warning about the company on his last appearance. Following a major distribution cut and equity raise, Olin argues Allied still has a distribution problem and says he would eliminate the dividend entirely—even as he acknowledges the company owns some great real estate. Plus, Olin weighs in on Dream Office REIT (D.UN), BSR REIT (HOM.U), Mainstreet Equity (MEQ), Nexus Industrial REIT (NXR.UN) and Plaza Retail REIT (PLZ.UN), including which names he thinks offer genuine value—and which apparent bargains could still be value traps. Before revealing his new Pro Picks, Olin revisits last year’s picks: Dream Industrial REIT (DIR.UN), First Capital REIT (FCR.UN) and Chartwell Retirement Residences (CSH.UN). First Capital was ultimately acquired after Olin had argued that its grocery-anchored portfolio was significantly undervalued, while Dream Industrial and Chartwell remain names he likes. For this year’s Pro Picks, Olin returns to Chartwell Retirement Residences (CSH.UN), pointing to powerful demographic tailwinds, limited new supply and rising occupancy. He also picks Brookdale Senior Living (BKD), the largest operator of retirement communities in the U.S., where he sees an occupancy and management turnaround story, and Csquare (CSQR), a newly public data-centre company he calls a “screaming value” with exposure to the less-hyped co-location side of the data-centre boom. Timestamps 00:00 Trailer 02:15 Intro 03:20 Is Real Estate dead money?  05:23 U.S. REIT Balance Sheets and Debt 06:42 Canadian REITs: Valuations and Leverage 08:09 Why Vision Capital Is Net Long 09:32 Real Estate M&A and Takeover Premiums 11:01 How Higher Rates Affect Deal Flow 11:47 Cap Rates Explained 12:59 Why Retail Real Estate Is Not One-Size-Fits-All 13:27 The Case for Grocery-Anchored Retail 15:24 Slate Grocery REIT: What Went Wrong? 16:39 Why the Slate Deal Angered Investors 18:57 ITM Mailbag: H&R REIT and GO Residential: The Deal Explained (GO.U, HR.UN) 27:32 Dream Office REIT and BSR REIT (D.UN, BSR) 33:21 Main Street Equity’s Long-Term Growth Story (MEQ) 37:41 Nexus Industrial REIT and Data Centre Claims (NXR) 39:19 Allied Properties: Governance and Capital Allocation 44:11 Should Allied Properties Eliminate Its Dividend? (AP.UN) 46:17 Plaza REIT and Potential M&A (PLZ.UN) 48:49 Jeff’s Past & Pro Picks ( DIR.UN, FCR.UN, CSH.UN, BKD, CSQR)  62:59 Closing Bell: Jeff Olin on Skiing and Family Sponsors Thank you to our partners at ATB Financial. ATB Cormark Capital Markets is a leading North American investment firm providing holistic corporate and capital markets advice and full-service financial solutions. Visit https://ATB.com/inthemoney for more information. For over 25 years, Raymond James has been helping Canadians achieve their financial goals. Visit https://raymondjames.ca today to discover how you can live a life well planned. Thank you to our partners at Hamilton ETFs. For more information visit https://hamiltonetfs.com All the charts you’ll see today are sponsored by Wealthsimple Trade. The self-directed trading platform built for active traders in Canada. 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