5 TSX Listed REITs to Avoid

Probability of a Fed interest rate hike this summer has skyrocketed, posing significant threats to these TSX Listed REITs

SmallCapPower | June 1, 2016: Real Estate Investment Trusts (REITs) are a liquid and often safe way for investors to put money into real estate. Through their trust structure, they are subject to tax advantages as well. That being said, they are also subject to interest rate risk. As the cost of borrowing increases, the value of real estate typically falls. As such, there is a strong negative relationship between rising interest rates and REIT unit prices. The U.S. Federal Reserve Chair, Janet Yellen, has announced plans to rollout interest rate hikes 2-3 times this year. Heavily reliant on the American economy, it should not come as a surprise that roughly 90% of the time the U.S. raises rates, so too does the Bank of Canada. In effect, debt-laden Canadian REITs will be impacted most. Have a look at this list of suchTSX Listed REITs.

Choice Properties Real Estate Investment Trust (TSE:CHP.UN) – $13.72
Commercial REITs

Choice Properties Real Estate Investment Trust (REIT) is an unincorporated, open-ended real estate investment trust engaged in owning, managing and developing retail and commercial properties across Canada. Its portfolio includes over 520 properties with a total gross leasable area of approximately 40 million square feet. Its portfolio includes over 500 retail properties, approximately 10 warehouse properties, an office complex, an industrial site and over five undeveloped parcels of land.

• Market Cap: $1.3 Billion
• Yield: 4.72%
• Debt to Equity (%): 465%

Brookfield Canada Office Properties (TSE:BOX.UN) – $28.95
Commercial REITs

Brookfield Canada Office Properties is a Canada-based real estate investment trust (REIT) that invests, develops and operates commercial office properties in Toronto, Ottawa, Calgary and Vancouver. The Company’s commercial-property portfolio consists of interests in approximately 25 properties totaling approximately 21.1 million square feet, including approximately 4.0 million square feet of parking and other. The Company’s development portfolio consists of the Brookfield Place Calgary East development site totaling approximately 1.4 million square feet in Calgary.

• Market Cap: $763.1 Million
• Yield: 4.14%
• Debt to Equity (%): 307%

WPT Industrial Real Estate Investment Trust (TSE:WIR.UN) – $10.67
Commercial REITs

WPT Industrial Real Estate Investment Trust (the REIT) is an open-ended real estate investment trust engaged in the business of acquiring and owning industrial investment properties located in the United States. Its objective is to provide Unitholders with an opportunity to invest in a portfolio of institutional-quality industrial properties in the United States markets, with a particular focus on distribution industrial real estate. The United States industrial real estate sector consists primarily of single-story properties located in or near major cities.

• Market Cap: $288.4 Million
• Yield: 6.73%
• Debt to Equity (%): 281%

BTB Real Estate Investment Trust (TSE:BTB.UN) – $4.69
Commercial REITs

BTB Real Estate Investment Trust (BTB) is a Canada-based unincorporated open-ended real estate trust (REIT) that owns approximately 72 commercial, office and industrial properties in primary and secondary markets. The Trust operates through four segments, which include office, commercial, industrial and general purpose properties.

• Market Cap: $163.6 Million
• Yield: 8.96%
• Debt to Equity (%): 255%

Partners Real Estate Investment Trust (TSE:PAR.UN) – $3.70
Commercial REITs

Partners Real Estate Investment Trust (Partners REIT) is a Canada-based open-ended real estate investment trust focused on the acquisition and management of a range of retail and mixed-use retail community and neighborhood shopping centers. The Trust’s properties are located in both primary and secondary markets throughout Canada, and are primarily mid-market assets. Partners REIT’s portfolio consists of approximately 30 properties located in British Columbia, Alberta, Manitoba, Ontario and Quebec.

• Market Cap: $124.3 Million
• Yield: 6.67%
• Debt to Equity (%): 244%

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