5 Canadian REITs at Risk of a Distribution Cut

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The Canadian REITs (Real Estate Investment Trusts) on our list could see a 2017 funds from operations (FFO) per unit decrease of more than 10%

SmallCapPower | September 13, 2017: Today we have identified five Canadian REITs (Real Estate Investment Trusts) with an expected 2017 funds from operations (FFO) per unit decrease of more than 10%. REITs are a pool of money (trust) that is used to buy, develop, manage, and sell real estate assets. REITs generate income through renting, leasing, and selling of property and distributes it directly to unitholders via a cash distribution or payout—less maintenance costs of the properties. With decreasing funds from operations per unit, the REITs on our list are at risk to decrease their payouts to investors.

Boardwalk Real Estate Investment Trust (TSX: BEI.UN)

Boardwalk Real Estate Investment Trust is a real estate company.  The Company acquires and manages multi-family residential projects throughout western Canada.

  • Market Cap: $2,011 million
  • Estimated FFO per share growth for 2017: -25%
  • Last fiscal FFO payout ratio: 186%

Dream Office Real Estate Investment Trust (TSX: D.UN)

Dream Office Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust. The trust acquires and manages office and industrial properties throughout Canada.

  • Market Cap: $1,595 million
  • Estimated FFO per share growth for 2017: -19%
  • Last fiscal FFO payout ratio: 24%

Pure Multi-Family REIT LP (TSXV: RUF.U)

Pure Multi-Family REIT LP is a newly-established limited partnership. The Company has been formed to invest in multi-family real estate properties in major markets in the United States.

  • Market Cap: $499 million
  • Estimated FFO per share growth for 2017: -17%
  • Last fiscal FFO payout ratio: 129.3%

Morguard Real Estate Investment Trust (TSX: MRT.UN)

Morguard Real Estate Investment Trust is a closed-end real estate investment trust.  The Trust owns retail, office and industrial properties across Canada.

  • Market Cap: $861 million
  • Estimated FFO per share growth for 2017: -13%
  • Last fiscal FFO payout ratio: 58.3%

Slate Office REIT (TSX: SOT.UN)

Slate Office REIT is an unincorporated, open-ended real estate investment trust. The REIT has been formed as a new vehicle that will focus on acquiring and owning industrial, office and retail properties.

  • Market Cap: $439 million
  • Estimated FFO per share growth for 2017: -12%
  • Last fiscal FFO payout ratio: 93.9%

Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.

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