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Since the beginning of the year, the Canadian REIT market has roared back with a vengeance to outperform many other asset classes. The opening presentation will provide an update on some of the key factors that have contributed to this trend and the results over the first half of 2016, both positively and negatively. The commentary will conclude with a few observations on where the market appears to be heading over the next twelve months.
Carolyn Blair, Managing Director, RBC Capital Markets Real Estate Group
A wide ranging discussion among portfolio managers on their views of the Canadian securitized real estate market, whether this is a good time to buy, sell or hold REIT units and REOC shares, and what are the key expectations that govern their current investment decision-making.
Michael Smith, Managing Director, Global Equity Research, RBC Capital Markets
Tom Dicker, Portfolio Manager, GCICL/Dynamic Funds Ltd.
Andy McCulloch, Managing Director, Real Estate Analytics, Green Street Advisors
Michael Missaghie, Vice President & Senior Portfolio Manager, Sentry Investments
Josh Varghese, Portfolio Manager, Signature Global Advisors, CI Investments
An overview presentation providing some insights on the principal fundamentals of the Canadian real estate market and how property values have fared in to this point in 2016. Among the questions that will be addressed: What have been some of the bellwether transactions in office, retail, industrial, apartment, seniors and hotel properties? Where are cap rates heading? How is the leasing market performing in all major property classes across Canada? What is the outlook for the Canadian market for 2017? What are the regional differences, e.g. has Canada become “just two markets”? What major trends are affecting real estate investment, e.g. impact of technology?
Colin Johnston, President, Research Valuation and Advisory, Altus Group
Sandy McNair, Data Curator, Altus Data Solutions
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As city building and renewal surges across Canada, REITs are undertaking development projects as one of their growth strategies. On the one hand, continued cap rate compression and the lack of quality assets available for sale make it difficult for a REIT to grow by acquisition only. On the other hand, market forces are very supportive of intensification and urbanization, resulting in all forms of development. The economics of building new assets are becoming compelling when compared with cap rates to buy existing ones. This panel will examine these questions in greater detail. How can REITs pursue development strategies successfully when their original structure was not designed with this capability in mind? Are there practical issues that make it possible for REITs to develop or not? Are the REITs well equipped to manage large development programs? How are investors, portfolio managers and analysts viewing REIT development strategies? How much risk does development introduce into the space? If REITs don’t have the opportunity to build capital reserves, how do you create contingency funds in case things go wrong with development? What have been the experiences of REITs to-date with new developments especially where they are mixed-use projects vs. a pure play? Are investors adequately compensated for REIT development activities?
Stephen Sender, Trustee, H&R REIT
Hugh Clark, Vice President, Development, Allied Properties REIT
Todd Cook, President & CEO, Northview Apartment REIT
Derek Warren, Assistant Vice President, Portfolio Manager Real Estate Equities, Lincluden Investment Management Limited
Michael Zakuta, President & CEO, Plaza Retail REIT
REITs have now been in existence in Canada for almost 25 years. Over that period of time, there has been a considerable evolution in the scope and strategies of how REITs function, their management and their activities. This session will examine key elements of a REIT in 2016 and discuss what are best practices that lead to a strong and successful REIT in the current market and going forward. Does the ideal business model of a REIT include: a consistent payout; well defined growth prospects; dividend growth potential; strong management, governance and board composition; and a portfolio of quality assets. Do investors focus more on AFFO, NAV growth, and risk (geographic exposure vs. little diversification vs. debt ratio vs. development)?
Michael Brooks, Chief Executive Officer, Real Property Association of Canada
Rael Diamond, President & COO, CREIT
Michael Markidis, Vice President & Director, Real Estate, Desjardins Capital Markets
Armin Martens, President & CEO, Artis REIT
John Morrison, President & CEO, Choice Properties REIT
Jeffrey Olin, President & CEO, Vision Capital Corporation
Virtually every new development in today’s market is being designed with LEED certification or some high performance metric in mind. However, new construction still only represents some 1% of the entire building stock. How can aging assets remain competitive in a market given the increasing amount of green buildings developed in recent years? Can you maximize returns and the financial potential of your property assets through value-added programs, repositioning, operational excellence and superior management expertise? Can you increase the value of B and C class buildings while in turn providing greater value to your tenants? Does this open new investment opportunities where you can see a value that the seller may not? How challenging is it to reposition or to repurpose your properties in order to grow your NOI? What do you need to keep in mind when considering these strategies?
Brady Welch, Partner & Co-Founder, Slate Asset Management LP
Kevin Hardy, Senior Vice President, Portfolio Management, Dream Office REIT
Glenn Hynes, Executive Vice President, CFO & Secretary, Crombie REIT
Mark Kenney, Chief Operating Officer, CAPREIT
Greg Romundt, President & CEO, Centurion Asset Management Inc.
In 2012 and the first half of 2013, there was an unprecedented level of activity of proposed and actual IPOs of new Canadian REITs entering the market. Many local, modestly sized, externally managed REITs were created. Joining them were a number of cross-border REITs created by owners of U.S. or European real estate assets, who are finding that their home capital market is not as welcoming as Canada’s. This session will examine the experiences of some of the smaller and younger REITs, and what their growth strategies are to achieve greater mass, and attract institutional/retail followings. What are the underlying fundamentals supporting these types of REITs in today’s investment environment? What are the challenges facing management and how are they addressing them? Are they looking at strategies that larger cap REITs do not follow? Is the pressure to acquire properties and grow pushing smaller REITs to other markets and asset classes? Will all of them survive in the public markets?
Shant Poladian, Managing Director, Head of Real Estate Investment Banking, Dundee Capital Markets
Scott Antoniak, Chief Executive Officer, Slate Office REIT
Brad Cutsey, President, InterRent REIT
Paul Dykeman, Trustee & CEO, Summit Industrial Income REIT
Milton Lamb, President & CEO, Automotive Properties REIT
Succession planning and strong governance are two critical elements for any organization in order for the enterprise to sustain its growth, an effective management team, and support from investors. While many senior executives of REITs and REOCs are likely to be leaving their organizations in the next five to ten years, some changes have occurred in the past year. In a few instances, Presidents have stepped away and new people are being groomed. We now have senior executives that did not build the REIT from its original IPO but will manage the entity. Here is an opportunity to examine how the management transition has progressed from an entrepreneurial one to perhaps a more institutional approach. How do organizations prepare themselves for inevitable succession in the senior ranks? What type of corporate governance is increasingly common among REITs, i.e. board composition, management/board alignment, board independence, shareholder rights and remedies? How do REITs protect themselves from activists’ attention? How much importance do analysts and investors place on evaluating the leadership at the helm of an organization? How are proxy advisory firms and organizations like CCGG impacting REITs’ governance practices?
Lori-Ann Beausoleil, Partner, National Forensic Services Leader & National Real Estate Advisory Leader, PwC
Alex Avery, Managing Director & REIT Analyst, Institutional Equity Research, CIBC Capital Markets
Brent Binions, President & CEO, Chartwell Retirement Residences
Scott Frederiksen, Chief Executive Officer, WPT Capital Advisors
Jon Hagan, Corporate Director, First Capital Realty
Jennifer McClelland, Vice President & Senior Portfolio Manager, Canadian Equities, RBC Asset Management
Access to well-priced capital can be helpful to the growth of publicly traded companies via acquisitions, development, or asset repositioning. This session will examine the current market conditions and environment for REITs to access debt and equity markets to meet their ongoing financial needs. What are the major sources that are being used to raise capital at this time? Discussion will also focus on units/shares, preferreds, converts, mortgages, mortgage bonds, unsecured debentures and revolvers. How are REITs evaluating and creating appropriate strategies on how and when to use these capital sources? Why is there so much unsecured financing? What should be a REIT’s interest rate strategy: long vs. short? How should capital be allocated in this market? Should capital be recycled rather than raising equity? Do the capital and investor markets favour larger real estate entities or do they simply want the existing ones to get bigger? What are appropriate credit metrics? Are people following them?
William Wong, Managing Director, RBC Capital Markets Real Estate Group
Louis Forbes, Chief Financial Officer, CT REIT
Larry Froom, Chief Financial Officer, H&R REIT
Heather Kirk, Managing Director, Equity Research, BMO Capital Markets
Vlad Volodarski, Chief Financial Officer & CIO, Chartwell Retirement Residences
Oil prices and the resource sector continue to underperform. The investment and development markets in Alberta are virtually at a standstill. The NDP provincial government is constrained with lower than historic revenues combined with a rising deficit along with the impact of the Fort McMurray wildfire. There is widespread concern among lenders and investors about the challenges in the Calgary market especially and growing issues about Edmonton as well. What are the current major facts about the Alberta economy, how it is performing, and what the potential outlook is for 2017 and beyond? Are there some facts and fallacies that can help external decision-makers?
Todd Hirsch, Chief Economist, ATB Financial. Often referred to as Alberta’s economist, Todd has worked as an economist for 20 years at numerous organizations including the Canadian Pacific Railway, the Canada West Foundation and the Bank of Canada. For almost a decade, Todd taught economics at the University of Calgary. He released his first book, The Boiling Frog Dilemma: Saving Canada from Economic Decline in 2012.
Four times a year, REITs and REOCs issue quarterly reports that provide investors, analysts and the public with a detailed update on their financial performance along with any key insights that management needs to share on a go-forward basis. This session will examine the demands that are placed on these public real estate entities, their accountability and transparency, and how quarterly reports can be part of an effective strategy for REITs and REOCs. Disclosure ranges from updates on NAV per unit to various elements that can affect shareholder value, e.g. current and anticipated growth in earnings per share/unit; anticipated total return from the stock; current dividend yields and payout ratios; levels of debt; and expected changes in management and corporate structure. How has IFRS affected reporting? How much variation is there in the ways that REITs calculate FFO and AFFO? Is there any likelihood that AFFO can become more standardized?
Tom Rothfischer, Partner, KMPG LLP
Mario Barrafato, Executive Vice President & Chief Financial Officer, CREIT
Simon Knowling, Partner, Torys LLP
Teresa Neto, Chief Financial Officer, NorthWest Healthcare Properties REIT
Mark Rothschild, Managing Director, Real Estate Analyst, Canaccord Genuity
A panel of senior executives from a cross-section of different types of investors will discuss some of their mandates and priorities for 2017. What are the differences between the issues faced by a REIT vs. a pension fund or lifeco vs. a private equity fund in pricing properties and accessing investment capital at this time? What are the respective investors’ priorities for the coming year? Which property classes will be most favoured, in which markets, and why? What are the challenges to buy or sell assets in this market? There appears to be a major shift to alternative asset classes among institutional investors. Will this be good or bad for the REIT sector? If pension funds and lifecos develop private structures, then large capital flows will be in competition. Some pension funds have done joint ventures with REITS. How has this worked out? Will shifts in appetite for real estate by institutional and private equity investors affect Canadian REITs or Canadian direct investment markets? How do investors think about the large differences in disclosure, governance and voting rights between public real estate entities and institutional/private equity vehicles?
Amy Erixon, Principal & Managing Director, Investments, Avison Young
Colin Baryliuk, Managing Director, Investments, KingSett Capital
Phil Gillin, Executive Vice President & Portfolio Manager, Bentall Kennedy (Canada) LP
Jonathan Gitlin, Senior Vice President, Investments, RioCan REIT
Stephen Taylor, Vice President, Real Estate, HOOPP
No other real estate property class continually attracts as much attention as retail. It is also the asset class that comprises the largest portion of the Canadian REIT market. For a few years, we heard about the number of U.S. and European retailers circling Canada or announcing plans to open stores here. Coupled with this is the continued increase in e-commerce. Then there is the influx of mixed-use developments and inner city intensification. But trends are changing. How has the closure of Target, Future Shop and other retail chains affected REITs? How much of Target’s former space has been released and where? What about household debt and the apparent tapped out Canadian consumer? How do brick and mortar stores co-exist with online shopping? How are all these trends reshaping the retail marketplace? This session will examine the overall extent of this influx and its potential implications on existing retail centres and formats, current retail tenants, and REITs active in this property class. How are landlords and retailers responding to the new entries and closures in our market? How are developers and retailers responding to the population surge in inner cities? What kind of innovative urban retail formats and projects are emerging? At the same time, is there another elephant in the room? What impact is internet shopping having on conventional retailing especially with Millennials? What potentially lies ahead for retail market activity in Canada? What will the landscape look like 24 months from now?
Sheila Botting, Partner & Canadian Real Estate Leader, Deloitte LLP
Gregory Menzies, Executive Vice President, First Capital Realty
Suthamie Poologasingham, Senior Advisor, E-commerce and Omni-channel, Director of Research, J.C. Williams Group
Jeff Ross, Senior Vice President, Leasing & Tenant Coordination, RioCan REIT
Patrick Sullivan, Chief Operating Officer, Primaris Management Inc.
An insightful examination of the challenges, trends, and issues facing Canadian REITs and REOCs, and what CEOs are doing to deliver strong performance and growth. As this sector continues to mature, will there be a strong shift from entrepreneurial to more institutional management cultures? The following are some of the questions that will be examined:
Kevan Gorrie, President & CEO, Pure Industrial REIT
Neil Downey, Managing Director, Global Equity Research, RBC Capital Markets
Michael Emory, President & CEO, Allied Properties REIT
Sandy McIntyre, Vice Chairman & Chief Investment Officer, Sentry Investments
Tom Schwartz, President & CEO, CAPREIT
Huw Thomas, Chief Executive Officer, SmartREIT