# Canadian Apartment Properties REIT (CAR-UN.TO)



## marina628 (Dec 14, 2010)

Been looking at this REIT for a few months but have not bought anything.Just wondering if you guys have any feedback on this?

Marina


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## MoreMiles (Apr 20, 2011)

marina628 said:


> Been looking at this REIT for a few months but have not bought anything.Just wondering if you guys have any feedback on this?
> 
> Marina


I hope you did not buy that day... it dropped 2.9% in one day today.
REIT can be volatile, it's better to buy an ETF like XRE or ZRE.


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## marina628 (Dec 14, 2010)

No Didn't buy anything just looking .


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## TomB16 (Jun 8, 2014)

Is anyone familiar with what is driving CAR-UN lower?

I'm not worried about it, this is a very small position for us, but it doesn't make sense given the strong earnings. Perhaps they are about to announce a huge earnings miss and this is some insider trading?


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## KaeJS (Sep 28, 2010)

TomB16 said:


> Is anyone familiar with what is driving CAR-UN lower?
> 
> I'm not worried about it, this is a very small position for us, but it doesn't make sense given the strong earnings. Perhaps they are about to announce a huge earnings miss and this is some insider trading?


I bought some earlier today.

It actually does make perfect sense. The reason is because rates are going up. The fed is obviously going to raise rates on Wednesday by 0.5% and this is indicative of future increases for Canada which is likely going to be another 0.5% increase, as well.

Obviously, when the rates rise, that makes debt more expensive which sucks for holding mortgaged properties. As an alternative, these companies are being paid rent that has not kept up with inflation, which technically means the profitability of the companies has gone down on a real return basis.

Should this already be known? Yes. But it is becoming more and more real as rates continue higher.


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## KaeJS (Sep 28, 2010)

Also - note that the yield for CAR is low.
In this environment, people are searching for safe yield that is going to keep up with inflation.

Nobody is exactly excited about the yield on CAR. I imagine lots of people are selling CAR in favour of some higher paying companies.

Some idea for higher yield REITs right now are CHP and SIA (both of which I own and am adding to).


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## TomB16 (Jun 8, 2014)

Thank you for the response.

I like the low yield as we are holding it in unregistered account. We're used to it going up and up. lol!

It looks like a healthy company to me so I shall do what I do best: nothing.


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## zinfit (Mar 21, 2021)

TomB16 said:


> Thank you for the response.
> 
> I like the low yield as we are holding it in unregistered account. We're used to it going up and up. lol!
> 
> It looks like a healthy company to me so I shall do what I do best: nothing.


Rising interest rates are a negative headwind for Reits. They compete with fixed income . With 5 year GICs now in the 4% range and may-be going higher some people will sell their Reits and put into GICs or bonds. Reits are capital intensive so rising interest rates on their debt is also a negative.


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