# American REITs



## Sherlock (Apr 18, 2010)

I am looking to add a REIT to the US portion of my portfolio and don't have much knowledge of this sector. If I put an American REIT in my RRSP, what portion of the dividends do I get to keep, is it the same as dividends from American stocks or are REITs treated differently as far as withholding tax goes?

Should I stick with an ETF or get an individual REIT or two? I notice that the big index funds like VNQ and IYR are only paying around 3.5% dividends. Am I better off getting something like O? O has no debt, hasn't cut their dividends in decades, and pays about 4.75% as of now. It seems like a very safe bet. What if I split my money between O and something higher risk like SNH which currently has a dividend of 7.75%? I am not interested in anything very high risk.

Please share any insight about US REITs.


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## Moneytoo (Mar 26, 2014)

Check out *WPT Industrial REIT (WIRu.TO) and Pure Multi-Family REIT (RUF_u.V)* - Canadian REITs with US assets:

http://www.bnn.ca/News/2015/5/15/De...IT-Boardwalk-REIT-Pure-Multi-Family-REIT.aspx

(I have 200 shares of *Slate Retail REIT (SRT.UN),* plan to add one or both of the above later this year)


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## Sherlock (Apr 18, 2010)

What are the pros/cons of holding a Canadian REIT with US assets versus holding an American REIT directly?


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## gibor365 (Apr 1, 2011)

Yes, generally US REITs are treated differently and you have to pay dividend withholding tax even within RRSP, so better if you contact your discount brokerage and ask, 
btw I asked IE regarding O and they told that there is NO dividend withholding tax.




> Check out WPT Industrial REIT (WIRu.TO) and Pure Multi-Family REIT (RUF_u.V) - Canadian REITs with US assets:
> 
> http://www.bnn.ca/News/2015/5/15/Der...mily-REIT.aspx


I hold a little bit of WIR.U.TO (it's a TSX stock, but traded and dividend paid in US$), no any dividend withholding tax.
RUF.U also looks interesting.... may initiate position.
http://seekingalpha.com/article/3019696-an-undiscovered-canadian-gem-that-pays-6-percent

similar stock is HOT.TO


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## Moneytoo (Mar 26, 2014)

Well I'm not a pro (at least not yet ), so my reasoning can be faulty, but my personal preference is based on the following assumption: US rates will start rising before the Canadian ones do (and will go up at a higher rate), so Canadian REITs with US assets will be able to borrow at lower rates longer. Additional bonuses: higher yields (I was checking US REITs last year) and most of them are in CAD (no currency conversion hassle)

Cons: don't know yet, as most of them are relatively new. I'm watching a bunch (another favorite is Milestone Apartments), and want to see how they'll react when the rates go up in the States.

Here're a couple of articles:

http://business.financialpost.com/n...its-based-on-foreign-assets-a-growing-concern

http://business.financialpost.com/n...sets-hit-the-sweet-spot-of-canadian-investors


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## gibor365 (Apr 1, 2011)

I like WIR top tenants
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## Moneytoo (Mar 26, 2014)

gibor said:


> I hold a little bit of WIR.U.TO (it's a TSX stock, but traded and dividend paid in US$), no any dividend withholding tax.


Thanks, good to know - and no withholding tax on Slate, either (but the dividends turned out to be in CAD, not in USD: I misunderstood Globe Investor's quote "Indicated annual dividend (U.S.) $0.76" - oh well, another learning experience )


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## gibor365 (Apr 1, 2011)

Moneytoo said:


> Thanks, good to know - and no withholding tax on Slate, either (but the dividends turned out to be in CAD, not in USD: I misunderstood Globe Investor's quote "Indicated annual dividend (U.S.) $0.76" - oh well, another learning experience )


It's really a bit confusing, as TDW gives $ price of WIR.U without indication that it's traded in US$  , so was surprised to see amount charged for the trade


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## Moneytoo (Mar 26, 2014)

gibor said:


> It's really a bit confusing, as TDW gives $ price of WIR.U without indication that it's traded in US$  , so was surprised to see amount charged for the trade


Yeah, I was initially gonna buy it in my TFSA, but luckily got curious and googled the difference between "U" and "UN" lol Now that it came down a bit, will try to convince my husband to buy some in his RRSP (he has USD )


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## gibor365 (Apr 1, 2011)

I bought into RRSP so I don't really care 
interesting that on my BUY , CIBC IE shows WPTIF:US	, but on dividend payment WIR.U.CDN


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## Moneytoo (Mar 26, 2014)

Wait, so it trades in USD but dividends are in CAD or it's the way your account is set up? (I.e. do you have stocks in that account that pay dividends in USD?) It paid dividend yesterday, guess that's why it "dipped"...


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## gibor365 (Apr 1, 2011)

Moneytoo said:


> Wait, so it trades in USD but dividends are in CAD or it's the way your account is set up? (I.e. do you have stocks in that account that pay dividends in USD?) It paid dividend yesterday, guess that's why it "dipped"...


It's dipping not on payment date, but on dividend date... 
WIR.U traded in USD and dividends paid in USD, but CIBC IE converting USD dividends to CAD$ at BoC sport rate (or very close to it), this probably why there is difference in tickers...
Not sure if RUF.U is traded in US$ or not....

OK, just checked on CIBC IE and yeap RUF.U is trading in USD (like WIR.u), CIBC gave quote $5.17 USD....
What I'm not sure... RUF.U is LP , we pay huge dividend withholding tax on US LP (close to 50%), so not sure is RUF.U is subject to some taxes


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## Moneytoo (Mar 26, 2014)

"U" is for "USD", "UN" is for units - there're usually two (except for WIR.U of course ):

http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=RUF.UN-X - in CAD
http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=RUF.U-X - in USD

My husband agreed to buy WIR (we're with Questrade, so there's no conversion - the dividends will be paid and DRIPed in USD )

But yeah, not sure about RUF now - what do you think of Milestone Apartments?

http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=MST.UN-T

(I don't like HOT...)


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## gibor365 (Apr 1, 2011)

> "U" is for "USD", "UN" is for units - there're usually two (except for WPT of course ):


 Ooooh  I didn't notice that there is also RUF.UN ... so now I'm confused why RUF.U was today up 0.4% but RUF.UN down 0.16 and CDN fell comparing to USD$ 0.2?
And again, I'm not sure about taxes as this is LP... Maybe will drop email to CIBC.... Actually I'd like to have combination of Industrial and residential (like RUF) REITs



> (I don't like HOT...)


 I like HOT ....., but not stock


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## Moneytoo (Mar 26, 2014)

gibor said:


> Actually I'd like to have combination of Industrial and residential (like RUF) REITs
> 
> I like HOT ....., but not stock


So how about this: you'll buy RUF, I'll buy MST (both are residential) - and we'll compare notes after we get the dividends? 

(Sorry, Sherlock, for hijacking your thread! Both gibor and I had similar threads recently - with not much participation... but maybe somebody else will answer your original question)


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## gibor365 (Apr 1, 2011)

MST is very similar to RUF, but EPS for MST are down

MRQ vs. same 1 year ago	-24.28%
TTM vs. same 1 year ago	-11.62%

and RUF up:
MRQ vs. same 1 year ago	61.35%
TTM vs. same 1 year ago	118.21%

Also RUF has higher revenue growth.



> Both gibor and I had similar threads recently - with not much participation.


 True!



> you'll buy RUF, I'll buy MST (both are residential)


 MST is pretty straightforward ... it's not LP like RUF....
Also not sure what is better RUF.U or RUF.UN , I'm kinda bearish on CAD$ ...but I'm usually wrong 

Most likely , first, I'll add to my WIR.U


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## Moneytoo (Mar 26, 2014)

Well, there's also Morguard (don't remember why I didn't like it, but kept it in my watchlist): http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=MRG.UN-T

Oh yeah, now I remember why - it's a mix: "The REIT's property portfolio consists of approximately 14 Canadian multi-unit residential properties and approximately 30 United States multi-unit residential low-rise properties. The properties are primarily located in Ontario, Alberta, Alabama, Colorado, Florida, Georgia, Louisiana, North Carolina and Texas."


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## gibor365 (Apr 1, 2011)

MRG has also industrial properties...we used to work in one ...than we moved to Dundee's property and MRG is still empty... I have enough Canadian REIT and want more only YS exposure


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## londoncalling (Sep 17, 2011)

I would agree that the way to get exposure to US real estate is through a Canadian listed REIT. I have also been watching the names above. My fence sitting has been mainly due to indecision of sector (residential,commercial, industrial) and slightly due to waiting to see how acquisition hungry/which tenants etc they would go after.
I plan to allocate some more money to REITS in the fall and will likely split b/w industrial and residential. 

Cheers


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## gibor365 (Apr 1, 2011)

> I plan to allocate some more money to REITS in the fall and will likely split b/w industrial and residential.


 I have similar approach... started industrials with WIR.U , now looking for residential...
Still cannot decide what is better RUF.U or RUF.UN


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## Moneytoo (Mar 26, 2014)

Got a newsletter from ChartAdvisor.com (one of the few subscriptions that I kept - subscribed to a bunch initially, but most were useless ):

*These REITs Are Looking Good Right Now*

Tickers in this article: *CLNY, CUBE, TWO, UDR*

I only know TWO out of these four - found it myself last summer, but chickened out because of the high yield (and didn't really understand much about mREITs - other than they might actually benefit from higher rates, unlike regular REITs; edit: scratch that) But it surprisingly held its share price - and looking good now:

«*Two Harbors Investment Corp. (TWO)* is trending higher since October, along what is now a very well defined trendline. That trendline was tested again in May when the price fell to, and consolidated near, the $10.45 region. Between May 6 and May 14 the price moved between $10.35 and $10.55, right on the trendline. The rally out of that small price range indicates the trendline has held, and presents a buying opportunity. Go long between $10.60 and $10.50 with a stop loss below $10.35. Target is $11.20 based on the trajectory of the trend channel. Collect the dividend yield of 9.77% while waiting for the target to be reached.»

What do you think?


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## gibor365 (Apr 1, 2011)

another article on TWO http://seekingalpha.com/article/3160536-two-harbors-is-the-dividend-safe


maybe better to go with US REIT ETF?


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## willow1044 (Jan 30, 2012)

OK, to summarise it looks like WIR and RUF are the way to go for individual REITs but I don't think I saw any suggestions for CDN EFT REITs with US assets. Unless I missed it. Any suggestions.


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## Moneytoo (Mar 26, 2014)

willow1044 said:


> OK, to summarise it looks like WIR and RUF are the way to go for individual REITs


Actually *Slate Retail REIT (SRT.UN)* that I own went up nicely in the last couple of days - and yields 7% 



> but I don't think I saw any suggestions for CDN EFT REITs with US assets. Unless I missed it. Any suggestions.


Well apparently some large REITs in XRE (and other CAD ETFs that track REIT index) have US assets, check out RioCan for example: "RioCan owns and manages a portfolio of shopping centers, with ownership interests in a portfolio of approximately 340 retail properties in Canada and the United States combined."


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## 1980z28 (Mar 4, 2010)

I hold 5480 shares of ruf.un dividend is 218 per month 

Have owned it for a while,will add another 4500 shares going forward


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## Moneytoo (Mar 26, 2014)

@1980z28, do you have any concerns that their properties are "in Sunbelt locations, such as Dallas, Houston and Phoenix"? (I didn't, since I'm geographically-challenged - and don't know much about different states/cities... but my husband thinks that those cities are not the best places to own real estate there - even via REIT...)

I think I'm gonna play it safe and just buy *Brookfield Property Partners LP (BPY.UN)* now - or their mothership BAM.A later...


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## 1980z28 (Mar 4, 2010)

Moneytoo said:


> @1980z28, do you have any concerns that their properties are "in Sunbelt locations, such as Dallas, Houston and Phoenix"? (I didn't, since I'm geographically-challenged - and don't know much about different states/cities... but my husband thinks that those cities are not the best places to own real estate there - even via REIT...)
> 
> I think I'm gonna play it safe and just buy *Brookfield Property Partners LP (BPY.UN)* now - or their mothership BAM.A later...


I own a small position in ruf.un average cost is under 6.00

Also own CSH.UN,,,,,CAR.UN,,,,BEI.UN,,,,,,,, in larger amounts

I like renters in my reits


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## Moneytoo (Mar 26, 2014)

FWIW, Paul Gardner advised today to sell half or hold, but not increase RUF.UN position at these prices: http://www.bnn.ca/Shows/Market-Call.aspx (Part 2)


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## godblsmnymkr (Jul 15, 2015)

anyone have experience with how RUF.UN is taxed at the end of the year? after quickly looking at their tax breakdown it seems a little complicated.
Tax Breakdown of Distributions 2013 (Actual) 2014 (Actual) Return of Capital* 15.58% 23.48% Interest (Cdn sources)* 0.02% 0.02% Foreign dividend + interest* 84.28% 75.08% Capital gain 0.12% 1.42% - See more at: http://www.puremultifamily.com/investor-info/income-tax-information#sthash.nAE6a9HZ.dpuf

is there a 15% withholding tax on this? most of the income is attributed to foreing dividend + interest.
thanks.


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## VLT (Jan 1, 2017)

gibor said:


> I have similar approach... started industrials with WIR.U , now looking for residential...
> Still cannot decide what is better RUF.U or RUF.UN


Hi Gibor, I am also wondering which is best. I have cash in my TFSA and my RRSP-US funds and don't know where best to buy some of these REITS. It's my understanding that REITS don't pay taxes, which is why we like them in our TFSAs. With Canadian REITS paying in US funds or US reits like REZ, I just don't know where to put them. Did you figure it out?


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## VLT (Jan 1, 2017)

Quote Originally Posted by gibor View Post
Still cannot decide what is better RUF.U or RUF.UN

Does anyone know the answer to this?


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