Iain Grant: [00:00:00] The information provided over the course of the following program is solely the view of the commentators, not necessarily those of Skyline Wealth Management. Newstalk ten, ten, or Bell Media. Now products are not guaranteed and investor qualifications do apply. Past performance may not be repeated. Good afternoon. I mean, granted, this is ask the expert. You’re on Newstalk 1010 Toronto. Last time we spoke with Rob Stein from Skyline Clean Energy Fund and discussed Canada’s clean energy sector. On today’s show, we’re joined by another one of skylines fund presidents, Gord Dreger. He is president of the Skyline Retail Arena. Gord is here with us today to talk about investing in Canada’s real estate sector, Skyline Retail REIT Fund, a premium Canadian REIT portfolio consisting of retail properties anchored by national name brand tenants. Gord, welcome in. It is great to speak with you. Thanks, Ian. First of all, I guess for any of our audience members who may not be familiar, can you tell us about Skyline Retail, REIT? Basically what is it and how does it work?
Gord Driedger: [00:01:03] Skyline Retail REIT is a portfolio of diversified and geographically diversified properties across Canada. It’s 100% Canadian portfolio. It’s one of the three skyline REITs. The other is being the apartment REIT and the industrial REIT is distributed by our own exempt market dealer, which is the Skyline Wealth Group. We have a total of 117 properties in Canada, a portfolio size of about 1.6 billion. That’s as of now. It’s been an active year for us and just about 5.4 million square feet across Canada.
Iain Grant: [00:01:37] Now, we’ve talked before about how the REIT’s are very separate and yet as a company, Skyline brings them all together. There’s so many areas where everyone can help each other out. The peer support during the course of these shows, yes, we are talking about individual rights, but under that Skyline banner, there’s a real team approach.
Gord Driedger: [00:01:56] There is. And it’s an interesting approach because we have a number of shared services across the company, which allows us to access experts in things such as HR and marketing and so forth. But within each REIT, we have specific expertise on, in my case, the retail business in Canada and then the others, the industrial and the apartment business. It allows us to focus our expertise on the subject matter, which in this case is the retail REIT.
Iain Grant: [00:02:22] And it’s not just limited to even this area of Ontario. You’re not looking at over 112 properties right across five provinces. From what I.
Gord Driedger: [00:02:31] Understand, we’re across five provinces, 67 individual communities. It’s a very geographically diverse portfolio and that’s an approach that is consistent with the other REIT’s as well. Being geographically diverse is obviously a very important aspect of the risk profile because you’re in so many different communities. Communities do ebb and flow based on their own individual economies and their employment situation. So it’s great to be diversified across so many different types of communities.
Iain Grant: [00:03:00] Gord You use the term pure play investment. That’s a new one on me. What does that mean?
Gord Driedger: [00:03:04] It means we’re focused on retail. It’s important to understand what the strengths of your business are. Our expertise is in retail, so we’re focused on that and it’s important that we don’t kind of stray off into other parts, whether it’s a mixed use or what have you. So we’ve been very focused and very diligent on ensuring that we stay close to our retail tenants and it’s 100% retail portfolio.
Iain Grant: [00:03:28] Gordon As an expert, can you tell us a little bit more about Canada’s retail sector? Because I think it’s an area that a lot of people are very interested in, but really, you know, they don’t honestly know where to crack the surface to find out more about it.
Gord Driedger: [00:03:40] We all understand retail in the sense that we’re all consumers in some way, shape or form. But there are different segments within the retail business. You know, there’s the classic enclosed malls, which there are still a number of, but fewer than there were maybe 30 or 30 or 40 years ago. There’s other types of retail, whether it’s automotive, retail or what have you. But what we’re focused on is the strip retail, an enclosed typically grocery and pharmacy anchored centers in secondary and tertiary markets. So we do not have any enclosed shopping center. It’s a different business to our minds. The tenant base is different. You retail in Canada is a very big business. You know, we often compare ourselves with the US and the per capita square footage in Canada is much lower than it is in the US. But we have to remind continually remind ourselves that we’re a very geographically dispersed population in Canada, way more so than the US. The metrics don’t quite apply to Canada.
Iain Grant: [00:04:43] What about some of the recent challenges that we’ve all been through? Obviously touching on COVID and the challenges we kept hearing about, you know, stories in the newspaper about rental rates, things like that, How did that affect things there?
Gord Driedger: [00:04:55] You know, it was an interesting time, obviously. Very. It didn’t matter what sector of the economy you were in. It was an interesting time. What we learned very, very early on in the pandemic, though, was that the types of uses that we have and types of tenants that we have in our portfolio for the most part are essential needs food and pharmacy. The quick service restaurants, which continue to do quite well throughout the pandemic, albeit for drive through the financial services, of course, the medical services which which were required throughout. So we learned very early on in the pandemic that our portfolio was quite resilient, our tenants were very resilient. And so it was an interesting revelation quite early on because of the nature of our tenants. You know, we’re not as involved in the discretionary purchases. And when I when I say discretionary, often I think of fashion, which is difficult, more difficult to do online. And of course, the stores were closed, so it was very impossible to do in the other way for a long period of time during the pandemic, know less. Less than 2% of our portfolio is in the fashion sector, which I think was kind of harder hit. That sort of differentiates our portfolio from, say, in a closed shopping center, which tends to have a higher proportion of the discretionary spending.
Iain Grant: [00:06:21] I remember asking your co-founder, CEO Jason Castellan, he mentioned it really stuck with me, was that so many of the areas that you deal in are based at the level you were just saying, like the pharmacies, the eye to eye kind of level, that yes, there’s all kinds of stuff happening out there in the world, but what you’re focused on is, you know, what’s happening on your back doorstep. And as long as you keep that focus, everything seems to, you know, remain in perspective as opposed to spinning off worrying about things that just don’t affect what you’re working on.
Gord Driedger: [00:06:52] We like to say, and I think it’s very true in most of most cases, but our shopping centers are central to the community. And I don’t mean geographically, although that’s usually the case. I mean, they they provide a focus for the community, whether it’s an informal meeting spot. And I think people, especially in the smaller communities, really needed that. The grocery store was one of their few outings, albeit more difficult maybe than it was before. And of course, the pharmacy as well. So it became kind of a meeting spot for a lot of our consumers.
Iain Grant: [00:07:29] Gord We have talked about different REITs on the show before. Skyline Retail REIT focuses retrenching specifically on the retail sector. Can you go into a little more detail on what the REIT is comprised of?
Gord Driedger: [00:07:42] We’re up to now 117 properties as of the most recent closings, and we’re we’re about 82% of our tenants are what we call essential based. So those are the food and the pharmacy. And the food stores typically are the major food stores that we would all think of the Loblaws and their various banners, Metro and and Sobeys and then the pharmacies primarily being the Rexall and the Shoppers Drug Mart. Some of our properties are freestanding. I’d say many of our properties are freestanding pharmacies, in some cases food stores. But the the remainder would be strip centers where you’d have a conventional grocery store at one end, maybe a pharmacy at the other end. And and the medical and service restaurants and other service providers in the middle. So it’s kind of a typical strip center, but always well anchored with one or the other of a food or a pharmacy.
Iain Grant: [00:08:42] So, Gord, when did you join Skyline?
Gord Driedger: [00:08:44] I joined Skyline in late 2015. So it was that itself started in 2013, but I joined in 2015 when the REIT was quite small and that brought some of my previous experiences to to bear on on growing the REIT here at Skyline. So and so that’s what we’ve been doing since.
Iain Grant: [00:09:06] Since joining Gord, how do you determine what properties you buy for the REIT? Are there specific assets that you’re looking for?
Gord Driedger: [00:09:12] We focus on the grocery and pharmacy, but beyond that, when we when we’re looking at a potential asset for acquisition, we handpicked these assets. We’re not buying 20 or 30 property portfolios. So we built this this $1.6 Billion REIT, pretty much one asset at a time. So we’re focused on things such as is the is the food store that may be a tenant there. Is it dominant in the community or is it second best? We prefer to buy the dominant food store because for obvious reasons they will likely be there longer and will attract more traffic to the rest of the shopping center. So we look at things like dominance. We look at the physical condition. We look at. Things like access. Is it? Is it easy to get in and out of the shopping center? Because sometimes tenants will need to leave a shopping center when they’re when their lease expires because some things happen to the road network that makes it difficult for the customers to get there. So we we look at things like that. We look at communities. Is it a growing community? Is it a stable community? Some place that we think we can do a good job of servicing the tenants is the big country. We have a lot of locations and some as I say, we’re across five provinces, so it’s a big country. But we want to make sure that when we buy an asset that we can do a good job of servicing the tenants that are there.
Iain Grant: [00:10:43] Gordon Draeger is president of the Skyline Retail REIT. Skyline Wealth offers private alternative investment products in real estate and clean energy. Skyline pride themselves on offering investors a unique investment experience, helping to cut out much of the noise and emotion of what many investors can come to experience in the public markets. All of the investments that Skyline Wealth offer are considered alternative investments, providing access to investments that are correlated from the public markets and driven by the underlying asset value. The skyline commitment to investors is to provide trusted advice and long term investment excellence while building and strengthening extraordinary client relationships. Skyline believes that investing should be enjoyable, engaging and rewarding. Skyline would love to connect with you and hear about your investment goals. To find out more about their investment philosophy. Go to Skyline Wealth to see a Skyline Wealth dot C A and get in touch with the Skyline Wealth Team. That website Skyline Wealth. Okay, I’m Ian Grant and this is Ask the expert here on Newstalk 1010 Toronto. We are back in. This is as the expert here on Newstalk 1010 Toronto, I’m Ian Grant. I’m joined by Gord Dreger. He is president of the Skyline Retail REIT. And that’s what we’re talking about this hour. Gord Responsible for the operational and financial performance of skylines, retail REIT, its comprising millions of square feet of retail space across the country. Corey, you were mentioning that you joined Skyline in 2016, but boy, I was talking to you during the break. Have you ever had some fascinating keys to some really interesting offices in your past?
Gord Driedger: [00:12:35] Yeah, it’s been a it’s been a great career. You know, I think my bio says 25 years. It might actually be a few more than that. But I’ve had the benefit, I think, of working in retail when one, one or other for most of my career, starting with some of the more major retailers that that we now have in our portfolio, the Canadian Tire and the Sobeys and, and then and then moving over to the landlord side and some some fine companies, including First Capital Realty. So, you know, really kind of being able to see because I come from kind of the landlord and the tenant side being able to see both sides of the business, which is important for us to understand our tenants perspective because our tenants are obviously key to our business. We want to make sure that we understand their business as well.
Iain Grant: [00:13:26] I’m sure at some point later in this hour, we’ll get into it in a little more detail. But skylines commitment to the environment has been something that since the very first paragraph of the first show that I did with Skyline, it was something that they really wanted to make sure that people understood. And I’m noticing here that you hold a Bachelor of Environmental Studies in the School of Urban and Regional Planning from a University of Waterloo. Again, it’s that great combination of experience in the bricks and mortar and and as well a qualification to speak and act on the environmental side as well.
Gord Driedger: [00:14:01] You know the environment is is important to to skyline to be sure and and not I don’t mean just the the physical environment although that’s a big part of it but our role in the communities as well. So my my formal training was in planning urban planning for the University of Waterloo, which is it’s a very much a precursor to real estate development in in in some way or another and was really the the Segway into the rest of my career the community aspects of what we do and this goes for all of our businesses is so important to us. You know we try very hard to once we’re in a community, which tends to be a bit of a smaller community in some of these secondary markets, we work very hard to involve ourselves in our tenants initiatives and many of the local initiatives as well.
Iain Grant: [00:15:00] On this segment, we’ve certainly talked about the story of Skyline before, which the retail REIT is a part of. It’s a really interesting story with the co founders starting way back in 1999. Where does the Skyline retail REIT come into that story?
Gord Driedger: [00:15:15] We formally started in 2013 and when the business first started in 99 and then, you know, the REIT’s were formed later, but there was always an opportunity for the business to be to be involved in different segments. If you may be buying an apartment from somebody that also had a retail shopping center next door. So I think there was a kind of a, a pull to diversifying. And as you said, we’re a pure, pure play REIT, retail REIT. There are REIT’s that that within one REIT will buy different different asset classes. But I think early on I think the the business really evolved to saying, you know what, let’s let’s get experts in place that that can focus on on one thing or another and and not necessarily try to be all things to all people. So that that’s the genesis of the retail REIT. You know the the odd opportunity to buy retail shopping centers or retail assets and then realizing that there was a good business there and we wanted to grow it.
Iain Grant: [00:16:23] Gord As we know, the retail sector was impacted by the COVID 19 pandemic. Can you talk a little bit about how the Skyline retail REIT was able to navigate the pandemic? What was the strategy to get through it.
Gord Driedger: [00:16:36] Very early on? You know, as I as I indicated, it became clear that our major tenants were we’re going to be fine. They were they were in such important parts of our community, people needed to eat and therefore the food stores needed to stay open. And that’s such a big part of our business. So that that part of it. Became clear very quickly. What wasn’t so clear was the impact on some of our smaller tenants, the independents. I mean, although 80% of our businesses is in the national tenants, we still have a number of smaller tenants. And our strategy was to get very close to them and to really. And it was a very hands on experience where we we spoke to them sometimes daily understanding what was going on in the business, how were they doing, Were they able to operate if they if they had a restaurant, were they able to operate takeout, for example? So our approach was very hands on. When the government announced some of the subsidy programs, we participated as much as we could. So if there was an opportunity to assist one of our smaller tenants in offsetting some of the rent, we did. And it has paid dividends. First of all, those companies and often families have been able to maintain their their livelihoods with support from the government and from Skyline. But the real dividends is they’re still operating and and our occupancy rates are at at or higher than pre-pandemic level. So it hasn’t been the fallout that you would that you might imagine from such a catastrophic event, especially in the smaller independent restaurant businesses, because we’ve been able to help them muddle through and come out the other side. And I think in many cases they’re doing quite well at this point.
Iain Grant: [00:18:43] Gord We’ve mentioned before that investors who invest in exempt market products are pretty unique group. They expect a different level of disclosure and discussion. You touch a bit on how Skyline accommodates that.
Gord Driedger: [00:18:55] It is very unique to a business like ours where we’re a private REIT, so we issue units to individuals and in some cases the investment is quite small. In some cases it’s quite big. It’s a very hands on approach. So I come from a background of working with some very fine publicly traded companies. Our time was spent more with bank analysts who represented the public investment within the Skyline Group. I mean, we have over 5000 now individual investors within our various REITs and funds and. It’s a very hands on approach. We see them often, whether it’s informal events such as our annual meeting, which is always very well attended, whether it’s cocktail parties and golf tournaments and so on. But we’re very accessible as well. So when they come to invest in Skyline, they’re always given the opportunity to reach out to me to to my team with a specific question before, during or after investment. So it’s a it’s an opportunity that they have that you wouldn’t typically have in what is now become quite large funds. And I very much enjoy it. It’s an opportunity to speak to the people who are funding the acquisitions, who are enjoying the benefits of their investment. They talk to us about what they do with their distributions, whether they’re funding their retirement or their children’s education or traveling. It’s very rewarding, I think, for all of us to hear those stories as to what people are actually doing with their investment funds, and it’s rewarding for us.
Iain Grant: [00:20:44] Gordon Draeger is president of the Skyline Retail REIT. Skyline Wealth offers private alternative investment products in real estate and clean energy. Over 5400 investors are enjoying historically stable investment performance. Skyline Pride themselves on offering investors a unique investment experience, helping to cut out much of the noise and emotion of what many investors can come to experience in the public markets. All of the investments that Skyline Wealth offer are considered alternative investments, providing access to investments that are correlated from the public markets and driven by the underlying asset value. Skyline believes that investing should be enjoyable, engaging and rewarding. Skyline would love to connect with you and hear about your investment goals. To find out more about their investment philosophy. Go to Skyline Wealth dot a Skyline Wealth dot CA and get in touch with the Skyline Wealth Team. That website Skyline Wealth S.A.. I’m Ian Grant and this is Ask the Expert here on Newstalk. 1010 Toronto. We are back. This is ask the expert here on Newstalk 1010 Toronto. I’m Ian Grant. I’m joined this hour by Gordon Draeger. He is president of the Skyline Retail REIT. Gord, just before we get back into things, for anyone who’s joined us over the past half hour, can you tell us just quickly what is the skyline retail rate?
Gord Driedger: [00:22:16] Well, the retail REIT is a portfolio of Canadian properties. We’re about 117 properties, just over 1.6 billion in total, assets geographically dispersed in five provinces and 67 communities across Canada.
Iain Grant: [00:22:31] Gordon When I first started doing these shows with Skyline, I was trying to get my head around what Skyline is. And I remember Jason summed it up in just a fantastic one sentence answer. He said, We offer institutional quality investments for the everyday investor, and that kind of made it all come together for me. Can you expand a little on that?
Gord Driedger: [00:22:53] It’s an opportunity for individuals to invest in retail properties, high quality retail properties with the finest quality tenants, the finest quality covenant of tenants without having to do the day to day management. We have a professional manager that looks after all these assets. So whereas if you had a relatively small sum of money and wanted to invest in a property, first of all, it’d be very difficult to get into some of the quality properties that we have. But it’s an opportunity for them to own those shopping centers without the management headache, often of kind of dealing with snow clearing and tree cutting and that type of thing. It’s an opportunity to be involved in institutional quality investments without having to do a lot of that work. These are institutional quality investments. So these are the same kinds of properties that are owned by our publicly traded peers. I think this is an opportunity for our investors to be a little closer to to the properties and understanding more about what happens within them.
Iain Grant: [00:24:06] Gordon We got a chance during the last segment to talk about some of the challenges over the past couple of years or so, but on the positive side, looking forward now. Can you talk about some of the opportunities that you see emerging in this sector.
Gord Driedger: [00:24:18] Throughout the period from March of 2020 to to to present? We’ve been continuing to buy assets. In 2020, we were among a small group of companies still doing so. We our history is that that both personally and within within our various companies. Sometimes in those periods it’s the best time to buy. Obviously, when fewer people are buying, sometimes the pricing is a bit better. So we continue to buy. This year, for example, we’ve bought just about $300 million worth of quality assets, seven properties, all within our kind of sweet spot in terms of the grocery and pharmacy anchored portfolio. It’s an opportunity now where pricing is, is the demand for our kinds of assets is very high. There’s really been a bifurcation of of interest within the market between the enclosed shopping centers, which were more impacted in the early days of of 2020 than the than the retail open air strips. So there’s there’s as much interest than ever in our properties from an ownership perspective that has served us well in terms of the increased value of the portfolio. Leasing, which is one of the three pillars of our business, being able to to increase our income by filling a vacant spaces and be filling the spaces with quality tenants that we may build on these sites. The leasing has never been stronger and that that’s an industry wide phenomenon that the retailers, the relevant retailers are stronger than ever.
Gord Driedger: [00:26:05] And then when I talk about relevance, it’s not the fad retailers, it’s the relevant retailers that will stand the test of time that that tend to be our primary tenants. So that’s been very strong. The other pillar of our business is we have hundreds of tenants and hundreds of leases that that from time to time will require renewal. Just as you would normally renew a lease, an individual might renew a lease on a on an apartment or a property that they have. So from time to time, we have that opportunity and we work very hard to make sure that when those leases come to to a time of renewal, that there’s no question first of all, there’s no question that the tenant wants to remain in the property because there’s always an opportunity for them to go down the street or around the corner to another property. We want to make sure that they’ve enjoyed their experiences. They’ve been successful. All in our properties and that they want to stay and hopefully are able to pay additional rent, which is another way that we continue to grow the the income from the property. We’re clearly out of the deep issues here and not that we felt them necessarily, but certainly some of our smaller tenants did. As we come out the other side, as you say, it’s been very, very strong.
Iain Grant: [00:27:26] You’re listening to Ask the Expert here on News 1010 Toronto. I’m Ian Grant speaking with Gord Dreger. This hour, he’s president of the Skyline Retail record. What about challenges? Is there anything to watch for beyond the pandemic?
Gord Driedger: [00:27:38] Well, I think inflation, you know, inflation affects everybody. You know, it’s certainly affected our service providers. You know, the people that plow the snow and fix the the air conditioning units and cut the grass. Things are more difficult to acquire than than they used to be. And I think that’s an interesting phenomenon because, you know, the companies that provide major systems for major buildings are busier than ever. So it’s very difficult. So that’s been a challenge for us, especially on the new construction that we that we have been doing to grow our income. Getting things as simple as doors and air conditioning units has been very difficult. So that I mean, we’re getting them. It’s just taking longer and sometimes in some cases costing us more. You know, wage inflation from our service providers as well as the inflation on some of the goods and services that they consume, is certainly a challenge for everyone.
Iain Grant: [00:28:41] This is ask the expert here on Newstalk 1010 Toronto, Ian Grant. Here are joined by Gord Dreger, who is president of the Skyline Retail Record. What has the REIT been up to over the past year?
Gord Driedger: [00:28:51] Well, the last year has been busy. We you know, we’ve we’ve continued to acquire in our in our markets the transaction. We’ve done seven transactions that say, but 300 million of acquisitions just in 2022 alone. Which brings us to the 1.6 billion in the total assets and in the fund. So we we continue to acquire in good markets and we’re we’re also quite busy on on the development side. And this is one of the three ways that we add income to to our portfolio is is to add density. And in our case, it’s retail density. So we’re adding new freestanding buildings, food stores, banks, liquor stores to our existing portfolio, which is which is a very good way of growing income. So that’s been a bigger part of our business in the last couple of years and and continues to be a big part of our business going forward where we’re adding density in simple terms, when we buy a shopping center, we buy it typically on the basis of of existing cash flow, existing income. So when we can add income incrementally on something that we’ve already paid for, it can be a very good return for our investors.
Iain Grant: [00:30:20] Gordon Draeger is president of the Skyline Retail REIT. Skyline Wealth offers private alternative investment products in real estate and clean energy. Over 5400 investors are enjoying historically stable investment performance. Skyline Pride themselves on offering investors a unique investment experience, helping to cut out much of the noise and emotion of what many investors can come to experience in the public markets. All of the investments that Skyline Wealth offer are considered alternative investments, providing access to investments that are correlated from the public markets and driven by the underlying asset value. The skyline commitment to investors is to provide trusted advice and long term investment excellence while building and strengthening extraordinary client relationships. Skyline believes that investing should be enjoyable, engaging and rewarding. Skyline would love to connect with you and hear about your investment goals. To find out more about their investment philosophy. Go to Skyline Wealth dot a Skyline Wealth dot CA and get in touch with the Skyline Wealth Team. That website Skyline Wealth. I’m Ian Grant and this is Ask the expert here on Newstalk. 1010 Toronto. Welcome back. This is ask the expert here on Newstalk. 1010 Toronto. I’m Ian Grant. I’m joined this hour by Gord Dreger. He is president of the Skyline Retail REIT. Gord, when we talk to Skyline, there is always this thread of doing things differently. And as we’ve certainly discovered in the past, it’s been proven as the right strategy for Skyline and apparently a large part of your success. Now the partners have been doing it differently since day one. Can you talk about, you know, the conscious decision not to take the tried and true routes and how that’s benefited pretty much everything that Skyline is a part of when.
Gord Driedger: [00:32:20] The various funds started and then the Reids were formed along the way. And certainly the retail rate was like this in 2013. At the outset, the the focus was on secondary markets. I want to talk about secondary markets. I’m talking about anything really other than what we would view as primary markets, which is the Vancouver or Toronto, in some cases Montreal, Calgary. So secondary markets are places like London and Waterloo and and Ottawa and Cobourg. So they aren’t necessarily very small markets, but they’re secondary markets. So the focus was on secondary market, good quality real estate and secondary markets and that at the outset that was a very novel approach. It’s become more mainstream. A lot of our institutional peers are doing some of the same kinds of acquisitions, but at the outset that was quite a novel approach. The thought being that you’re buying cash flow and I’ll use Shoppers Drug Mart is a good example who is a big part of our portfolio. You’re buying cash flow from a fine company like Shoppers Drug Mart slash Loblaws in a smaller secondary market versus a urban Toronto market. The quality of the cash flow is the same. The rents may not be as high, but that’s okay because you’re buying them on the basis of of the quality of the cash flow.
Gord Driedger: [00:33:46] You’re going to pay less if the rent is lower, but the quality of the cash flow is the same. So that that was our approach. It is our approach. So we look for the for the, the quality tenants you’d find in a bigger market. But but we’re typically enjoying a bigger margin on our profitability because we’re paying less for the same the same cash flow. And that’s that’s been a tried and true approach for for all of the funds. And the other thing that I think sets us apart to a great extent is our commitment to our individual communities know, irrespective of the of the fund, the Skyline Fund, we have different programs. And in the retail REIT, for example, we opened really the support of the Skyline Group of companies supported it in one of the retail assets, what we call a community hub, which is a youth mental health kind of focus. So that that kind of approach and that kind of project is is really indicative of the the the approach that the funds have taken since since day one.
Iain Grant: [00:34:58] And as you mentioned during the last segment, the quality of the tenants in these secondary and tertiary markets, same as the primary markets, but you’re able to achieve that greater margin.
Gord Driedger: [00:35:08] It’s really a hallmark of the retail REIT’s approach. We’re we have very good relationships with these these nationally funded and nationally coveted retailers. And it’s the same relationship we would have in a primary market. But our but our margins are better and and we’re paying less for the same dollar of cash flow, which is a big part of our ability to provide good distributions to our investors.
Iain Grant: [00:35:38] Gord Speaking about that tenant base, you mentioned essential services. What would those be?
Gord Driedger: [00:35:44] The food and pharmacy, but also medical, the medical and the paramedical, the chiropractors, the dentist, that type of thing that, that they’re in business day in and day out. We have the dollar stores are a growing part of our business and the quick service restaurants especially during 2020 2021, the drive thrus were really doing quite well for obvious reasons. And of course the financial services, the banks and other financial services companies that people need throughout. It was an interesting time when I was at Bank of Montreal because and that was in the early so late 2000s, I guess, you know, the question the banks were asking themselves at that point and maybe still are, but how much? How much in-person banking are people going to need or want to do? And I think that question’s been answered now. I mean, there’s there’s really almost as many physical banks as there were back in in the nineties, and they may be a bit bigger and providing different services than they once did. But there’s still they still need that physical footprint. So, you know, understanding the trends, investing in tenants, investing in shopping centers that are tenanted by these people that need physical space. You can do a lot of things online in the case of a food store. Yes, you can order online. Yes, you can have it delivered. But having food delivered, especially in the secondary market, is much more difficult for those companies to to do it profitably. And when I say those companies, I’m talking about the bigger food store chains. And so while people sometimes order online, the the transaction still involves the store. So they will pick it up in store. And so that that it’s been it’s been a key part of that evolution of the food business. While there is some online activity, it typically and especially in the secondary markets, typically involves the physical food store.
Iain Grant: [00:37:56] Can you tell us just quickly what is the Skyline retail REIT?
Gord Driedger: [00:37:59] Well, the retail REIT is a portfolio of Canadian properties, about 117 properties, just over a 1.6 billion in total assets geographically dispersed in five provinces and 67 communities across Canada.
Iain Grant: [00:38:15] And as we wrap up the show, the exciting question, what’s next? What’s in the future?
Gord Driedger: [00:38:20] We ask ourselves that what could we what should we be doing differently? And I keep coming back to what we have been doing over the last five or six years. You know, when we started the REIT, we began doing certain things. And when in 2020, which caused everybody to kind of look at their business model and understand what is it? Is it it should it be the same? What’s changed? And what we realize is that that what we had been doing was also very, very good strategy for going forward. So as simple and perhaps unexciting as it sounds, we’re going to be doing more of the same. It’s we know it and we think we’re we’re adept at it. And we will be doing more of the same in terms of buying good quality shopping centers and great markets, managing them well and just doing more of the same.
Iain Grant: [00:39:17] Gord, thank you so much for joining me this hour. Just fascinating.
Gord Driedger: [00:39:21] My pleasure.
Iain Grant: [00:39:22] Gordon Draeger is president of the Skyline Retail REIT, a premium Canadian REIT portfolio consisting of retail properties anchored by national name brand tenants. Skyline Wealth offers private alternative investment products in real estate and clean energy. Over 5400 investors are enjoying historically stable investment performance. Skyline Pride themselves on offering investors a unique investment experience, helping to cut out much of the noise and emotion of what many investors can come to experience in the public markets. All of the investments that Skyline Wealth offer are considered alternative investments, providing access to investments that are correlated from the public markets and driven by the underlying asset value. The skyline commitment to investors is to provide trusted advice and long term investment excellence while building and strengthening extraordinary client relationships. Skyline believes that investing should be enjoyable, engaging and rewarding. Skyline would love to connect with you and hear about your investment goals. To find out more about their investment philosophy. Go to Skyline Wealth dot a skyline wealth dot c A and get in touch with the Skyline Wealth team. That website Skyline Wealth. Okay, I’m Ian Grant and this has been asked the expert on Newstalk 1010 Toronto.