Why I continue to add to H&R REIT
Hi everybody,
It has been almost a year or so since NCP has been pounding the table on H&R REIT. Admittingly, the story has taken longer then I expected in terms of performance but despite the sluggish behavior of the unit price the REIT is in significantly better condition after material dispositions, including the continued sale of ‘hard to sell’ type assets which has resulted in fine-tuning of the portfolio. Wishy-washy management communication from CEO Tom Hofstedter has not been helpful for the unit price. For example, at the end of last year he signaled news was coming by end of the year on the strategy, only to procrastinate further. In Q4 2025, management seemed to suggest an NCIB program was imminent before pushing it out further, which has further annoyed, upset and likely caused underperformance in the unit price. Underperformance has long been the name of the game at H&R REIT, which has not done well as a public issuer. It started out as a family affair nearly three decades ago and NCP believes the story will be wrapping up in its original form. Negative historical performance and disdain for certain managers has caused investors to miss out on opportunities in the past few years in the REIT space. I believe the same opportunity exists in H&R and it is not useful to reflect on Tom Hofstedter’s historical underperformance in lieu of the nearer-term catalysts which present material upside potential if NCP is right about the road ahead for H&R REIT.
