These safety-conscious stocks remain buys

Article Excerpt

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST, $16.91, is a buy. The REIT (Toronto symbol AP.UN; Units outstanding: 128.0 million; Market cap: $2.4 billion; TSINetwork Rating: Average; Dividend yield: 10.6%; www.alliedreit.com) owns 201 office buildings and nine properties under development, mainly in major Canadian cities. Its occupancy rate is 86.3%. The REIT has increased its stake in two office towers under development—one in Toronto and one in Vancouver—by buying some of the stake of partner Westbank Corp. As a result, Allied now owns 95% of the Toronto building, and 90% of the Vancouver project. In exchange, the REIT cancelled $198.0 million of loans it had extended to Westbank. It also paid $36.3 million in cash to Westbank. To help offset those costs, Allied plans to sell $200 million of less-important properties, mainly in Toronto and Montreal. To put those amounts in context, the trust’s market cap is $2.4 billion. The transaction cuts Allied’s risk, as Westbank’s deteriorating financial condition increased the possibility it would default on its…