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“Wal-Lord: How the Retail King’s Landlord Could Pay You Monthly Rental Income”

Sleuthing out the teased Walmart landlord from Brian Hicks

The “Wal*Lord” teaser from Brian Hicks is not a new one, but I’ve had readers asking about it over and over during the last week or so — which must mean that it’s being re-run by Angel Publishing in an attempt to hoover up some more subscribers to The Wealth Advisory.

So I took a quick look to make sure that they’re still teasing the same company that they featured a little over 2-1/2 years ago… and whaddya know, it is still the same. Indeed, the ad itself is almost exactly the same — I didn’t notice any real updates or edits (other than to say that they’ve been paying their monthly dividend for 11 years now, not nine). The stock price of the company is pretty close to where it was back in April of 2012 at about C$27 — though performance looks better for the shares in Canadian dollars (flat) than it does in US dollars (down 5-10%). Back when this ad first ran the US$ was slightly less valuable than the C$ so the stock was slightly over US$27 and slightly under C$27, that currency relationship has flipped so now the Canadian shares are still slightly under C$27 but in US terms the fair price is a bit under US$25. The company continues to have a decent yield, continues to rely heavily on Wal-Mart as a tenant, and has not raised or lowered the monthly dividend since the Summer of 2007.

If they can’t come up with a new ad, I’m not going to write a whole new article (so there!) — what follows is our article that ran on April 5, 2012. It has not been edited, updated or revised. The original discussion from back then is still at the bottom of the article, so feel free to jump in if you have thoughts to share.

—–from 4/5/2012——-

“Every Month for the Past 9 Years, This Little-known Landlord Has Sent Out ‘Rent Checks’ It Collects from Wal-Mart to Its Partners…”

“I’ve Found a Way for You to Become a Partner for as Little as $27….”

That’s the intro to Brian Hicks’ “Wal*Lord” teaser ad that’s been circulating very heavily today — and to be honest, I almost didn’t even look at the ad, because from the name I was certain it was just another version of the Walmart landlord teaser that Roger Conrad has been sending out for his Canadian Edge newsletter off and on for a couple years.

But though they’ve lifted the basic idea from Conrad’s teaser ad campaign, this is a different pitch for a different company. The tease is an attempt to get you to subscribe to The Wealth Advisory from Angel Publishing, which apparently is now being edited by Brian Hicks … and the promise, as always, is a lusty one …

“It’s the single most reliable way you can get an extra check every single month.

“One little-known “landlord” has been sending out ‘rent checks’ it collects from the world’s largest retailers to its partners for the last NINE YEARS!

“I’m talking about collecting rent from some of the world’s biggest billion-dollar retailers — like electronics superstore Best Buy.

“This landlord also gets rent from office supply behemoth Staples and from home improvement and crafts leaders Lowe’s and Michaels…

“This landlord even collects rent from the world’s largest retailer, Wal-Mart.

“That’s right. Even the huge retailer Wal-Mart is contractually obligated to pay this landlord each month in order to honor its lease agreements — no matter how shaky the economy is, or how high inflation soars…

“Wal-Mart must pay him before it even pays itself…

“That’s why I’ve dubbed him ‘Wal-Lord.’

“And I’ve found a way for you to become a partner of this landlord starting immediately — with as little as $27.”

So I guess if we’re going to be calling ships “she” then calling real estate owners “he” is only fair, but it still sounds a bit odd.

And not to let the cat out of the bag too early here, but yes, this is clearly just another teaser for a REIT with a Wal-mart connection. Which many of them have.

REITs, if you’re new to this game, are Real Estate Investment Trusts — they’re popular in the US and Canada as a way to democratize real estate income, they buy or develop properties (some specialize in malls, or office buildings, or apartments or other niches, others are diversified), then they get a tax break (as in, “don’t pay any” for their real estate income as long as they pass the lion’s share of that income through to their shareholders (or unitholders, as they’re sometimes called). They’re almost all built to pay regular and growing dividends and appeal to income investors.  And they trade and act just like regular stocks in almost every way, though their dividends are generally treated as regular income (not like stock dividends), since they didn’t pay taxes at the corporate level.

And this particular one, though it’s not the same REIT Conrad has been pitching, is also Canadian. But which one? Here are a few more clues from the ad:

“‘Wal-Lord’ has delivered reliable ‘rent checks’ to partners for 113 consecutive months (that’s NINE years!) without missing a single payment.

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“And this past October, Vancouver’s main newspaper The Globe and Mail reported: ‘… A dollar invested [with this landlord] in 2001 is now worth $18.’

“That means it has returned well over 1,700%.

“You could have turned a small $10,000 investment into a whopping $180,000 profits!

“It has averaged 29.7% returns to its investors every year.”

So that’s almost enough detail to confirm our answer … perhaps a little more?

“This landlord specializes in retail real estate. Its strategy involves leasing shopping centers anchored by “big box” retailers.

“It owns and manages a massive portfolio of shopping centers in major cities in our friendly neighbor to the north, Canada.

“Their ownership interest contains an aggregate of over 25 million square feet….

“It’s already signed over 70 long-term lease agreements with Wal-Mart, and most of these leases have terms of 20 years or more.

“And here’s the beauty part of this opportunity…

“Because of its strong relationship with the world’s biggest retailer, several more retail powerhouses are also cozying up to this landlord.

“This landlord has an enviable list of Fortune 500 clients including Best Buy, Staples, Lowe’s, Michaels, and most recently, Target.”

So … who is it, eh? Well, all those clues get poured into the Thinkolateur, and we learn that this is … Calloway REIT (CWT in Toronto, CWYUF on the pink sheets).

Like many REITs in Canada, Calloway pays a monthly dividend — in their case, it comes to a yield of about 5.8% at the current just-under-$27 share price. And they are a major Wal-mart landlord in Canada, thanks to a partnership with an aggressive big-box developer who basically helped to bankroll Wal-mart’s mass expansion in Canada and who then offloaded many of his “SmartCentre” developments to Calloway. You can see that whole story here in that Globe and Mail article that Hicks quotes from, and the partnership with SmartCentres and its aggressive CEO has indeed been a solid growth driver for Calloway — though most of the aggressive parts of that growth came early in the last decade.

I’ve never looked particularly closely at Calloway, but they do compare pretty favorably with Riocan (that’s the one Conrad teased a couple years ago, and has continued to tease) — Riocan is the Big Daddy of Canadian retail REITs, and arguably has more high-value urban locations in the East and a bit more diversification, and as such it gets a little bit of a premium price compared to Calloway, but they’re pretty close in valuation. Both are very low-cost operators (as befits a big box and strip mall landlord with economies of scale — boxes are much cheaper than operating enclosed malls or office buildings), and both look reasonably appealing.

There’s been a bit of a buzz around Canadian retail lately, with the relatively strong economy and resilient real estate market making some folks more comfortable with Canadian REITs than those on our side of the border, but it’s worth noting that though demand is pretty high for Canadian retail space right now, it’s a dramatically smaller market and it’s apparently a tougher one to expand in even though more retail space is needed — so much so that Riocan is pushing most of its expansion forward on our side of the border in a search for growth. There’s an interesting story here from Reuters today about demand for big retail space in Canada and how the lack of mall development has kept rents high and spaces hard to find — so that ought to be a positive driver, particularly for folks like Calloway that have new malls with strong anchors that might draw more interest from US retailers who are moving north (and yes, they did get Target as a tenant recently, which could become a big deal, though it was largely because Target took over a defunct retailer’s space in a couple of their malls).

So there you have it — a Canadian REIT, a pretty good yield, a strong base of centers with high occupancy, about 40% of of which are indeed anchored by Wal-mart. I don’t know what their growth profile looks like going forward, but they do certainly have the high-profile and hard-charging leadership to push for more development, and they appear to be on track to expand along with their developer partner as more projects are developed and then spun off to the REIT. It’s not as staid a pick as Riocan seems to be, and they’re more tied to strategic partners (Wal-mart Canada and SmartCentres) who might have an impact on their plans, but they’re a bit cheaper, have a higher yield, and own a lot of relatively young big box malls that appear to be doing quite well. If Wal-Mart loses the attention of the Canadian consumer they’d probably be in trouble, since Wal-Mart is both a large part of their revenue (more than 25%) as well as a critical anchor for most of their key properties, but as long as Canadians keep shopping at Wal-mart I imagine they’ll probably do just fine. With a large portfolio already under their belt, and a market cap of well over $3 billion, I’d be a bit surprised to see them churn out near-30% growth again over the next decade as they did in their first decade of growth, but if they continue to leverage their space and their backlog they ought to at least be able to keep up that steady dividend and, one hopes, keep pace with inflation as they gradually raise rents.

So whaddya think? Would you prefer Riocan or Calloway for your Canadian mall money, or do you have other real estate plays north of the border that you prefer? Or do you think US retail REITs are a better bet? I own a retail REIT in the western US (ROIC), and have suggested a few REITs to the Irregulars over the years, but do not own any of the companies mentioned above. Let us know what you think with a comment below.

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gatekeeper
Guest
gatekeeper
August 2, 2012 8:50 am

This is alot to consider for a person just breaking in…just want to pick up a few canadian stocks to get started…any thoughts?

apl16
Irregular
September 5, 2012 4:57 pm
Reply to  gatekeeper

I’m not that learned an investor as many here but putting a little dough into a bank like National would be a safe start until you get more comfortable with the markets.
For a bit of fun, you might dump a grand or 2 on a small gold stock like scorpio or prodigy……..or maybe a little semafo, which is a beat up gold stock starting to come back a bit…………..Good Luck!!!

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Donald Bush
Guest
Donald Bush
August 13, 2012 2:04 pm

Please send me your information on buying into Wal-Lord Thanks Send information to my e-mail. Don Bush

Tesfai Kflu
Guest
Tesfai Kflu
June 10, 2013 12:14 pm
Reply to  Donald Bush

As a possible American investor, all I want to know is how do I buy
the Wal-Lord’ stocks?.

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Cutting
Guest
Cutting
November 28, 2013 11:54 am

Are these people even reading the entire article of Travis? They keep asking the same question over and over again. If you are not savvy enough to figure out a OTC/Pink from Travis’s guide, you should be better off staying away from this game.

prettydarn
Member
prettydarn
September 5, 2012 3:39 pm

Brian, can you tell me if I can roll over funds from an existing Canadian RRSP mutual fund without penalty to fund a new Canadian REIT?

BillyJoe
Guest
BillyJoe
October 17, 2012 5:48 pm

What about buying these REITs for a ROTH IRA? Good idea? Bad idea?

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JOEL GREENBEFG
Guest
JOEL GREENBEFG
October 22, 2012 11:56 pm

I SUBSCRIBED TO YOUR WL LORD PITCH. HAVE HAD NO CONFIRMTION OR NY WORD. IS THIS FOR REAL OR A SCAM TO GET MY CREDIT CARD AND PERSONAL INFORMTION? JJG

valkoff
Member
valkoff
October 25, 2012 2:14 pm

Please send me info and buy in instructions to Wal-Lord. Send to my email. Thank you.

Belle Tilson
Guest
Belle Tilson
October 26, 2012 12:27 pm

This sounds to good to be true.

Gail
Guest
Gail
November 1, 2012 12:37 pm
Reply to  Belle Tilson

Belle, How so? There are a number of RIET’s paying higher than 5.8%. Also, this has already run up and “stabilized”.

montyspivak
Member
montyspivak
October 28, 2012 9:47 am

Hi,
I am a new subscriber, and just read this article and comment thread.
You may find this series of articles and blogs, that I published earlier this year on Seeking Alpha, helpful for your Canadian REIT research. It breaks out the Canadian REITs by sector, and includes some helpful (such as OTC ticker , description, market cap, dividend, and other, but now a little dated) information, in a comparable format. Here is the title and link of one of a dozen or so articles:
Analyzing Canadian REITs, Part X: Highest Yields And Lowest Risks
http://seekingalpha.com/article/365151-analyzing-canadian-reits-part-x-highest-yields-and-lowest-risks
Cheers, Monty

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Gail
Guest
Gail
November 1, 2012 12:44 pm
Reply to  montyspivak

Thanks, Monty. It is great to have an objective analysis rather than the overblown hype of newsletter promotions. I love Seeking Alpha and Stock Gumshoe, too.

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Marvin Jeschke
Guest
October 29, 2012 10:08 am

Appreshiated your information

Ruth chodrow
Guest
Ruth chodrow
January 12, 2013 12:24 pm

I was able to get the answer about the Target and Walmart renter…Calloway and Dayton. Thank you.

Jean Lamb
Member
Jean Lamb
January 30, 2013 7:21 pm

I bought stock in Wal Lord CWYUF) on the US Exchange (Scottrade) does that give me the monthy checks?

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francis Colosimo
Guest
francis Colosimo
March 26, 2013 11:27 am

Have been trying to apply for the WAL*LORD advertisement, but never can find the application of this promised gift, or are you folk advertising it only to trap people into buying your publications? Be real and let me know how to apply if it is true and above board. Cheers Francis.

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RICHARD L HANSEN
Member
RICHARD L HANSEN
June 9, 2013 2:53 am

I WOULD LIKE TO GET INSTRUCKINONS ONWALMART LANDLORD

Hannes Viljoen
Guest
August 28, 2013 3:37 pm

I stay in South Africa, I am very much interested in an investment that would give me a monthly income each and every month with a growth of 29.7% yearly. Could you please send me more info.
Thank you,
Hannes Viljoen.

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dom
Guest
dom
July 9, 2014 10:10 am
Reply to  Hannes Viljoen

Hi Hannes

Did they ever reply to you ?? and if so what happened

Robert Bate
Guest
Robert Bate
December 16, 2013 6:55 am

I also stay in South Africa, and as above would like know the same info; R: Wall Lord
Kind regards Bob Bate

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meassassin
July 27, 2014 3:50 am

Is it my imagination or have we seemed to pick up several trolls?

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frank_m
frank_m
July 29, 2014 8:54 pm
Reply to  meassassin

I am thinking it is not your imagination. The skeptic in me says someone at the newsletter is not happy about getting busted for re-running an outdated spiel, and the repetitive inane questions and comments demonstrate just how clever they really are. Just my opinion.

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tanglewood
July 29, 2014 9:57 pm
Reply to  frank_m

Frank and Kevin; I wonder if Travis should stop being a nice guy and only allow irregulars to post comments.

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konduparti murarji
Guest
konduparti murarji
July 29, 2014 3:37 am

The initial payment for Wal*Lord is $27. Why not you show the way to make payment. Why do you ask $49 for your publications. This creates doubts in the minds of most of us. Whether $27 is one time payment or a regular monthly payments ?. Or it is only a registration fee ?. It is not clear. You are forcing us to purchase your publications to know details. You are keeping us under illusion.

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Mike N.
Guest
Mike N.
August 7, 2014 1:41 pm

I would suggest you read the article more carefully, then – no one is forcing you to pay $49 for anything. All of the information that is necessary to purchase this REIT is in the post.

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Thomas H Graham
Guest
Thomas H Graham
November 1, 2014 2:10 pm

Dear Sirs
I wish to buy a holding in Land-Lord to increase my pension
Please send me all necessary details.
Best regards
Thomas H Graham

Santafe66
Irregular
November 14, 2015 6:25 pm

So is this the same thing being pitched by this Hicks guy at Angel publishing that he’s now calling “Wal-01(k)”? I never got to the bottom of his pitch to sign up and find out. Thought I’d ask the friendly Gumshoe for the truth.

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