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Re-Arrangement: Sell Some MRG For BRE

|Includes: Brookfield Real Estate Services Inc. (BREUF)

Morguard North American REIT is still my top pick, but I wanted to get an open position on BRE before the new year.

MRG.UN has recovered somewhat, though still represents a good deal, but it was the most reasonable one to sell down for BRE.

BRE is a tremendous value, and represents a ludicrous yield opportunity for a great business in a great industry.

I have decided to open a speculative position in Brookfield Real Estate Services, BRE. I sold a portion of my MRG.UN in order to open the position, placing MRG.UN more in line with my other top holdings (20%) in order to get more exposure to the Canadian housing market's real estate business, increasing my position in BRE to about 8% of the portfolio. 

If the "crash" is gentle, BRE will continue to benefit handsomely from good returns. If the crash is extreme, BRE's agent's will benefit from its flexible fee's and it should grow as more independent agents move to their network (or offer themselves for sale during the downturn to the best operators, of which I believe BRE is one). 

The current yield is comically high, driven by investors fears of a major housing crash in Canada. As I have been consistent over my entire writing career, I believe these fears are overblown, and opportunities abound. BRE is one of those opportunities. 

I plan to increase my allocation in the New Year to this company and other's in the housing industry that have been beaten down over fears of a crash with new capital. 

Have a Happy New Year, and happy investing. 

Disclosure: I am/we are long BREUF.

Additional disclosure: I am long BRE and MRG.UN on the Canadian exchange: TSE where they are easier to trade. MRG.UN does not have an American ticker.