Headline inflation of 2.8% came in below estimates, moderating versus last month…

… on broad-based easing at the category level, with transportation leading the way…

… thanks to the temporary ceasefire with Iran, which pushed oil lower and drove decelerating Y/Y growth in gas prices.

The one category up meaningfully in the month was travel-related services, with accommodation rising nearly 20% in Toronto and Vancouver…

… thanks to demand linked to the World Cup.

Brookfield (BAM) continues to deploy capital into real estate, announcing two deals worth $7B in aggregate…

… $5B of which is earmarked for LXP Industrial, who owns 108 warehouse and logistics facilities in the US. The asset class has seen faster rent growth than others…

… so it’s no shock to see Brookfield and CPP follow up past industrial deals with this one.

Its $2B JV with Healthpeak is a little more interesting, with the new entity owning 86 outpatient medical facilities - an asset class that’s seen steady growth in visits…

… and one that makes up over a third of Vital Infra (VITL-U), the only TSX-listed vehicle for this type real estate exposure…

… which got a small bid on the news and could get more attention, given BAM has historically timed its entry points well.

Yesterday we dug into the key differences between Timbercreek Financial (TF) and other publicly traded MICs, highlighting its balanced geographic mix relative to the GTA-dominant portfolio of its peers…

… which have more exposure to the region’s 30% drawdown in high-density land values since 2018.

The other key difference is collateral, with over 80% of Timbercreek’s book tied to income-producing assets…

… while peer portfolios are mostly backed by assets with no cash flow, which could be tough to move in a worst-case scenario given the build in multi-unit inventory.

While they’ve all been impacted by the BoC’s tightening cycle in 2022, investors are pricing in excessive pain in TF shares at ~0.8x book value…

… with the >$120M discount vastly overstating the true impairment risk we outline in our initiation.

A good chart from National on the potential impact of Trump’s latest 50% tariff threat, which would impact ~5% of US exports if implemented (big IF).

Magellan (MAL) was up 8% after announcing a contract to produce the M-72 LAW, as the GoC looks to bring more equipment production in-country…

… an initiative the company sits directly downstream from.

After a quiet H2’25, MAL shares have nearly doubled YTD - with wins like this and the recent TKMS torpedo production deal pushing the multiple to new highs.

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