I’ll be using my Ice Cream company failure for many examples and lessons in the next little while. I learned so many things from that grand mistake. Here is this week's lesson for me —and perhaps for you, if you have what you think is an amazing business idea.

I was convinced fresh ice cream made with fresh fruit was a market killer. I loved eating ice cream. Chocolate was my favorite, but how could putting fresh fruit into it not be a winning business?

That was basically the premise that convinced me I should start the Ice Cream Company. I loved ice cream, and fresh fruit would only make it better.

But I made a grand mistake that I would repeat for a few more startups before I figured it out. 

I didn’t listen to the customers to find out if they really needed my product.

I didn’t listen to learn that in June-August, yes, they do want and need, at times, incredible ice cream made from local fruit. That’s a real want people have. You are driving in your car, it’s 30 °C (95 °F), and you see a sign for fresh fruit-based ice cream or yogurt. But that’s for about 3 months in Canada. What about the other 9 months?

Well, not so much a need. During those months, the need for ice cream is met by buying ice cream brands at the grocery store. So, my dream for a business had nothing to do with what the market wanted. It was at best a 3-month business, with 12 months of bills and expenses.

Lesson one, consider a business that meets a customer's want or need. What you think is a good idea doesn’t matter.  I didn’t follow that first rule. Not only this time, but much later, when I launched another failure. Always start a business that meets a need. I’ll tell you about that failure a few newsletters from now. It’s still tough to talk about.

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In this week's REIT countdown, here is number 3. Killam Apartment REIT. My app picked it as number 3 for a variety of reasons. I like it a lot when it had more of the mobile home parks it now seems to want to sell, and its focus on Atlantic Canada was something I loved. Now they are expanding beyond that Geography, and I have some concerns. Nevertheless, here is the analysis putting it at #3.

This information is for Educational Purposes only. Do not make portfolio changes without speaking with your financial advisor. I am not a financial advisor.

Killam Apartment REIT – Full Hank Analysis

Business Overview & Context

Killam Apartment REIT (TSX: KMP.UN) is a Canadian residential REIT with primary exposure to apartment properties and manufactured home communities (MHCs).
It owns over 18,000 apartment units and approximately 6,000 MHC sites, with properties across Atlantic Canada, Ontario, Alberta, and British Columbia.
The REIT’s portfolio value stands at roughly CAD $5.5 billion. Its strategy emphasizes capital recycling, internal reorganization, and modernization of its property base.

Hank 10 Rules Analysis

Summary Verdict

Average Hank Score: 7.1 / 10

Killam REIT demonstrates disciplined management and strong operating performance.
The REIT’s balance of growth and capital discipline earns it a “Hold / Moderately Bullish” rating within the Hank framework.
While rate and refinancing risks persist, its payout ratios and occupancy levels provide a buffer.
Its capital recycling and AFFO growth support long-term resilience.

Risks & Opportunities

Key Strengths:
- Steady same-property NOI and revenue growth (~6–7% YoY)
- Moderate AFFO payout ratio (~67%)
- Strong capital recycling and improved leverage
- Geographic diversification across stable regions

Risks:
- Interest rate and refinancing risk
- Cap rate expansion and property valuation volatility
- Rent control and regulatory risk
- Regional economic dependence (Atlantic Canada concentration)

Graham Verdict

Verdict: HOLD / VALUE CANDIDATE
Killam is not deeply undervalued but appears fundamentally sound.
If macro headwinds subside or its unit price declines, it could transition into a stronger value opportunity.

This information is for Educational Purposes only. Do not make portfolio changes without speaking with your financial advisor. I am not a financial advisor.