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Looking west at the VMC. Formerly a vacant pocket of suburbia, 53 of the 442 acres of land in the project is held by SmartCentres and Calloway REIT, which was hunting for new ways to grow.

The past five weeks haven't been kind to real estate investment trusts, a sector that has been a magnet for income-starved investors for years now given the ultra-low interest rate environment.

The S&P/TSX Composite Capped REIT Index is down close to 10 per cent from its all-time high on April 30.

Corporate insiders are betting the setback will just be temporary.

Buying by officers and directors within their own real estate businesses shot up in recent days, particularly in small and mid-cap names such as Summit Industrial Income REIT, True North Apartment REIT and Agellan Commercial REIT, according to INK Research, which monitors insider transactions.

The buying has pushed INK's real estate investment trust sentiment indicator back to 400 per cent, meaning there are four REITs with key insider buying for every one with selling. It had peaked at over 600 per cent at the end of April before plunging in May as investors became skittish over rising long-term interest rates. Some of the larger REITs, such as Riocan REIT and Boardwalk REIT, had seen some of the most significant selling over the past few weeks.

"Canadian real estate insiders seem to be signalling that REITs are once again offering decent value following the recent sell-off," INK Research CEO Ted Dixon said in a research note today. "While long-term bond yields jumped again Friday on the back of strong Canadian and mixed U.S. employment numbers, insiders appear to be betting that most of the damage has been done."

That said, long-term bond yields are continuing to push upward today, with the 10-year U.S. Treasury bond hitting another fresh 52-week high of 2.23 per cent.

The bargain hunting in Canadian REITs is largely responsible for pushing INK's Canadian financials indicator higher. It's now over 300 per cent - or three stocks with key insider buying for every one with selling. Some notable non-real estate stocks with insider buying include Intact Financial and TMX Group.

REIT insiders in the U.S. are also on the prowl for bargains. INK's U.S. REIT indicator shot up to 60 per cent last week after languishing under 30 per cent for most of April and May, noted Mr. Dixon.

BMO Nesbitt Burns analysts think insiders are onto something. In a new report on the U.S. REIT sector today, they blamed the recent selloff on "non-dedicated and short-term" investors.

"Bottom line, we believe the pullback in REIT shares should morph into an opportunity for investors dialled into real estate fundamentals (rather than the now-exiting cohort of shareholders that viewed REITs as a place to hide in a low-rate environment)," the New York-based analysts said.

They believe the companies best positioned for further gains are those that have the greatest pricing power.

BMO's conversations with management teams during a recent industry conference indicated "varying levels of conviction" with respect to raising rental rates. Those REITs that hold multifamily units were the most upbeat on rental growth, with industrial and office players more of a mixed bag. Pricing power appeared to be widespread in self-storage suppliers, while lodging companies remain confident that fundamentals are moving in the right direction.

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