Re-Examining a Hedge Against Inflation: Multi-Family Residential Real Estate

Authors

Grant Alexander Wilson, Ph.D., Assistant Professor, Faculty of Business Administration, University of Regina

Jason Jogia, MBA, M.Fin., Chief Investment Officer, Avenue Living

Author Bios

Dr. Wilson is an Assistant Professor at the Hill and Levene School of Business, University of Regina. His research focuses on marketing, strategy, and innovation. He has published over 20 peer-reviewed articles in top management journals including Journal of Small Business ManagementResearch-Technology Management, and Journal of Business Strategy. His research has been featured in the National Post and by the World Economic Forum. Dr. Wilson is also a research consultant and contributor to Avenue Living Asset Management.

Mr. Jogia is the Chief Investment Officer at Avenue Living and has over 15 years of experience in real estate capital markets, originating over $10 billion in real estate loans and $1 billion in equity. He has extensive experience in real estate investment analysis and capital structure across various real estate classes. In addition to holding 2 Masters’ degrees in Finance, Mr. Jogia is pursuing his Doctorate of Business Administration and currently serves as an instructor at the University of Calgary, specializing in real estate finance.

INTRODUCTION

The inflation example of milk increasing from $0.40 to $4.00 per gallon over a 100-year period (Wilson, 2021a) requires an update, as milk prices are expected to increase by a record-breaking 10% in 2022 (Canadian Broadcast Company, 2021; Heslop, 2021). Inflation is the increase of prices (e.g., milk), resulting in decreased purchasing power of consumers (e.g., milk buyers) (Lumsden, 2011). The primary explanations of inflation are demand-pull and cost-push (Lumsden, 2011). Prices of goods and services appreciate as a result of increased aggregate demand (demand-pull) or the rising production costs (cost-push) of such items. According to Pride et al. (2020), a stable rate of inflation is 2% per annum.

The most common measure of inflation is the change to the Consumer Price Index (CPI) (Statistics Canada, 2021a). The CPI “measures price change by comparing, through time, the cost of a fixed basket of goods and services” (Statistics Canada, 2021a). Prior to COVID-19, annual changes to the Canadian CPI averaged just below 2.0% (Figure 1). Canada’s pandemic-induced economic contraction and unemployment increase, resulted in unprecedentedly low inflation in 2020. With the rollout of vaccines in 2021 and the full reopening of the economy, Canada is now experiencing above-average inflation. This trend is likely to continue, with high inflation forecasted into 2022 and beyond (Trading Economics, 2021a) (Figure 1).

FIGURE 1 – 12-MONTH CPI CHANGE & FORECAST

12-MONTH CPI CHANGE & FORECAST

Statistics Canada (2021b) & Trading Economics (2021a)

Although inflation is a country’s natural economic tendency (Rothbard, 1962), if prices increases too quickly and without corresponding wage changes, purchasing power is diminished (Pride et al., 2020). Over the last five decades, industrialized nations’ monetary policies have placed great emphasis on the prevention and reduction of inflation (Lumsden, 2011). However, such policies are imprecise, much less guaranteed. Accordingly, savvy investors have explored ways to hedge against inflation. Specifically, multi-family residential real estate investments are increasingly appealing for investors (Nickerson, 2021). The next sections describe how forecasted interest rates, home values, and energy prices support the investment in multi-family properties.

INTEREST RATES & AFFORDABILITY

According to the Bank of Canada (2021a), it “carries out monetary policy by influencing short-term interest rates. It does this by adjusting the target for the overnight rate.” In an attempt to stabilize the economic contraction from the pandemic, the Bank of Canada (2021b) decreased the overnight rate from 1.75% to 0.25% in early 2020. As Canada’s economy expands and high inflation looms, the Bank of Canada is expected to increase the overnight rate by 1.25% to 1.50% by March 2023 (Trading Economics, 2021b) (Figure 2).

FIGURE 2 – CANADIAN OVERNIGHT RATE & FORECAST

CANADIAN OVERNIGHT RATE & FORECAST

Bank of Canada (2021b) & Trading Economics (2021b)

According to the Bank of Canada (2021c) the overnight rate is the starting point for “interest rates in the economy that matter for Canadians.” Changes to the overnight rate result in corresponding changes to commercial lending rates (Kenton, 2021). Based on the forecasted overnight rate and resulting commercial lending rate changes, mortgage interest rates are likely to increase by 1.25%. Table 1 illustrates the homeownership affordability effects of a 1.25% interest rate increase across various home values ($350,000 to $1,000,000), assuming a 5% down payment, 4% Canadian Mortgage and Housing Corporation (CMHC) insurance premium, 25-year amortization period, and 12 payments per year.

TABLE 1 – MORTGAGE PAYMENTS & INTEREST RATE CHANGES

 

*2.25% IR = 2.25% interest rate, **3.5% IR = 3.50% interest rate

            The change of 1.25% in mortgage interest rates elicits an increase of 14.8% in monthly payments. Given over 25% of Canadian homeowners currently spend more than what is considered “affordable” on mortgage payments (Canadian Mortgage and Housing Corporation, 2018; Statistics Canada, 2019), the planned interest rate increases will create further affordability issues. Specifically, there will be heightened barriers to entry for new home buyers and greater risk exposure for variable-rate mortgage holders. As a result, the rental market is increasingly appealing to middle-income earners (Wilson, 2020). The growing rental demand is also appealing for real estate investors, as more renters mean lower vacancy rates and stronger cash flows. Individuals and property investors with fixed interest rates will be advantaged over those with variable rates. Individuals will be better able to manage their household budget and property investors can increase residential rents – in accordance with the tenancy agreements – in response to interest rate changes.

HOME VALUES & AFFORDABILITY  

As with interest rate increases, the appreciation of home values in Canada has created affordability issues for housing market participants. Since the onset of the pandemic, Canadian home prices have appreciated significantly (Figure 3). Home prices increased by nearly 20% from October 2020 to October 2021. The new housing price index – a proxy for residential property appreciation – is expected to continue to increase in 2022 and plateau well above pre-pandemic values.

New Housing Price Index to June 2022 and Forecast. January 2020 to

Statistics Canada (2021c) & Trading Economics (2022)

The appreciating nature of residential real estate, including single and multi-family dwellings, is both promising for investors and challenging for new home buyers. According to Wilson (2021a; 2021b), capital appreciation from property investments has historically outpaced inflation, proving to be an effective hedge. In contrast, the wages of low and medium-income earners lag market price changes (Shahid, 2021), making homeownership increasingly difficult. Aside from the rising home prices and impending interest rate increases, the energy market outlook poses new affordability concerns.

ENERGY MARKET & AFFORDABILITY

After 18 months of natural gas supply shortages caused by the pandemic and its increased demand due to the reopening of the global economy, prices have surged to new heights (Figure 4). Average natural gas prices are expected to track above $5.00 per Metric Million British Thermal Unit (MMBtu) for the foreseeable future. These increases “will fuel inflation and hit low-income Canadians the hardest” (Alini, 2021).

  FIGURE 4 – NATURAL GAS PRICES & PROJECTIONS

Natural Gas Prices and Projection 2019 to 2022

Investing (2021) & Trading Economics (2021d)

            As natural gas is the main source of energy that heats homes and businesses (Canadian Gas Association, 2020), Canadians will be impacted both directly and indirectly by price increases. Natural gas prices will directly impact most Canadians’ utility bills, making homeownership less, and renting more, desirable. The indirect effects of natural gas price increases are realized by consumers via cost-push inflation. For example, higher energy costs make it more expensive to produce, transport, and store goods, resulting in higher-priced goods and services. The energy market outlook makes renting an affordable or in some cases a necessary, alternative to homeownership. From a real estate investor perspective, the natural gas market outlook and its inflationary pressures are poised to create strong demand for residential real estate, further supporting low vacancy rates that translate into consistent cash flows.

INSIGHT FOR INDIVIDUALS & INVESTORS

The multi-family residential real estate market is ideal for individuals and investors amid high inflation, increasing interest rates, soaring home values, and energy price forecasts. For middle-income individuals and families, these market uncertainties support renting in the short term. For investors, the capital appreciation from increasing property values and consistent cash flow from the high rental demand support investment positions in multi-family residential real estate.

STRATEGIC INVESTMENT IN MULTI-FAMILY REAL ESTATE

It is well documented that real estate has historically outpaced inflation (Wilson, 2021a; 2021b). Accordingly, investments in real estate have been regarded as a strategic hedge against inflation. However, based on the current market outlook, residential real estate has advantages over commercial real estate investments. As discussed, rising inflation, interest rates, and natural gas prices are making homeownership increasingly difficult for many Canadians. Strong demand for rental housing is imminent, affording residential real estate investors strong cash flows due to low vacancy rates. Commercial renters – producing goods and services – are not immune to inflationary pressures, as operation costs are continually increasing. In many cases, these costs are passed down to the consumer, but not always. The pandemic and its lagged effects created some of the highest commercial vacancy rates on record (The Canadian Press, 2021). Despite the recent declining trend in commercial vacancy rates across Canada – due to the reopening of the economy – changes are less immediate and rates are far greater than in the residential market (The Canadian Press, 2021). Lastly, residential, as compared to commercial, leases allow for more flexibility. Residential leases are short-term, ranging from month-to-month to 12-month contracts. Conversely, commercial leases are conventionally five-year terms. The flexibility of such short-term contracts permits greater responsiveness to inflation and interest rate changes, advantaging residential real estate investors.

CONCLUSION

Rising inflation, increasing interest rates, and soaring natural gas prices are working against the proverbial homeownership dream in Canada. The re-examination of real estate’s effectiveness as an inflation hedge is upheld and supports previous work (Wilson, 2021a; Wilson, 2021b). However, current market dynamics advantage residential versus commercial estate in the short and medium term. Consequently, investments in multi-family properties are likely to be both strategic and profitable.

REFERENCES

Alini, E. (2021). Natural gas price hikes will fuel inflation and hit low-income Canadians the hardest. https://globalnews.ca/news/8245318/natural-gas-prices-canada-inflation/

Bank of Canada. (2021a). Policy interest rate. https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/

Bank of Canada. (2021b). Canadian interest rates and monetary policy variables: 10-year lookup. https://www.bankofcanada.ca/rates/interest-rates/canadian-interest-rates/

Bank of Canada. (2021c). Understanding our policy interest rate. https://www.bankofcanada.ca/2021/04/understanding-policy-interest-rate/

Canadian Broadcast Company. (2021). Milk, cheese prices could soon jump 10 to 15 per cent. https://www.cbc.ca/news/canada/new-brunswick/milk-prices-increase-new-brunswick-1.6237730

Canadian Gas Association. (2020). Natural gas facts. https://www.cga.ca/natural-gas-statistics/natural-gas-facts/

Canadian Mortgage and Housing Corporation. (2018). About affordable housing in Canada. https://www.cmhc-schl.gc.ca/en/developing-and-renovating/develop-new-affordable-housing/programs-and-information/about-affordable-housing-in-canada

Deschamps, T. (2021). Home prices were up 18% annually in Canada last month. https://globalnews.ca/news/8374771/home-prices-canada-crea-october/

Evans, P. (2021). This is the busiest year ever for the housing market, with prices up 18%. https://www.cbc.ca/news/business/crea-housing-october-1.6249145

Gibillini, N. & Gaviola, A. (2021). Food prices rose nearly 4% in September. These products saw biggest jump. https://globalnews.ca/news/8283469/food-prices-inflation-september-2021/

Heslop, B. (2021). Cost of milk expected to jump in Canada in 2022. https://www.iheartradio.ca/610cktb/news/cost-of-milk-expected-to-jump-in-canada-in-2022-1.16411210

Investing. (2021). Natural gas futures. https://ca.investing.com/commodities/natural-gas-historical-data

Kenton, W. (2021). Bank rate. https://www.investopedia.com/terms/b/bankrate.asp

Lumsden, K. G. (2011). Economics. Heriot-Watt University.

Nickerson, C. (2021). Multifamily withstands pandemic better than most property types.  https://renx.ca/multifamily-withstands-pandemic-better-most-property-types/

Pride, W. H., Hughes, R. J., Kapoor, J. R., Althouse, N. R., and Allan, L. A. (2020). Business. Nelson.

Rothbard, M. N. (1962). The case for a 100 percent gold dollar. Libertarian Review Press, 94-136.

Shahid, S. (2021). Low-income Canadian households will suffer the most from soaring inflation. https://www.theglobeandmail.com/opinion/article-low-income-canadian-households-will-suffer-the-most-from-soaring/

Statistics Canada. (2019). Homeownership and shelter costs in Canada. https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011002-eng.cfm

Statistics Canada. (2021a). Consumer price index portal. https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes

Statistics Canada. (2021b). 12-month change in the Consumer Price Index (CPI) and CPI excluding gasoline. https://www150.statcan.gc.ca/n1/daily-quotidien/211020/cg-a001-eng.htm

Statistics Canada. (2021c). New housing price index. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810020501

The Canadian Press. (2021). Canadian commercial real estate pointing to post-pandemic economic upswing: CBRE.  https://www.theglobeandmail.com/business/article-canadian-commercial-real-estate-pointing-to-post-pandemic-economic/

Trading Economics. (2021a). Canada inflation rate. https://tradingeconomics.com/canada/inflation-cpi

Trading Economics. (2021b). Canada interest rate. https://tradingeconomics.com/canada/interest-rate

Trading Economics. (2022). Canada new house price index. https://tradingeconomics.com/canada/housing-index

Trading Economics. (2021d). Natural gas. https://tradingeconomics.com/commodity/natural-gas

Western Investor. (2019). Cap rates for multi-family rentals are lowest of all CRE sectors. https://www.westerninvestor.com/news/multi-family/cap-rates-for-multi-family-rentals-are-lowest-of-all-cre-sectors-1.23925194

Wilson, G. A., & Jogia, J. (2020). Essential workers, workforce housing, & property investing. https://avenuelivingam.wpenginepowered.com/essential-workers-workforce-housing-property-investing/

Wilson, G. A., & Jogia, J. (2021a). Canadian real estate & farmland: A hedge against inflation. https://avenuelivingam.wpenginepowered.com/canadian-real-estate-farmland-a-hedge-against-inflation/

Wilson, G. A. (2021b). As inflation looms, here’s how real estate and farmland have protected investors. https://theconversation.com/as-inflation-looms-heres-how-real-estate-and-farmland-have-protected-investors-155854

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.

Avenue Living Closes $138 Million in Multi-Family Real Estate Acquisitions

mutli-family building in Calgary

Following another recent company announcementAvenue Living Group (‘Avenue Living’) is pleased to announce the acquisition of three multi-family rental residential properties in Calgary, Alberta. The acquisition, which includes 764 doors worth $138 million, brings the owner-operator’s share of Calgary’s multi-family rental unit market to greater than 4.5 per cent.

The portfolio was a desirable purchase for Avenue Living due to its affordable rental rates and strategic locations in nodes around the city. The properties are positioned near green space, schools, and numerous amenities. These acquisitions present significant value-add opportunities for Avenue Living, as the organization intends to undertake strategic capital improvement projects to enhance the properties.

“We have always seen promise in the Prairies,” says Anthony Giuffre, Founder and CEO of Avenue Living. “Over 40 per cent of our 750 employees are based in Calgary. This head office is also home to our vertically integrated platform, which supports our broader regions by drawing on efficiencies created by centralizing the disciplines of finance, legal, human resources, technology, marketing, and property management.”

Avenue Living now represents over 14,300 multi-family doors under management in 22 markets, across the North American Heartland. This Heartland region has been an important area of focus for the company and spans across the Canadian Prairies into key regions of the central United States. This acquisition, supported by a recent influx of investment capital, builds on other notable transactions in 2021, with 482 units acquired in Moose Jaw, Saskatchewan and Edmonton, Alberta.

Since 2006, Avenue Living has kept its focus on assets the company is highly experienced in – low-to-medium density multi-family housing. The company actively manages its assets and consistently invests in capital improvements, sustainable practices, and technologies to create an exceptional experience for its customers, while continuing to deliver value to investors. Its flagship investment offering, the Avenue Living Real Estate Core Trust, is the first true North American workforce housing provider delivering institutional-level servicing to this demographic.

“Delivering a best-in-class customer experience is vital to our success,” says Jason Jogia, Chief Investment Officer at Avenue Living. “With housing affordability being a dire need in today’s economy, we endeavour to elevate that experience and the overall value to our customers in each market. The workforce housing demographic, made up of essential workers, has proven to be stable and resilient. As such we will continue to grow our footprint across the North American Heartland.”

ABOUT AVENUE LIVING 
Founded on the principle of investing in the everydayAvenue Living focuses on opportunities that are often overlooked by others, having grown to over $3.5 billion in aggregate assets under management across four private real estate investment mandates. The Avenue Living team includes over 750 professionals with expertise in real estate operations and transactions, property management, research, investment origination, and capital markets, as well as a suite of subject matter experts to support Avenue Living’s growing portfolio of multi-family residential, commercial, agricultural land, and self-storage assets. In addition to over 14,300 multi-family units located in Canada and the United States, Avenue Living and its related entities own over 496,500 square feet of commercial space, 48,000 acres of productive farmland, and more than 2,700,000 square feet of self-storage space.

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This may contain forward-looking statements. Readers should refer to the information contained on our website at www.avenuelivingam.com for additional information regarding forward-looking statements and certain risks associated with them.

Diverse Voices Drive Growth, Innovation, and Success

Since Avenue Living’s inception, inclusion and diversity have been values that drive our organization. Strong, talented women help fuel our continued growth, and we are proud to say that more than 40 per cent of our C-suite is female (which we proudly featured last year). We believe different viewpoints, perspectives, and levels of experience help us achieve our goals and make our company better. This year’s International Women’s Day aims to #BreakTheBias — which encourages us to envision a world free of bias, discrimination, and stereotypes, and to create one that is both diverse and inclusive. This year, we want to take the opportunity to highlight and celebrate even more talented women at Avenue Living who are taking us to new heights. We asked them to share the professional experiences and insights that guide them.

 

Showcasing a few of the women on our team  

Faye Garlitos, Regional Vice President, has been with the Avenue Living team for three years. Throughout that time, she has gained a deep understanding of our customer journey. 

Kathleen Cowick, Senior Counsel and Director of Legal Operations, brings more than 20 years of legal experience in a range of industries to Avenue Living’s various business segments. 

Marina Post, Chief Accounting Officer, joined Avenue Living in 2018, with many years’ experience working in accounting, finance, and leadership roles for national organizations. 

Tammy Cho, SVP, Marketing, joined the team early in 2022 with 15 years’ experience in leading corporate marketing and communications strategies for technology companies in energy, manufacturing, life sciences, aerospace and defense, and wholesale distribution. 

Vanessa Prosser, Director, Supply Chain and Procurement, has worked in supply chain management since her teenage years, broadening her experience across all facets of the industry. 

Wendy Ell, Director, Public and Government Relations, joined the team in 2021 and brought with her three decades of experience in energy, finance, real estate, and technology.  

 

What inspires you professionally and personally?  

Marina Post is inspired by “being surrounded by ambitious, driven, enthusiastic, and engaged individuals; the opportunity for growth and development; making a positive impact with my team and organization, as well as my family.” 

Personally, and professionally, Vanessa Prosser is inspired by new challenges, growth, and life-long learning. “I love problem-solving, finding solutions, building things, and developing new skills, and I try to seize any opportunity to do so.”   

Team success inspires Kathleen Cowick. “As a lawyer, your work is usually behind the scenes, so you take your inspiration from the success of your clients and their business. Personally, and professionally, I strive for new experiences that keep things fresh.”   

“My parents have inspired me since I was little,” says Tammy Cho. “They immigrated to Canada in the early 1980s with a positive outlook, limited financial means, and minimal understanding of the English language. They persevered through difficult times to ensure a better life for our family.” 

How did you get into your current line of work? 

“Through another woman, I highly look up to,” says Faye Garlitos. “Had she not given me a chance and opening to venture into the property management business, I highly doubt I would ever be part of this industry.” 

“I knew in grade school if I ever wanted to succeed in life, I would have to put myself out there — in jobs that had me working on the front lines, monitoring and tracking the ever-evolving wants, needs, perceptions, and actions of different groups of people,” says Wendy Ell. 

“I was a lawyer for many years at a large firm before joining Avenue Living, focusing on operations,” says Kathleen Cowick. “I followed the highest needs within our group and focused on the things I thought would provide the most value to the organization.” 

“I’ve had a passion for communications and marketing since I was in university because it’s an ever-evolving and changing discipline,” says Tammy Cho. “I enjoy understanding customer pain points, working across various teams to bring solutions to life, and using tools to persuade buyers as to why our offering is the best option available.” 

What challenges have you experienced as a woman in the workplace?  

“I’m fortunate to say that being a woman in the workplace has not in any way impeded my career development,” says Marina Post. “I would attribute that to being part of the right teams with the right culture, with leaders who value input from all individuals, regardless of gender, race, religion, etc.” 

Vanessa Prosser has worked in male-dominated industries — and male-dominated departments — for years. “In general, the men I have worked with have been phenomenal and we have been able to build strong, supportive teams together,” she says, “but there have certainly been times where people have made assumptions about my role, authority, knowledge, and qualifications that they didn’t make regarding my male colleagues.” 

“There is sometimes an assumption that as a young woman, you are not the expert in the room,” says Kathleen Cowick of her own career experiences.  

“Having worked three decades in energy, finance, real estate, and technology, I firmly believe I’ve had to work at least twice as hard to make myself heard,” says Wendy Ell. 

How have you overcome the challenges you’ve experienced?  

Marina Post says she has “been fortunate enough to be in workplaces where there are largely opportunities rather than challenges when it comes to women in leadership positions. I have also seen massive shifts in the overall atmosphere around the removal of the proverbial glass ceiling. I think employers and leaders are much more focused on an individual’s contributions rather than their gender.” 

“I work hard and try to make sure my performance is beyond reproach,” says Vanessa Prosser. “I research and educate myself on the industries I work in to build a strong background and knowledge base. I also actively try to build great relationships with colleagues at all levels so we can all support each other in our growth and professional goals.” 

“I’ve been lucky to have some strong female role models, even in what is still a male-dominated industry and a city where the majority of business leaders are still male,” says Kathleen Cowick. “Having the confidence to understand that you’re at the table for a reason and that there is value in your opinion is important.” 

“In my 20’s, 30’s, and 40’s I had the great honour of having some outstanding mentors successful individuals each with national/international acclaim,” says Wendy Ell. “With their guidance, I learned to observe the non-verbal, listen intently, and trust in my well-earned knowledge.” 

What’s the best advice you’ve received?  

Be curious and ask questions. Don’t be afraid to make mistakes. Be a lifelong learner,” says Marina Post. 

“Keep moving forward,” says Faye Garlitos.  

Vanessa Prosser looks to the words of one of her university professors: Dare to know. “That’s how I try to live my life, and it’s been great advice so far.” 

“To trust my own knowledge,” says Wendy Ell. “It’s less about trusting ‘the gut,’ but more about knowing that as I put in the hard work to listen, monitor, track and relate, then I am generally not only on par with others, but in most cases, one or two steps ahead.” 

Kathleen Cowick was advised early in her career to always find multiple paths to a goal. “There may be challenges or obstacles in your path, be it in life or in respect of a client’s objective, and if you have more than one way to get to your destination, you are more likely to be successful.”  

Tammy Cho’s mentors have given her advice that she uses in her decision making, “Don’t live life with regrets and walk towards, not away from. At the end of the day, you’re accountable to yourself.”  

 What would you tell a younger version of yourself? 

“When one door closes, another door opens,” says Marina Post. “So much of what happens in our lives can seem quite challenging or negative in the moment but can be, in retrospect, the opportunity for growth, improvement, and a path to something better.” 

“Set reasonable expectations and exceed them rather than trying to be all things to all people. And invest early,” says Kathleen Cowick. 

“Slow down and smell the flowers. You’re doing it right,” says Wendy Ell. 

Tammy Cho has found it valuable to “trust your gut, take more risks, and know your worth.”  

 

As we benefit from the insight of different women across Avenue Living, we continue to appreciate our diverse team and the manner in which our female leaders contribute to our ongoing success. We are always looking for dynamic people to join our team. Take a look at our career opportunities.  

 

 

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.avenuelivingam.com for additional information regarding forward-looking statements and certain risks associated with them. 

Avenue Living Asset Management Announces Successful Equity Raise and Milestone $3.55 Billion in Assets Under Management

Calgary-based Avenue Living Asset Management, announced today its Avenue Living Real Estate Core Trust has raised $103 million in equity since December 2021. Beginning with an original expansion target offering of $60 million, the allocation of this close to a series of accretive purchases, brings the Canadian alternative asset manager from $3.25 billion to over $3.5 billion in assets under management in only two months.

According to Jason Jogia, Chief Investment Officer at Avenue Living, “this strong investor interest demonstrates confidence in Avenue Living’s uniquely designed, vertically integrated investment platform.”

“We are very excited about the timing of this accretive capital raise, and what it does for the execution of our continued growth and diversification activities. It builds on a carefully defined consolidation strategy focused on multi-family, low-to-medium density workforce housing apartment assets across the North American Heartland,” says Jogia. “These funds continue to support and accelerate further acquisitions, many of which are already in action in key regions across Canada and the United States.”

The Core Trust focuses on multi-family assets and delivers institutional-level servicing to North America’s most essential workers. The fund provides investors with an opportunity to own real assets that are not correlated to the public markets and delivers a valuable hedge against inflation.

“Right now, investors are shying away from market volatility,” says Anthony Giuffre, Avenue Living’s Founder and Chief Executive Officer. “An offering like the Core Trust is an ideal way for them to invest in real estate without actively managing the assets themselves. We are thrilled about the response to this capital raise as it will help us actualize our growing pipeline of North American acquisitions, allow us to gain significant market share, and provide investors with geographic diversification at a time when housing affordability is in high demand.”

ABOUT AVENUE LIVING
Founded on the principle of investing in the everydayAvenue Living focuses on opportunities that are often overlooked by others, having grown to over $3.5 billion in aggregate assets under management across four private real estate investment mandates. The Avenue Living team includes over 750 professionals with expertise in real estate operations and transactions, property management, research, investment origination, and capital markets, as well as a suite of subject matter experts to support Avenue Living’s growing portfolio of multi-family residential, commercial, agricultural land, and self-storage assets. In addition to over 14,000 multi-family units located in Canada and the United States, Avenue Living and its related entities own over 450,000 square feet of commercial space, 48,000 acres of productive farmland, and more than 2,700,000 square feet of self-storage space.

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This communication may contain forward-looking statements. Readers should refer to information contained on our website at www.avenuelivingam.com for additional information regarding forward-looking statements and certain risks associated with them.