Investing in Saskatchewan Real Estate | Saskatoon

Investing in Saskatoon Real Estate

Saskatoon, the largest city in Saskatchewan, has been making waves in recent years as an emerging hub of economic growth and development in Western Canada. Nestled in the heart of the province, the city also known as the “Paris of the Prairies” boasts a unique blend of urban living surrounded by vast farmlands.  

Avenue Living’s unique and proven strategy is informed by our deep understanding of the metrics and market dynamics behind every investment decision. In this summary, we look at the city’s economic boom, the factors contributing to its success, the rising need for housing, and why Saskatoon is an attractive choice for residents and investors alike. 

Investing In Saskatoon Real Estate

Economic Growth and Employment Surge 

Saskatoon experienced significant economic growth in 2023, fueled by increased full-time employment in high-paying industries like professional, scientific, and technical services. The city also saw strong wage growth across various sectors and notable regional investments. These factors, alongside a steady rise in population, have led to a robust job market, increased housing demand, and a notable decline in vacancy rates from 3.4% in 2022 to 2% in 2023. (1) 

Affordability and Population Expansion 

Saskatoon boasts strong affordability relative to other jurisdictions, with rental rates still available within CMHC’s well-defined affordability measures of total rent being less than 30% of a household’s pretax income. (1) 

The city has experienced a 24.2% increase in total population growth from 2011 to 2022, which strongly outpaced the national average of 11.1% and the Toronto, Vancouver, and Montreal average of 10.3% over the same period.(3) Population growth over the past five years has been steady at annualized 1.6% and is projected to rise to 1.8% per year over the next three years. This increase has greatly affected the demand for rental apartments, leading to a significant shortage of housing across the province. (4)  

Infrastructure and Development Boom 

Saskatchewan is making substantial investments in infrastructure and development projects. BHP’s $14 billion investment in the Jansen Potash Project is projected to boost Saskatchewan’s real GDP to 1.1% in 2024, more than double the national average.(5) The Jansen project will directly benefit Saskatoon’s economy, which thrives on a diverse base that includes key sectors such as mining (potash and uranium), oil, agriculture, and technology.  

Culture, Recreation, and Education  

Saskatoon also has a unique blend of urban amenities and natural beauty, making it an enjoyable place to call home. The city has a vibrant arts and culture scene including the Remai Modern, a renowned contemporary art museum known for its works by Canadian and Indigenous artists. The area also features many parks and green spaces like the Meewasin Valley for outdoor enthusiasts to enjoy, and countless festivals and events throughout the year. With its friendly prairie charm and endless entertainment options, Saskatoon truly offers all its residents a high quality of life. 

Saskatoon is known for several prominent educational institutions, including the University of Saskatchewan (U of S) and Saskatchewan Polytechnic. The U of S is particularly well-regarded for its research contributions and programs in agriculture, engineering, and health sciences. 

Investment Appeal 
For investors eyeing the real estate market, Saskatoon presents an attractive opportunity. Multi-family cap rates in B-class properties in Saskatoon ranged from 5.25% to 6.75% in Q4 2023 versus the national average of 4.62% to 4.90% during the same period.(6) Rent growth in Saskatoon was also very robust in 2023, increasing 9.2% from 2022 while boasting an impressive occupancy rate of 98% as of October 2023.(1)  Saskatoon’s current primary rental supply of 18,067 units (1) — of which 1,583 are managed by Avenue Living — has failed to keep pace with the city’s growing population, contributing to Saskatchewan’s substantial housing supply gap, now estimated to exceed 6,000 housing units.(4) 

Saskatoon’s remarkable economic growth, diverse industries, and attractive real estate market position it as a key player in Canada’s evolving landscape. Saskatoon’s future appears bright and promising as the city continues to draw in residents and investors alike. Whether you’re seeking a thriving job market, affordable living, or lucrative real estate opportunities, Saskatoon is undoubtedly a city on the rise. 

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://www.avenuelivingam.com/forward-statements for additional information regarding forward-looking statements and certain risks associated with them.   

Sources:

Investing in Alberta Real Estate | Calgary

Investing in Calgary Real Estate

Headquartered in Calgary, AB, Avenue Living is proud to own and operate approximately 3,800 multi-family units in the province’s largest city. In the last quarter of 2023, several acquisitions increased our total market share to an estimated 7.2% of the primary rental market and we closed on our largest acquisition in the city to date. 

In 2024 and beyond, the Calgary market is expected to benefit from significant, positive international and interprovincial migration. We are excited to continue to grow our operations in the city by acquiring high-quality assets while remaining focused on providing homes for the workforce housing demographic.  

Calgary Real Estate Market Facts

Promising Market Demographics: 

Calgary is Canada’s fourth-largest city and has experienced the most significant population growth in the country for the last 10 years. Between 2011 and 2022, the region sustained robust population growth of 23.9%, which strongly outpaced the national average of 11.10%. With a population of 1.6 million, the CMA region is expected to grow another 2.4% over the next four years, putting further pressure on supply constraints and exacerbating the need for high-density, multi-family homes.   

Calgary is also one of the nation’s youngest cities, with a median age of 38.2, bringing innovation and energy to the community and priming it for long-term growth.   

Industry & Employment  

Previously, the Oil and Gas industry drove the job opportunities attracting new Calgarians. However, in recent years, the economy has become more diversified, supported by stable sectors such as technology, energy, agriculture, healthcare, education, transportation & logistics, aerospace, and government. 

The tech sector grew 61% from 2017 to 2022, ranking Calgary second behind Vancouver for improvement in North America. Poised to become a major tech hub, these opportunities attract federal investment, and international and inter-provincial talent and exposure.  

Some of the largest employers based in Calgary include WestJet, Shaw Communications, and the Canada Pacific Railway, offering prospective Calgarians a diverse range of employment opportunities. 

The city is also home to several post-secondary education options, including three public universities — the University of Calgary, Mount Royal University, and the Alberta University of the Arts. Southern Alberta Institute of Technology is also an attractive option for students pursuing technical degrees. These post-secondary institutions employ several thousand Calgarians and are frequently ranked within Alberta’s top 100 employers. 

Culture & Recreation  

Calgary is Canada’s third most diverse major city, home to over 240 different ethnic origins, and there are 165 languages spoken here, lending to a rich and welcoming community.  

The city is also known for its Western culture. Calgary hosts the “Greatest Outdoor Show on Earth” — the Calgary Stampede, which runs for 10 days every July. The festivities include live music, rodeos, carnival attractions and more, seeing an average attendance of 125,000 people a day from all over the world. 

As the “Gateway to the Rockies,” the city is a central hub for outdoor enthusiasts, with globally acclaimed parks like Banff and Kananaskis being easily accessible. Tourists and locals alike can revel in having scenic hikes, lakes, and snow sports at their fingertips.  

There are also plenty of opportunities to explore the outdoors within city limits. After Rouge National Urban Park in Toronto, Fish Creek Park is the second-largest urban park in Canada, where visitors can enjoy over 100 KM of pathways, picnic areas and opportunities to spot wildlife.  

Overall, Calgary’s combination of economic opportunities, cultural attractions, outdoor recreation, and quality of life make it a desirable place to live and visit. 

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. 

The SunRise: Illuminating Edmonton’s Skyline with Renewal and Sustainability 

SunRise Apartments Edmonton

When we began reconceptualizing Capital Tower in Edmonton, we knew it was only fitting the renewed building would need a new name. We’re pleased to unveil a fresh identity for the property, now called The SunRise. This renaming marks a significant milestone in the building’s history, symbolizing its extensive renovation and revival. The SunRise reflects a new beginning, promising a fresh outlook and enhanced living experience for the building’s residents. The property will offer modern amenities and a renewed sense of vibrancy to its inhabitants and the surrounding Chinatown neighbourhood — which is undergoing a revival of its own.  

When selecting a name, we wanted to evoke a sense of optimism and positivity. Just as a SunRise marks the beginning of a new day, the name suggests a new beginning for residents who choose to make this apartment their home. Additionally, the imagery of a SunRise is often associated with warmth, light, and a welcoming atmosphere, all of which are qualities that many individuals seek in their living spaces. The name not only captures the essence of a new chapter but also conveys a sense of hope and inspiration, making it an appealing and meaningful choice for an apartment building. 

This name gains even more significance with the addition of a one-of-a-kind solar panel mural to the building’s North exterior. This building is a fixture of Edmonton’s iconic Chinatown, and the location of the SunRise is within the Treaty 6 territory. As such, the mural depicts the unity, coexistence, and cultural parallels between First Nations and Chinese cultures, incorporating imagery from the Cree seven sacred grandfather teachings and the Chinese zodiac. This impressive feature enhances the properties’ aesthetics and underscores Avenue Living’s commitment to sustainability. The mural, which collects solar energy, serves as a display that reflects the neighbourhood’s unique heritage but also demonstrates the building’s focus on harnessing renewable resources, making “SunRise” an apt name for this innovative apartment complex. 

To learn more about the project, check out our blog, ‘Capital Tower: A Beacon of Sustainability and Community Revival in Edmonton’ which outlines the building’s history and the outcomes of the renovation.  

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.   

Stability, Growth, and Sustainability: Avenue Living’s Themes for 2023

Themes for 2023

2023 was a challenging year for Canadians and the broader markets. While inflation has slowed and interest rates appear to have stabilized, the overall economic picture continues to fluctuate. 

“It’s been only one year, but we’ve seen changes that you don’t normally see within five,” says Gabriel Millard, Senior Vice President, Capital Markets – Equity and Research. “We’re still in the midst of digesting one of the fastest rate-hiking cycles in history, with a lot of variables in the macro environment.” 

In light of this, investors have expressed increased interest in alternative investments for stability and returns that are non-correlated to public markets. Against that backdrop, we’ve continued to invest in the everyday, striking a balance between defensibility, growth, and sustainability across our strategies. 

Multi-family and self-storage: from pause to growth 

“During the first nine months of 2023, we took a deliberate pause on acquisitions within both our multi-family and self-storage strategies,” Millard says. “Over that time, we saw material net operating income (NOI) improvements from rent adjustments enabled by heightened service standards and introducing new operational cost-efficiency measures.” 

Avenue Living shifted gears in the back half of the year, adding over 1,600 units to our multi-family residential footprint. In November, we finalized a deal with a large institutional investor for a 700-unit portfolio across five towers and a number of townhomes.  

“We’re seeing opportunities to acquire higher-value properties from institutional players, including pension funds, which weren’t available even two years ago,” Millard says.  

As borrowing costs accelerated, the importance of vertical integration, active property management, and managing rising costs in the real estate space became acutely clear. Across both the multi-family and self-storage markets, pure capital allocators struggled to sustain their investment returns, creating more acquisition opportunities. 

“We’re exiting 2023 at just over 17,000 multi-family units,” Millard says. “The Mini Mall Storage Properties fund also grew quite rapidly to almost 8 million square feet — including the largest acquisition in its history of almost 900,000 square feet across 19 properties — making Mini Mall the top 21st largest self-storage operator in North America by rentable square footage.”  

The multi-family Prairie markets are seeing growth from record net immigration, driven by households seeking affordability. A sizeable portion of these newcomers are coming from higher-growth markets like Vancouver, Toronto, and Montreal where rent payments can take up 40% to 50% of households’ income.  

Historically, self-storage has proven to be a resilient asset class and remained stable even in times like the 2008 North American real estate crash. Robust consumer-driven demand continues to propel the investment class, painting a constructive picture.   

Strong tailwinds for Canadian farming 

Avenue Living’s two Saskatchewan-focused agricultural strategies, the Avenue Living Agricultural Trust and Tract Farmland Partners LP (Tract), have also managed well amid persistent demand for farmland investment from across Canada.  

In its mid-2023 report on farmland values, Farm Credit Canada saw Saskatchewan lead the nation with an average gain of 11.4%. Most locations in the province, the report said, saw increases between 7% and 11%. On the ground, Tract identified acquisition targets from word-of-mouth referrals within the farming community, a testament to its reputation as a trusted partner.

“It’s a consolidation play that’s still just in its early stages. An estimated 98% of transactions within the province remain outside of investment funds, and we’re continuing to acquire assets,” Millard says. “By the time we close a deal, we’re already seeing impressive appreciation.” 

ESG efforts coming to fruition 

Roughly two years after striking its partnership with the Canada Infrastructure Bank (CIB), Avenue Living is moving forward on a number of energy retrofit projects across its multi-family residential portfolio, including work on large solar arrays, exterior renovations, and mechanical upgrades. 

“A large portion of the acquisitions in our self-storage fund are within the Sun Belt region of the United States. Our portfolio is made up of assets that are wide, not high,” Millard says. “That offers an abundance of roofline where we’re able to implement solar projects.” 

Avenue Living’s agricultural strategy also lends itself well to ESG, given Canada’s outsized role in producing staple grain products. 

“The opportunity to help improve food security for Canadians and other nations is something we’re very proud to be a part of,” he says. 

Avenue Living released its first full ESG report in 2023, with a second one set to come out this year. Beyond that, we’ve bolstered our commitment to responsible investing. In 2021, we became a signatory to the United Nations-supported Principles for Responsible Investment (PRI) and over the last year we furthered our commitment and became members of the Responsible Investment Association (RIA). 

Avenue Living continued its annual Avenue Giving campaign, bringing together donations from residents and staff to support local food banks. We also launched an Employer-Supported Volunteerism program in the last quarter of 2023. In three months, employees volunteered for over 160 hours with 10 organizations including local food banks, Canadian Blood Services, veteran and seniors’ resource centres, community kitchens, and drop-in centres across the Prairies.  

For 2024, a continued stewardship focus 

From the beginning, Avenue Living’s growth has been inextricably tied to its commitment to the customer. Millard says that focus will continue in 2024, along with a focus on ensuring defensibility across the organization.  

“Since 2020, it’s been a volatile period, and 2024 doesn’t appear to be any different,” he says. “As a responsible asset manager, we’re maintaining a leverage profile in the low 50%, and keeping over 10% of our NAV in liquidity to ensure defensibility.” 

Last year, Avenue Living acquired over half a billion dollars in multi-family assets. With a large pipeline of acquisitions, it’s pressing its growth advantage in 2024, allowing improvement of margins by spreading fixed head-office costs over a larger number of units. 

“We don’t grow for the sake of growth, but to improve our overall operations through accretive transactions,” Millard says. “Through technology and operational improvements, our focus is to continually level up our operations for the benefit of our residents, customers, and investors.”  

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.  

2023 Year in Review

2023 Year in Review

Over the last year, we’ve stayed the course and once again proved we’re equipped to navigate any environment.  
 
We saw a number of formative milestones in 2023, including our largest acquisitions to date in both our multi-family and self-storage funds as well as achieving over $5 billion in assets under management. 
 
Moving forward, our focus is on bringing our proprietary management model to more Canadians and expanding our investment offerings.

Avenue Living’s Most-Read Content for 2023

Most-Read Content for 2023

Examining the economy and markets heading into 2024, we see a landscape dotted with opportunities. We believe our strategy of measured growth, sustainability, and defensibility has put us in a strong position for the next leg of our journey. 

As we reflect on the year, we’re looking back on the blogs and white papers that resonated most with our readers in 2023.  

The topics run the gamut from our partnership-oriented agricultural investment strategy to academic research on key stakeholder segments for our business, to our efforts in leading the charge on sustainable workforce housing. 

At the heart of it all is our commitment to providing value for our residents, investors, and the communities where we’ve put down roots.  

BLOG: 

Harvesting Alpha in Canada’s Agricultural Heartland 

We unpack how the Avenue Living Agricultural Land Trust and its successor strategy, Tract Farmland Partners LP, are set to benefit from long-term tailwinds while prioritizing an active approach and partnership with the community.  

WHITE PAPER: 

An International Examination of Market Orientation and Performance in Residential Property Management 

In this peer-reviewed study, our leaders in the Capital Markets team, Gabriel Millard and Cameron Hills, collaborated with the University of Regina’s Dr. Grant Wilson to examine how a commitment to understanding and serving residents translates into tangible benefits — including loyalty, trust, pride in accommodations, and timely rent payments — for residential property managers. 

BLOG: 

Multi-Family Retrofits: The Case for Going Green 

Following on from our 2022 partnership with the Canada Infrastructure Bank (CIB), this blog outlines the energy-conservation measures (ECMs) we’re planning across our Canadian portfolio of multi-family rental properties. It also uncovers our framework for ensuring the viability and impact of deep energy retrofit projects. 

WHITE PAPER: 

Examining Personal Financial Advisors’ Knowledge, Client Recommendations, and Personal Investments in Private Real Estate and Real Estate Investment Trusts (REITs) 

In another collaborative study published in the Journal of Financial Services Marketing (JFSM), our Chief Investment Officer, Jason Jogia, worked with Dr. Grant Wilson to investigate the under-researched subject of financial advisors’ REIT knowledge and engagement with REITs, including how their personal perceptions influence client recommendations. JFSM is a leading journal in finance and marketing, ranked B on the ABDC list, and recognized by all management and real estate journal quality lists. 

BLOG: 

Revitalizing Canada’s Housing Landscape: The Crucial Role of Retrofits 

As the country manages two major challenges — housing affordability and environmental impact — it’s becoming clear that retrofits to existing buildings are a key part of the solution. This blog looks at how strategic retrofits can help solve Canada’s increasingly critical housing supply challenge. 

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.