Every single building bought by Avenue Living Asset Management gets an upgrade. Every. Single. Building.
Avenue Living has spent millions of dollars renovating properties to increase their value for residents as well as enhancing their experience of living in rental units. It also enhances the value of the portfolio for the company’s investors.
Neal Shannon, Vice-President of Capital Projects for the company, says that in 2018 alone, Avenue Living invested about $35 Million in its properties, including exterior and interior upgrade projects.
“Approximately 3,000 suites were renovated,” says Shannon.
This is in addition to an $85 Million capex program through the worst regional recession in history. However, the pro-renovations platform has helped propel Avenue Living to a company that today has more than $1.3 Billion in assets and 8,500 residential rental units throughout Western Canada.
“A lot of the work we do is kicked off when we are doing due diligence to buy a building,” explains Shannon. “My involvement in acquisitions is to inspect prospective properties and really to work out where the potential is, where the opportunities are to improve the building and create a capital plan with dollars and cents and what it’s going to cost to do that work. That’s where a lot of our capital spending begins.”
Some of the buildings Avenue Living acquires have deferred maintenance or deferred capital expenditures. They also may have been managed below Avenue Living’s standards.
“The type of work we do is really dependent on the building. Sometimes it’s nothing. Sometimes it’s almost everything. We’re replacing roofs, boilers, siding, windows, renovating every unit. So it really depends on what the specific property needs,” says Shannon.
He adds that Avenue Living’s strategy is building specific. If it purchases a building from an owner who has kept up on maintenance, there may be less work involved in renovating and improving that property to Avenue Living’s high standards. But the other end of the spectrum is where Avenue Living will update everything, from top to bottom.
From a resident’s perspective, Avenue’s Living’s improvements in a rental building lead to a better quality of life – improving the value for its residents.
Shannon offers an example of this. In late 2018, Avenue Living conducted a residents satisfaction survey to understand what’s most important as in having a positive living experience. One of the main factors was related to safe and secure buildings. With a focus on continuous improvement, the company then assembled a security focus group internally and assessed all of its buildings from a security perspective, coming up with ways it could improve the security knowing it’s an important part of the residents’ experience.
“The result of that focus group was a plan to basically add things like new commercial entry doors. We added a lot of exterior lighting to improve visibility around the buildings. We’re in the process of adding security cameras in several of our buildings to help with monitoring and deterring crime or bad behaviour,” says Shannon.
“We’re doing some substantial upgrades to the properties on a case by case basis. We’re taking the feedback from our customers and making the upgrades we need to make to address the criteria they’ve told us is important and that they value.”
Improvements to Avenue Living’s portfolio not only enhance the quality of life for existing residents, they also are a means of attracting new people to one of the company’s rental buildings.
Another example where Avenue Living has made significant improvements is a cluster of buildings in Edmonton – three properties on 88th Street near 118th Avenue. The neighbourhood itself has been improved by the City, with Avenue Living following suit with the buildings.
“We’ve done a complete building envelope upgrade to all three. The buildings were original stucco, original cedar, original brick. Pretty typical 1970s look to them. What we’ve done is totally change the exterior. We’re using premium products, like James Hardie siding. From a maintenance perspective it’s a better product and it looks great,” says Shannon.
“How does that impact our residents? I feel like when our buildings look good there’s certainly a pride of ownership on our side, but also a pride for people in living in the building. It looks new and fresh. That makes a difference.”
And, he says, several neighbours to those buildings have approached him to thank him for Avenue Living’s initiative in improving those structures and investing in the community.