Our first acquisition in the U.S. took place in October 2020 in Colorado Springs, CO. We purchased a distressed asset for $13.9 million USD comprised of six buildings on three separate lots with a total of 129 units. We are now almost a year into the redevelopment process and looking at a successful transformation of the property.

We have conducted extensive exterior and interior renovations, added attractive amenities, and unlocked value through strong and active asset management. Bettina Oslanski, Vice President, U.S. Asset Management, explained how we demonstrate to our residents that we take care of the property and community and how the renovations improve the overall living environment.

“We identified the opportunity to transform a collection of separate underperforming assets into one contiguous and well-managed community. The pivotal change we introduced was the removal of fences between the properties and connecting the three lots by extending the pavement, allowing us to join the parking lots,”

Bettina added that all but one of the exterior projects are complete, and that the interior renovations of roughly 75 per cent of the suites are estimated to be completed in Q1 2022. The total budget for the project was just under $3 million USD.

“We have helped transition the neighbourhood,” Bettina said. “The revitalization of the area had already gained momentum through significant capital injections into other assets on the block — we realized that this presented a particularly favorable environment for our investment and redevelopment efforts.”

The interior renovations follow the natural turnover of this asset, which means suites will be renovated as residents move out, allowing us to avoid “renovictions.” The suites have seen extensive work — we’ve repainted, replaced flooring, cabinets, and vanities, as well as installed new light fixtures, faucets, doors and door handles. We have also established new amenities such as a dog park and barbecue area, which help create community at the property.

This work has helped elevate the asset to a higher standard. We inject capital where it makes the most sense to achieve positive leasing trends, high retention, and maintain a good reputation. With the population of Colorado Springs expected to grow at twice the rate of the U.S. average, we believe that Colorado Springs and our presence in the market contribute to our continued growth and excellence in the multi-family market.

Leaning on the experience of a local property management company, their team was able to provide valuable insight into the market and what they thought the asset needed. The property managers were involved during the due-diligence process to inform our assumptions and give recommendations on capital projects with the greatest return potential. Our team researches and analyzes markets and assets with the objective to streamline operations, realize efficiencies, facilitate net operating income (NOI) increases, and improve the resident experience.

For our community in Colorado Springs, the rebranding of the combined property from Mallard Meadows to “The Monroe” marked a significant achievement in the redevelopment process. Since January, we have seen a remarkable increase in NOI of 64 per cent. “After purchasing for $13.9 million USD and investing another $3 million USD, current NOI trends suggest a significant increase in the overall valuation of the asset to somewhere in the $20-25 million USD range,” Bettina said.

Our data-driven market selection model can be a catalyst for positive performance, and we strive to enhance the market momentum through capital expenditures focused on items that improve the resident experience, such as investment into amenities and curb appeal.

“The model helped compile a short list of cities that are more attractive than others, and Colorado Springs is ranked in the top three through every iteration we’ve run,” Bettina said.

With the U.S. having strong commercial real estate data available on cities and markets, it has allowed us to develop a model that digests variables such as employment systems, unemployment rates, industry diversification, and rent growth forecasts.

Due to its rapid growth, the U.S. is an enticing market for us as we seek other assets to add to our portfolio. “More and more people are jumping from larger, more expensive markets to secondary markets for a better cost of living, and that migration pattern has provided new opportunities for us — especially given our recent entry to the U.S. market,” said Bettina. “We are focused on where we strategically target next.”

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.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them. 

Avenue Living Asset Management has aggressively grown its portfolio of multi-residential rental units in the Calgary market in less than two years with a strategy to continue ambitious expansion.

Two years ago, Avenue Living had less than 100 units in the Calgary and area market, explains David Porter, Avenue Living’s Senior Vice-President of Operations for Southern Alberta. We have now surpassed 1,000 units with our latest acquisition in the southwest of Calgary.

“We’ve grown from being a relatively small presence in Calgary less than two years ago to over 1,000 units today,” explains Porter, adding that the growth has consisted of properties both large and small.

“Despite the recent challenges in the oil and gas industry, Avenue Living has found that our target market — workforce housing — is still rewarding us with residency. They find our affordability and the product offering fits their needs,” says Porter, “There’s opportunity here where we can buy strong assets, with a good unit mix, in an area that is growing and diversifying its economy.”

The Right Market

Uplands Manor, which was constructed in the community of Bankview in 1965, fits the bill both geographically and operationally for Avenue Living. In the coming years, we plan to make capital improvements to the vintage building to keep it up to date and comfortable for our residents.

Avenue Living, which has 12,500 residential rental units across Alberta, Saskatchewan, Manitoba and into the United States, completed the purchase of our largest acquisition to date — 1,566 apartments and townhomes in Edmonton at the end of June.

“Calgary is now second as far as number of units in our company, just behind Edmonton,” says Porter.

“Our occupancy in Calgary has always performed extremely well. We buy in the right areas of town and there’s a lot of inventory that fits the type of acquisitions we target.”

Porter says the overall occupancy is 94.2 per cent for Calgary residential properties, with the Calgary portfolio making up about eight percent of the company’s overall multi-family portfolio. Beyond that, the city is affordable and offers great lifestyle factors for residents. Calgary gives people access to beautiful parks and amenities, and is just a short drive west to the Rocky Mountains.

“We’ll continue to buy in Calgary. We’re aiming to strategically grow in the Calgary market when those opportunities arise,” adds Porter. He says that the properties Avenue Living purchases in Calgary are maintained to a high standard, and, when coupled with the organization’s strategy of making capital improvements, Avenue Living can deliver quality but affordably priced homes that fit our workforce housing demographic. Even with COVID-19, this segment of the economy has remained stable.

Investing in Our Backyard

Being a Calgary-based organization, we feel it’s important to invest in our own backyard and a reason why our portfolio has burgeoned here in the last two years.

The proximity of the Calgary properties to our head office allows us to test new initiatives such as signage and suite standards. It’s also a great opportunity to develop internal staff training programs. “Avenue Living is focusing on our staff and their ability to deliver resident satisfaction. Those training programs are critical to our future,” says Porter.

He says the expansion of the Calgary portfolio has also triggered employment growth with Avenue Living and is home to many employees that make up our platform which allows us to quickly grow and scale as we acquire more assets.

We are proud to have remained a net positive employer throughout the pandemic, when many Canadian businesses were forced to lay off some or all of their teams.

“We’re providing employment to a significant number of Calgarians, and intend to continue that growth,” says Porter.

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.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.

Avenue Living has had a strong and solid presence in the Edmonton rental market for many years. We further strengthened that presence with the recent portfolio acquisition of 874 apartments and townhome units in the Hermitage community of eastern Edmonton. This acquisition, Avenue Living’s largest to date, further solidifies Avenue’s strength as a leader in the multi-family real estate investment space, and as one of Canada’s leading Real Estate Investment Trusts (REITs).

In what was a triumphant week for our organization, Hermitage represents one of three large Edmonton acquisitions that helped push our assets under management past $2.8 billion, highlighting our ambitious and continued growth.

When it comes to geography, we are agnostic in where we invest. We focus on markets where the fundamentals hold up, and those fundamentals keep bringing us back to Edmonton. The market has the right price, customer, and location for us to successfully execute our investment strategy.

Nick Buffum, Associate, Investments for Avenue Living Asset Management, notes how well maintained the properties are, and what made the area and units so desirable. “It is a fantastic opportunity for us to acquire a portfolio of assets that has been owned and operated by a single group since they were built. The pride of ownership is evident when you walk through these properties and see how well they have been maintained. From an operational standpoint, we are able to take advantage of significant economies of scale with this acquisition and grow our existing Edmonton portfolio,” Nick said.

“The properties are well taken care of, the interiors are clean, and all they’re concentrated in a desirable area.”

Because the properties were well taken care of, we expect they’ll require minimal renovation.

The condition in which the units were kept was a big reason why our team focused on the properties. It’s an opportunity to add 874 units to a burgeoning portfolio in a node that we have a proven ability to execute in. This was a strategic and well-researched investment in an area that offers many lifestyle choices.

This was an opportunity where we felt we could grow with the community and invest in a portfolio of buildings that have been kept in pristine condition. Its longevity was an attractive factor.

The community of Hermitage is located near the Yellowhead and Anthony Henday ring road, giving it strong access to other areas of the city.

The Hermitage neighbourhood is ideally located adjacent to Hermitage Park, on the North Saskatchewan River Valley, and is complete with ample green space and local amenities in the neighbourhood. It takes 15 minutes to get downtown Edmonton, 10 minutes to get to Sherwood Park, and the beautiful river valley is just a short bike ride away.

It’s important for our customers to have near city-wide access, offering the opportunity to live in a quiet neighbourhood that is well taken care of while still being close to amenities.

Of the 874 units in the Hermitage Portfolio, there are 548 apartments and 326 townhomes. The demographic within those units is vast, says Nick. “We have everybody from a single 20-year-old all the way to a family in a three-bedroom townhome.

“There is a place here for everybody,” he says, adding that units are also age-friendly and allow older residents to remain in a community they have called home for a long time.

The properties’ continued strong performance complements our presence in Edmonton as it brings scale into a major market in a concentrated, desirable area of the city.

The acquisition adds to our competitiveness and positions Avenue Living as an institutional player on many levels.

“This is the biggest acquisition that we’ve ever done,” Nick says. “It shows that we’re able to execute on an acquisition of that size and brings us to the forefront, not only in Edmonton, but Canada-wide. It demonstrates that we are able to execute from a capital position and operational standpoint, which is great for visibility.”

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.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.

Running a flourishing business with billions of dollars in assets under management (AUM) requires a sound and astute investment strategy.  For Avenue Living, our growth from 24 doors in 2006 to more than 12,500 doors today is a testament to our organization’s highly researched investment strategy and all that goes into targeting specific markets, cities, and buildings to reposition.

We sat down with Jason Jogia, Chief Executive Officer, Opportunity Trust and Chief Investment Officer, Avenue Living, to glean insight into how we make such strategic investments, and what we offer to our residents.

“Our business is rooted in a number of different principles, and we know our customers,” Jason said. “Typically, when you have a business model to serve those customers, you have to build an infrastructure to appropriately serve them and provide a housing experience that would be deemed best-in-class.”

We provide homes to people for attainable rent prices, while still offering an institutional level of customer service. As an organization, we have consolidated buildings that would be classified as low-density workforce housing buildings and built a robust management system to serve those customers to the best of our capability.

“We’ve taken an active approach to management, and we’re agnostic to geography. We’re going to go where the fundamentals hold up,” Jason said. “We’re across the Prairies right now because the Prairies have some of the most affordable real estate across Canada, and on the flip side, some of the most reasonably-priced rents. We have taken a significant position in properties and plan to continue to double down on the Prairies because there’s a lot of room to run.”

Since 2015, we have invested $340 million in capital expenditure projects, repositioning buildings across the Prairies, bringing stark improvements to vintage buildings and neighbourhoods.

We are able to buy assets below replacement costs, renovate those assets, and then reposition those assets for the same demographic, but provide a higher offering and ensure they remain cost-effective for that tenant base. We always have our eye on affordability, which, according to the Canadian Mortgage and Housing Corporation, means that rent is 30 per cent or less of a person’s pre-tax income.

We diligently research markets and areas with the customer experience at the forefront. Access to public transit, employment areas, and parking is important. We study those markets and demographics, taking a top-down approach with the macros in the market. We also look at historical data and dive into past economic cycles. It’s all part of our investment strategy.

“It’s what we’ve been doing for 16 years. We’re buying where the people are and where they want to live. The Prairie provinces have robust service and employment sectors. What they lack in population density, they make up with infrastructure. We aim to serve those people,” Jason said.

So, what does all this mean in terms of Avenue Living’s strategy and long-term outlook?

“A lot of these buildings were built in the 1970s, ‘80s, and ‘90s. They have been owned and operated by the same family and group for many years. We are seeing pressure for them to exit. Baby Boomers want out because real estate is hard to manage,” Jason said.

There are many assets and buildings, circa the 1990s and early 2000s where the same finishes, customers, and rents have not changed for years. For Avenue Living, those properties present a unique opportunity: we can acquire them at a deep discount, upgrade the finishes, and implement active management.

“We’re a business that knows our product. We take an owner-operator approach. We have built our infrastructure to manage it. We are in a once-in-a-generation wealth transfer movement where the opportunity to buy is there. It’s a self-fulfilled prophecy now after just over 16 years of getting here,” Jason said.

With any successful business, it’s the road already travelled that helps determine the future. “We are in a very interesting position. Our barriers to success are behind us. The road that’s in front of us — we have a window to capitalize on,” Jason said.

As we continue to raise capital, and deploy creatively, we create a sustainable value and model, and build a larger stream of revenue, creating more incremental dollars to reinvest into the organization. This is why we’ve been able to build a platform of services — including technology, property management, logistics, legal, business analytics, and marketing services — to support our growth and accelerate new ventures.

“A lot of people talk about investment strategy without talking about operations. They talk about investment strategy without talking about how the market is or the macros on the market,” said Jason. “But our investment strategy is our investment strategy because we are an owner-operator. This is a unique differentiator in the industry. If we weren’t an operator, we wouldn’t be buying what we’re buying. We are consolidating what needs to be consolidated.”

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.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.

In today’s modern and fast-paced world, information technology (IT) is an integral cog in the wheel for successful companies. From dealing with employee questions and communication to storing and transmitting information, IT departments are tirelessly working in the background so people can perform tasks on a daily basis.

Technology improves efficiency and employee engagement, and helps companies expand and increase capacity. And all the while, it helps save time and effort and enhances company security.

For Avenue Living and its diverse group of companies, having a strong and complementary IT department in its arsenal is just one way we keep pace in an ever-changing and evolving world. Speaking with Nathan McAuley, VP, Information Technology/Information Systems, he expressed the importance of the IT department, how they help us function, how their team has grown and evolved throughout the years, and how they have managed themselves throughout the pandemic.

“To me, it’s small incremental steps in the right direction towards getting better every day.” Nathan has been with Avenue Living since 2019, watching the team consistently expand. “We’ve seen immense growth in a number of ways, from adding people (six when Nathan started to 13 present day) to managing projects, business analysis, and analytics” he said, adding that the amount of tech projects the team is undertaking has ratcheted up. The Avenue Living team has rapidly grown over the last serval years, adding to the intensity and heightened need of a strong IT department.

Technology plays an important role in all of our departments. Effective execution of new technologies has become more critical as we continue to expand. To ensure our ongoing success, the IT department continually has taken the necessary steps to be able to better serve our internal and external stakeholders.

IT has been there supporting our expansion, like when we founded two new Trusts, Mini Mall Storage Properties, and the U.S. Real Estate Trust, as well as other venture partnerships.

Nathan likens the IT department to enablers — they enable across multiple functions, and their goal is to get the person back up on their feet as quickly as possible, and to help them to do their job and not worry about technology. “We’re enabling the business to be better, more efficient, increase revenue, and do something through technology that they haven’t done before.”

Having a mind and eye on expertise in technology is a major focus for the department. They seek to understand what’s out there and what’s coming in terms of technology and how it can better the business or how it can be implemented. Expertise is a big piece of continual learning.

“If you’re in IT, you’re going to be learning new things that are going to challenge your assumptions, every single day, because what you said yesterday will probably be out of date already. You have to continue to challenge yourself and try to gain as much expertise as possible,” Nathan said.

Keeping pace with a rapidly evolving industry and sector is a challenge that Nathan and the IT department embrace through one word: curiosity.

“Being curious and understanding things at a detailed level helps you learn things that you don’t know and find out if things have changed. Curiosity at the foundational level in our team is something we want everybody to have.”

IT plays a key role in Avenue Living’s day-to-day functioning, and from a technology standpoint, is important to our successes and processes. IT has the experience and wherewithal to help support the business and what we want to do. They’re problem solvers.

Serving Avenue Living’s diverse needs requires an IT department that approaches things from a point of understanding and being agile on their feet, and adapting to unique and changing circumstances. Whether someone is having an issue with their laptop or tablet or an application issue, the IT department plays a large role as customer service and closely working with people.

“It’s our job to come in every day and be everybody’s comfort blanket,” Nathan said.

Acting as technology experts, IT has also been integral in working with Scrum, which is an agile framework that helps people and teams solve complex adaptive problems, while delivering products of the highest value.

With a focus on data and its tangible uses for Avenue Living, the IT department recognizes how it can be an asset across the board. Honing business intelligence and analytics to help predict the future helps us make strategic decisions, allocate resources, or change the way we look at things.

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.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.