A Risk-Adjusted Investment Strategy – Key To Avenue Living’s Continued Growth
Over the years, Avenue Living Asset Management has acquired a portfolio of resilient residential income producing properties throughout western Canada. Avenue Living’s strategy of purchasing assets and adding value through capital projects and property management has been effective. Alongside the intent to increase occupancy and rent, we continue to gain and materialize efficiencies resulting in improved yields for our investors. Avenue Living continues to expand not only across western Canada but most recently south of the border.
“Avenue Living’s investment philosophy is based around risk-adjusted returns,” said Hakeem Mitha, Director of Investments for Avenue Living Asset Management. “We’re willing to take calculated risks, and always have our investors’ preferences top of mind. We are fortunate to have five investment offerings so we can match up our investors’ appetite to a specific mandate. And this investment philosophy has served the organization well since its inception in 2006.”
Avenue Living has two real estate investment funds in Canada that target multi-family and commercial real estate – the Core Trust and the Opportunity Trust – where we can spread out different risk profiles. The Core Trust is an open-ended mutual fund trust, targeting stabilized assets. The Opportunity Trust is also an open-ended mutual fund trust, however targets assets that require more value-add opportunities.
“Shifting thoughts to the U.S., we recently closed our second U.S. acquisition, The Corinth Portfolio in Kansas City, KS. Although Avenue Living is not a startup, the launch of the new U.S. Real Estate Trust was. It involved developing a proprietary market entrance model, ensuring that we have mitigated the risk of new market entry,” said Mitha.
The Avenue Living U.S. Real Estate Trust is an open-ended mutual fund trust, targeting stabilized multi-family assets in balanced U.S. markets. The key to our investment strategy is our ability to understand the complete social and economic dynamics in a community. Avenue Living’s investors find class B and C assets beneficial because this asset class provides the opportunity for a stable yield.
“Through all the economic challenges that we have seen in 2020, Avenue Living continues to perform well. This showcases the stability of our asset base and the certainty that class B and C multifamily can provide. Volatility in the market makes our business case more attractive for the investor who prefers a stable yield,” said Mitha.
COVID-19 has highlighted the fact that housing is an essential investment. Having a well-priced rental home, with property management proactively ensuring its residents live safely, comfortably, and responsibly is attractive in today’s economic climate.
“Pre-pandemic, people were fine with paying more for smaller, newer spaces and the additional lifestyle luxuries, such as gym memberships and shared workspaces. Whereas now, people are allocating more of their income to their rent and necessities,” said Mitha. “This is a good time for Avenue Living in terms of both capital raising and capital deployment. Society has shifted more value to shelter. People are spending more time at home, whether working from home or educating their families from their dining tables.”
The multi-family industry is doing well and our drive to invest in class B and C assets holds strong. Class A product may be seeing a downward trend and the repercussions of these economic times evidentially increase the demand in class B and C product. People are looking for affordable lifestyles and homes that provide value and quality, with a realistic payment.
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. 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.