With Edmonton becoming a key market for Avenue Living Communities, the real estate rental company is looking to aggressively grow its portfolio in Alberta’s capital city in the near future.
Mark Nixdorf, Senior Vice President of Residential Operations for Avenue Living Communities, describes the Edmonton rental market these days as stable and presenting huge opportunities for expansion.
“Edmonton has not seen the peaks and valleys that perhaps Calgary has seen just in terms of the economics,” says Nixdorf. “First of all, Edmonton is the largest market in our portfolio as well. We have the most amount of units in Edmonton. It’s 1,300 and growing.”
“It’s a very stable market and we’re seeing prices go up in Edmonton and vacancy is very strong there. It’s a high growth market for us. We are actively looking for more sales as opportunities to acquire there and we expect it to continue to lead the way for us for units. We have a bright future in Edmonton. I think we can grow to 3,000 plus in Edmonton for sure.”
Nixdorf says while Edmonton does get impacted by the downturn of the oil and gas sector, it’s usually not to the degree that Calgary experiences. Employment is steady and growing in Edmonton. Diversity of the economy is far greater than Calgary. There’s plenty of construction taking place as well, particularly in and around the downtown ICE District.
“Overall as a city you’re seeing stronger economic factors. It’s certainly leading the way in Alberta.”
According to the most recent Canada Mortgage and Housing Corporation report on the rental market, Edmonton’s vacancy rate last October was 5.3 per cent, which was down 1.7 percentage points from the previous year.
Avenue Living Asset Management has aggressively and ambitiously built a portfolio of more than 8,500 residential rental units across Western Canada in just 13 years. The Calgary-based company’s journey began in 2006 with the purchase of 24 rental units in Brooks, Alberta for $3 million.
Nixdorf says the Edmonton market aligns well with Avenue Living’s workforce housing philosophy which caters to a city’s “essential workers” who are overqualified for affordable housing yet may not be able to afford average market-rate homes, whether for rent or purchase.
“We have a good diversification of product in Edmonton. We’re in northeast, north central, northwest primarily and that really suits our target market very well,” he says.
“We’re looking at acquiring more assets on the south side of the city where we currently don’t have many assets. That’s an area where we believe we can grow within the city of Edmonton. Both the southeast and southwest have a lot of rental properties, and tie in well with our workforce housing market. These areas offer good proximity to downtown from a commuters point of view.”
Nixdorf says there is still much opportunity for expansion of the company portfolio on the north side of the city but for now, the company will concentrate now on the south side.
“Also, I think we can get higher rents on the south side. A lot of properties on the south side are newer, so we think we have some growth on the south side in terms of rental prices as well,” he says.
Edmonton has three times the rental properties that Calgary possesses. That level of inventory increases the potential for acquisitions.