Avenue Living has reached an impressive and important milestone, with assets for the Calgary-based real estate owner/operator surpassing $1.5 billion in assets under management across its platforms. Avenue Living owns and operates residential, commercial and agricultural real estate through three investment funds.
Jason Jogia, Chief Investment Officer for Avenue Living Asset Management Ltd, the asset manager of the three funds, says the acquisition of 91 units in Medicine Hat and 27 in Calgary pushed the asset value past the significant milestone.
“The valuation of our assets continues to improve, based on the capital that we’re spending on them,” says Jogia. “And our recent acquisitions in Calgary and Medicine Hat pushed us over that $1.5 billion mark.”
“The size allows us more depth of economies of scale and scope. In May of 2018, we were at $1 billion. Now, a year and a half later, we’re at $1.5 billion. It’s exciting for us because it shows that the market likes what we’re doing. The market continues to allocate investment dollars to us and this, together with our positive relationships with our lender partners, has allowed us to continue to grow our asset base. It’s very validating.”
Avenue Living traces its beginnings back to 2006 with the purchase of 24 rental units in Brooks, Alberta for $3 million. Today it has commercial and agricultural assets, plus a diversified portfolio of 9,000 residential units across 18 markets in the Prairies, on track to grow to more than 10,000 residential units in 2020.
Avenue Living provides economical housing for what it considers to be the “workforce housing” population. This niche market is geared to a city’s essential workers who are the backbone of every city, making up almost 40 per cent of the Canadian population, according to Avenue Living.
Avenue Living has spent $100 million on a capital investment program to renovate about 6,500 suites in its portfolio. That strategy has led to an increase in average rents of 17.5 per cent since the company began its renovation program.
Jogia says the $1.5 billion value of assets shows potential investors that Avenue Living is an investment platform that continues to create, grow and accrete value through its various investment vehicles.
In addition, Jogia says reaching the $1.5 billion mark in assets in only 13 years boils down to Avenue Living’s ability to create a recipe for success in a broad footprint.
“We manage wide, not high. Most of our buildings are not high rises, nor high density. As champions of the Prairies, we have created a proposition where there’s a significant amount of depth to continue to acquire and consolidate that wide, low-density market. And we’ve created a management platform with the scale we need to successfully execute and continue to grow,” he says.
“When you put those things together, between our expertise in the type of assets we buy, understanding the demographic we service, understanding that we’ve got a large geographic territory to cover that’s not yet consolidated, and having the management expertise to be able to execute, it allows us to attract the dollars to continue to buy and accrete.”
Right now, Jogia says the pipeline of potential residential units is robust. Avenue Living has identified more than 3,000 doors it could execute on in the same territory, representing the same type of assets and very accretive purchases.
“Over the course of 2020 we hope to continue growing at a similar pace,” he says.