For Calgary-based Avenue Living Asset Management, August was the company’s busiest month ever in terms of leasing volume for rental properties.
A record-breaking renewal rate of about 75 per cent, which is considered to be very high for the rental housing industry, as well as new leases signed, have been triggered by the company’s aggressive and ambitious capital investment in its properties.
Since 2018, Avenue Living has spent more than $80 million on renovations and will have spent $100 million by the end of this year, says Jason Jogia, Chief Investment Officer for the company, which owns and operates 8,800 multi-family rental residences across many Western Canadian markets.
Jogia says the company has renovated over 5,800 suites to date and will finish the last 800 suites by the end of October. A by-product of that comprehensive capital investment strategy has been an increase in average rents by 17.5 per cent since the company embarked on its renovation program. This also is compounded by the fact that Avenue Living’s natural vacancy is less than 5% across the region.
“We set out on a program to reinvest in our units and create what we call the classic and premier categories of units,” says Jogia. “Given that we have these refreshed units and improved buildings and continued investment capital in the buildings, we are seeing way more renewed leases. People like what they see. Our retention rates have never been so high.
“It’s really the right investment at the right time that has led to these strong results for us as an organization.”
Avenue Living began as a company in 2006 with the purchase of 24 rental units in Brooks, Alberta for $3 million. The company, which has a diversified portfolio across 17 markets in the Prairies, intends to grow to more than 10,000 residential units across Western Canada by the end of this year by providing affordable 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, and make up close to 40 per cent of the Canadian population, according to Avenue Living.
August and September are typically the strongest leasing months of the year, so having rent-ready, quality inventory is paramount to capitalizing on demand this time of year, explains Jogia.
The capital investment includes refreshing the curb appeal of the property through initiatives like landscaping, repaving the parking lot, new siding and windows.
“We’ve focused on improving the curb appeal of our buildings, so they look like a place to call home at first sight,” says Jogia. “When you walk inside our buildings, you’ll notice new refreshed common areas and see suites have been turned into classic and premier units. The resident experience from the moment someone pulls up to the parking lot of an Avenue Living building is very, very improved, given the amount of capital that we’ve spent in the building.”
Renovation of units typically takes between two to four months, depending on the size of the unit and the amount of work needed.
“By building relationships and delivering higher levels of product and service quality we put ourselves in the best position to retain our residents,” says Jogia.
“We have a duty of care to our residents. We need to ensure we are providing them with a home that provides both quality and value.”