Geoff Lang of Equiton on why real estate offers unmatched opportunities for advisors and clients alike
This article was produced in in partnership with Equiton
With rate cuts stimulating real estate activity and momentum in the capital markets, Geoff Lang, Senior Vice President of Business Development at Equiton, sees an opportunity for advisors to incorporate real estate into client portfolios, leveraging its potential for long-term stability, income, and growth.
“It’s been an interesting year,” Lang notes. “Rate cuts arrived later than most Canadians had anticipated, leading to hesitation and stalled transactions earlier in the year. But with cuts in June and further reductions in the fall, transactional volumes are showing signs of recovery. The stage is now set for a strong finish to 2024 and an exciting 2025.”
Investors seeking stability look to real estate
With the outlook bright, investors seeking capital preservation and steady growth are becoming increasingly aware of the benefits of diversifying their portfolios with Canadian real estate. To support their goals, advisors have multiple options available.
Advisors can recommend direct ownership, which offers more control and tangible engagement with assets like multifamily properties or residential units. However, an ownership approach demands significant time and resources for ongoing management. As well, individual investors can find it hard to ignore the capital-intensive nature of financing a property purchase.
For clients seeking a less hands-on approach and lower barrier to entry, passive investing through private real estate funds offers accessibility without the operational burdens. Once limited to large institutional investment firms and high-net-worth individuals, private real estate funds have since become significantly more accessible. The Equiton Residential Income Fund Trust (The Apartment Fund) gives investors exposure to institutional-grade assets with significantly lower entry costs — Equiton’s minimum investment, for instance, starts at $25,000.
“Real estate has become increasingly expensive to access directly,” Lang explains. “REITs provide a passive alternative that delivers diversification and stability without the financial and operational hurdles of ownership.”
Aligning real estate with client goals
Real estate investments come in a number of varieties typically categorized by asset type, region, and growth strategy, allowing advisors to align them with client objectives, such as prioritizing income, equity growth, or diversification.
For clients focused on long-term capital appreciation, real estate serves as an equity sleeve, adding stable growth and risk mitigation. These investments capitalize on the enduring growth of real estate markets, particularly in resilient sectors like multifamily housing. The Private Canadian Apartments index has never had a negative year over the last 35 years. Its stability and resilience make it an invaluable addition for clients seeking reliability over the long term.
Additionally, it serves as an effective hedge against inflation. Rising rental incomes and property appreciation during inflationary periods preserve purchasing power, ensuring the asset class remains relevant in all market conditions.
Other clients may prioritize income generation, seeking tax-efficient returns to supplement cash flow. The Apartment Fund, for example, targets an annual net return of 8‑12% with distributions currently structured as 100% return of capital (ROC).
Long-term value in real estate
Advisors tailoring real estate allocations must consider client risk tolerance and overall portfolio objectives. Lang emphasizes the importance of assessing exposure to alternatives and finding the right balance between equity and income.
“It’s a sustainable, prudent asset class that complements traditional investments. With rates decreasing and valuations improving, now is an opportune time to invest,” says Lang.
Lang is a strong advocate for a long-term buy-and-hold approach. “Real estate rewards patience,” he affirms. “By investing in value-add properties and focusing on sustainable growth, clients can benefit from an asset class that has provided historically consistent appreciation and compounding returns.”
