Private real estate strategies gain traction as investors navigate risks and market uncertainties
Wealth Professional, in collaboration with Equiton, reported optimism for 2025 in private and public markets.
Falling interest rates and investor confidence could boost growth, but uncertainties remain, underlining the importance of diversification.
Equity markets in 2024 were driven by high-performing tech and artificial intelligence stocks, raising concerns about sustainability.
Meanwhile, private real estate, particularly in multifamily housing, offered stability and consistent income.
Geoff Lang, senior vice-president of Business Development at Equiton, noted, “With rising demand and carefully managed investments, private real estate offers a stable and strategic way to diversify in 2025.”
Purpose-built rental housing is uniquely positioned to meet growing demand.
The Canada Mortgage and Housing Corporation (CMHC) forecasts tight rental markets, with reduced condo development further impacting supply. This creates opportunities for purpose-built rentals to address unmet housing needs.
Equiton emphasizes conservative acquisitions and financing strategies.
Lang explained, “We lock in our interest rates on 10-year fixed mortgages. It’s not the flashy move, but it’s the prudent one. This gives us the stability we need to grow confidently, even in markets like the one we just emerged from.”
The company’s approach includes navigating rent controls and identifying properties with significant rent gaps.
Lang noted, “Our average rent is about 30 percent below market. As we turn over units, we close that gap. It’s a key driver of our net operating income and a differentiator in how we approach growth.”
In Ottawa, Equiton is developing a three-tower rental project, with the first tower set to launch in mid-2025. The city’s strong rental demand and low supply make it a favourable market.
Global economic factors, including inflation trends and geopolitical risks, are expected to shape 2025. Though gradual rate cuts are anticipated, potential risks such as stagflation and slowing global growth persist.
Real estate, particularly purpose-built rental housing, offers reliable returns in volatile markets. Equiton’s focus on disciplined acquisitions and value creation underscores its adaptability.
Lang stated, “We say what we do and do what we say. That reliability has been key to our success since 2015.”
