Real estate company says indicators are positive that sector will thrive
The rental investment market is ripe for a slice of an investor’s portfolio.
That’s the view of Anthony Giuffre, CEO of leading real estate portfolio firm Avenue Living Asset Management, which last month exceeded the $1 billion AUM mark.
In the first quarter of 2018, Avenue Living’s Opportunity Trust acquired 412 units with a value of $17.6 million. Including a recent 235-unit Red Deer, Alberta closing, the company acquired an additional 301 units with a value of $43.6 million in Q2. It now has about 7,400 units in its portfolio with Giuffre confident that during the next two quarters the firm will exceed the 8,000 mark.
He believes that as the current environment stabilizes, more customers are going to look at the rental option.
He said: “If you start to look at indicators in Canada, for example, there is a rising interest environment coming from historically low rates, private debt is some of the highest on record and, thirdly, home ownership rates in Canada are high.
“All three of those things would suggest that we are at a high point, which would mean that apartment rental and multi-family position should be in some portfolios.”
The company began in 2006 with the purchase of a 24-unit building in Brooks, Alberta and now has a multi-family portfolio of secondary and tertiary markets across 14 areas in Alberta, Saskatchewan and Manitoba. Its portfolio also includes 400,000 sq ft of commercial space and 20,000 acres of agricultural real estate.
Giuffre said recent economic factors, including the uptick in oil prices, increasing interest rates and changes in government mortgage policies, also bode well for the rental markets.
He added: “I would probably say, for certain, that rental investments within someone’s portfolio at this moment in time would make sense under the proviso that the companies holding the rentals actually have the ability to achieve yield because in the Toronto market, where it’s three-cap, or in Vancouver, where it’s two-cap, it’s pretty tough to make a rental yield.”
Giuffre said Avenue Living remains open to investors and that many potential suitors in Toronto have had their eyes opened by the potential of the western Canada real estate market. For Giuffre, the future looks bright.
He said: “I don’t know if I can give you a quantum in terms of AUM but I would say we’re able to strategically grow right now based on the access to capital. There is access to product within those market places based on how we have built out the infrastructure of our organization.”
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