said Anthony Giuffre, CEO of Avenue Living Asset Management.
“Now that we’re stabilized, we look more like our larger public
peers, except we’re not indexed to a stock price. The final part of
our journey is to de-lever.”
Since it was founded in 2006, Avenue Living Asset Management
had been on an aggressive arc of multi-residential acquisition. But
when the price of oil plunged in 2014, the company stopped asset
hunting. After the ink dried on the final deals, Avenue Living’s Real
Estate Core Trust portfolio had more than $850 Million worth of
assets under management, totaling 6124 units.
In the face of a regionalized recession with no end in sight, Giuffre
decided to double down, focusing on operational stabilization.
Avenue Living started a massive capital expenditure program in
2015. An $85 Million investment in renovations and upgrades
across the entire portfolio resulted in 90% occupancy.
“The most difficult thing to achieve when you build a company is
to standardize all processes,” said Giuffre. “After focusing on that
for the last three years, we are ready to de-lever the balance sheet,
which will put us in an optimum place to seize new opportunities.”
A NATURAL HEDGE
“The benefit of multi-family residential is that we don’t experience
large blocks of lease expirations,” said Giuffre. “The continuous
flow of tenants coming in and out of our buildings is a natural
hedge. Each month we typically we see 1.5 to 3% tenant turns. And
because we’re in a non rent-controlled environment, we’re also able
to keep pace with interest rates.”
For investors interested in real estate exposure, Avenue Living
offers a significant scale of multi-residential with geo-demographic
diversity. The platform is spread across multiple markets in three
provinces: Alberta, Saskatchewan and Manitoba.
SKIN IN THE GAME
Giuffre is part of a small control group that is the single largest
shareholder of the Core Trust — in excess of 50% of the equity.
“Investing alongside your investors creates better management,”
said Giuffre. “As a result, we take a long term approach to our
To finance an $85 Million renovation through the worst regional
recession in history, Avenue Living had only one option – borrow
from non-conventional high cost lenders.
Now past the depths of the downturn, Avenue Living’s Real Estate
Core Trust is currently raising an additional $75 Million to swap
this high cost debt for equity. The Core Trust buys into the company’s existing limited partnership and holds an interest pari passu to
existing investors. By replacing high interest cost debt with distri-bution-paying equity, the optimization of the balance sheet is immediately accretive to investors in the platform.
$75 Million is just the start. Avenue Living has many accretive
acquisition opportunities to grow the platform into 2019 and
beyond. The company is structured to be an open-ended vehicle.
By Tiffany Burns
“It’s been 12 years, two recessions, and
an $85 Million cap ex program, but it’s
really just the beginning,”
Calgary-based journalist and TV personality.
An Overnight Success Story
AFTER TWELVE YEARS
By Tiffany Burns