Hear from Jason Jogia, MBA, CIO, and Gabriel Millard, SVP of Capital Markets – Equity & Research, on the 2024 outlook for multi-family and self-storage real estate, and what Avenue Living has in store for the year.
Read the full article on Wealth Professional.
2023 was a challenging year for Canadians and the broader markets. While inflation has slowed and interest rates appear to have stabilized, the overall economic picture continues to fluctuate.
“It’s been only one year, but we’ve seen changes that you don’t normally see within five,” says Gabriel Millard, Senior Vice President, Capital Markets – Equity and Research. “We’re still in the midst of digesting one of the fastest rate-hiking cycles in history, with a lot of variables in the macro environment.”
In light of this, investors have expressed increased interest in alternative investments for stability and returns that are non-correlated to public markets. Against that backdrop, we’ve continued to invest in the everyday, striking a balance between defensibility, growth, and sustainability across our strategies.
Multi-family and self-storage: from pause to growth
“During the first nine months of 2023, we took a deliberate pause on acquisitions within both our multi-family and self-storage strategies,” Millard says. “Over that time, we saw material net operating income (NOI) improvements from rent adjustments enabled by heightened service standards and introducing new operational cost-efficiency measures.”
Avenue Living shifted gears in the back half of the year, adding over 1,600 units to our multi-family residential footprint. In November, we finalized a deal with a large institutional investor for a 700-unit portfolio across five towers and a number of townhomes.
“We’re seeing opportunities to acquire higher-value properties from institutional players, including pension funds, which weren’t available even two years ago,” Millard says.
As borrowing costs accelerated, the importance of vertical integration, active property management, and managing rising costs in the real estate space became acutely clear. Across both the multi-family and self-storage markets, pure capital allocators struggled to sustain their investment returns, creating more acquisition opportunities.
“We’re exiting 2023 at just over 17,000 multi-family units,” Millard says. “The Mini Mall Storage Properties fund also grew quite rapidly to almost 8 million square feet — including the largest acquisition in its history of almost 900,000 square feet across 19 properties — making Mini Mall the top 21st largest self-storage operator in North America by rentable square footage.”
The multi-family Prairie markets are seeing growth from record net immigration, driven by households seeking affordability. A sizeable portion of these newcomers are coming from higher-growth markets like Vancouver, Toronto, and Montreal where rent payments can take up 40% to 50% of households’ income.
Historically, self-storage has proven to be a resilient asset class and remained stable even in times like the 2008 North American real estate crash. Robust consumer-driven demand continues to propel the investment class, painting a constructive picture.
Strong tailwinds for Canadian farming
Avenue Living’s two Saskatchewan-focused agricultural strategies, the Avenue Living Agricultural Trust and Tract Farmland Partners LP (Tract), have also managed well amid persistent demand for farmland investment from across Canada.
In its mid-2023 report on farmland values, Farm Credit Canada saw Saskatchewan lead the nation with an average gain of 11.4%. Most locations in the province, the report said, saw increases between 7% and 11%. On the ground, Tract identified acquisition targets from word-of-mouth referrals within the farming community, a testament to its reputation as a trusted partner.
“It’s a consolidation play that’s still just in its early stages. An estimated 98% of transactions within the province remain outside of investment funds, and we’re continuing to acquire assets,” Millard says. “By the time we close a deal, we’re already seeing impressive appreciation.”
ESG efforts coming to fruition
Roughly two years after striking its partnership with the Canada Infrastructure Bank (CIB), Avenue Living is moving forward on a number of energy retrofit projects across its multi-family residential portfolio, including work on large solar arrays, exterior renovations, and mechanical upgrades.
“A large portion of the acquisitions in our self-storage fund are within the Sun Belt region of the United States. Our portfolio is made up of assets that are wide, not high,” Millard says. “That offers an abundance of roofline where we’re able to implement solar projects.”
Avenue Living’s agricultural strategy also lends itself well to ESG, given Canada’s outsized role in producing staple grain products.
“The opportunity to help improve food security for Canadians and other nations is something we’re very proud to be a part of,” he says.
Avenue Living released its first full ESG report in 2023, with a second one set to come out this year. Beyond that, we’ve bolstered our commitment to responsible investing. In 2021, we became a signatory to the United Nations-supported Principles for Responsible Investment (PRI) and over the last year we furthered our commitment and became members of the Responsible Investment Association (RIA).
Avenue Living continued its annual Avenue Giving campaign, bringing together donations from residents and staff to support local food banks. We also launched an Employer-Supported Volunteerism program in the last quarter of 2023. In three months, employees volunteered for over 160 hours with 10 organizations including local food banks, Canadian Blood Services, veteran and seniors’ resource centres, community kitchens, and drop-in centres across the Prairies.
For 2024, a continued stewardship focus
From the beginning, Avenue Living’s growth has been inextricably tied to its commitment to the customer. Millard says that focus will continue in 2024, along with a focus on ensuring defensibility across the organization.
“Since 2020, it’s been a volatile period, and 2024 doesn’t appear to be any different,” he says. “As a responsible asset manager, we’re maintaining a leverage profile in the low 50%, and keeping over 10% of our NAV in liquidity to ensure defensibility.”
Last year, Avenue Living acquired over half a billion dollars in multi-family assets. With a large pipeline of acquisitions, it’s pressing its growth advantage in 2024, allowing improvement of margins by spreading fixed head-office costs over a larger number of units.
“We don’t grow for the sake of growth, but to improve our overall operations through accretive transactions,” Millard says. “Through technology and operational improvements, our focus is to continually level up our operations for the benefit of our residents, customers, and investors.”
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Over the last year, we’ve stayed the course and once again proved we’re equipped to navigate any environment.
We saw a number of formative milestones in 2023, including our largest acquisitions to date in both our multi-family and self-storage funds as well as achieving over $5 billion in assets under management.
Moving forward, our focus is on bringing our proprietary management model to more Canadians and expanding our investment offerings.
Examining the economy and markets heading into 2024, we see a landscape dotted with opportunities. We believe our strategy of measured growth, sustainability, and defensibility has put us in a strong position for the next leg of our journey.
As we reflect on the year, we’re looking back on the blogs and white papers that resonated most with our readers in 2023.
The topics run the gamut from our partnership-oriented agricultural investment strategy to academic research on key stakeholder segments for our business, to our efforts in leading the charge on sustainable workforce housing.
At the heart of it all is our commitment to providing value for our residents, investors, and the communities where we’ve put down roots.
BLOG:
Harvesting Alpha in Canada’s Agricultural Heartland
We unpack how the Avenue Living Agricultural Land Trust and its successor strategy, Tract Farmland Partners LP, are set to benefit from long-term tailwinds while prioritizing an active approach and partnership with the community.
WHITE PAPER:
In this peer-reviewed study, our leaders in the Capital Markets team, Gabriel Millard and Cameron Hills, collaborated with the University of Regina’s Dr. Grant Wilson to examine how a commitment to understanding and serving residents translates into tangible benefits — including loyalty, trust, pride in accommodations, and timely rent payments — for residential property managers.
BLOG:
Multi-Family Retrofits: The Case for Going Green
Following on from our 2022 partnership with the Canada Infrastructure Bank (CIB), this blog outlines the energy-conservation measures (ECMs) we’re planning across our Canadian portfolio of multi-family rental properties. It also uncovers our framework for ensuring the viability and impact of deep energy retrofit projects.
WHITE PAPER:
In another collaborative study published in the Journal of Financial Services Marketing (JFSM), our Chief Investment Officer, Jason Jogia, worked with Dr. Grant Wilson to investigate the under-researched subject of financial advisors’ REIT knowledge and engagement with REITs, including how their personal perceptions influence client recommendations. JFSM is a leading journal in finance and marketing, ranked B on the ABDC list, and recognized by all management and real estate journal quality lists.
BLOG:
Revitalizing Canada’s Housing Landscape: The Crucial Role of Retrofits
As the country manages two major challenges — housing affordability and environmental impact — it’s becoming clear that retrofits to existing buildings are a key part of the solution. This blog looks at how strategic retrofits can help solve Canada’s increasingly critical housing supply challenge.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Alternative investments are experiencing a surge in interest from advisors and investors seeking ways to drive returns.
With a focus on hard assets, Avenue Living has consistently delivered stable returns over the past decade — a trajectory that we anticipate will continue due to strong market fundamentals including population growth and limited supply.
Hear from our SVP of Capital Markets, Gabriel Millard and Head of Sales, Alex Steele, about how our vertically integrated management platform and solid financial partnerships set us apart, making Avenue Living a defensible choice for alternative investors.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Our CEO and Founder, Anthony Giuffre, sat down with Real Estate News Exchange (RENX) to discuss Avenue Living’s recent acquisitions, growth strategy, and how our expertise as property managers is helping us navigate the current market.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Alternative investments are enjoying a rise in popularity, but not all are created equal.
Investments in alts, such as real estate, may offer opportunities to increase diversification and generate competitive returns while potentially providing protection against inflation. Avenue Living’s funds offer an accessible way to invest in multi-family real estate, farmland, and self-storage.
Learn what investors should look for:
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
As our leadership team reflects on the first half of 2023, the theme is one of sustainability and continued growth for Avenue Living. As we progress throughout the year, we’re poised to reach new milestones given the strong foundation we have spent the last few years cultivating. Each of our funds has access to a robust vertically integrated platform with talented experts in finance, legal, marketing, technology, accounting, HR, and customer service to support their operations. As we grow, that platform scales with our different businesses, allowing us to maximize efficiency across the organization.
Multi-Family
This year, our Core Trust has sustained its steady growth trajectory, as the groundwork from previous years allowed us to find upside in constrained markets. Our approach as an active property manager, and the platform we have built to support our operations, has helped us deliver superior resident experiences and manage our assets while mitigating rising costs.
“We remain focused on our defensibility and advancing our business for the rest of 2023,” says Avenue Living Founder and CEO, Anthony Giuffre. “We continue to be bullish on the Prairies given its population growth and affordability when compared to other markets.” Our multi-family acquisition pipeline includes over 3,000 units in the region which have the potential to close in the latter half of 2023 or early 2024, which could bring our portfolio to over 18,000 units.
“Our investments in people and technology have created the basis for us to support new acquisitions across our asset base without increasing management costs,” says Jason Jogia, CIO of Avenue Living. “This ability to scale, coupled with our ability to borrow strategically while taking advantage of the inverted yield curve, allows us to minimize our costs while investing in our assets and delivering a superior resident experience.”
Sustainability remains a key cornerstone of our business, as we invest in capital improvements and strategically plan our projects to reduce greenhouse gas emissions across our portfolio. These projects — many of which will launch in the second half of 2023 and progress over the next four years as part of our landmark partnership with the Canada Infrastructure Bank — will improve the energy consumption of approximately 240 buildings and enhance comfort for around 10,000 Avenue Living Communities residents.
Self-Storage
Mini Mall’s focus on operational efficiency at the beginning of 2023 has been key to its growth. This approach has allowed the front-line customer service team to deliver a consistent experience at every location, bringing new acquisitions to the MMSP standard.
“With over 100 stores coming online last year, we wanted to stabilize our operations and quickly produce consistent performance and results on these assets,” says MMSP CEO, Adam Villard. Mini Mall delivered on that by adding operational expertise to the executive team and focusing on efficiency, resulting in close rates increasing by 48% and delinquencies decreasing by 84% between January to June.
“We’ve really been focused on ‘the three C’s’,” says Villard, “closing, cleaning, and collecting.” By putting strategic practices in place to help close leads, bringing facilities up to the Mini Mall standard for aesthetics and cleanliness, and lowering delinquencies, site managers and staff can concentrate on creating a seamless customer experience across the organization.
Mini Mall also implemented new marketing and customer service strategies to refine its lead generation process, which doubled results between the end of March to the end of June. “Those efforts are really what’s driving our business right now,” says Villard.
Going forward, Villard sees Mini Mall maintaining strong occupancy throughout the winter to balance the seasonal fluctuations the industry is known for, and continuing to drive targeted programs to build on revenue and occupancy numbers.
Farmland
2023 has been a notable year for our farmland investments as we developed and launched Tract Farmland Partners – building on the success of our Avenue Living Agricultural Land Trust. Interest in farmland as an investment gained traction during the pandemic and it shows no signs of slowing. In its first six months, Tract now holds 3,560 acres of arable land.
CEO of Tract Farmland Partners and Agricultural Land Trust, Leif Snethun, credits the recent world events for the uptick in people’s interest in food supply, noting that the launch of the Agricultural Land Trust in 2017 was slower to get underway than Tract has been. There has always been interest in farmland, but since 2020 it has become more widespread among investors.
“The farmland industry has always been a wonderful space to be in,” says Snethun. He sees Tract adding more assets to its portfolio for the remainder of 2023. “I’m eager to see the momentum build as people remain interested in the agricultural sector and want to know where their food comes from.”
Our Path Forward
The first half of 2023 has been significant for our investment vehicles, as we fostered our ground-breaking partnerships, launched new projects, and saw growing investor interest in our asset classes. Our active management model and platform of services — coupled with careful planning and analysis — will allow us to capitalize on a breadth of opportunities. We’re excited to continue driving our business forward and deliver a competitive advantage in these unique economic times.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
The past year has been punctuated with announcements of rising interest rates, as the Bank of Canada (BOC) redoubled their efforts to combat inflation with successive rate hikes. The latest, in July, brought the overnight rate up by 25 basis points to 5%, its highest since early 2001. Changes in interest-rate policy can have wide-ranging effects throughout the economy, and for real estate investors, it’s vital to interpret the different outcomes between long-term and short-term rates. Understanding the inversion of the yield curve — where long-term interest rates are lower than short-term rates — can help well-prepared property owners mitigate risk.
Understanding the Yield Curve
Figure 1
During the period of rising interest rates, there has been a notable difference between prime-based borrowing rates and bond-based borrowing rates in Canada. While the prime rate has experienced significant increases (from 2.7% in March of 2022 to 6.95% in June of 2023), the Canadian 10-year bond rate has remained relatively stable over the same period. Whereas retail borrowing is often based on prime, commercial borrowing is traditionally based on long-term government bonds. Therefore, well-managed commercial borrowers will generally be less impacted — as compared to retail borrowers — by the recent rise in interest rates. One of the many upsides to indirect real estate investment through entities such as REITs is that investors are able to benefit from the relationships and knowledge of a team of experts. By indirectly investing in real estate, everyday investors can take advantage of bond-based borrowing rates through a strategic asset manager, without becoming a commercial borrower themselves.
With the Canada Mortgage and Housing Corporation (CMHC) setting lending rates at a spread over the 10-year bond, those who have access to bond-based borrowing for long-term decisions have been in a more favourable position since the beginning of 2022. A visual representation of these trends can be observed in Figure 1.
Figure 2
As per Figure 2, during an inverted yield curve, where long-term interest rates are lower than short-term rates, long-term borrowing becomes cheaper than short-term borrowing. By securing financing at lower rates, long-term borrowers benefit from stability and predictability in their interest costs over an extended period. Conversely, short-term borrowers and those with variable rates may experience heightened volatility and financial strain as their borrowing costs increase in response to rising short-term interest rates. The inversion of the yield curve emphasizes how important it is for borrowers to consider duration and structure when interest rates are rising.
Rental property owners facing rising interest rates can take advantage of the differences in duration between short-term leases and long-term debt. Using long-term debt instruments, such as a 10-year mortgage, alongside shorter lease terms, allows property owners to adjust to changing market conditions in real-time, counterbalancing the impact of higher borrowing costs. However, property owners should also consider market conditions and the resident experience before implementing this strategy.
Interest Rates and Homeownership
Rising interest rates — and the resulting increased cost of short-term borrowing — can have a negative impact on development projects, lowering construction activity and limiting the supply of housing units. With fewer developments, the cost of housing increases, leading to higher rents and housing prices. Scarcity of supply and increased borrowing costs compel developers to set higher prices for their projects, ultimately affecting affordability.
A survey conducted by Chartered Professional Accountants Canada identified several barriers to homeownership among non-homeowners in the country. Rising interest rates were cited as the top obstacle by 89% of respondents, followed closely by the affordability of down payments (84%), necessary renovations (83%), and finding a home in a desired area (83%). Other challenges included taxes and mortgage payments (81% each) and income instability (69%).
Existing homeowners also faced hurdles, with renovation costs affecting three out of five individuals, ongoing difficulties in affording home maintenance (46%), and challenges with mortgage payments, property taxes, and utility payments for varying percentages of respondents. These findings shed light on the financial obstacles Canadians encounter in their quest for homeownership, as well as the ongoing strains faced by prospective and existing homeowners.
Navigating the Landscape
Canada’s rising interest rates present distinct challenges for many sectors of the economy — but they also give rise to opportunities. It’s essential for borrowers to understand the benefits and drawbacks of short- and long-term interest rates and formulate their debt strategy accordingly. For property owners, understanding the interest-rate landscape, managing duration, and responding to local market conditions can help minimize borrowing costs and optimize revenue.
Understanding how an asset manager uses different debt vehicles to mitigate risk and reduce borrowing costs allows investors to make informed decisions. Asset managers like Avenue Living, for example, can make strategic use of short- and long-term borrowing to potentially maximize returns and de-risk their portfolios. Considering an asset manager’s borrowing strategy — along with other factors — can help investors find the vehicle that’s right for them.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
When Mini Mall Storage Trust was established in February 2020, creating a unique customer experience was top of mind. The self-storage industry is fragmented, and with that fragmentation often comes varying levels of service. Mini Mall knew they could set a new standard for the industry and worked to define a consistent customer experience online, over the phone, and in person.
Over the last three years, Mini Mall has seen significant growth with operations throughout seven provinces, 15 states, and over six million square feet of storage space. With each new facility or market, the company has recreated its seamless experience by taking an omnichannel approach with comprehensive training and technology.
Hubs and Spokes
Mini Mall operates on a hub-and-spoke model, which means that in every market, its facilities are no farther than a half-hour drive from a management centre. Even with self-serve, unmanned facilities, customers who want an in-person interaction can request someone to be on-site quickly.
This mix of in-person and digital operations is possible thanks to state-of-the-art technology that enhances security and automates administrative tasks, allowing customers to find the right unit, get a quote, sign a lease, and move in through the website or call centre. Facility staff are there to offer support if there are questions or challenges — or if the customer just prefers to interact face-to-face. And in those situations, staff have easy access to information and guidelines about a range of scenarios.
“Our goal is for any one of our Mini Mall representatives to be able to access the information they need within three clicks,” says Tadek Sampson, Director, Operational Training. “We want to make things easier for our staff because when we have a happy team, they’re able to make sure we have happy customers.”
People Skills are Key
For Mini Mall, adopting innovative technology is only part of the story. While customer relationship management software, security systems, and interactive apps have transformed the self-storage landscape in recent years, people skills are still a vital piece of the customer experience. Onsite managers must be both tech- and people-savvy to ensure they can develop customer relationships and effectively solve problems. The automated, online experience must match seamlessly with the in-store, in-person experience — and that requires training.
Onsite managers have traditionally been responsible for bringing new staff up to speed, but with such significant growth the company saw the need for a standardized program to help managers and their staff quickly understand policies and procedures. The MMSP training program is designed to support customer service employees across both in-person interactions and technical software. It also takes into consideration frequently asked questions and most-often-encountered scenarios.
“We learned pretty quickly that our best resources were the people working on the front lines, with our customers,” says Tadek. “In some cases, these people have worked at a location for years — decades, even — and they truly know their customers.”
Tracking Outcomes
There are many factors at play when measuring the effects of training. Mini Mall reviews how employees are performing in training modules so they can optimize the program to best fit the team’s needs while simultaneously bolstering customer satisfaction levels. The training team assesses staff during their first 30 days, and again during ongoing refresher training. The goal for 2022 was to bring the average score of 76% during onboarding to an average of 85% in refresher training. Today, the current scores exceed that goal, tracking well above 90% for staff in service and sales refresher training.
As the company has progressed, the team has also found ways for employees to share their experience and insights. Top performers are invited to join the panel in a bimonthly webinar, where they can share stories of their successes, their learnings, and their best practices. “We’ve found that by giving employees a platform to lead their peers, we get better adoption from the field than if managers or trainers share that information,” says Tadek.
Continuing to Evolve
As technology advances and customer demands continue to change, the self-storage industry will continue to evolve, and Mini Mall will adapt to meet those needs. Innovations in technology may mean some of the heavy lifting becomes automated, but there is always a need for personal interactions, in every demographic. Mini Mall plans to continue to support managers and its team of storage concierge specialists with training programs, tools, and knowledge sharing to ensure everyone has the skills to navigate a high-tech environment and provide an industry-leading high-touch experience.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Dallas, TX and Calgary, AB, February 2, 2023
In the midst of significant and strategic growth across North America, Mini Mall Storage Properties (MMSP) is focused on delivering operational efficiency and superior customer experience at every location. With that in mind, the company is announcing the addition of two new members this week: Joe Colavecchia is joining as SVP, Operations, and Lee-Ann Emment as SVP, Business Operations. Both leaders bring a wealth of experience working for major brands in their respective functions, and their contributions will help guide the strategic growth as MMSP embarks on a promising 2023.
Joe Colavecchia has decades of experience in operations and leadership, having built roadmaps to drive efficiency for major automotive rental and mattress companies. He actively invests in people through training and mentorship to deliver superior customer service — which is already a tenet within the Mini Mall strategy. Colavecchia is looking forward to helping MMSP develop operational plans, training, and procedures to support field teams and create a consistent customer experience. “Mini Mall’s solid foundation and aggressive expansion excites me,” says Colavecchia. “The hub-and-spoke model and state-of-the-art technology set Mini Mall apart, and I’m looking forward to being part of building the company’s future growth.”
Lee-Ann Emment brings 30 years of experience in business operations and has held various leadership roles for major companies in retail and financial services. Emment’s background in project management, operations, and corporate strategy will be instrumental in helping Mini Mall improve its in-house processes and ensure smooth operation across different business functions. “The consumer goods and services industry is constantly evolving and businesses are affected by different economic situations and external drivers,” says Emment. “As a company, you need to adapt to meet customer needs and I’m eager to enhance the tools and insights at Mini Mall.”
“We continue to refine our operations and focus on our customers as we gear up for another exciting year,” says Adam Villard, Chief Executive Officer of Mini Mall Storage Properties. “We’re fortunate to have Joe and Lee-Ann join us to evolve our teams and advance our business practices. I’m confident their leadership skills and multifaceted experience will add tremendous value as we work to deliver industry-leading self-storage to secondary and tertiary markets across North America.”
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
We’ve gathered the blog posts, articles, and white papers that garnered the most interest from our readers last year. They cover a diverse range of topics, from our partnership with the Canada Infrastructure Bank to the complexities of the private rental housing market, but they all come back to one thing: understanding the real estate investment landscape. As investors seek opportunity in a changing market, it’s important to explore and analyze the fundamentals that impact our industry to refine our strategy and provide value for our residents, our investors, and the communities in which we operate.
PRESS RELEASE:
This announcement is the next step in our commitment to ESG — one we officially started when we began a relationship with PRI (Principles for Responsible Investing). Our partnership with Canada Infrastructure Bank will allow us to undertake capital improvements that reduce our carbon footprint and provide comfortable homes for our residents, without compromising affordability.
WHITE PAPER:
RE-EXAMINING A HEDGE AGAINST INFLATION: Multi-family Residential Real Estate
This paper examines the effects inflation and rising interest rates have on affordability, and how investors may find opportunities in multi-family real estate.
PEER-REVIEWED WHITE PAPER:
PRIVATE RENTAL TARGET MARKETS: A COMPREHENSIVE SPECTRUM
Our founder and CEO, Anthony Giuffre, collaborated with the University of Regina’s Dr. Grant Wilson on this examination of the North American rental housing market, identifying the lifestyles, demographics, and value propositions that make up six major groups in the housing spectrum. The peer-reviewed paper was published in the International Real Estate Review in April 2022.
WHITE PAPER:
DIVERSIFICATION WITH AND WITHIN REAL ESTATE
This white paper explores how diversification in real estate portfolios — across asset types and markets — can enhance value for investors, helping them minimize risk and maximize the potential for returns.
BLOG:
WHY WE SEE OPPORTUNITY IN THE WORKFORCE HOUSING MARKET
We examined factors that make the workforce housing market an attractive investment opportunity and why it’s the focus of our multi-family strategy.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
With a cycle-tested business model and a steadfast commitment to the everyday, Avenue Living continued to make great strides.
In 2022, accelerating inflation and rising interest rates created a challenging investment environment, with negative returns flashing across the asset spectrum. Still, that didn’t stop Avenue Living’s 16-year growth streak.
After ending 2021 with just over $3.1 billion in total assets under management (AUM), the organization grew by 48% to reach $4.6 billion AUM. It achieved broadly diversified growth across its multi-family apartment, farmland, and self-storage real estate portfolios — all while staying true to its strategy of investing in the everyday.
“It speaks to the durability of Avenue Living’s business model across multiple market cycles,” says Gabriel Millard, SVP, Capital Markets – Equity & Research. “2008 (GFC) and 2014 (Commodity Crisis) were lost years for many other players, but they were periods of growth for Avenue Living as we leaned into the opportunities. 2022 was another very formative year for us.”
A win-win in the multi-family residential space
Avenue Living entered the apartment space as owner-operators in 2006 with a relentless focus on the resident experience. The company has continued to grow while offering an institutional level of service to those who call its buildings home. A pivotal strategic development was the establishment of the Avenue Living Real Estate Core Trust, which has grown into the first North American Workforce Housing Fund in just five years. Today, Avenue Living’s residential portfolio includes over 15,000 multi-family suites across 3 Canadian provinces and 5 U.S. states.
While headlines around real estate investments tend to revolve around high-growth markets — the likes of Toronto and Vancouver — Avenue Living leans into moderate growth markets, such as the Prairie provinces, where assets are valued at a relative discount. Its vertically integrated business model has also allowed it to control operational costs.
Those factors have enabled Avenue Living to responsibly raise rents in pace with higher inflation and interest rates, without hurting residential stakeholders. “We’re achieving our targeted returns while still maintaining affordability for our residents,” Millard says. “We’ve seen collections improve, occupancy continued to tick up, and we have wait lists at over 100 of our buildings.”
Growing opportunity in Canada’s breadbasket
Meanwhile, Avenue Living’s farmland holdings have expanded from 49,000 acres of Saskatchewan farmland at the end of 2021, to over 83,000 acres today.
In terms of global output, Canadian farmland represents a large portion of durum wheat, peas, and other important base crops. Saskatchewan is a big piece of the agricultural puzzle, as it accounts for approximately 40% of the cultivated acres in Canada.
“We’re witnessing a breakdown in the global food supply chain,” Millard says. “Canada has a real opportunity to be a world leader in ensuring food security.”
With a history of outperforming inflation over the past 30 years, farmland is also growing more attractive as a diversifying asset class. That’s bolstering Avenue Living’s bullish view on Saskatchewan farmland, which remains at a steep discount compared to neighbouring provinces.
Great strides in self-storage
The Mini Mall Storage Properties Trust has also cemented itself as a premier player in the secondary and tertiary markets of North America’s self-storage industry.
From just over 2 million square feet at the end of 2021, the trust has grown to nearly 6 million square feet of self-storage space. That expansion was partly driven by Avenue Living’s ability to introduce its proprietary technology stack and operating expertise into all the new locations it enters.
“A lot of innovation has happened in the primary downtown, new-development segment of self-storage over the past decade,” Millard says. “We’re taking that approach and applying it to older legacy-run assets that have traditionally operated as mom-and-pop, cash-and-paper businesses.”
Avenue Living is pushing for more growth through a new office in Dallas, where it has hired key industry leaders in the self-storage landscape.
“Our expansion into Texas has taken us from a smaller, scrappy Alberta-based company into a truly North American player,” Millard says. Mini Mall Storage is now a top 25 self-storage operator in North America.
More milestones
Above the 49th parallel, Avenue Living has arrived on Bay Street with a new Toronto office. With that new foothold in Canada’s financial hub, the company is positioned to further reinforce and broaden its capital base in the years to come.
With about $160 million in expenditures made toward capital improvements in its residential properties, Avenue Living is also sharpening its focus on maintaining a superior resident experience and providing great customer service.
After becoming a PRI signatory in 2021, the company is doubling down on sustainability through a partnership with the Canada Infrastructure Bank, which includes a $150-million co-investment on deep energy retrofits on its older-style multi-family assets.
“Real estate – especially older stock properties – represents a significant portion of GHG emissions in Canada,” Millard says. “Our goal is to reduce GHG emissions by at least 49% through deep energy retrofits”.
Leveraging its unique perspective on workforce housing, Avenue Living has also published industry-leading papers and research. That includes a peer-reviewed paper on the residential housing spectrum, which unpacks the nuances of typical renter demographics, as well as their needs in terms of rental housing.
“We’ve published a number of white papers on the importance of affordability, and how a changing cost of capital affects real estate across different markets and asset classes,” Millard says. “We’re really solidifying ourselves as thought leaders within the industry, while continuing to advocate for our residents and provide value for our investors.”
The way forward
Avenue Living has built a strong capital stack. Coupled with a diversified equity base and the use of longer term, fixed-rate debt instruments, Avenue Living is focusing on innovation and investment to ensure strong same-door performance and operations in 2023. It also plans to continue focusing on active property management to deliver the best possible results for residents and investors alike.
“We’re heading into a world with a lot of dark clouds, but we’re seeing opportunities in the market. We’re in a defensible position, and we are aiming to take advantage of any disruptions that may come,” Millard says. “2023 is going to be an interesting year globally, and a very exciting year for Avenue Living.”
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
The organization demonstrates a commitment to innovation, sustainability, and customer service excellence.
Calgary, Alberta – December 7, 2022 – Avenue Living Asset Management (“Avenue Living”) has been named a gold winner for Company of the Year – Canada by the Best in Biz Awards.
By investing in the everyday and adding value to its properties, expanding the organization’s footprint, and focusing on its workforce and brand advantage, Avenue Living has demonstrated the ability to be defensible, stable, and strategic in its daily operations and long-term vision to drive value for its customers and stakeholders.
The 12th annual Best in Biz Awards saw more than 700 entries from public and private companies of all sizes and represents diverse industries and regions in the U.S. and Canada, ranging from global brands to the most innovative start-ups and local companies. This year’s judges highlighted the winning companies’ visionary leadership, innovative strides in the use of new technologies, and the adoption of workplace best practices. Many winners also continued to invest in environmental and corporate social responsibility programs.
“We’re incredibly proud of the resilience our team and organization showed throughout 2022,” says Jason Jogia, chief investment officer of Avenue Living. “Being named a gold winner for Company of the Year by the Best in Biz Awards is a testament to our team’s commitment to excellence and sustainability in the multi-family industry.”
Since the program’s inception in 2011, winners of the Best in Biz Awards have been determined by independent judging panels assembled from some of the most respected national and local newspapers, TV and radio outlets, and business, consumer, technology, and trade publications in North America. The 2022 judging panel included, among others, writers from AdWeek, Computerworld, Forbes, The Globe & Mail, Inc., The Oregonian, and Portland Tribune.
“The depth and breadth of this year’s nominees in Best in Biz Awards – and especially the winners – demonstrate savvy business acumen among the leadership and represent the type of entrepreneurship powering today’s economy,” said Dustin Klein, Smart Business, judging his first Best in Biz Awards competition.
After reviewing hundreds of submissions, the judges were impressed with Avenue Living’s growth, both in terms of employee numbers and assets under management. They highlighted Avenue Living’s focus on serving all stakeholders, including offering new features such as integrated payments through its fin-tech platform, Zenbase. Its resident retention and Google reviews clearly showcase how this has resulted in high resident satisfaction. In addition, the panel emphasized Avenue Living’s commitment to sustainability and its involvement in the United Nations-supported organization, Principles of Responsible Investment, to spearhead environmental retrofits, implement smart solutions, and update aging assets.
For a full list of gold, silver and bronze winners in Best in Biz Awards 2022, visit: http://www.bestinbizawards.com/2022-winners.
About Avenue Living Asset Management
Founded on the principle of investing in the everyday, Avenue Living focuses on opportunities that are often overlooked by others, having grown to $4.25 billion CAD in aggregate assets under management across four private real estate investment mandates. The Avenue Living team includes over 900 professionals with expertise in real estate operations and transactions, property management, research, investment origination, and capital markets, as well as a suite of subject matter experts to support Avenue Living’s growing portfolio of multi-family residential, commercial, agricultural land, and self-storage assets. In addition to 15,000 multi-family units located in Canada and the United States, Avenue Living and its related entities own over 496,500 square feet of commercial space, 82,900+ acres of productive farmland, and more than 5 million square feet of self-storage space.
About Best in Biz Awards
Since 2011, Best in Biz Awards has been the only independent business awards program judged by a who’s who of prominent reporters and editors from top-tier publications from North America and around the world. Over the years, judges in the prestigious awards program have ranged from Associated Press to the Wall Street Journal and winners have spanned the spectrum, from blue-chip companies that form the bedrock of the global economy to some of the world’s most innovative start-ups and nimble local companies. Each year, Best in Biz Awards honors are conferred in two separate programs: North America and International, and in 100 categories, including company, team, executive, product, and CSR, media, PR and other categories. For more information, visit: http://www.bestinbizawards.com.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Whether it’s the medicinal healing waters that gave the city its name; some serious baseball history (this is the birthplace of spring training and the spot where Babe Ruth hit baseball’s first 500-foot-plus home run); or unique attractions like the alligator farm and petting zoo, Hot Springs, Arkansas has drawn people to it for generations.
And for Mini Mall Storage Properties, Hot Springs offers several strategic advantages as well.
Easy Access
Arkansas is known for its affordability and business-friendly environment. These factors, paired with Hot Springs’ appealing cost of entry, made it an ideal region for Mini Mall to deploy its hub and spoke model.
“This city is the perfect size to fit our business plan,” says Raheem Amer, president of U.S. operations. “Our framework dictates that all our facilities must be located within 30 minutes of a management hub. In Hot Springs, we had the opportunity to create a real market presence by acquiring 17 properties in close proximity, which means our manager is no farther than five minutes from any location.”
This ability to travel quickly and easily between locations is a cornerstone of Mini Mall’s strategy and helps us to elevate the customer experience to a universal standard. Mini Mall also uses technology paired with a human touch to provide a top-tier experience for an affordable price. Customers benefit from on-site managers, customer service specialists, and technological upgrades such as state-of-the-art security systems that allow tenants to access their units via a mobile app.
A market that makes sense
Real estate analytics provider CoStar finds that Hot Springs apartments rent for half the national average, making it an ideal place to put down roots, and with a metro population of 100,000, Hot Springs is demographically full of promise for the self-storage industry. According to the U.S. Migration Report, in 2021 Arkansas experienced, more active in-migration than any other state (by ratio). In that time, 44 per cent more people moved into the state than out, with many attracted by strong employment opportunities and an affordable cost of living.
Home to numerous stable industries including banking, finance, healthcare, logistics, and light manufacturing, the area has benefitted from strong job creation and income growth. In fact, CoStar reports that wages are climbing seven per cent per year, well above the national average, and are forecasted to remain strong when compared to the rest of the country.
The self-storage tenant profile for Hot Springs is also appealing. The region is home to a vibrant tourism industry, and retail intensification continues to drive strong demand from commercial tenants. Seasonal residents in Hot Springs and nearby resort communities also use self-storage for recreational vehicles and other items not needed throughout the year. In addition, there’s a growing retirement community, and renters make up a substantial portion of the population. Many homes lack basement storage, so people turn to self-storage facilities to reduce clutter.
“With every acquisition, we look for ways to bring technology and innovation to a self-storage facility, enhancing safety, security, and service for our customers,” says Raheem. “We were thrilled to bring our model to Hot Springs and demonstrate to this growing market what the future of self-storage can look like.”
As with every community we enter, we look forward to developing and deepening relationships with the residents of Hot Springs, a place with a rich history and, we believe, a vibrant future.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://avenuelivingam.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.
Calgary, Alberta, October 18, 2022 – Avenue Living announced today it has exceeded $4.25 billion in assets under management (AUM).
Following a series of key acquisitions in its multi-family residential, self-storage, and agricultural funds, Avenue Living reported this significant milestone, representing a 4X increase to its AUM since 2018. Headquartered in Calgary, Alberta and Dallas, Texas, the organization has grown to over 900 employees in seven provinces and 13 states, with additional plans for growth on both sides of the border.
“Our business philosophy of ‘investing in the everyday’ means that we see potential in properties and markets that others often overlook,” says Anthony Giuffre, founder and CEO of Avenue Living. “We have built a scalable, defensible model that continues to perform through varying market cycles, and we have effectively institutionalized low-density property management by developing an infrastructure that is sustainable and repeatable.”
Starting in 2006 with its first acquisition of a 24-unit property in Brooks, Alberta, the journey to becoming one of Canada’s largest property owners in both the multi-family rental residential and self-storage sectors has resulted from a clear, strategic focus on the North American Heartland. The organization has a well-researched understanding of the unique demographic profile, dubbed ‘workforce housing’, which it defines as a subset of the economy earning between $15 and $50 per hour.
Jason Jogia, chief investment officer at Avenue Living states, “The days of passive income through property ownership are ending. In the largely unconsolidated markets we enter, legacy owners are looking for succession plans for their properties and businesses.” Jogia asserts that, “We find and acquire properties that are underperforming, and invest in strategic operational, capital, and technological enhancements to bring these properties up to the Avenue Living standard. These improvements not only enrich the customer experience but improve the operating performance of the property. Our growth is measured, conservative, and deliberate across the geographies we target; and the assets we choose have proven to be defensible through times of volatility.”
Avenue Living is the second largest building operator in Canada by roofline and has 10 per cent of their residential multi-family portfolio in the United States. The organization’s self-storage fund, Mini Mall Storage Properties, has grown exponentially in just over two years with over 4.6 million square feet of storage space and 56 per cent of its facilities in the U.S.. In addition, Avenue Living Agricultural Land Trust steadily grew across the Canadian Prairies, with 82,900 acres under ownership and leased as active farmland.
The organization’s focus away from ‘shiny objects’ has historically insulated the portfolio from the high highs and the low lows seen in high-growth markets. “Our growth is intentional; it creates economies of scale and scope, which continuously enhances our operational excellence,” says Gabriel Millard, senior vice president of capital markets. “We focus on markets that have historically exhibited low to moderate growth, where we use our expertise to manufacture alpha. As we see a resurgence across the North American Heartland, we are well positioned to continue capturing the upside of this economic trend.”
ABOUT AVENUE LIVING
Founded on the principle of investing in the everyday, Avenue Living focuses on opportunities that are often overlooked by others, having grown to $4.25 billion CAD in aggregate assets under management across four private real estate investment mandates. The Avenue Living team includes over 900 professionals with expertise in real estate operations and transactions, property management, research, investment origination, and capital markets, as well as a suite of subject matter experts to support Avenue Living’s growing portfolio of multi-family residential, commercial, agricultural land, and self-storage assets. In addition to 15,000 multi-family units located in Canada and the United States, Avenue Living and its related entities own over 496,500 square feet of commercial space, 82,900+ acres of productive farmland, and more than 4.6 million square feet of self-storage space.
All financial figures are in Canadian dollars.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.
Investors weary of market volatility and looming inflation look to self-storage for stability over the long term.
The self-storage industry has long been known for supporting people through everyday life events – the five D’s: downsizing, dislocation, death, divorce, and disaster. These drivers form the baseline demand for, and stickiness of, self-storage, making it one of the most attractive alternative asset classes during economic volatility.
Learn more about what’s driven Mini Mall Storage Properties’ growth and how a flagship company within the Avenue Living operating platform, shares many of the same guiding principles: operational excellence, customer satisfaction, and sound investment decisions that reduce unsystematic risk.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.
Our CIO, Jason Jogia, joined @Wealth Professional to discuss the strategy that sets Avenue Living apart, allowing us to thrive regardless of market conditions.
“We’ve always had to manufacture alpha by out-operating our peers,” says Jason. “By being able to operate effectively, we’ve been able to create a defensible multi-family portfolio.”
Our approach is built on three key drivers: strategic diversification, customer focus, and operational integration. Read more about these foundational elements and how they have allowed us to build a successful business model.
Dallas, TX, August 25, 2022
Mini Mall Storage Welcomes Brian Boulter as Senior Vice President of Acquisitions to Strategically Drive Growth From Coast to Coast
With a well-defined focus on first generation self-storage products in secondary and tertiary markets and a continued upward trajectory, Mini Mall Storage Properties (MMSP) has appointed Brian Boulter as Senior Vice President of Acquisitions. Based in the company’s Dallas location, Boulter will lead the overall acquisition strategy across North America.
In its first two years of operations, MMSP has aggressively added new acquisitions and expanded into exciting new markets, reaching over 4.1 million square feet in self-storage space, $660 million in assets under management (AUM), and setting the stage for strong future growth.
Boulter brings over 15 years of experience in self-storage asset management and acquisitions, having previously served in various executive positions at different national self-storage brands across the U.S. and Canada. Throughout his career, Boulter has developed a unique focus on acquisitions, fostered deep relationships with brokers and property owners, and led a team of acquisitions experts in best practices and strategic development.
“Mini Mall’s growth trajectory is coupled with an entrepreneurial spirit that I have not observed in the self-storage industry for a very long time,” says Boulter. “The fundamentals for self-storage are strong right now — it’s one of the best asset classes to be in as a hedge against inflation. I’m excited to join MMSP’s focused and highly strategic leadership team to successfully deliver on our clear vision and acquire stabilized properties from coast to coast.”
“As Mini Mall continues to bring stability to independent operators, our customers, and the industry as a whole, we are very fortunate to have Brian lead our team of talented acquisitions experts,” said Adam Villard, Chief Executive Officer of Mini Mall Storage Properties. “As the market shifts, I’m confident that our breadth of self-storage leaders and professionals will provide a solid foundation for us to drive ongoing value for our customers and investors.”
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.alamstg.wpenginepowered.com for additional information regarding forward-looking statements and certain risks associated with them.
