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C A N A D A ’ S O N LY N AT I O N A L P U B L I C AT I O N F O R A PA R T M E N T O W N E R S A N D M A N A G E R S

VOLUME 9 / N UMBER 3 / M ay 2012

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Concert

Striking the right notes

Who’s Who 2012 See page 25 for this year’s ranking

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Who’s Who in 2012?

If you have ever wondered who’s who among the top companies in the Canadian multi-residential sector you are in luck!

This month’s issue of Canadian Apartment Magazine includes “Who’s Who 2012” - a comprehensive ranking of the industry’s top Canadian companies.

This report, generously sponsored by RentSeeker.ca and painstakingly assembled by Jonathan Anderson, lists the Top 10 Canadian multi-residential companies in the categories of Apartment, Condo, and Industrial. It also includes the Top 70 companies ranked by total units.

And coming in at number 36 is Concert – the subject of this month’s feature article. Vancouverbased Concert has quietly built a name for itself in the so-called “purpose-built” rental market.

This unique company, which is funded by some 19 pension funds, has established itself as one of the country’s dominant players in the rental apartment industry at a time when others in the industry are steering clear of that area in favour of the more lucrative condominium market.

“We consider ours purpose-built because we are building rental apartment buildings. There seems to be fewer and fewer people that are actually focused on building rental apartment buildings these days. There are only a handful of players …” said Brian McCauley, Concert president and chief operating officer.

With this comprehensive listing, I am sure this will be one issue that you keep on your desk for the remainder of the year.

Scott Anderson Editor

Quoteworthy “First and foremost Concert’s rental apartments are condominium quality and feature a comprehensive array of amenities. There is really very little difference if you walked into one of our rental buildings versus a condominium in Toronto or Vancouver”

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To Tolearn learnmore, more,scan, scan,click click or or call call 1-866-607-0432.

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-- Brian McCauley, Concert president and chief operating officer

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contents Cover Story 14

Striking the right notes

8 Finance Anti-money laundering legislation

Cover image by capture it photography

By Peter Cook and Robert Fleet

Concert

Special Feature 25

columns

Who’s Who 2012

10 MCAP Demystifying CMHC’s documentation requirement

By Vito Campisi

32 Insurance One can only wonder…

By Andy Schwartze

34 Portfolio strategy Taking the mystery out of mystery shopping

By Derek Lobo

38 CMHC Financing options for energy efficient multi-unit properties and energyefficient retrofits

By Paula Gasparro

40 Regulations Ontario places new limits on allowable rent increase 44 Marketing Email communication management

By Carissa Drohan-Jennings

Publisher

Paul Murphy paulm@mediaedge.ca (416) 512-8186 ext. 264

Acting Editor

Scott Anderson

Senior Designer

Annette Carlucci

Designer

Jennifer Carter

Production Manager Rachel Selbie Contributing Writers P eter Cook, Derek Lobo, Robert Fleet, Paula Gasparro, Carissa DrohanJennings, Andy Schwartze, and Vito Campisi Lina Trunina

Circulation

For sales information call (416) 512-8186 ext. 262 Canadian Apartment Magazine is published six times a year by:

5255 Yonge St., Suite 1000, Toronto, Ontario M2N 6P4 E-mail: info@mediaedge.ca

Tel: (416) 512-8186 Fax: (416) 512-8344 President Kevin Brown Copyright 2012 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140X

Departments 4

Editor’s Note

48 Newsline 50 New Products 54 Smart Ideas

Columnists

Circulation ext. 232 Subscription Rates: Canada: 1 year, $50* 2 years, $90* US $75 International $100 Single Copy Sales: Canada: $12* * Plus applicable taxes Reprints: Requests for permission to reprint any portion of this magazine should be sent to Paul Murphy Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions.

Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor.

The opinions expressed are those of the authors of articles and do not necessarily reflect the views of Canadian Apartment Magazine. This information is general and is not a substitute for legal advice.

Sworn Statement of Circulation: Available from the publisher upon written request.

Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused.

Printed in Canada

/cammediaedge Peter Cook, Robert Fleet, Carissa Drohan-Jennings, Paula Gasparro, Derek Lobo, Andy Schwartze

/cdnapartmentmag /mediaedgecam

NEW 2012 Energy Efficiency Incentives

Better Incentives.

Easy Process.

Bigger Profit.

Condensing Boilers Bring Efficiency and Comfort to Older Apartment Complexes Incentives from Union Gas influenced CLV Group to choose condensing boilers to replace inefficient heating systems in many of the older apartment buildings they manage. As property managers for InterRent REIT properties across Ontario, CLV Group installed natural gas condensing boilers at properties in Hamilton, Dundas, Burlington, Guelph, London, and other cities, which immediately lowered operating costs and made residents a lot more comfortable.

CLV Group’s Senior Project Manager, Dave Nevins says, “We had choices, but we’ve always been progressive about energy management and even though condensing boilers are more expensive than other options, we’ll save more on operating costs. The Union Gas incentives were certainly part of the decision.” In addition to their cost savings Nevins says, “Residents get the right amount of heat in winter because we can adjust temperatures more easily with the condensing boilers so we’re creating a better living atmosphere for all our residents.”

Energy Efficiency in Action In 2011 CLV Group received $89,000 in Union Gas incentives for installing 48 condensing boilers. With these high efficiency condensing boilers, CLV expects to save 6,000,000 m3 and reduce energy costs by $1,200,000 over the twenty-five year lifetime of the equipment, based on today’s natural gas rates.

CLV Group is already planning more energy efficiency upgrades this year and they’ll install about 10 more condensing boilers. Nevins says, “Union Gas is great to deal with - they’re helpful, knowledgeable and they know the contractors we deal with so it made the process easy.”

Certain criteria apply for some technologies and rate classes, contact the account manager in your area.

Subject to change. © Union Gas Limited 3/2012 UG20120044.

951-961 Wonderland Rd. S. London ON

Increased Financial Incentives for 2012 Union Gas has developed several energy saving incentive programs for multi-unit residential buildings which include: • Condensing Boilers – up to $4,500 per unit • Condensing Make-up Air Units – up to $2,400 per unit • Energy Recovery Ventilators – up to $1,500 per unit • Heat Recovery Ventilators – $400 per unit • Laundry Equipment with Ozone – up to $6,000 per unit • New and Retrofitted Equipment – $0.10 per annual m3 saved up to $40,000 Contact the Union Gas account manager in your area at uniongas.com/accountmanager or visit uniongas.com/savemoneyandenergy for full details on our energy efficient programs

Early Bird $200 Bonus Act quickly for an additional early bird bonus.

The first 500 eligible units will receive a $200 early bird bonus on top of the incentive.

Finance

What borrowers need to know about anti-money laundering legislation Follow us on Twitter @Robert_Fleet and on LinkedIn. Peter Cook and Robert Fleet are committed to helping borrowers strategize the best loan structure possible. They are available for oneon-one consultation for any CAM reader requiring multi-residential financing. As “Apartment Financing Specialists” with First National Financial LP they have originated over $4 Billion of mortgages. Their combined 35 years experience in the financial industry has lead to frequent speaking engagements across the country. They freely share their knowledge and techniques with audiences, clients and prospective clients. If you have questions, Peter and Robert may be reached by phone or email.

Peter Cook — (416) 593-2913 pcook@firstnational.ca Robert Fleet — (905) 301-3449 robert.fleet@firstnational.ca

8 www.canadianapartmentmagazine.ca

Money laundering and terrorist financing is a common problem that no country, politician or law enforcement in the world has been able to escape, because it ranges from small individual operations to organized crime.

It’s been around for decades and it takes on many different forms, which makes it very hard to identify. It’s also been a hot topic over the last few years because of its direct correlation to a country’s economic growth, and is more than a billiondollar problem in Canada alone.

New government legislation is cracking down on this illegal practice to help preserve the integrity of the financial services industry and the social demand to put criminals behind bars. If you’ve applied for funding in Canada since 2008, you may have noticed new detailed requirements that – while certainly frustrating to navigate – provides a significant contribution to Canada’s defense against money laundering and other illicit financial activity.

Regulating bodies Canada has several organizations to prevent money laundering and terrorism financing (AML). The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) was created in the early 2000s. The intention was to facilitate the detection, prevention and deterrence of money laundering and terrorist activity financing while ensuring the protection of personal information. To support the role of FINTRAC, the Office of the Superintendent of Financial Institutions Canada (OSFI) plays a valuable role by overseeing hundreds of financial institutions to verify their financial condition, ensure compliance with governing statute law and make the appropriate recommendations to FINTRAC. To help strengthen their

Finance

“

To demonstrate just how seriously they take AML issues, FINTRAC and OSFI have implemented a strict auditing process for all regulated institutions”

efforts against financial fraud, FINTRAC and OSFI consulted with the federal government to amend the Proceeds of Crime (Money laundering) and Terrorist Financing Act, S.C. 2000, c. 17 (Act) in 2008. Real estate investors are now seeing the effects from changes to this act, as they purchase new properties, refinance debt and renew existing mortgages.

Effects of the legislation The amendments have increased the burden on banks, credit unions, and other financial institutions to verify the identity of their client and prove the origin of equity for all real estate transactions. Mortgage lenders typically accomplish this by verifying the identity of the client with two pieces of ID and having them complete a detailed borrower information form. Lenders must also verify down payment proceeds by reviewing three months of bank statements to confirm the client has had the proceeds for an extended period of time.

In addition to borrowers providing identification for new mortgages, they will need to provide ID upon renewal of their existing mortgages funded pre-legislation. Both new and experienced investors are generally surprised by these extra steps when working with their lender, as they believe it is specific only

to their institution. In fact, this is not the case as every FINTRAC and OSFI-regulated institution must abide by this legislation.

Penalties To demonstrate just how seriously they take AML issues, FINTRAC and OSFI have implemented a strict auditing process for all regulated institutions. OSFI employs a number of methods ranging from regular monitoring, intensive document reviews and regular communication with the lender’s senior management.

OSFI also reserves the right to audit any service provider of a regulated institution provided it gives reasonable notice. It provides feedback when necessary to insure the institutions and their service providers adhere to the provisions within the act.

If an institution is found to be non-compliant, FINTRAC has the legislative authority to issue administrative penalties which can include: Infraction Type Penalty Minor (individual/entity) Up to $1,000 Serious (individual/entity) Up to $100,000 Very serious (individual) Up to $100,000 Very serious (entity) Up to $500,000

FINTRAC also has the ability to report extensive non-compliance to law enforcement. These infractions include: Infraction Penalty Failure to report suspicious transactions Up to $2 million and/or 5 years imprisonment.

Failure to report a large cash transaction or an electronic funds transfer Up to $500,000 for the first offence. Up to $1 million for subsequent offences.

Failure to meet record keeping requirements Up to $500,000 and/or 5 years imprisonment.

Failure to provide assistance or provide information Up to $500,000 and/or 5 years imprisonment. during compliance examination Disclosing the fact that a suspicious transaction report was made, or disclosing the Up to 2 years imprisonment. contents of such a report, with the intent to prejudice a criminal investigation These are serious offences that management of lending institutions cannot take lightly. Lenders must make sure they cross all their T’s and dot all their I’s when it comes to AML. Failure to comply with the AML legislation can be damaging to an institution with both monetary penalties and more importantly restrictions on their ability to lend. With these mandatory provisions present in commercial financing and the regulatory bodies stepping up their efforts against money-launderers, lenders and borrowers should certainly expect additional hurdles to navigate in order to get their mortgages funded.

May 2012 9

MCAP

Demystifying CMHC’s documentation requirement Vito Campisi recently joined MCAP Financial Corporation as vice-president, Commercial Lending in Toronto after a long career with CMHC. He is responsible for originating mortgage financing, with an emphasis on CMHC insured products, for multi-residential, nursing homes, retirement homes, assisted housing and student housing.

Campisi is a Certified General Accountant and an Accredited Mortgage Professional. He may be reached by phone or email at 416 591 2888 or vito.campisi@mcap.com.

How many times have you said or heard “I can’t go to CMHC, I have a quick closing and just cannot wait for them”, or something similar? As the former Canada Mortgage and Housing Corporation (CMHC) regional manager of Underwriting at the Ontario Business Centre, I can tell you that CMHC staff can turn around an application within a reasonable time. They just need the appropriate information.

CMHC publishes an excellent reference guide (CMHC Mortgage Loan Insurance for Multi-Unit Projects) which provides details on its products and policies related to multi-unit projects. At the end of the booklet you will find a handy checklist of the minimum documentation needed.

Of course, ticking off the box and attaching paper to it will not do the trick. The information must be up to date, accurate and complete. Often this is not the case and here is where time starts to get wasted as numerous emails go back and forth requesting additional information and clarification. My advice is: take a bit of extra time to assemble the information and you will reduce the processing time by a lot.

As you know, the underwriting process focuses on three areas whether the loan is financed with CMHC mortgage loan insurance or not: • Analysis of the housing market • Analysis of the borrower and guarantor • Analysis of the security What follows are some examples of the information needed for each area of analysis for existing projects.

Housing market The main considerations will be the vacancy history of the market and sub-market area and of the project under consideration. As a minimum you should provide a three-year vacancy history of the project and show how it compares with the market and submarket area. This is where you need to support the vacancy rate you want CMHC to accept. Make sure that the rationale of your recommended vacancy rate is supported by facts. To aid you in this assessment, you should refer to the Rental Market Survey (RMS) published by CMHC in the spring and fall each year.

Go online for more finance articles

www.canadianapartmentmagazine.ca 10 www.canadianapartmentmagazine.ca

Borrower/Guarantor capacity Two main aspects are examined in analyzing the borrower - competence and capacity. This is the area that, in my view, insufficient information is provided and therefore results in time delays.

For competence, the underwriter will assess track record, management ability and relevance to past experience. For the assessment of capacity, the underwriter will review financial statements and net worth statements.

For competence simply provide a one-page document to describe your track record and property management process and ability. A clear, concise and factual description will make the work of the underwriter much easier.

For the capacity portion, provide the most recent fiscal year financial statement, preferably prepared by a public accountant on a review engagement basis. Make sure that you provide

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MCAP sufficient information for the underwriter to assess profitability, liquidity and equity. Simply providing a copy of the financial statement is not sufficient. Provide details behind the numbers.

Show how you arrived at the market values of the income producing assets. Provide details on assets and liabilities that are material.

Remember, the underwriter has to be satisfied that the equity in the company is solid and durable. As for the income statement, explain components that appear out of the ordinary.

Lastly, provide an up to date credit report of the borrower and guarantors. Provide explanations for any derogatories.

Security This is probably the most important component for you. CMHC’s valuation of the property will determine the maximum loan amount. CMHC will generally use the income approach to arrive at a value and then it will reconcile it with comparable recent sales in the market area to determine an acceptable lending value. It is, therefore, very important to provide relevant up to date information about the property. Your support documentation should include:

“

CMHC staff can turn around an application within a reasonable time. They just need the appropriate information…”

• A current rent roll with details of unit type, unit rents, parking charges and other charges and rent-effective dates.

Clearly identify vacant units and explain anomalies.

• A current Income and Expense Statement for a 12-month period with at least one previous year for comparison. Show the Gross Income Potential, Vacancy and Bad Debt and Effective Gross Income separately. For expenses make sure to explain unusual amounts and rationalize any adjustments or normalizations made.

For example, if you installed new boilers or replaced windows recently and you expect substantial savings in utility costs, show your calculations to support the reduction. If the expenses include expenses not related to the property,

identify them and provide an explanation.

• Provide a list of recent improvements and planned improvements to the property.

• Provide copies of bills of the most recent property tax, property insurance and utility costs listed by type and month and totalled.

Provide details of superintendent costs and other wages and benefits costs.

• Indicate if the property is self-managed or managed by third party. If it is managed by a third party, provide a copy of the agreement. If it is self-managed, describe your internal charge.

I hope the above information helps you to better understand and appreciate some of the CMHC information requirements. And that it will also help you to work with the lender of your choice in preparing an application for mortgage loan insurance.”

We never lose sight of what tenants really want.

More than shelter tenants are looking for a home. A refuge from a complex world. Our priority is to keep them happy, but we’ve learned you can’t unless you first have happy employees.

That’s why we give our people the best training possible and empower them to make their own decisions. When we reward them well and treat them with respect, we know they’ll pass it on to your tenants.

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Concert’s regional manager, residential properties, Rod Pirie and his leasing team at Village Gate West

Cover Story

Striking the right notes in rental housing When it comes to building top-quality rental housing in some of the country’s most desirable locations, few rival Concert.

At a time when most property developers are forgoing the construction of rental properties in favour of exclusively developing condominiums, Vancouver-based Concert has struck a balance and carved a niche for itself in the purposebuilt rental market.

May 2012 15

Cover Story

The company was established in 1989 with the mandate of providing economically-priced rental housing in British Columbia. Since then Concert has expanded geographically into Alberta and Ontario as well as by asset class. Today, the company is also known for excellence in developing condominium homes and retirement communities as well as acquiring and developing commercial, industrial and infrastructure properties.

With the financial backing of 19 Canadian union and management pension plans, Concert has completed some $2 billion worth of projects, developed more than 9,600 rental and condominium homes, and built or acquired more than 10.7 million square feet of income-producing properties. Along the way it has created more than 20.8 million person-hours of union employment and contributed in excess of $83.8 million to affiliated union pension, health and welfare plans.

To date the company has more than 1,700 rental apartments in Vancouver and over 2,400 in Toronto that are either currently operational or under construction. These apartments compete with condominium owners who are renting out their individual suites. Concert has effectively differentiated itself in this competitive marketplace in a few key ways. “First and foremost Concert’s rental apartments are condominium quality and feature a comprehensive array of

16 www.canadianapartmentmagazine.ca

Cover Story

March May2012 2012 17

Cover Story

amenities. There is really very little difference if you walked into one of our rental buildings versus a condominium in Toronto or Vancouver,” said Brian McCauley, Concert president and chief operating officer. “We may forgo the stainless steel appliances and the granite countertops, but the size and finish of our rental apartments are every bit the same as the condominiums that we compete with.”

Concert further differentiates itself in the marketplace with outstanding customer service. All residents benefit from the company’s signature Concert On-Call maintenance which provides round-the-clock service.

“We have on-site maintenance people that not only live in the building, but they are on call 24 hours a day,” said Rod Pirie, Concert’s regional manager, residential properties in Toronto. “If a tenant has a problem with their toilet in the middle of the night it will be taken care of immediately.”

Furthermore, Concert’s long-term approach to property management sets the company apart. Concert is building a portfolio of rental apartments that it has every intention of holding for decades to come.

Sustainability “We have taken a good hard look at our global footprint. As a property manager, Concert embraces the challenge of reducing waste while enhancing the performance of existing assets. In addition, every new development we undertake is gauged either against LEED or another green building standard more applicable to the jurisdiction that we are working in,” McCauley said.

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18 www.canadianapartmentmagazine.ca



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trust service tradition value

Proud of our continued partnership with Concert Properties on the 132 Berkley Street Project

Cover Story

“

We are very committed to building greener and more sustainable communities”.

- Brian McCauley, president and chief operating officer

Last year the company issued its inaugural Report on Sustainability which summarized the results of its first greenhouse gas emission audit. The report, which was finalized in early 2011, captured the environmental impact of Concert’s operations in 2010. This provided a baseline measurement for the company.

In its second year of reporting on greenhouse gas emissions, the company has already started to realize the effects of its efforts to shrink emissions. There was a 2.5per cent reduction in emissions per square foot which places the company on the path to achieve its goal of a 20 per cent reduction by 2020.

“Every one of our new buildings are created utilizing an integrated design approach. All of our consultants are engaged and challenged at the outset to determine the most costeffective and innovative sustainability solutions,” said McCauley. “We are very committed to building greener and more sustainable communities.”

Within its existing rental and commercial properties, Concert has embraced waste reduction and energy consumption with initiatives such as the installation of energy-efficient systems and appliances, energy audits and regular upgrades and improvements.

“I think our tenants, and the population in general, are becoming more concerned about what is happening with the environment and they want to do their part,” said Pirie.

Although both Pirie and McCauley take pride in the company’s sustainability efforts, McCauley concedes there is still much work to be done.

“I don’t think the public is yet willing to really pay for sustainability features. Whether it is condominium or residential rental, people aren’t really putting their money where their mouth is right now,” he said. “Part of it is education, and we take that seriously. We try to engage and educate both our homebuyers about sustainability in general and the specific features included into their building.”

Growing portfolio The company has a number of developments under construction that will add to the growing portfolio of properties of this 23-year-old company.

Motion is a 29-storey rental highrise with 463 units and 11,500 square feet of ground floor retail space. The development is targeting LEED Gold sustainability certification

20 www.canadianapartmentmagazine.ca Untitled-3 1

12-04-26 1:33 PM

TAKE A fresh LOOK AT WHAT’S POSSIBLE

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Learn how CMHC mortgage loan insurance gives you more choices for your multi-unit property investment. Call 1-877 Multi GO or visit www.cmhc.ca/multi-unit.

Cover Story

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88 Scott

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Cover Story

as well as Tier Two of the Toronto Green Standard. Set for completion in the spring of 2013, Motion offers studio, one, two and three bedroom rental apartments. The development is ideally located in the heart of downtown Toronto steps from the financial district, shopping, the University of Toronto and Ryerson University.

“It is a high demand area where there hasn’t been much in the way of new rentals,” said Pirie. “There has been a lot of condominium development in that area, but not a lot of rental. We are very excited about this opportunity.”

Also under construction is One32 Berkeley, a 10-storey, 177-suite rental community targeting LEED Gold certification at the corner of Berkeley and Queen Streets in downtown Toronto. One32 Berkeley is due for completion in the summer of 2013.

Concert also recently completed its Village Gate West masterplanned rental community in Etobicoke, Ont. This impressive community in the historic Islington Village features Serrano with 278 apartments, a Tapestry Retirement Community with 168 apartments, Sierra with 218 apartments and Palomar with

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283 apartments. Sierra and Palomar are targeting LEED Gold certification.

Axis, Concert’s latest residential rental building in Vancouver is being constructed on the campus of the University of British Columbia. The 15-storey development, which broke ground earlier this year, will include 174 self-contained rental apartments.

The company will also be contributing a 25,000-square-foot landscaped green space complete with a children’s playground.

Concert is targeting the prestigious REAP Gold certification administered by UBC’s Sustainability Office. Completion is scheduled for the summer of 2013.

While Concert has expanded into many other facets of the real estate industry over the past 23 years, the company remains committed to building and maintaining quality rental buildings across Canada. Along the way it has earned a reputation for excellence in rental housing and garnered numerous awards from the Canadian Home Builder’s Association, the Urban Development Institute and the Federation of Rental-Housing Providers of Ontario.

May 2012 23

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CANADIAN APARTMENT MAGAZINE

WHO’S WHO 2012 PRESENTED BY:

TOP 10

IN CANADIAN MULTI-RESIDENTIAL

MANAGE ONLY 1 2 3 4 5

OWN ONLY

APARTMENT

1 2 3 4 5

CONDO

1 2 3 4 5

19081 11506 11333 9036 8000

COMMERCIAL

1 2 3 4 5

1 2 3 4 5 26 www.canadianapartmentmagazine.ca

Baywest Management Corp.

Northern Property REIT Boardwalk REIT Minto Properties Homestead Land Holidays Ltd.

6 7 8 9 10

Mainstreet Equity Corp.

Shelter Canadian Properties Ltd. Citigroup Properties Inc. Briarlane Property Management Inc. Bayshore Property Management

67 15 14 9 9

10826 9367 8086 7519 7284

8000 3650 3149 2875 2733 NUMBER OF UNITS

4 Bona Building and Management Co. Ltd. 5 Morguard Residential

13 4

NUMBER OF UNITS

6 7 8 9 10

Greenwin Inc. Briarlane Property Management Inc. Apollo Property Management Ltd. Bayshore Property Management The DMS Group

207 118 112 102 100 NUMBER OF UNITS

6 Industrielle Alliance, Assurance et services financiers Inc. 7 AWM- Alliance Real-estate Group Ltd. 8 Berkley Property Management 9 Old Oak Properties Inc. 10 Parkhurst Asset Corp.

NUMBER OF UNITS

450 310 230 190 187

116 27 15

NUMBER OF UNITS

NUMBER OF UNITS

Lanesborough Real Estate Investment Trust AON Inc. Sabjoy Inc. The Brown Group of Companies Preston Group

MANAGE & OWN ONLY

Killam Properties Inc. Minto Properties Park Property Management Inc. Skyline Apartment REIT Northern Property REIT

NUMBER OF UNITS

470 277 238 219 212

370 240

NUMBER OF UNITS

6 7 8 9 10

NUMBER OF UNITS

34057 1333 115

7802 6777 6335 6300 3925 NUMBER OF UNITS

6 Old Oak Properties Inc. 7 Berkley Property Management 8 Industrielle Alliance, Assurance et services financiers Inc. 9 AWM- Alliance Real-estate Group Ltd. 10 Parkhurst Asset Corp.

NUMBER OF UNITS

Gateway Property Management Corp.

Minto Properties Shelter Canadian Properties Ltd. Pacific Quorum Properties Inc. AWM- Alliance Real-estate Group Ltd.

OWN ONLY

2100 1817 1737 1226 837

35277 28389 23800 22348 11505

1 Baywest Management Corp.

2 CAPREIT 3 Shepherd Village

MANAGE ONLY

Vertica Resident Services Minto Properties Shelter Canadian Properties Ltd. Cogir Management Corporation Berkley Property Management

NUMBER OF UNITS

Gateway Property Management Corp.

AWM- Alliance Real-estate Group Ltd. Pacific Quorum Properties Inc. ICC Property Management Ltd. Apollo Property Management Ltd.

MANAGE & OWN ONLY

NUMBER OF UNITS

6 7 8 9 10

NUMBER OF UNITS

Boardwalk REIT CAPREIT Realstar Management Homestead Land Holidays Ltd. Timbercreek Asset Management

MANAGE ONLY 1 2 3 4 5

18022 15507 15233 14875 9244

Preston Group Lanesborough Real Estate Investment Trust AON Inc. The Brown Group of Companies Sabjoy Inc.

MANAGE & OWN ONLY 1 2 3 4 5

NUMBER OF UNITS

MetCap Living Management Greenwin Inc. Gateway Property Management Corp.

The DMS Group Briarlane Property Management Inc.

4 2 2 1 1 NUMBER OF UNITS

6 7 8 9 10

Mainstreet Equity Corp.

Realstar Management Killam Properties Inc. Timbercreek Asset Management Skyline Apartment REIT

185 147 144 128 93

2012 WHO’S WHO TOP COMPANIES IN CANADIAN MULTI-RESIDENTIAL Thank you to those companies submitting information for our 2012 ranking of multi-res owners/managers in Canada. We appreciate your input. Every effort has been made to ensure the accuracy of the figures published. These are Canadian Apartment’s listings and are based on data that was supplied to us but not independently verified. If you have any questions or comments, please contact me at paulm@mediaedge.ca. If you were not represented in the rankings and would like to participate next year, you can obtain a registration form by contacting me at the above email.

APARTMENT RANK

TOTAL UNITS

MANAGE

670

OWN

CONDO BOTH

MANAGE

692

OWN

% BY REGION

COMMERCIAL BOTH

MANAGE

34057

OWN

BOTH

1

Baywest Management Corp.

35869

2

Boardwalk REIT

35507

3

Gateway Property Management Corp.

34821

4

CAPREIT

29722

28389

5

Realstar Management

23947

23800

147

6

Homestead Land Holidays Ltd.

22535

22348

187

7

MetCap Living Management

19430

18022

8

Minto Properties

19260

6777

9

MetCap-WhosWhoArticle-halfH-v2-1.pdf 05/01/2012 10:15:29 AM Greenwin Inc. 17727 15507

35277 15233

35

9367

19081

470

WESTERN ONTARIO QUEBEC MARITIMES CANADA

450

>80

230

60-80

<20

<20

2

60-80

<20

<20

<20

60-80

<20

<20

<20

60-80

<20

<20

<20

<20

<20

<20

1333

>80

1406

2

2649

277

190

>80

207

15

>80

1998

> GREATER THAN < LESS THAN

>80

7

# C

M

Y

CM

MY

CY

CMY

K

MetCap Living knows the importance of your property investment. With over 20 years in professional property management and experience in owning and managing all aspects of multi-unit housing, we have the expertise to boost your NOI. From Marketing, Leasing, Utilities and Site Management, Collections and Accounts Receivable, we tailor our services to your needs.

We manage over $1 Billion in assets owned by private families and institutional investors. Our focus is on revenue growth and vacancy reduction, while maintainting strict control over expenses. We also have three engineers on staff for those difficult capital projects!

To ensure the health of your bottom line, contact: Stacey Kurck – Director, Business Development Office: 416-340-1600 x 467 Cell: 416-894-2377 Stacey.Kurck@MetCap.com

May 2012 27 12054_MetCap_WhosWho_2012.indd 1

12-05-15 10:43 AM

2012 WHO’S WHO TOP COMPANIES APARTMENT RANK

TOTAL UNITS

MANAGE

OWN

CONDO BOTH

MANAGE

OWN

% BY REGION

COMMERCIAL BOTH

MANAGE

OWN

BOTH

10

The DMS Group

14975

14875

11

AWM- Alliance Real-estate Group Ltd.

12245

498

12

Briarlane Property Management Inc.

12237

13

Pacific Quorum Properties Inc.

11971

14

Timbercreek Asset Management

11633

11505

128

15

Killam Properties Inc.

10970

10826

144

16

Shelter Canadian Properties Ltd.

10449

6335

17

Apollo Property Management Ltd.

9362

18

ICC Property Management Ltd.

19

WESTERN ONTARIO QUEBEC MARITIMES CANADA

100 27

11506

212

9244

2875

118

419

11333

219

>80 2

>80 >80 >80 60-80

1250

8000

112

>80

9132

20

9036

76

>80

Morguard Residential

8648

1154

20

Park Property Management Inc.

8295

21

Mainstreet Equity Corp.

8185

22

Vertica Resident Services

7836

7802

23

Skyline Apartment REIT

7709

94

24

Northern Property REIT

7594

7284

310

25

Drewlo Holdings Inc.

7323

7271

52

26

CLV Group Inc./ Interrent REIT

7200

7200

27

Berkley Property Management

6669

3925

28

Cogir Management Corporation

6352

6300

10

The DMS Group Paul Smith 416 736 2524 psmith@dmsproperty.com www.dmsproperty.com 28 www.canadianapartmentmagazine.ca 12054_DMS_WhosWho_2012.indd 1

735

8086

140

4

15

22

1

68

8000

185 34

7519

240

3

40-60

<20

52

1

51

>80

>80 >80

>80

<20

<20

60-80

93

2

<20

40-60

<20

>80 40-60

<20

<20

<20

>80 >80

2450

<20

<20

238

6718

4

<20

3650

#

222

> GREATER THAN < LESS THAN

<20

>80 <20

>80

DMS is a market leading third party rental property management organization with a diverse portfolio of multi-residential, commercial and government-owned properties across Ontario.

Our team are energized. DMS is focused on growth of our managed portfolio and on personal growth for our staff. As a multi-dimensional enterprise, DMS offers team members unparalleled career development opportunities. Our culture encouraging promotion from within the organization has allowed many staff to experienced multiple promotions.

Our clients trust us. DMS manages professionally for over 100 different owners – many for over 20 years. Service delivery is tailored to specific property requirements and each client benefits from industry leading practices and economies of scale.

DMS is proud to be ranked once again by Canadian Apartment Magazine as one of the in the top few multi-residential property management companies.

CANADIAN APARTMENT MAGAZINE WHO’S WHO 2012 12-05-10 5:08 PM

IN CANADIAN MULTI-RESIDENTIAL APARTMENT TOTAL UNITS

RANK

MANAGE

OWN

CONDO BOTH

MANAGE

OWN

BOTH

MANAGE

OWN

BOTH

70

WESTERN ONTARIO QUEBEC MARITIMES CANADA

29

Globe General Agencies

6099

30

Bayshore Property Management

4755

1920

2733

102

31

Citigroup Properties Inc.

4228

995

3149

84

32

Hollyburn Properties Ltd.

4067

33

Sterling Karamar Property Management

3993

3799

163

31

34

Devon Properties Ltd.

3880

3340

464

76

35

The Regional Group

3875

2000

1800

75

36

Concert Properties

3398

37

Prospero International Realty Inc.

2735

38

Centurion Apartment REIT

2675

2648

27

39

Kelson Group

2563

2524

39

40

O’Shanter Development Company Ltd.

2555

460

2016

50

6

23

>80

41

Old Oak Properties Inc.

2399

977

1347

62

6

7

>80

MA PL E LE AF QU AY,

6029

4000

TO RO NT O

Briarlane Rental Property Management Inc. is a private Canadian Corporation based in Markham, Ontario and was established in 1999 to provide an integrated array of investment and property management services to owners, investors and financial institutions.

Briarlane manages many properties in the Greater Toronto Area, and we have for many years also very successfully managed properties in London, Brantford, Kitchener, Waterloo, Guelph, Pickering, Ajax, Oshawa, Oakville and Ottawa, Ontario.

Our size allows us to negotiate excellent pricing for supplies and services including utility costs and our ability to compare operating costs throughout our managed portfolio allows us to ensure that our clients properties are operating

<20

60-80

20-40 >80

>80 >80

49

Briarlane Rental Property Management Inc. Brad Smith 905 944 9406 ext 225 bsmith@briarlane.ca www.briarlane.ca

<20

>80

18

2686

>80

>80

67

3380

> GREATER THAN < LESS THAN

% BY REGION

COMMERCIAL

40-60

<20

40-60

>80 >80

<20

>80

12

#

efficiently and competitively whether within the GTA or outside of it.

We would welcome the opportunity to show you how by being very “hands on”, utilizing our years of experience, proven systems, and documentation we can ensure that there are few surprises or emergencies at your property while providing you with efficient and competitive operations in IRE , R, SU SA NN E MA GU any rental market.

L-R: MO NIS H CO MA DR US KU NG BR AD SM ITH , PAT

BR AW N, AN

CANADIAN APARTMENT MAGAZINE WHO’S WHO 2012 12054_Briarlane_WhosWho_2012.indd 1

May 2012 29

12-05-11 1:35 PM

2012 WHOâ&#x20AC;&#x2122;S WHO TOP COMPANIES IN CANADIAN MULTI-RESIDENTIAL APARTMENT TOTAL UNITS

RANK

MANAGE

OWN

CONDO BOTH

MANAGE

OWN

% BY REGION

COMMERCIAL BOTH

MANAGE

OWN

BOTH

WESTERN ONTARIO QUEBEC MARITIMES CANADA

42

Preston Group

2109

2100

43

Lanesborough Real Estate Investment Trust

2009

1817

44

Greenrock Property Management Limited

2000

2000

45

AON Inc.

1848

33

1737

46

The Brown Group of Companies

1713

471

1226

47

Salpam Properties

1508

48

Lawrence Construction/Grant Management

1427

519

49

Tandem Property Management

1008

1008

50

Twin City Management Ltd.

995

949

51

Cogir

980

980

52

Capilano Property Management Ltd.

964

53

Sabjoy Inc.

851

54

Manulife Real Estate

801

800

55

Shepherd Village

778

659

115

56

Bona Building and Management Co. Ltd.

753

740

13

57

Equity Hill Properties Group

700

58

Blue Stone Properties Inc.

674

674

59

Equitable Real Estate Investment Corp.

634

606

28

>80

60

Northland Properties Inc.

614

605

9

>80

61

Shindico

592

94

5

>80

62

Canadian Urban Ltd.

551

547

63

State Building Group

450

450

64

Gistex Inc.

440

430

65

Compass Commercial Realty

329

317

66

Greenwood Lane Inc.

318

35

67

GoodWood Property Investments

152

68

Industrielle Alliance, Assurance et services financiers Inc.

120

69

Realspace Management Group Inc.

105

70

Parkhurst Asset Corp.

16

30 www.canadianapartmentmagazine.ca

9 125

> GREATER THAN < LESS THAN

>80

67

>80 >80

56

7

15

7

9

1500

40-60 <20 8

>80

<20

<20

>80

908

>80 >80 1

45

>80 >80

950

14

837

>80

14

48

638

>80 1

>80

4

>80 >80

14

>80 >80

490

3

<20

<20

<20

4 >80 10

278

12

>80

5

>80

150

2

116

103

20-40

4

>80 40-60

2 15

40-60

>80 1

>80

Insurance

One can only wonder...

Andy Schwartze, BSc., MBA, CIP, is an insurance broker specializing in property management and real estate. He is a former President of the Insurance Institute, has taught in the community college system and provides continuing education to other brokers. He can be reached at andy@ takecover.ca. For any comments, you can go to www.takecover.ca and post them on their new blog.

32 www.canadianapartmentmagazine.ca

The year is not going well. There is no point in pretending that there’s a recovery occurring, or that we are “over the worst part”, nor that things can only go “uphill from here”. Optimism is a wonderfully uplifting attitude that can invigorate us and provide the energy and motivation to move forward. But there is nothing gained by ignoring reality and, as far as North America goes, the realities are not pleasant.

Recently, I had the opportunity to travel to Texas and Vancouver on business. The impressions were far from positive and I came away from the trip more concerned than ever about the direction in which we are heading.

My stay in Vancouver included a get together with a real estate client who, while originally an Ontarian, is now a local resident in this beautiful West Coast city. For a visitor, Vancouver is a sight for sore eyes, with mountain and ocean views that are simply stunning. The earthquake fears are not that visible and tend to be ignored.

Thousands of city centre condo apartments have apparently never been occupied since the day they were built. It was suggested that some 7,000 condo units are empty as a result.

Finally, the east end of downtown, well known as the home for Canada’s downtrodden and

Insurance

addicted, has little prospect of ever being cleaned up. There is apparently no government willingness to step in, as local Vancouverites are fearful that the inhabitants will resettle in other parts of the city. Politics is fully in charge of the status quo. But, in spite of this, it’s a beautiful place and I will visit every chance I get. Tourism comes with certain innocence, after all.

Meanwhile, in the east, an Ontario government grovels for survival by tacking two per cent on to the tax bill of those earning more than $500,000.

In the entire province that number is only 19,000 … expecting this small group to rescue the province, from its declining credit rating is like asking one’s uncle to pay the mortgages for all the nieces and nephews because they are over stretched. Spending less is just not an option.

Even in Toronto, the popularly elected mayor is being hammered by obstructionist opposition at all levels. On the real estate side, when one drives in to the city along the Gardiner Expressway, one can easily count at least 12 condo construction cranes. On the way out, one sees at least 12 more that weren’t visible on the drive in. Desperate development, because the city can then collect four times the property tax that it gets from a private residence.

Just as this is written, we hear that a local downtown brewery had its property tax pushed up by a factor of eight times … MPAC had walked in and their assessment simply triggered the higher tax bill. Who at MPAC has ever run for election? Assessment too high? Sorry … pay first, argue later. For those who have argued before the OMB, better 20 lashes with a nine-foot buggy whip.

Let’s leave our neighbours to the south out of this. The over administered, election crazy, divided country has more problems than there is room here to recount. When we look at their divided electorate we can only wonder how they will ever come together again. Does anyone doubt the current president’s return to office for a second term?

You might ask yourself, what is an insurance professional doing expounding on all this negativity? It’s a fair question and certainly deserves an answer. Insurance is a financial recovery tool for the cost of accidents and unexpected losses. How our social/economic world goes, so goes the insurance world as it constantly adjusts to the demands made on it.

As violence increases (witness the G-20 damage) and as infrastructure ages, financial stress grows and as the legal world expands its recovery attempts, the world of insurance becomes the support system for the unanticipated needs of its clients. Fortunately, the property/casualty insurance world has the ability to re-price itself on an annual basis. Hence, the premiums that we pay will always be (albeit one step behind) reflective of the socio-economic trends that affect it.

The life insurance world handles this a bit differently. While benefit plans are similarly re-priced annually, most of the remaining life insurance products don’t have it quite so easy. Testimony to this is the industry’s hurried exit from what is referred to as “guaranteed” insurance products. Interest rate declines have so battered this product sector that regulators are trying to determine if certain heavily exposed life insurers need to raise additional capital.

Guaranteed products are pretty much no longer available.

As I have made clear in the past, if things become difficult enough, insurers will simply pull the plug on offerings that have become too expensive to manage profitably. When that happens, especially in the property/casualty world, the lack of insurance availability can devastate affected businesses forcing them out or under. The insurance world is a barometer of socioeconomic change. It is worth paying attention to.

May 2012 33 Untitled-5 1

12-05-04 2:03 PM

Portfolio Strategy

Taking the mystery out of mystery shopping Derek Lobo is the founder of DALA Group of Companies and Rock Advisors. Derek has been the Canadian rental apartment industryâ&#x20AC;&#x2122;s leading consultant for almost 30 years and is now one of the industryâ&#x20AC;&#x2122;s most active brokers. Derek recently brokered the sale of the ESAM portfolio to Minto Management in one of the largest multi-unit residential sales in Canadian history.

34 www.canadianapartmentmagazine.ca

Portfolio Strategy

As a typical apartment owner, you can’t be everywhere at once. You can’t always be fixing the plumbing, handling rent cheques, or, most importantly, giving tours of vacant apartments and keeping your building filled. You have staff that handles these tasks. But how can you tell how well your staff is doing?

You will quickly hear from your tenants if maintenance issues are going unresolved, but prospective tenants who are not impressed by how your building is presented will not tell you of the problems that led them to choose a different building down the street. You will simply never hear from them again.

Selling a rental lifestyle Filling vacant apartments is like selling a home. Your building needs curb appeal, the apartment itself needs to look good, and the path the prospective tenant takes from street to suite must be well maintained so that the tenant can be confident of the whole package to which they are committing.

But there is one big difference between selling a home and renting an apartment: homes have brokers. These individuals specialize in how to present the best face of a property. They know how to walk prospective buyers through it, engaging them, talking up the selling features. The task of renting out your vacant apartments falls to you, and to your staff, and you probably don’t have a broker’s training.

So, train yourself, and train your staff. Learn the techniques that realtors use to sell homes, and make sure your staff learns these as well. Understand your apartments, understand what the best selling points are, and be sure to build a presentation that highlights these points. Prospective tenants may call to arrange a showing, or they may show up off the street, so it’s important that you are prepared to put your best foot forward. This includes how you and your staff dress (you don’t have to dress for a job interview, but business casual will do), and how you approach the prospective tenant (a warm smile and firm handshake is best).

Vacant apartments are a drain on your bottom line, so you have motivation, but how motivated is your staff? You can give them incentives to perform, possibly through bonuses for each apartment they help rent out, and that can get them behind you in renting out vacant apartments, but it can be hard to check on their performance. This is where mystery shopping comes in.

“

Mystery shopping is not a tool to spy on your staff. What the mystery shopper provides is constructive criticism for you and your staff members to identify ways that the showing process can be improved…”

May 2012 35

36 www.canadianapartmentmagazine.ca

Portfolio Strategy

Testing yourself and your staff Mystery shopping has been used by market research companies and consumer watchdogs to test how well stores serve customers.

At the DALA Group of Companies, we have mystery shoppers pose as prospective tenants and arrange to be shown a vacant apartment, testing each staff member of the apartment through successive visits. As a staff member shows the shopper the apartment, the shopper makes note of the process. Did your building have good curb appeal? Was he or she greeted in a friendly manner? Was the staff member helpful? Did he or she answer questions well and seem knowledgeable of what he or she was showing? Were all of the apartmentâ&#x20AC;&#x2122;s selling points shown to their best advantage?

The shopping continues for the whole showing, including going back to the managerâ&#x20AC;&#x2122;s office and providing the rental agreement paperwork for the mystery shopper to fill out afterward.

The staff member is not aware that the mystery shopper is a mystery shopper. That way you can be sure that the performance on display is the one the staff member gives to all prospective tenants. You should tell your staff that you have hired a mystery shopper, however, nobody likes to be kept in the dark and, letting staff know that their performance is being assessed could add a spring to their step as they deal with real prospective tenants who show up during the mystery shopping period.

Untitled-9 1

Constructive criticism Mystery shopping is not a tool to spy on your staff. What the mystery shopper provides is constructive criticism for you and your staff members (you can hire mystery shoppers to check out your own performance as well, and you should let your staff members know that you are being similarly assessed) to identify ways that the showing process can be improved. You and your staff are not trained brokers, so you may not know the simple tricks that can dramatically improve how an apartment is showed and get vacant apartments rented quicker. A mystery shopper helps with that.

The detailed assessment the mystery shopper agency provides will describe what went well in the showing process and what can be improved. Sharing this information between you and your staff gives you the information you all need to better rent out vacant apartments. This, combined with incentives to get your staff behind you in renting out your vacancies, will help get your vacant apartments rented faster, and directly help your bottom line.

DALA Group of Companies offers a number of services to help building owners rent out their vacant apartments, and mystery shopping is key among them. At our office, Celia Pinto handles mystery shopping. To set up your mystery shopping schedule, call Celia at (800)898-0347 x 17.

May 2012 37

12-05-02 3:41 PM

CMHC

Energy-efficient construction and retrofits of multi-unit residential properties Paula Gasparro is the Manager, Business Development, Multi-Unit Mortgage Insurance at CMHC. Reach her at 416-250-2731, via e-mail at pgasparr@cmhc.ca or visit www. cmhc.ca/multunit. CMHC provides a wealth of research material and energy-saving tips at www.cmhc.ca > Business /Government Housing Organizations > Building & Design > Highrises and Multiples. You can also call CMHC at 1-800-668-2642.

Go online for more finance articles

www.canadianapartmentmagazine.ca 38 www.canadianapartmentmagazine.ca

CMHC is Canada’s provider of mortgage loan insurance for the construction, purchase and refinancing of multi-unit residential properties, including rental buildings, licensed care facilities and retirement homes. CMHC’s innovative products can help you grow your business. CMHC is continually looking to provide borrowers with greater choice and financing options.

CMHC recently introduced enhancements to its multi-unit loan insurance policies and products which enable lenders to offer more financing options for energy efficient multi-unit properties and energy-efficient retrofits.

The enhancements are offered on a two-year pilot basis and include: • Borrowers may be able to receive instant savings by choosing to receive an up-front premium reduction at the time of financing, when applicable.

• For energy-efficient multi-unit rental retrofits the level of premium refund is based on the reduction in energy consumption and the maximum refund increases from 10 per cent to 15 per cent.

• CMHC energy efficiency incentives are now available for qualifying new construction projects –the building is required to be the higher of five per cent more energy-efficient than if constructed to meet provincial/territorial requirements (where they exist) or 20 per cent more energy-efficient than if constructed to meet the Model National Energy Building Code for Buildings (MNECB).

• Borrowers are now able to use a variety of documents to demonstrate eligibility such as reports prepared by other government organizations and utility companies that provide grants.

• In addition to heat and hydro, CMHC will now also recognize an estimated reduction in water consumption.

• CMHC recognizes energy-efficient improvements that have been made within a 12-month period prior to the current mortgage loan advance.

• CMHC continues to recognize energy savings for valuation purposes.

When these flexibilities are used in conjunction with other energy efficiency incentive programs, they will encourage borrowers to make energy-efficient improvements to their buildings. Building/unit owners and tenants may benefit from reduced operating costs when energy efficiency measures are implemented and certain energy efficiency initiatives may also contribute to the prolonged life span of the structure itself.

In addition, we encourage you to leverage the wealth of energy-saving information and ideas on reducing energy and water consumption in multi-unit residential buildings available on the CMHC website at www.cmhc.ca.

CMHC brings a unique combination of proven industry expertise, knowledgeable service and flexible products helping you focus your time on building greater possibilities.

To take advantage of CMHC’s Mortgage Loan Insurance, contact Paula Gasparro, Manager, Business Development, Multi-Unit Mortgage Insurance at 416-250-2731 or via e-mail at pgasparr@ cmhc.ca. For more information, log on to www. cmhc.ca/mult-unit.

PAINT | ELECTRICAL | PLUMBING | FLOORS | KITCHEN | BATHROOM | WELDING REPAIRS | FIRE PROOFING | GARBAGE REMOVA L

!!

OW

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Email

LICENSED MOLD REMEDIATION

Web

Regulations

Ontario Places New Limits on Allowable Rent Increase This article is reprinted from Canadian Property Management, January 2012.

40 www.canadianapartmentmagazine.ca

Inflation could bring added budgeting woes for Ontario’s rental housing landlords beginning in 2013 when the annual allowable rent increase will be capped at 2.5%. This arises from a new amendment to the Residential Tenancies Act that the recently re-elected provincial government introduced in December 2011, much to the surprise of rental housing industry advocates.

“No one called for this [during the election campaign] and there was no call from the public,” observes Mike Chopowick, Director of Government Policy with the Federation of Rental-housing Providers of Ontario (FRPO). “What’s disappointing is that the government did this without any consultation or discussion with our industry. That’s one of the things we find most alarming.”

Currently, the annual allowable rent increase in Ontario is pegged to the Consumer Price Index (CPI) for the 12 months ending May 31 of the previous year. This means the maximum rent increase can be no greater than the average retail price increase of approximately 600 goods and services that Statistics Canada monitors and weights according to their prominence in consumers’ overall spending.

Critics have argued that this formula is too broadly based since much of the CPI’s basket of goods has little direct bearing in rental housing operation, and badly timed since more

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Regulations

Electricity discount intact

The 2012 Ontario budget confirmed that the Ontario Clean Energy Benefit would remain in place for most eligible consumers. This reaffirms the 10% discount on electricity bills that the Ontario government first extended to residential, multi-residential and small business customers in the fall of 2010.

However, the budget did introduce an exception for customers consuming in excess of 3,000 kilowatt-hours (kWh) per month, which is likely to have the greatest impact on the farm and small business sectors.

The policy will be applied to multi-residential buildings on a 3,000 kWh-per-suite formula so landlords with bulk-metered buildings should be vigilant about required paperwork.

“We were told by Ministry of Finance staff that, as long as landlords continue their suite-count declarations under the Regulated Price Plan, they should be eligible under the 3,000 kWh/month cap,” says Mike Chopowick, Manager of Policy with Federation of Rental-housing Providers of Ontario (FRPO). “But Ministry staff also advised that this must be authorized in the Regulation so FRPO will be monitoring to make sure that happens.”

Reprinted from Canadian Property Management, April 2012

42 www.canadianapartmentmagazine.ca Untitled-1 1

12-05-11 11:47 AM

“

Capping rent increases would provide greater certainty…”

than 18 months can elapse before landlords can account for some major inflationary hits. Notably, the 3.1% allowable rent increase that went into effect for January 2012 reflects the impact of additional harmonized sales tax (HST) that landlords have already been paying since July 1, 2010.

The proposed new amendment sets upper and lower limits for allowable rent increases that disregard the CPI once it rises above 2.5% or falls below 1%. “Capping rent increases would provide greater certainty and reduce year-to-year volatility in housing costs so that Ontario families continue to have access to affordable housing,” the Minister of Municipal Affairs and Housing, Kathleen Wynne, stated when the legislation was introduced.

“Ontario tenants already have some of the strongest rent control laws in Canada,” counters Allan Weinbaum, a Principal with WJ Properties currently serving as FRPO’s chair. “In 2011, rents were limited to a 0.7% increase – far less than what is needed for landlords to cover rising maintenance costs.”

In comparison, the annual allowable rent increase in British Columbia is the CPI plus 2%, which translated into 2.3% for 2011.

FRPO has called for a similar approach in Ontario to better address maintenance needs in what’s predominantly older housing stock.

“It would allow landlords to cover inflation in operating costs and also allow additional dollars for capital repairs,” Chopowick says.

A 2.5% cap will provide little budgeting room for that kind of discretionary spending, particularly when operating costs increase at a higher rate. Nor is there much consolation in the lower-end guarantee that the allowable increase will not drop below 1%.

“Most economists have been forecasting an inflation rate of 3% for the foreseeable future,” Chopowick notes. “So we do come out on the losing end.”

In future, the upper and lower caps could be adjusted since the amendment calls for a review at four-year intervals.

Across Ontario’s major urban centres, Canada Mortgage and Housing Corporation’s most recent market survey recorded an availability rate of 3.8% in October 2011. The average rent for a two-bedroom apartment was $1,002, up from $980 in October 2010.

This is lower than the average rents for two-bedroom units in Alberta ($1,044) and British Columbia ($1,050). Meanwhile, Saskatchewan experienced the greatest percentage gain of any province, at 4.6%, as the average rent for a two-bedroom unit rose from $872 to $913.

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Marketing

Email communication management Carissa Drohan-Jennings is the Director of Marketing and Communications at Landlord Web Solutions (www.landlordwebsolutions. com). If you would like to learn more about any of the topics mentioned, please email Carissa at carissa@landlordwebsolutions.com for more information.

44 www.canadianapartmentmagazine.ca

Building a multimillion-dollar property is not for the faint of heart.

When trying to fill vacant units, many developers toss and turn at night wondering how theyâ&#x20AC;&#x2122;re going to fill the property quickly. Every vacant unit is lost revenue, and after maximizing resources to build an apartment building, every month a unit sits empty is money wasted.

The KG Group recently faced this situation when building the Harrison, a beautiful, modern condominium-style apartment tower located near Yonge Street and Sheppard Avenue in Toronto. This building is state of the art and stylish units cost between $1,200 and $2,300 per month.

So how did KG Group manage to rent out the entire building in just over one year? (Which is an astounding feat!) They turned to email marketing.

Email marketing is a digital form of direct mail. In the broadest sense, the term covers every email ever sent to a customer or potential customer. In general, though, itâ&#x20AC;&#x2122;s used to refer to sending direct promotional emails to try to acquire new customers or persuade existing customers to buy again, or to encourage customer loyalty and enhance the customer relationship.

Jeff Goldband, property manager of the Harrison project stated, â&#x20AC;&#x153;We developed an email marketing program whereby we collected email addresses from each prospective renter that visited the building. We then aggregated these emails into Constant Contact, a professional grade email marketing program, which allowed us to keep each prospect informed about the progress we were making on the development. In each email we also highlighted services that would be available at the building. Our prospects liked how we kept them in the

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And that’s exactly why email marketing works. It’s an effective form of communication because the messaging that is sent is targeted to appeal to a select group of individuals who have opted to receive the communications. People who receive these emails begin recognizing the value that is being delivered and they become more receptive to the messaging. In time this receptiveness presents an opportunity for the landlord to expand their email campaigns to include more sophisticated calls to action that can drive further sales.

“As a result of the success we had at the Harrison, we’ve taken email marketing and applied it to all of our buildings. We now also use email to communicate with residents and

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deliver news and event information pertaining to their building. Email marketing has given us tremendous insight into what our customers want, and in some cases it has opened our eyes to what we need to offer them,” said Goldband.

“By knowing what content is clicked on by our recipients we are able to determine what services are most important to them. We can then take that feedback and make actionable operational decisions based on it.”

Email marketing is a great way to deliver messages to interested renters quickly, easily and affordably. For pennies on the dollar any landlord can deliver messaging quickly to residents, potential residents, customers or investors. Print communications can become costly, but digital communication is cost-effective and quick to implement, resulting in a solution that is perfect for any sized marketing budget.

The fact is, email communication is alive and well, and renters want to communicate by email.

A study done in the United States, “Getting Inside the Head of Today’s Online Renter”, which surveyed 85,000 residents from 30 different property management companies across the country, determined that 89.4 per cent of respondents preferred communicating by email. This figure is not surprising, as most individuals use email for quick and non-intrusive communication.

But email marketing is not only for communicating with renters. REITs and property management companies can also benefit from email communication campaigns when communicating with their investors and customers. Passing along news and information instantaneously, while keeping costs low makes it an essential component in any marketing program.

So whether you’re building a new property, performing renovations, or dealing with vacancy issues, an email campaign is a great way to create a communication channel with your current and potential residents. By keeping customers informed during transitional periods you can build trust and loyalty.

If you are a landlord or supplier who would like to learn about email marketing and how it could bring value to your business, send an email to carissa@ landlordwebsolutions. com with email marketing information in the subject line.

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News tips

InterRent makes $23.9M acquisition in Mississauga InterRent Real Estate Investment Trust has entered into an unconditional agreement to acquire a property consisting of highrise and lowrise apartment buildings situated in Mississauga, Ont. The complex is located at 2757 Battleford Road and consists of 184 suites and 250 parking spaces. The property is located within a sought after rental neighborhood at the intersection of Glen Erin Drive and Battleford Road (across from Meadowvale Town Centre) and borders the walking trails around Lake Aquitaine Park. There is easy access to public transit, Erin Mills Parkway and Highways 401 and 407.

The acquisition is expected to be completed in June at a purchase price of $23.9 million. The property is being purchased with a going in capitalization rate of 6.1 per cent and is immediately accretive to the REIT. The acquisition will be financed through a combination of an existing first and a new second mortgage.

“This is a well maintained and well positioned property with a strong tenant base and within close proximity to our other Mississauga locations. This purchase adds more scale and efficiency to our operations in Mississauga, which is a strong market and one that we have targeted for growth,” said chief executive Mike McGahan.

GTA Q1 rental market report Greater Toronto REALTORS reported 3,804 leased condominium apartment transactions in the first quarter of 2012, up 11 per cent from the 3,442 units rented during the first three months of 2011. The number of condominium apartments listed for rent on the TorontoMLS system during the first quarter was also up, but by a lesser four per cent to 7,096 units.

“There have been very few purpose-built rental buildings completed in the GTA over the past few years. This means that households looking to rent an apartment with modern finishes and amenities have been focusing on condominium apartments rented out by investor owners,” said Toronto Real Estate Board President Richard Silver.

“Condominium apartment vacancy rates, as reported by CMHC, were down in 2011 and it looks as if this trend is continuing with growth in lease transactions outstripping growth in listings.”

Average one-bedroom and two-bedroom condominium apartment rents increased at annual rates above inflation, at four and seven per cent respectively.

“Tighter rental market conditions played a key role in the strong annual average rent increases. However, a lot of condominium apartment projects were completed over the last year. Some owners chose to list their units for rent. Newly completed units benefiting from the latest trends in finishes and amenities could have arguably commanded higher rents compared to older units. This factor likely played a role in strong year-over-year average rent increases as well,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Please send your company’s news tips, acquisitions and new products to cam@mediaedge.ca.

As well, check out our website, www.canadianapartmentmagazine.ca for timely news, features and V-Reports.

48 www.canadianapartmentmagazine.ca

Hollyburn Properties acquires $60M apartment portfolio in Toronto Hollyburn Properties Ltd. has purchased four prime residential apartment properties in Toronto. That brings to 13 the total number of buildings the company owns and manages, in exclusive Toronto neighbourhoods.

The Vancouver, B.C. based company faced fierce competition for these rare properties in an unpriced bid process. Bidders came from a diverse cross section of local, national, and international buyers who all attempted to acquire these prime revenue properties, all in upscale neighbourhoods.

David Montressor of CBRE Ltd.’s National Apartment Group and Swiss Canadian Management Co. Ltd., marketed the properties and facilitated the transaction while Vito Campisi of MCAP, arranged the CMHC insured financing.

Hollyburn has been branching out in recent months as these deals come on the heels of the recent purchase of two more residential apartment properties in Calgary. Hollyburn now owns and manages 65 residential properties in Metro Vancouver, Calgary and Toronto.

“Our base is still in Metro Vancouver, where we own and operate 47 residential properties,” said Hollyburn’s Director of Communication Peter Louwe. “That won’t change - it’s where we started and still do the bulk of our business. But there’s no doubt we’re increasingly looking at the Toronto market to expand,” he said.

The new Toronto buildings are: 411 Eglinton Avenue East & 445 Eglinton Avenue East, both located near Mount Pleasant Road. The properties are situated in an affluent neighbourhood, and in close proximity to the Yonge-Eglinton shopping centre, a number of city parks and highly ranked public schools.

48 Isabella Street - located west of Church Street, in the Yonge-Bloor neighbourhood in downtown Toronto. It boasts a desirable location downtown and transit options, including two major subway lines in one terminal within walking distance. The surrounding area has excellent shopping, dining and entertainment options.

224 St. George Street sits just north of Bloor Street West, in the Annex district of Toronto. Like all Hollyburn apartments, transit is within easy reach. The Annex is a vibrant and colourful downtown neighbourhood, with much of its character derived from the nearby University of Toronto.

CAPREIT closes $176.3M equity financing Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) closed its previously announced issue and sale of 7,750,000 units, which includes the exercise in full of the over-allotment option to purchase an additional 900,000 units, for $22.75 per unit for aggregate gross proceeds of $176,312,500. The offering was sold through a syndicate of underwriters led by RBC Capital Markets on a bought-deal basis.

CAPREIT intends to use a portion of the net proceeds of the offering to repay the $85.4 million owing under its Acquisition and Operating Facility as of March 31, 2012. Upon closing of the acquisition of 3,562 apartment suites in 14 properties across the Greater Toronto Area, Southwest Ontario, Montréal Region, Québec City and Halifax (the “Acquisition Properties”), CAPREIT intends to apply to remainder of the net proceeds of the offering towards the purchase price of the Acquisition Properties. In the event the Acquisition Properties are not acquired, CAPREIT intends to use the remainder of the net proceeds of the offering to fund future acquisitions, repay maturing mortgages and for general trust purposes.

“We have financed our portfolio growth and valueenhancing capital investment programs with debt and internally generated funds since our last equity offering in October 2011,” said Thomas Schwartz, president and CEO. “With the proceeds from this offering, we have significantly strengthened our balance sheet and positioned ourselves to capitalize on future investments aimed at enhancing unitholder value.”

May 2012 49

New Products

j

New consumer product fights global warming Earth Innovations launched EcoCompo, an affordable household product that conveniently allows homeowners to reduce their carbon footprint year round, while eliminating the odor emitted from food waste.

“Whether in an apartment or a backyard, consumers can now eliminate the unpleasant odor from separated food waste and effortlessly decrease their carbon footprint at the same time,” said product founder Mark Watson.

The methane gas emitted from decomposed food waste is a significant contributor to the unwanted greenhouse gas emissions causing climate change and a substantial reason why landfill emissions are a problem. EcoCompo’s non-toxic crushed volcanic minerals stop this by reacting and absorbing the odors from food waste, including ammonia and later methane. It can safely be used in indoor food waste containers, municipal green bins, and all types of composters.

“Homeowners can easily halt the unwanted odors from food waste by sprinkling fast acting EcoCompo on top of the food waste or in their composter, while doing their part against climate change without additional effort,” said Watson. “Although composting is the best way to minimize landfill, those who don’t can still make a positive change year round.”

According to the United States Environmental Protection Agency, 16.2 percent of anthropogenic methane emissions in 2010 came from the country’s landfills, the third largest contributor behind natural gas systems and enteric fermentation. EcoCompo captures methane from decomposed food, before it’s emitted into the atmosphere. It also makes compost soil richer and accelerates the composting process.

EcoCompo will be sold in 4.5kg/10lb recyclable plastic jugs and available across Canada at Tru-Serve hardware stores and Home Hardware locations. It can be purchased commercially through Acklands-Grainger. Additional retailers will be announced on the company web site.

“We’re very fortunate to have had success follow us this far. We work really hard at making a difference; this industry is what we love”

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SPECIALIZING IN DISASTER RECOVERY • TECHNICAL SERVICES • GENERAL CONTRACTING • NATIONAL ACCOUNTS 905.475.0707 1.877.33 SOLID info@solidgc.ca www.solidgc.ca 50 www.canadianapartmentmagazine.ca 12054_SolidGeneral_2012.indd 1

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Hamilton apartment market regional report Hamilton, with a population of over 500,000 is one of Ontarioâ&#x20AC;&#x2122;s most economically diverse cities.

It was recently ranked as the 2nd best place to invest in Ontario over the next five years (20092015) by the Real Estate Investment Network. For Apartment investors Hamilton is a challenging market. Read how investors, owners and managers can profit in this unique marketplace. issue: Summer 2012 advertising close: June 29th advertising material: July 4th For more information please call Paul Murphy, Publisher at (416) 512-8186 X264 or email me at paulm@mediaedge.ca

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12-05-22 2:02 PM

New Products

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Magical Pest Control teams up with K-9 detection service Canadian military and law enforcement agencies have been using specially trained dogs to accurately detect bombs, firearms, ammunition, narcotics, missing persons, and signs of arson. Now, dogs have become the latest weapon in the war against bed bugs.

Traditional bed bug detection methods can be very time consuming and offer less than a 35 per cent accuracy rate for even the best trained human inspector. However, certified bed bug detection dogs such as the ones deployed by Magical offer a much faster and more accurate way to inspect for bed bugs. The average bedroom can be inspected in less than two minutes.

The first bed bug dog inspection occurred in 2006 and this more accurate and scientifically proven method of inspecting for bed bugs is now the most popular form of bed bug detection in North America. Magical Pest Control aims to once again offer its clients the best products and services available to the industry.

“Certified K-9 bed bug detection teams are a necessity to any respectable pest control company, said Alex Dayan, manager of Magical Pest Control. “The key ingredient in this procedure is certification as not all teams out there are certified.

Our dogs can check for bed bugs behind walls, base boards, in dresser drawers and under carpets without having to strip down the room or pull baseboards away from the walls. This is also the least disruptive way for our clients.”

All of Magical Pest Control dogs are third-party certified by the International Association of Canine Pest Inspectors (IAOCPI) and together with ongoing daily training, these dogs are very expensive resources.

Magical Pest Control’s Bed Bug Management Division offers free bed bug consultations to residential and commercial property owners.

CMHC & Conventional Mortgages for: Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects Vancouver Brian D. Kennedy or Jonathan Wong Phone: 604-685-1068 Fax: 604-683-2787 Email: vancouver@peoplestrust.com Calgary Dennis Aitken or Daniel Stewart Phone: 403-237-8975 Fax: 403-266-5002 Email: calgary@peoplestrust.com Toronto Michael Lombard or Ady Steen Phone: 416-368-3266 Fax: 416-368-3328 Email: toronto@peoplestrust.com ™

www.peoplestrust.com 52 www.canadianapartmentmagazine.ca Untitled-1 1

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Smart Ideas

Bug off!

Bugs can be pests around a building at any time, but with the warmer weather, the creepy crawlers will inevitably return in full-force. Facility maintenance is crucial for a well-managed property. Here are some tips to squash these bugs.

Inspect

Courtesy of Orkin Canada

Regularly inspect the exterior of your facility for cracks and crevices that could provide entry points for pests, as it only takes an opening of 1.5 millimeters for most insects to enter a building. If you do spot these entry points, seal them with weatherresistant sealant and reinforce them with copper mesh to prevent rodent access

54 www.canadianapartmentmagazine.ca

Clean

Check

Clean and rotate trash cans often to eliminate food and odours that attract pests, keeping dumpsters and trash as far from the property as possible. Ask residents to regularly take out trash rather than leave it near the building where it can attract pests

Regularly check your property for food or water spills as they can quickly draw pests, which only need small amounts to survive. Specifically, correct water leakage from broken HVAC pipes, vending machines and other sources as soon as possible to eliminate water that can help sustain pests

Seal Consider weather stripping around doors and windows to further prevent pest entry, installing #16 screens where needed

Install

Install fitted grills over air intakes and wire mesh at roof level to prevent bird and wildlife pests

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