CAM August

C A N A D A ’ S O N LY N A T I O N A L P U B L I C A T I O N F O R A P A 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 / NUMB ER 4 / Augu st 2012

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Timbercreek Asset Management Patience Is A Virtue

Hamilton’s Time Has Come See page 10

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Editor’s Note

FRPO would like to

THANK

our 2012 golf tournament sponsors May 30th at Angus Glen Golf Club

It’s Hammer time!

To use a phrase from an old rap song; “It’s Hammer time.”

Toronto’s Golden Horseshoe neighbour is quickly gaining a reputation as a hot spot for rental accommodations. Despite losing tens of thousands of manufacturing jobs over the past few years things are looking up for the industrial city.

“Optimism and strong economic indicators are making Hamilton an increasingly attractive option for investors looking for lower prices and solid returns,” notes Jered Stuffco in his article “Hammer time” which appears in this issue of Canadian Apartment Magazine.

Stuffco writes that “prospective homeowners and real estate investors are looking to the city because of its affordability, location and amenities.”

Average rent for a two-bedroom apartment in the Hamilton area is now $876 and according to CMHC projections, it will climb to $925 by the end of next year. By comparison, an average two-bedroom apartment in Toronto is $1,210.

If you couple that with a growing list of project applications for condos, hotels and rentals, the future continues to look better for both property owners and tenants.

One company that sees potential in Hamilton is Timbercreek Asset Management which has purchased and retrofitted a number of properties it accumulated over the past five years. We feature Timbercreek in this issue.

“Hamilton was an exciting (project) for us as it allowed us to grow in a region that we have had some success on a smaller scale,” said Eli Miller, Capital Manager, at Timbercreek. “The Hamilton buildings fit our valueadd strategy perfectly. We got a chance to take some under-utilized space, incorporate some amenities into it and add some more units that we didn’t originally anticipate.”

In the past Hamilton was criticized for its blue-collar feel and its steel industry reliance. But with its affordability, location and growing number of rental choices, it is safe to say that people won’t be “putting the Hammer down” anytime soon.

Scott Anderson Editor

4Rent.ca Canadian Credit Protection Corp CMHC Gottarent.com HSI Solutions Midnorthern Appliance Phelps Apartment Laundries Sparkle Solutions The Byng Group for more information visit the Federation of Rental-housing Providers of Ontario at www.frpo.org 4 www.canadianapartmentmagazine.ca

Quoteworthy “We look for buildings in good locations that need a little TLC. You can fix a building but it is very, very hard to fix a location” -- Ugo Bizzarri, a founding Managing Director of Timbercreek

– page 20

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

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contents Cover Story 16

One deal at a time

Timbercreek Asset Management

Special Feature

columns 8 Finance In praise of the CMHC

By Peter Cook and Robert Fleet

10

Hammer Time

28 CMHC Residential intensification: A case study

By Jered Stuffco

By Paula Gasparro

34 Insurance Let’s review something important

By Andy Schwartze

38 Portfolio strategy Prepare for the future

By Derek Lobo

42 Legal Lawsuit seeks redress for replacement costs

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 Barbara Carss, Peter Cook, Derek Lobo, Robert Fleet, Paula Gasparro, Andy Schwartze, and Jered Stuffco Lina Trunina

Circulation

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

By Barbara Carss

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

44 Newsline 48 People on the move 50 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, Paula Gasparro, Derek Lobo, Andy Schwartze, Jered Stuffco

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Finance

In praise of the Canada Mortgage and Housing Corp.

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

There has been concern over the past few months by real estate investors relating to regulatory changes in the mortgage industry. Also, Canada Mortgage and Housing Corp. (CMHC) has been in the news recently over policy changes and concerns with the availability of insured funds as it approaches its lending limit of $600 billion. CMHC has insured $121 billion in mortgages since an increase in its ceiling limit of $450 billion in 2008. The federal government has no plans of increasing this limit at this time.

Change can be good To curb the demand for consumer debt and CMHC insured funds the federal government has announced new policies and regulations for single-family residential mortgages. These changes include lower amortization periods, limiting CMHC insured mortgages for purchases less than $1 million, tighter debt service requirements and lower loan to value when refinancing. Changes in policy for residential mortgages allows CMHC to stay within its limit without having to alter its multi-family underwriting policies.

This is good news for the apartment investor. The new regulations should result in positive lasting effects for the landlord. These tougher restrictions on qualifying for financing in the single-family market will create a barrier to home ownership and force the first time home buyer to stay in the rental market longer. The increased demand for apartment rentals will force vacancy rates even lower and should allow landlords to increase rents and in the process improve their bottom line.

It is business as usual at CMHC Regardless of the news reported in the media it is business as usual at CMHC for multi-family investors. More than 80 per cent of the multi-unit mortgages we have financed this year are insured and we anticipate our new CMHC loan volume at First National in 2012 will exceed $1.5 billion. Whether you are the largest landlord in Canada or the owner of a 10-unit apartment building, CMHC in our opinion is still your best financing option.

Finance

CMHC Insured Mortgage Advantages • Lower rates – Between 1.0% and 2.5% lower.

• Leverage up to 85% of value.

• Limited personal guarantee: 0%-50% of loan amount. Depending on loan to value.

• All CMHC insured mortgages are assumable provided that the purchaser meets qualification requirements.

• No geographical restrictions.

• Lender must offer renewal at term maturity.

• Insurance premiums and application fees are tax deductible.

• Debt Coverage Ratio (DCR) – (Net Operating Income/Annual Mortgage Payment): 5-year term minimum is 1.30% and 10-year term minimum is 1.20%.

• Amortization periods up to 35 years.

• Only environmental report required. Typically appraisal and structural reports not required.

• Easy to transfer from one lender to another at term maturity providing borrowers stronger position to negotiate lower rates with other lenders.

• CMHC 2nd mortgage program provides access to low interest rate funds up to 85% LTV. Can also be advanced behind an existing conventional mortgage.

• CMHC offers an insurance premium rebate that provides incentive for borrowers to refinance or increase their mortgage within the first seven years.

• Increase loan amount to 65% loan to value through CMHC’s Top up program and pay the insurance premium only on the new funds.

• Insurance premium and CMHC application fee can be added to the mortgage-paid only once for the full amortization period.

• Lender’s processing fees are typically 0.10% - 0.25% of loan amount.

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August 2012 9

12-08-20 2:44 PM

Feature

Hammer time

Hamilton emerges from Toronto’s shadow

By Jered Stuffco

Photos courtesy of Tourism Hamilton

10 www.canadianapartmentmagazine.ca

While red-hot housing markets in Toronto and Vancouver regularly grab headlines, another Canadian city is starting to attract a growing share of attention.

According to industry insiders and observers, optimism and strong economic indicators are making Hamilton an increasingly attractive option for investors looking for lower prices and solid returns.

There was once concern that job losses could result in Hamilton joining other so-called “Rust Belt� cities in the unemployment lines.

But despite losing more than 30,000 manufacturing jobs in recent years, the future looks bright as education, innovation and new families come to the area.

According to Arun Pathak, property manager at Smar Holdings Limited, the optimism is everywhere.

Feature

“The city centre is getting new developments, especially condos and hotels,” he said.

In particular, Pathak points to areas such as St. James Street North, which is undergoing a renaissance led by the city’s vibrant arts scene.

“There is more of a feel of optimism, growth, investment and general improvement,” he said.

Not only does the city occupy a central location at the corner of Lake Ontario—which puts it on the doorstep of the United States and the vibrant Greater Toronto Area—but its natural attributes offer a great variety of lifestyle options.

Likewise, prospective homeowners and real estate investors are looking to the city because of its affordability, location and amenities.

Want proof? Look no further than the stats.

The city of Hamilton lists several project applications for condos, hotels and rentals, including a 412-unit, two tower development at 150 Main Street.

A rental-specific building has been proposed for 275 King Street West, with 29 units.

Meanwhile, a 36-unit building at 50 Murray Street, a 60unit building on James Street North and a massive plan for 85 Robinson Street are also in the works.

In October 2009, the rental vacancy rate was 4 per cent. But in April of this year, that number had fallen to 2.9 per cent, according to the Canadian Housing and Mortgage Corporation.

Likewise, rents have been gradually increasing. Average rent for a two-bedroom apartment in the Hamilton area is now $876.

In 2009, that number was $831.

And according to CMHC projections, average rent will climb to $925 by the end of next year. By comparison, an average twobedroom apartment in Toronto is $1,210.

Big Smoke spin-off Though the prices are climbing in Hamilton, the market is attracting droves of young families, artists and investors from the Greater Toronto Area seeking value.

In fact, the city of Hamilton estimates that the population will swell to 660,000 by 2031, including a growth of 80,000 new households.

Sarah Fong, a senior CMHC analyst who studies Hamilton, agreed that the city is seeing a spillover from Toronto and its environs, but she said it’s coming into its own, as well.

“Hamilton has become more and more of a destination,” she said in a phone interview.

“There are a lot of new developments coming up, especially in the core.”

August 2012 11

Feature

Fong noted that for homes, the average resale price in the Hamilton area, which includes Burlington, is $363,000. For Toronto, the price is significantly higher at $508,600.

Not surprising then, that folks are looking to the Hammer.

“I’ve seen more changes in the past two-to-three years, with the downtown being revitalized, with new hotels and condos,” she said, adding that recent surveys have listed Hamilton as a top investment spot.

Fong pointed to a recent report from the Real Estate Investment Network, which listed the city behind Edmonton and Calgary as the third-best investment destination in Canada.

“That really sparked a lot of investors to take a look at what’s there,” she said.

Pathak, the property manager, said that the interest in Hamilton has stretched beyond Ontario and even Canada.

“There is definitely a similar trend in apartment buildings and there are a number of Toronto buyers who have purchased in Hamilton. Realtors are reporting a very high interest in people not only from Toronto but other areas of the country and also other countries,” he said.

While observers say the last two years in particular have seen a host of new projects, the seeds for Hamilton’s growth stretch back to 2001, when amalgamating the old city with a number of surrounding communities created the new City of Hamilton.

Though amalgamation pushed the city’s population over 500,000, many of the old communities have maintained their own vibrant downtown areas and have the feel of intimate village-type communities.

According to many locals, this community patchwork allows people living in these areas to have all the advantages of a smalltown lifestyle and the amenities of a large city.

(Just ask the art fanatics who took part in a recent art crawl through the St. James Street North neighbourhood.)

12 www.canadianapartmentmagazine.ca

Steal city?

Sure, Hamilton is known as the heart of Canada’s steel industry, but these days, the city is just as likely to steal your heart with its stunning surroundings.

Nestled between Lake Ontario’s parks and beaches and the stunning escarpment, locals have plenty of recreation options to choose from, including the numerous parks and conservation areas that follow the 900 kilometre-long Bruce Trail.

The cliffs of the escarpment offer stunning views and have more than 100 waterfalls, which led to Hamilton’s title as the Waterfall Capital of the world.

Throw in the Royal Botanical Gardens, the Canadian Warplane Heritage Museum, the Canadian Football Hall of Fame and various historic attractions such as Dundurn Castle, and you’ll begin to see that there’s plenty to do and see.

The African Lion Safari Park is also a must see for visitors to the area.

For education, McMaster University and Mohawk College are renowned centres of learning, and the McMaster Innovations Park is now drawing tech companies to the region.

There has been considerable growth in Hamilton’s arts and cultural sector with new art galleries, recording studios and numerous TV and film productions taking up residence.

Celebrated Canadian musician Luke Doucet moved to the city from Toronto a few years ago and was so inspired that he wrote an album called “Steel City Trawler” about his new home.

There’s also a solid community of professionals, including a strong number of residential rental property owners and managers who are represented by the Hamilton and District Apartment Association.

With a membership of more than 250 property owners, managers and suppliers to the industry, the association has a strong municipal voice that is illustrated in its ability to connect with the Federation of Rental-Housing Providers of Ontario and the Canadian Federation of Apartment Associations.

Feature

Integrated region and economy While it’s only 80 kilometres from Toronto, regional officials are working to improve transport between the two cities as the region becomes more integrated.

“The Hamilton market is still more affordable than surrounding areas both for ownership and rentals and the purchase of rental units. This also creates demand from people who work in the Toronto direction, be it Burlington, Oakville, Mississauga or Toronto,” said Pathak.

“Currently there is only morning and evening Go Train service to Hamilton, with bus service connecting in Burlington during other hours. There are plans for all-day Go Train service and when they come into effect, this will increase the interest in Hamilton from Toronto residents.”

As Hamilton’s vacancy rate has been dipping, those numbers are mirrored in unemployment figures, which have fallen from 8.4 per cent in 2009 to 6.3 per cent in 2012.

Nationwide, it’s part of a larger trend.

In the CMHC’s Spring 2012 rental market report, the average rental apartment vacancy rate in Canada’s 35 major centres fell from 2.5 per cent in April of 2011 to 2.3 per cent a year later.

A jobless rate better than Toronto’s (6.9 per cent unemployed compared with a rate of 9 per cent in Toronto), in conjunction with new migrants coming to Canada’s major centres, are factors that are supporting rental demand in Hamilton.

“

Hamilton has become more and more of a destination. There are a lot of new developments coming up, especially in the core”

“Immigrants, as well as young workers, usually tend to rent first and then move to homeownership,” said Pathak.

In a report last year, city officials said Hamilton lost 758 rental units since 2001, representing shrinkage of 1.2 per cent of the rental stock.

While 1,489 apartment units were approved for condominium conversion, the Canada-Ontario Affordable Housing Program added an additional 731 additional units.

In an action plan in June, the city said that it needed to create 377 new affordable rental units annually to meet projected growth.

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.

A study by J. D. Power and Associates suggests that satisfied tenants were almost twice as likely to renew their lease and over three times as likely to pay a higher rent.

Over the years, we’ve created a whole culture around customer satisfaction. And it pays off in less turnover, more referrals and bigger smiles. We make them feel at home.

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12-04-09 5:29 PM August 2012 13

Feature

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Union Gas helps their clients in Hamilton stay competitive by helping them monitor their ongoing energy use, invest in energy efficiency and take advantage of valuable rebates and incentives. Their EnerSmart programs offer space and water heating incentives that many multi-unit residential customers have utilized to conserve energy.

Eligible equipment includes condensing boilers, condensing gas water heaters, condensing make-up air units, energy recovery ventilators and heat recovery ventilators. Joe Meriano, Union Gas National Account Manager explains, “upgrading your space heating equipment saves the most natural gas compared to other equipment. By using less natural gas you reduce operating expenses, enhance business profitability and preserve the environment.”

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14 www.canadianapartmentmagazine.ca

“This annual target is not being achieved, and any loss of rental housing to condominium conversion will compound this deficit,” said a previous housing report that called for even more apartments.

Interestingly, Hamilton is big on rentals—it has a bigger rental market than Calgary, which has nearly twice the population of Hamilton’s 519,000.

In the 2005 census, Hamilton had 61,645 rental households, which represented 31.8 per cent of the total—a larger proportion compared with the provincial average.

While stats suggest that 48 per cent of renters live in secondary rental housing markets, the city has admitted that almost no purpose built rental housing is being created.

According to Pathak, the shortage is also driving up prices—which isn’t technically a bad thing for owners and managers.

“There is a shortage of apartments for sale and prices have been pushed up by that. It is anticipated that rents will continue to increase, allowing for a further increase in apartment building values,” Pathak said.

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Along with the shortage of traditional rental units, the CMHC’s Fong noted that many renters are looking to condo rentals because of amenities like gyms.

Still, the city reports that one in five renters pays more than 50 per cent of their income on rent, and that 18 per cent live in poverty.

Likewise, there is some possibility that the city’s bargains may not last, according to Derek Lobo, CEO of Rock Apartment Advisors Inc. “More and more investors are realizing the untapped potential (and low prices) in Hamilton,” he said.

“The word is getting out as there’s less and less good quality inventory.”

Still, for investors, the city is a stable, long-term bet.

“Hamilton’s market already has risk priced into it compared to Toronto and some other markets,” he said. “So for people who are looking for steady income and not huge growth, Hamilton is a good, stable bell-whether market.”

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Ugo Bizzarri Founding Managing Director Portfolio Management & Investments Jeff Hutchison Managing Director Asset Management

Cover Story

One deal at a time If patience is really a virtue then this trait has rewarded Timbercreek Asset Management many times over.

The Toronto-based real estate company has adopted a patient approach to investing in real estate properties since its inception some 12 years ago and has enabled it to become a significant player in the Canadian multi-residential real estate market.

By Scott Anderson

August 2012 17

Cover Story

“We have always been about finding a good quality property. If we don’t find a quality property we won’t buy, but if we continue to find good investments then we will continue to buy. It is not just growth for growth sake.

We are very patient. Some years we will do very big deals and some years we will do very little,” said Ugo Bizzarri, a founding Managing Director of Timbercreek.

Since the inception of the first Timbercreek real estate fund in 2000, Bizzarri has overseen the acquisition of more than $2.1 billion worth of multi-residential real estate comprising of some 17,200 units in 27 cities.

But it was a blockbuster deal earlier this year that saw Timbercreek bulk up its holdings across the country. The company was part of a massive transaction that saw TransGlobe Apartment REIT privatized by Starlight Investments Ltd. As part of the transaction, Timbercreek acquired 26 properties, comprising of 5,400 units located in Montreal, Ottawa, the Greater Toronto Area, Cambridge, Guelph, London, Calgary and Medicine Hat. “The TransGlobe transaction is strategically aligned to Timbercreek’s commitment to actively grow when the right property investment comes along,” Bizzarri said.

18 www.canadianapartmentmagazine.ca

Although this deal saw the company grow its portfolio by approximately 30 per cent in a single transaction, the company has largely adhered to its game plan of taking its time when seeking properties.

“While we are thrilled to come across portfolio investment opportunities like the TransGlobe transaction much of our multi-residential portfolio has been built one asset at a time,” Bizzarri said. “We have always paced our growth to be sure we have adequate resources to absorb and effectively manage the assets we acquire. In this case we were sure to have the necessary resources in place to successfully handle the increase in our portfolio.”

Alternative investing Timbercreek was founded in 1999 by Bizzarri and Blair Tamblyn as an investment firm focused on providing alternative investment opportunities to institutions, trusts and endowment funds, discretionary investment advisors as well as qualified individuals.

It now actively manages approximately $3 billion in assets through various private and public investment vehicles that focuses on direct real estate - primarily multi-residential, mortgage debt, and public real estate securities.

Cover Story

Congratulations Timbercreek on your success!

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August 2012 19

Cover Story

Real Estate Appraisers and Consultants

Since inception, Timbercreek’s approach has been focused on value investing with an active management style. An approach that was first applied to multi-residential real estate with the belief that through active management, Timbercreek felt it could surface long-term value for its investors.

“We were attracted to the asset class due to its low volatility, strong predictable cash flow and low correlation with the broader equity markets,” Bizzarri explained.

The real estate investments are held through different vehicles, said Jeff Hutchison, Managing Director Asset Management. On the multi-residential real estate side the company concentrates on two different mandates: one targeting core, stabilized assets and another that focuses on repositioning distressed properties.

Although Timbercreek started in direct real estate investing and exclusively multi-family, it has since branched out to access real estate through other means: mortgage debt and global real estate securities.

Ray Heron & Edwardh RealMacKenzie Estate Appraisers and Consultants

MacKenzie Ray Heron & Edwardh

“

We look for buildings in good locations, but that need a little TLC. You can fix a building but it is very, very hard to fix a location” “However, our multi-residential roots have been a critical foundation to our success as a real estate investment manager,” Bizzarri said.

“Multi-residential real estate is a very labour intensive asset class and having the expertise to underwrite and manage multi-residential real estate definitely makes us a better lender and real estate investor in general.”

As more and more capital has become attracted to multi-residential real estate over recent years, Timbercreek has focused on finding value for investors through a more value-added investment approach. The company has spent the last 12 years building and refining a multiresidential management platform. This platform now allows the company to take advantage of investment opportunities that are not as appealing to the general investment community because “they require a manager to really roll-up their sleeves,” said Bizzarri.

“We look for buildings in good locations that need a little TLC,” Bizzarri said. “You can fix a building but it is very, very hard to fix a location.”

Congratulations Timbercreek!

Congratulations Timbercreek!

Proud to be part of of your Proud to be part yoursuccessful successfulteam team

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250 Dundas Street West, Suite 402, Toronto, Ontario, M5T 2Z5 Phone: 416-591-1515 Fax: 416-591-1220 250 Dundas Street West, Suite 402, Toronto, Ontario, M5T 2Z5 E-mail: mail@mrhe.com Phone: 416-591-1515 Fax: 416-591-1220

E-mail: mail@mrhe.com

20 www.canadianapartmentmagazine.ca Untitled-4 1

12-08-13 3:14 PM

Altus Group Altus Group congratulates Timbercreek on their continued success. We are proud to provide decision making analysis, appraisals and property tax reviews to support Timbercreek as they continue to grow.

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Cover Story Today the company boasts a large portfolio of properties in 16 major cities across the country from Calgary, Alta. to Halifax, N.S. “The assets are as diverse as the cities and the people who live there,” said Hutchison. “We have a wide variety of properties.”

Building enhancements Once a property has been purchased the company looks to improve its overall efficiency by addressing the maintenance needs of the individual building including the boilers, windows, lobbies, hallways, and lighting as well as the balconies and parking lots.

“Our number 1 priority is to renovate the building if we think there is a need. At the end of the day our tenants are our customers, so we try and

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Quality allied elevator is proud to service timbercreek’s elevators.

The Maitlands newly renovated living room in a one bedroom suite, Maitland Street Toronto. create a better product for them. We are also able to compete with the rest of the market by providing a better quality product,” said Bizzarri.

This was the case with the Lord Dufferin, one of its recently renovated buildings in Toronto’s trendy Liberty Village.

Located at the edge of Liberty Village neighbourhood in Toronto, the 40-year-old building had not seen much capital invested in it in recent years and was in need of a makeover.

“We saw the opportunity to upgrade the quality of the common areas, add amenities, renovate the suites and really revitalize the property,” said Hutchison.

The building was upgraded with condo quality amenities and features such as an upgraded, open concept suite with custom kitchen cabinetry and stainless steel appliances. In addition to standard amenities, such as parking, onsite laundry and storage lockers, the building also offers tenants a fully equipped gym, a pool and a social room.

“The goal there was to try to reposition what was a tired 40-year old building, to as close to condo quality as possible,” said Hutchison. “It’s a great,

12-07-12 4:44 PM

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22 www.canadianapartmentmagazine.ca QualityAlliedElevators_2012.indd 1

12-07-27 12:54 PM 12095_RentCheck_2012.indd 1

12-08-14 9:37 AM

Cover Story

The Lord Dufferin before and after of a bathroom at 200 Dufferin Street Toronto, complete with pedestal sink and walk-in glass shower.

24 www.canadianapartmentmagazine.ca

up-and-coming area. Five years ago it might have been different, but it’s a market that is seeing a complete revitalization. A whole resurgence and transformation from what it was to what it is.”

Another property, The Maitlands, also in downtown Toronto, is considered a “gem” in Timbercreek’s portfolio.

Located in the Yonge and Wellesley neighbourhood, The Maitlands was acquired in November 2010. Originally built in 1911 and now restored back to its original grandeur, the property is full of old-world Victorian charm.

Acquired in a state of varying degrees of deterioration, Timbercreek had its work cut out with this project. Over the years, previous owners had completed various retrofits, but, upgrades were done on an impromptu basis which meant leaving “mix-n-match” unit finishes.

The newly renovated suites include refinished original hardwood floors, wood trim and crown moulding, as well as stained glass windows and fireplace mantels. Kitchens and bathrooms were completely upgraded with modern conveniences including stainless steel appliances and quartz.

Electrical, plumbing, and fire building systems were also replaced, and common areas and corridors were renovated as well. As part of the upgrade and to ensure fire safety, the original wood doors were replaced with fire-rated solid wood unit doors to ensure that the heritage characteristics were not lost. New energy-efficient windows with lead glass inserts were installed and the exterior brickwork and façade were cleaned and refreshed.

Further around the Golden Horseshoe in Hamilton, Ont. Timbercreek has also undertaken a significant retrofit program with a number of properties that it accumulated over the past five

Cover Story

“

The assets are as diverse as the cities and the people who live there.

We have a wide variety of properties”

years. This included two buildings that were acquired in 2008 and another package of buildings that it added in 2011.

The recent acquisitions included two buildings on Hunter Street and one building on Spring Street.

“In any given market, we try and achieve a balance in the number of units we have. Our target scale for any specific region is a minimum of 1,000 doors, which helps us achieve operational efficiencies. That said we do not over-invest in any one particular region in an effort to manage our exposure.

This deal in Hamilton was an exciting one for us as it allowed us to grow in a region that we have had some success on a smaller scale,” said Eli Miller, Capital Manager, at Timbercreek.

“The Hamilton buildings fit our value-add strategy perfectly. We got a chance to take some under-utilized space, incorporate some amenities into it and add some more units that we didn’t originally anticipate.”

Timbercreek has “a pretty simple formula” when it updates buildings, said Miller. The company looks at the building systems, building exteriors, common areas, and garages.

“We try to touch on each of these elements depending on the needs, the target and the general condition. These buildings weren’t in terrible condition at all. The windows were all pretty good and the balconies were in decent condition.”

Miller said some garage work was needed, and some security upgrades were made. They also conducted some interior work including painting in lobbies, and updated both the carpeting and the lighting in the hallways.

More capital intensive work included updated boilers and six new elevators.

Miller said the company tried to stick to the company-wide plan of supporting the local contractors.

“We like the smaller, local service providers. Our philosophy has always been to have local relationships and I don’t think that regardless how big we grow that we will lose that,” he said. “In our experience on the multiresidential side the local suppliers understand it a bit better and they seem to be a little bit more creative in working with us. It is partnering with the right people that can help us manage our expenses.”

A focus on tenants Just like the individual buildings in Timbercreek’s portfolio, the company’s online efforts are also seeing an upgrade to bring it more up to date with the latest technology and trends.

“We are in the process of completely re-doing our website and really focusing on how to interact more effectively with our existing and future tenants. It will continue to be an area of focus for us,” said Hutchison.

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August 2012 25

12-08-17 11:53 AM

Cover Story

The Lord Dufferin before and after of a kitchen in a one bedroom suite at 200 Dufferin Street Toronto.

All this is being done with an eye on maintaining and even improving the tenant retention rate.

“Obviously there is a lot of talk around the use of social media as a means of having a conversation with your tenants and a means of communicating with them. This is where the industry is headed and as such, these are areas of focus for us as well,” he said.

Always with a careful consideration for the tenants, Hutchison and the company have been active in the Ontario-based Certified Rental Building Program.

This program, developed by the Federation of Rental-Housing Providers of Ontario, is the only multi-residential apartment building certification program in North America, and assures tenants they are choosing a wellrun, well-managed building, said Hutchison.

Companies seeking to be included in the program must adhere to some 40 established building management and customer service standards which cover a wide range of practices. Mandatory external audits, conducted by J.D. Power and Associates, as well as completion of the program’s Property Manager training and education course by building management and staff is also required.

Today, Timbercreek is one of the top companies in the program with some 75 properties listed.

And Hutchison’s philosophy on being involved in the program mirrors the overall philosophy of the company.

“We are committed to being a positive influence in the industry and work to improve the level of professionalism. Our industry is changing. It used to be one where we were really focused on selling a physical product. That isn’t the case today. It really is about customer service and building a better customer experience and focusing on those needs.”

Congrats to a company that knows how to grow...successfully.

Timbercreek Asset Management knows that successful growth requires careful reasoning— and good instincts. Grant Thornton LLP would like to congratulate our dynamic client on their continued expansion. We’re proud our advisory services group has been a valuable resource for them, and we look forward to assisting Timbercreek as they continue with their impressive growth.

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26 Untitled-7 www.canadianapartmentmagazine.ca 1

12-08-02 11:17 AM

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CMHC Sterling Place, a commercial building converted to modestly priced rental lofts in downtown London.

Case study: Sterling Place in London, Ont.

Residential intensification 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.

28 www.canadianapartmentmagazine.ca

Sterling Place is a heritage, adaptive reuse project in downtown London, Ont. It transformed an old vacant shoe factory and warehouse, built in 1901, into highdensity rental housing with studio, one-bedroom and two-bedroom apartments.

The 32 units range from 22 to 66 m2 (240 to 710 sq. ft.) Every apartment has vaulted ceilings and exposed ventilation ducts, which recreate the warehouse feel of the building’s past. The developer received financial assistance from the City of London through restoration grant and loan programs, which helped revitalize the deteriorating heritage building and add new housing to London’s core district.

The City of London has been trying to attract more residential development to the downtown core to promote a rebirth of the core area as a residential and commercial centre.

The city offers incentives through its Rehabilitation/Redevelopment Grant Program and Façade Restoration Loan Program, to encourage developers to invest in London’s central business district while preserving heritage structures.

Spriet Associates, the developer for Sterling Place, took advantage of the city’s programs to change the Clarence Street building from a neglected warehouse into modestly priced

CMHC The restored front entrance to Sterling Place.

rebate of $103,760 over 10 years from the London Downtown Rehabilitation/Restoration Grant Program.

The project was financed through internal assets at first, and later, a mortgage. Most of the cost is attributed to the redevelopment of the interior of the building. The property has seen a dramatic increase in value as a result of the renovation.

Development cost breakdown: • Land and buildings $9,375/unit • Building construction $44,700/unit • Soft costs (such as taxes, DCCs, consultants) $9,358.75/unit • Infrastructure $1,160/unit • Total per unit $55,235 • Total $2,067,000

rental apartments. The developer completely gutted and rebuilt the interior of the building to conform to current residential building codes. In the process, they added new windows, vaulted ceilings, a new concrete stairwell, a new sprinkler system, and reused the original maple hardwood flooring. The project is surrounded by commercial buildings and is one of the only residential buildings in the neighbourhood. The building’s 32 rental units are ideal for singles or couples who work downtown or who want to be close to entertainment and amenities in the core.

Marketability and profitability Many citizens of the city who were excited about living a more urban lifestyle were interested in this development, as it is located in the centre of the London core with access to amenities. Though a sizeable city, there are few residential opportunities in downtown London, so location was the most important factor in attracting tenants. The fact that the project contained smaller units at reasonable rents drew interest from young singles and couples and a number of university students. The developer was fortunate to have had a considerable amount of free publicity in local newspapers and magazines. The unique features of the project, such as

Project success: A developer’s perspective “There is definitely a push for downtown living. The city has determined that we need downtown housing to revitalize the core area. All development for housing had historically been in the suburbs,” said Nicole Spriet, from Spriet Investments Inc. The developer was motivated to develop the project by the compensation granted by the city for redevelopment projects, the close fit with the Official Plan downtown strategy and the chance to revitalize a heritage building. The project also created work for the company’s construction and engineering divisions and this made the project more attractive for the company as a whole. The developer successfully applied for a zoning bylaw amendment to allow ground-level residential units. This increased the maximum permitted density for the property to 800 uph from 350 uph.

There were few residential rental units in the downtown core, which helped make the project attractive to many prospective tenants. This, in addition to the property’s prime location, created a foundation for the marketability and subsequent success of the project.

Costs and financing The total cost of Sterling Place was nearly $2.1 million. The developer was assisted by an interest-free loan of $30,000 from the London Façade Restoration Loan Program and a property tax August 2012 29 Untitled-1 1

12-05-11 11:47 AM

CMHC

Project success: Residents’ perspective “We like the character of the building immensely; the fact that it’s a heritage building that they basically modernized. It has that older feel, but it’s a good blend of new and old. It’s the reason we stay here.”

The original red bricks from the turn of the 20th century were cleaned and repaired with the help of a London Façade Restoration Loan. the loft-style vaulted ceilings, the hardwood flooring and exposed ductwork, were advertised as features uncommon within the London area. As such, the 32 units were occupied after just one month on the market. Although more expensive than originally anticipated, the success of the project was never in doubt and the developer is happy with the final product.

Obstacles The most difficult aspect of the project was the selective demolition of the warehouse interior and the residential retrofit. With the conversion from commercial to residential, many new building code standards had to be met, such as installing a fire sprinkler system, a solid concrete stairwell, sound and thermal insulation and ventilation equipment. These building code conditions were not fully anticipated, which caused a few problems and resulted in some unforeseen costs. Asbestos removal was a minor issue and cost $3,500 for Ontario Ministry of Labour inspection and removal.

Municipal support The City of London was very supportive of this project as it conformed to the Official Plan guidelines for increasing downtown residential space and preserving heritage buildings. In addition to the financial assistance already mentioned, the city allowed a substantial increase in density.

With a previous zoning maximum of 350 uph, Sterling Place required a zoning bylaw amendment to increase the density to 800 uph. Along with additional density, the city allowed residential units on the ground floor, usually reserved for commercial enterprises in this area.

Lessons learned The developer advises others to make sure all approvals for building permits and building codes are pre-screened with city staff as part of the process to determine the feasibility of the project. The developer explains: “Many building code requirements can greatly change the cost of the construction and the concept.”

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Design features In converting the vacant commercial building the developer respected the building’s historical significance. The façade was fully restored, the interior was repaired and brought up to current building standards and the building was given a heritage designation. The most common statement from the residents was: “The high ceilings are great!” One resident living in a smaller unit found the vaulted ceilings make a big difference in making the place seem larger.

Along with the higher ceilings, the windows are also quite tall, allowing more sunlight to enter and a more open atmosphere in each apartment.

The downtown location and the fact the building is a rental property has made it a very attractive residence for young couples and students. Many of the younger tenants feel lucky to be living in a convenient and modernized heritage building. The loft feel, combined with exposed piping near the ceiling adds a character evoking the building’s former commercial life.

Neighbourhood and transportation As a result of recent city initiated development projects (a new market and arena) and progressive revitalization policies, London’s downtown is gradually regaining some of the life it had lost as commercial activity moved to suburban malls from downtown.

Located a block from the main street the project is quite convenient and has reasonable access to amenities. There are a variety of restaurants, pubs, movie theatres, coffee shops and retail stores in the immediate vicinity and many more options within a 10-minute walk. Many of the tenants in the building do not own vehicles but still find it easy to get around. Of the five residents surveyed, the four who are employed walk to work. This compares with 12 per cent of workers in the London CMA who walk, bicycle or take public transit to work.

A number of bus routes have stops within two blocks and cycling and walking are pleasant. Those owning vehicles were slightly inconvenienced because the building doesn’t have its own parking lot. One lot adjacent to the building and another across the street offer monthly parking and the building owners contribute a portion to make the costs reasonable. Only four blocks away from Sterling Place there is an extensive cycling-walking trail along the banks of the Thames River, which winds its way through London. The river has large portions of parkland along its banks and is used extensively for recreation. Not far in the other direction, residents can enjoy Victoria Park, where the summer festival circuit makes a stop. Other recreation options are a fitness gym and a community centre, both a fiveminute walk away.

Project success: Municipal planner’s perspective “This project is an excellent example of the type of residential conversion redevelopment that the city’s core area incentives program was designed to encourage. The success of the project from the city’s perspective resulted from the introduction of 32 new residential units to the downtown core, rehabilitation of a heritage building and reuse of a vacant commercial building,” said Tanya Mitchner, Planner II, City of London

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CMHC Neighbourhood opposition or support Located in the downtown core where residential uses are still rare, Sterling Place is somewhat isolated in relation to other residential buildings. The city held public consultations about the amendment to the zoning bylaw to increase residential density, but no responses were recorded. This was likely because there were few residents in the area who would be affected by the zoning change.

Planning objectives Sterling Place is within the designated downtown area and thus falls under the guidelines and objectives for this district under the Official Plan.

According to Tanya Mitchner, the project meets the following Official Plan objectives for the Downtown Area: • Encourages growth in the resident population of the downtown through the renovation/conversion of existing buildings; • Preserves and retains a heritage building; and • Uses land and buildings efficiently through the redevelopment of vacant or under-utilized buildings.

The financial incentives provided by the city supported these planning objectives.

Does it fit into the neighbourhood?

The project is on a prominent corner and occupies a valuable spot in the old downtown warehouse district. Before Spriet Investments Inc. bought the building in 1999, Sterling Place was designated a heritage building under the Ontario Heritage Act to ensure the retention of character along the Clarence Street and York Street corridors. The fact that the building is now

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strictly residential has added a new dimension to the previously commercial neighbourhood that will likely be part of a more mixed community as London pushes for more downtown living.

Regulations and approvals The only significant planning approval the developer required from the city was the density increase. At first, the situation was treated as a minor variance to increase the density from 350 uph to 525 uph, but once the developer applied to provide residential units on the ground floor, the density rose to 800 uph and a zoning bylaw amendment had to be submitted. This was approved by city council on the basis that the property was not functionally part of the pedestrian-oriented shopping district and would not disrupt any ground-level commercial nature of the streetscape.

Lessons learned The city was successful in this case in using financial incentives to attract a developer to convert a heritage property. London’s Official Plan creates clear goals and objectives for the downtown area and allows the city to create programs to help it save heritage buildings.

This has revived unused buildings and started to bring a new residential population to the core, adding new life and prosperity to what was a declining central business district. In turn, the developer has produced a successful, niche product for the city that offers modestly priced rental accommodation for residents attracted to a more urban lifestyle.

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.

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Insurance

Let’s review something important 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.

34 www.canadianapartmentmagazine.ca

The past six months have started to see the property/casualty insurers place an increasing emphasis on attempting to get a better handle on the validity of the insured values that owners are insisting on using, when negotiating renewals.

One major carrier, in particular, has even on occasion gone so far as refusing to renew an insurance account unless the client agrees to higher values. The notion that an insurer would dictate values is a relatively new development; one that flies in the face of historical underwriting practices. What has brought this about?

The explosion of the condominium market and a subsequent statutory amendment placed a responsibility on condo directors to insure their sites for “100 per cent of replacement value.�

Property managers, familiar with the revised Condominium Act requirements, began to push their directors to somehow find ways to establish valuations that were defensible. That called for independent assessments of replacement value, from which was spawned a new (and, in some jurisdictions, licenced) insurance appraisal industry. Most condo corporations, these days, will have an

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Insurance

“

Deliberately insuring less than 100 per cent exposes an owner to possible underinsurance discounts applied to the claim amount (known as co-insurance). The fact that ‘my building can’t burn down’ is totally irrelevant to the policy wordings being used”

insurance appraisal done every few years. They are inexpensive, unlike “market value” appraisals which are much more complex.

An insurance appraisal is essentially a quantitative assessment of materials, quality of construction and an incorporated labour component.

As the demand for insurance appraisals grew, so too did the demand for, and availability of, inexpensive software that made such assessing easy. It was just a matter of time before insurers realized that they could easily adapt this system to the rental stock. In virtually every jurisdiction, the law disallows insurance companies and the licenced advisor to act in an appraisal capacity. The obvious conflict of interest would, after all, encourage the industry to skew the numbers higher, hence increasing premium and remuneration. At the same time, there was a developing transition that encouraged underwriters to contract out the inspections that often occur following the issuance of the insurance contract. This was based on the common premise that a contracted service can be bought for less than if it is provided by in-house salaried employees. Numerous inspection facilities can now be called up, on an as needed basis, with many of these field inspectors operating from home offices.

Underwriters began to insist that, rather than just conducting an assessment of potential loss hazards, these inspectors also conduct a cursory review of what it might cost to replace a building from the ground up. Inexpensive software, loaded in to the same laptop, allows an inspector to pace off the building, estimate its size and, when entered in with some basic construction quality factors (plus amenities) determine a rough replacement number.

The report, only a couple of pages long and easily understood, goes to the client’s broker with exhortations that the values insured be “reviewed”. The insured is urged to get his/her own independent insurance appraisal, of course, from a “reputable and knowledgeable” source.

Backing this stern request, to review the adequacy of insured values, is the typical content of a mortgage agreement. It inevitably calls for 100 per cent replacement cost coverage and places the onus, to ensure that this happens, directly on the borrower.

Lenders, generally reliant on insurance consultants who make sure that the insurance policy complies with their requirements, expect that the building is not insured for anything less. So where does this leave us?

Insurers need only decide whether or not they wish to continue to cover an underinsured building. It’s their choice. Some will and some hesitate. A few are starting to decline, as some owners are beginning to witness. But for the broker, whose responsibility is entirely to the building owner, this represents a dilemma.

Having been warned about possible underinsurance, what does 36 www.canadianapartmentmagazine.ca

the professional broker do? In the grandest tradition of “CYA”, most pros will provide a copy of the insurer’s field appraisal to the client, encourage an independent appraisal and do this in writing. Failing to warn the client properly can be deemed a professional misconduct. If something major happens and the insurance is insufficient the insured will inevitably “talk to a lawyer.”

We are probably, at some point in the future, going to see an underwriting environment in which periodic insurance appraisals become the norm. After all, rates are predicated on the assumption that 100 per cent of a risk is insured, not just the bottom half of the building, or its left or right side. Those who are knowingly under insured are not contributing sufficiently to the “pot” and thus forcing higher rates on everyone. It’s very hard to quantify the extent of this, but the hypothesis is obvious.

Deliberately insuring less than 100 per cent exposes an owner to possible underinsurance discounts applied to the claim amount (known as co-insurance). The fact that “my building can’t burn down” is totally irrelevant to the policy wordings being used.

In this low interest rate environment, one which may still have some legs to it, P&C insurers are hobbled on the investment side.

Their options are limited, so most of them are rolling over T-bills, and other similar instruments, from month to month. They are not allowed to tie up capital for long periods of time … that big claim may require money quickly … it has to be available.

And if you can’t make it by investing the cash flow, the bottom line becomes underwriting driven. In such circumstances, as we have now, proper insured values become one of a number of tools in the arsenal that insurers can use before they begin raising rates; resorting to this strategy always generates howls of buyer indignation.

It should again be stated that there is only one truly consistent way to judge insurance costs - as a percentage of total annual rental revenues. Since 1980, this fundamental litmus test has remained unchanged. For example, for concrete built apartments, insurance costs will range from a high of 1.5 per cent for small buildings, hover around 1 per cent for medium sized buildings, and about 0.75 per cent for the big ones. Multi building portfolios will find that percentage even lower, perhaps down to less than 0.5 per cent. I wonder from how many clients I am about to hear? This is a yardstick, not a guarantee … other factors also play a role.

For those wishing to explore some of the insurance terms that impact this topic, there is a series of easily understood explanations to be found in the “Education” section of the web site www.takecover.ca/ Scroll down to the “Glossary”.

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Portfolio Strategy

Prepare for the future Derek Lobo is the founder of DALA Group of Companies and Rock Advisors. Derek has been the Canadian rental apartment industry’s leading consultant for almost 30 years and is now one of the industry’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.

38 www.canadianapartmentmagazine.ca

Last month, I debuted the first online seminar discussing the activity in the Ontario purpose-built rental apartment industry. Along with special guest Sandy Mandel, we looked at the transactions that had taken place so far this year, and cast our eye on the future.

These are good days to be invested in the purpose-built rental apartment industry. Vacancy rates are low, average rents are rising, and demographic changes suggest that demand – already outstripping supply – is going to increase. Cap rates have compressed to record lows, and apartments have been selling for some of the highest prices in Canadian history.

In fact, statistics from RealTrack.com show that more than 100 apartment buildings have sold in Ontario so far this year, amounting to total sales

of over $670 million, and an average per unit price of more than $148,000.

One Toronto transaction netted an astounding per-unit price of more than $600,000!

But as with any boom time, we should avoid thinking that the good times will last forever. While there are plenty of excellent investments to be made in the purpose-built rental apartment industry, it would be wise for small and medium portfolio owners to prudently take steps to protect their investments in case conditions change.

What could change? Well, Canada’s record prices are largely being fed by record low cap rates, and the major driver for low cap rates is low interest rates. If we liken the hot marketplace to a rocket ship, the level of demand relative to supply is the rocket itself, while low interest rates represent the

Portfolio Strategy

fuel. The rocket can only stay on its trajectory if low interest rates continue.

Interest rates have defied expectations and have stayed low for the past few years, but the fact remains that there is nowhere else for these rates to go – they’ll either stay the same, or go up. Furthermore, one should consider the average age of much of Canada’s rental apartment stock. These buildings aren’t getting any younger, and the increasing need to make capital improvements on aging stock will nudge cap rates higher.

For small and medium portfolio owners, one way to protect oneself against changes in the marketplace is to examine one’s portfolio and sell the outlier – the one underperforming building of the portfolio. Now is a good time to sell, and the funds realized from such a sale can then be applied to capital improvements on your other properties, increasing their value, reducing your operating expenses and improving your bottom line.

Selling a building can be an intimidating process; there is a lot of preparation to be done, and owners worry over the taxes that come due for such a sale. However, there are steps you can take to ensure that your buildings sell for top dollar, and ways you can minimize the taxes that come due on sale. A qualified and experienced apartment broker can offer you advice on how to do these things.

This isn’t to say that you should be worried about the future. Times have been remarkably good for this industry, and the fundamentals of the marketplace are strong. There are plenty of excellent investment opportunities to be had across this country. It’s just that those who like to enjoy the years of this boom and the next boom, as well as the leaner years in between, should always invest an ounce of prudence to protect themselves from the marketplace in case things change. This goes hand in hand with finding the best new opportunities to invest.

Are you contemplating the sale of your apartment property?

Consider the following: • Who will represent your best interests?

• Who will give your property maximum exposure?

• Who will deliver the highest value for your property?

With over 20 years experience, tens of thousands of units sold, and hundreds of clients represented, we have consistently delivered superior results. Through our local and national coverage, we create maximum exposure, ensuring maximum value for your property.

Please visit our website at www.cbre.ca/nag-toronto or contact us at 416.815.2332 to learn more about how we can help you.

SOLD 226 Suites - Oakville $182,655 per suite

SOLD 849 Suites - Toronto $129,564 per suite

SOLD 76 Suites - Toronto $139,474 per suite

CBRE Limited - National Apartment Group

: : David Montressor*, Executive Vice President 416.815.2332 david.montressor@cbre.com * Sales Representative CBRE Limited Brokerage

www.cbre.ca/nag-toronto Vancouver

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August 2012 39 AD Redesign Half Page Island 2011 Jan 012.indd 1

1/6/2012 4:35:37 PM

Advertorial

Taking your energy management to the next level Enbridge’s free services and financial incentives give building owners and managers the support they need to improve energy performance and reduce energy costs.

Forward-looking building owners and managers know that keeping energy costs in line is vital to a healthy business strategy.

They also recognize that good energy management boosts asset values. But once the obvious energy improvements are made it can be hard to keep up the momentum.

How do you take your buildings to the next level? Enbridge Gas Distribution helped Cadillac Fairview face the challenge.

When they joined the Race to Reduce, an initiative spearheaded by Greening Greater Toronto and partners like Enbridge, Cadillac Fairview’s Toronto Office Portfolio committed to reducing energy use by 10% across their portfolio by 2014. Simcoe Place, a thirty story office tower and retail concourse located in downtown Toronto, was already one of the best energy performers in their portfolio.

Enbridge worked with a team that included energy service consultants and Toronto Hydro to identify new energy savings opportunities.

As a result of their recommendations eight of ten main supply and exhaust fans were retrofitted with Variable Frequency Drives (VFDs) and three boilers equipped with linkageless controls.

Taken together, these two measures will save an estimated 311,000 m3 a year of natural gas and 1,050,000 kWh a year of electricity, making for significant cost savings. The retrofit, combined with operational improvements, should put the building on track to becoming one of the most efficient office buildings in Toronto’s financial district.

Enbridge also provided $60,483 in energy efficiency incentives based on the projected natural gas savings. And any future carbon credits attributed to the project’s greenhouse gas reductions will be retained by Cadillac Fairview.

Free services support strategic energy planning Rocky Mancini is one of several Enbridge commercial sector Energy Solutions 40 www.canadianapartmentmagazine.ca

Consultants (ESCs). He has found, “We can help customers develop the best energy strategy by adding to their knowledge. Owners and managers are looking for information on where to invest and what to invest in. If it’s a single building the question is which piece of equipment or systems will work best and what will the savings be. If it’s a portfolio of buildings people want to know which building to invest in for the best return. Our biggest satisfaction comes when a client tells us we helped them move forward on their energy management strategy.”

With more products on the market all the time, often it’s difficult to separate fact from hype when it comes to energy savings claims.

Unbiased third-party validation of technologies is one of the most important services that Enbridge provides. Enbridge’s assessments are based on a wealth of experience with many different buildings and applications. As David Stelzer, another Enbridge commercial ESC, puts it, “Our only interest is to promote technologies that produce the best results for our customer’s buildings.”

Investments in energy efficiency can be risky, especially where there’s a chance that actual savings might not match original estimates. Enbridge helps reduce that risk, with free analysis of natural gas consumption data and savings estimates customized to the actual buildings where the investment will be made. This kind of knowledge gives customers the information they need to make better energy management decisions.

More and better information make it possible to move from stand-alone energy efficiency projects to a pro-active energy management strategy. Enbridge offers a range of energy management services and incentives to help support effective energy planning and profitable energy investments.

Within a portfolio the building with the highest energy consumption is not always the least efficient. Enbridge’s Energy

Compass provides a free diagnostic service for properties to identify the best and worst energy performers relative to size and other variables. This makes it possible to target investments for the best return. The Energy Compass service includes a customized building-by-building energy performance report, identification of energy efficiency opportunities, identification of available incentives, and connections to Enbridge business partners.

Enbridge’s large-volume commercial customer* can take advantage of Run it Right, another free service that helps owners and property managers improve the energy performance of their buildings, Run it Right bundles technical expertise and support with financial incentives. Once enrolled, eligible customers receive the assistance to identify energy-related operational improvements and generous financial incentives (up to 100% of costs to a maximum of $5,000)† when implementing these measures.

Enbridge works with Run it Right participants to analyze consumption data, establish an energy baseline, and calculate the return on investment for various options.

Qualified customers may be upgraded to a pulse capable meter for daily gas consumption readings. Run it Right also provides financial support for monitoring and reporting.

Building operators can make or break an energy savings strategy. Customers who register for Run it Right and who use their own in-house energy manager or mechanical contractor to implement improvements can receive free training on operational improvements. Topics covered include building re-commissioning, best practices for energy savings, and how to identify short, medium and long-term payback opportunities.

Incentives help reduce project costs and improve paybacks Enbridge continues to offer a wide range of financial incentives for the purchase and

* Typically consuming 300,000 m of natural gas annually. † 2012 financial offer 3

Advertorial installation of energy efficient technologies in existing buildings. These include fixed incentives for a defined list of technologies or one-time custom project incentives to support retrofit projects that are more complex or involve more innovative technologies. These projects can qualify for incentives of up to 10 cents per m3 based on projected first-year natural gas savings (up to a maximum of $100,000). Enbridge also offers incentives for audits‡ and studies to provide more detailed information to guide energy management decisions.

New ventilation technologies deliver double benefits Enbridge recognizes that new ventilation technologies offer one of the best ways to save on both natural gas and electricity costs.

Variable Frequency Drives (VFDs) change the speed of fans that control air flow, matching air flow to the actual use. This results in natural gas savings because less heated air is required. It ensures significant electricity savings because it uses less power when operating at lower speeds. This technology can also save on the cost of air

conditioning in the cooling season. As an added benefit, running motors at lower speeds can extend their life and save on maintenance costs.

Demand Controlled Ventilation (DCV) adjusts the amount of outside air coming into a building based on occupants and their ventilation demands. A DCV system uses CO2 or occupancy sensors to monitor occupancy and this information is used to control ventilation dampers for more or less air intake. The system saves energy and money by not heating and cooling excess air.

It also ensures that occupants have sufficient outside air at all times.

Through September 28, 2012 Enbridge is offering double incentives to encourage installation of VFDs and/or DCVs in existing commercial buildings. During this special promotion customers may be eligible for a one-time incentive of up to 20 cents per m3 of natural gas saved up to a maximum of $100,000 §.

Enbridge works hard at making it easy for the customer Enbridge recognizes that building projects have to be on time and on budget. Enbridge has designed its energy efficiency programs for easy access. There’s no complicated contract to review, no lengthy approvals process. As Walter Matias, Enbridge Commercial Portfolio Manager, puts it: “Our long-standing work in energy conservation has made it possible to design one of the best and most accessible energy efficiency programs. Our goal is to make sure customers get the support they need when they need it so they don’t miss out on energy saving opportunities.”

Contact Enbridge for assistance with your energy action plan. energservices@enbridge.com www.enbridgegas.com/commercial 1-888-427-8888

‡ Hospitals, long-term care facilities, colleges and universities qualify § Maximum available incentive is the lesser of $100,000 or 50% of project cost

If energy saving were a baseball game, we’d offer you two home runs For a limited time Enbridge Gas Distribution has doubled the incentive to get its customers started on long term energy efficiency gains. We’re offering $0.20/m3 (versus $0.10/m3) on the annual m3 of natural gas you save by implementing one or both of these proven energy-saving technologies. And you can substantially reduce electricity costs too:

Variable Frequency Drives (VFD) vary the operating speeds of motor-driven equipment. During periods of reduced load, this can result in valuable energy savings.

Demand Control Ventilation (DCV) adjusts ventilation rates to serve the actual number of occupants in a given space (rather than the maximum number) creating significant energy savings.

If you install either or both of these technologies, your incentive could be worth up to $50,000.* Call 1-888-427-8888 or email your Enbridge Energy Solutions Consultant today.

Offer ends by September 28, 2012 and is only available to the first 200 applicants.

For complete terms and conditions, contact energyservices@enbridge.com

(Be sure to mention your reference code: 12 CAM AD)

* Eligible technology must be installed and operating by December 12, 2012. Maximum available incentive is the lesser of $50,000 or 50% of the before tax project cost. Subject to terms and conditions.

August 2012 41

Legal

Lawsuit Seeks Redress for Replacement Costs

By Barbara Carss

A new round of legal proceedings is underway in Ontario where building owners are seeking compensation for costs related to an elevator mechanism that the province’s Technical Standards and Safety Authority (TSSA) ordered replaced more than five years ago.

The Ontario Court has certified a Class lawsuit with the Toronto Community Housing Corporation as the representative plaintiff for owners of more than 2,030 safety brakes commonly known as sheave jammers that were designed, manufactured, sold and/or installed by ThyssenKrupp Elevator (Canada) Limited/ThyssenKrupp Northern Elevator Corporation.

The TSSA instructed elevator owners to replace the equipment on December 5, 2006 – a more stringent revision to an earlier order that would have allowed them to retrofit the device. Owners were initially given a deadline of August 1, 2007 to comply, but this period had to be extended somewhat due to the volume of work required, which created supply and labour backlogs.

“The sheave jammer was a standard design that Northern Elevator used from 1990 to 2005 and it sold a lot of elevators in that time,” observes Cliff Ayling, an elevating devices specialist and Principal with Ayling Consulting Services Inc. “It’s a decade-and-a-half worth of elevators produced by one of the dominant manufacturers in North America.”

42 www.canadianapartmentmagazine.ca

Counterweight correction The sheave jammer was one of the most commonly implemented measures to provide so-called “up-fall” protection in traction elevators, which are counterweighted for operating efficiency.

Ontario regulators introduced this safety requirement after worker fatalities on a tower construction site in Toronto in the late 1980s.

Other North American jurisdictions then followed suit.

“If there are only one or two people in an elevator cab, it weighs less than its counterweight. If the system fails, gravity will pull the cab upward,” Ayling explains. “In response to the safety regulation, there were really just four methods, in the end, that were used. The sheave jammer works in a similar fashion to the way a brake works on a bicycle rim and essentially causes the sheave to stop.”

Other options on the market included: a double brake system that provides safety redundancy; the BODE brake, which was less popular because it requires a compressor; and the Hollister-Whitney Rope Gripper, which clamps onto the elevator ropes (cables) to halt its movement. The rope gripper became the most prevalent replacement choice to comply with the TSSA order.

The Class action documentation pegs replacement costs at $10,000 to $15,000 per elevator. Notably, Toronto Community Housing Corporation paid approximately $2 million to replace 167 sheave jammers in it

Legal properties, including associated service fees to its maintenance contractor, ThyssenKrupp.

In the condominium sector, Ontario’s new home warranty insurance program, TARION Warranty Corporation, insulated those condominium corporations still within the seven-year window for coverage of major structural defects, at a cost of nearly $2.9 million to the insurer. However, this created two categories of affected owners.

“There are those who had it covered by TARION and those who paid themselves,” reports Sally Thompson, an engineer with Halsall Associates and a member of the board of directors of the Canadian Condominium Institute’s Toronto chapter.

ThyssenKrupp denies the plaintiffs’ allegations that its equipment was dangerous, defective and negligently produced and sold. It also rejects the claim that it was obliged under maintenance contracts to replace the devices at no cost.

Jurisdictional variance Although they are no longer a feature in new elevators, sheave jammers are still permitted and in service in other Canadian provinces. Regardless, all owners/operators must adhere to CSA B44, the Canadian code for elevating devices, which mandates annual inspection and testing of devices that perform up-fall protection. “The requirement for that, in fact, is how some of the problems came to light,” Ayling notes.

Some provinces also have targeted requirements for the ThyssenKrupp Northern Elevator devices. Most recently, British Columbia’s Safety Authority issued an order in March 2012 stipulating that the sheave jammer must be dismantled annually, cleaned according to the

manufacturer’s specifications and tested following reassembly. These are suggested solutions for cleaning and maintaining components that ThyssenKrupp also put forward to address the TSSA’s initial concerns about the equipment’s tendency to malfunction during testing.

In Ontario, regulatory compliance has long since outdistanced the pace of litigation. Given the TSSA’s inspection oversight, informed observers say it is unlikely sheave jammers could still be found in any operating elevators.

Meanwhile, after a three-year process to certify the Class suit, the case is really beginning anew. Certification simply establishes that there are common issues that apply across the Class. The plaintiffs will now have to prove the merits of their claims.

“We’re still at fairly early stages of discovery, but because of all the work we’ve done to certify the Class, we feel we are in a good position to proceed,” says Linda Rothstein, a Partner with Paliare Roland LLP, who is one of the lawyers representing the plaintiffs.

Upon certification, all owners of elevators that were outfitted with the sheave jammers were automatically designated members of the Class and had until May 31, 2012 to formally opt out if they did not wish to participate. Lawyers with Paliare Roland advise all prospective participants to preserve pertinent documentation such as: purchase, installation and maintenance contracts; maintenance records and log books; and incident reports related to the sheave jammers.

For more information about the Class proceeding, see Paliare Roland LLP’s web site at http://www.paliareroland.com/Elevator-Class-Action.asp. The preceding article is reprinted from Canadian Property Management, July 2012.

Greater VancouVer apartment market reGional report As Canada’s gateway to the Asia-Pacific region job growth remains strong. With limited apartment supply the Greater Vancouver area is a challenging market for apartment investors.

Read how Vancouver is supporting intensification, new construction and renewal in this unique marketplace. issue: September 2012 advertising close: September 14 advertising material: September 19 For more information please call Paul Murphy, Publisher at (416) 512-8186 X264 or email me at paulm@mediaedge.ca

12095_Vancouver_HouseAd_2012.indd 1

August 2012 43 12-08-24 1:58 PM

Newsline

News tips

California fund buys interest in Bentall Kennedy The California Public Employees’ Retirement System (CalPERS) has become a one-third owner in Bentall Kennedy, one of North America’s largest real estate investment advisors.

“Bentall Kennedy has a track record of fiduciary excellence and is a global leader in environmental, social and governance practices,” said Rob Feckner, president of the CalPERS Board of Administration. “This relationship will allow our real estate team to further expand on trends and opportunities in real estate investment and management.”

CalPERS, the largest public pension plan in the United States, has acquired the ownership interest that has been held for the past two decades by Ivanhoé Cambridge, the real estate subsidiary of the Caisse de dépôt et placement du Québec.

The remaining two-thirds limited partnership ownership is evenly split between the British Columbia Investment Management Corporation (bcIMC) and Bentall Kennedy’s senior management team.

“CalPERS is a complementary and welcome addition to the Bentall Kennedy Group,” said Doug Pearce, bcIMC’s chief executive officer and chief investment officer. “BcIMC and CalPERS are like-minded institutions with similar investment goals and core values. We admire the leadership of the CalPERS team in the U.S and look forward to the opportunity to work more closely together as they become a co-investor in Bentall Kennedy.”

For Ivanhoé Cambridge, the sale is part of a strategic process to bring more of its real estate activities in house over the long term.

“We have been very pleased with the success in our equity investment in Bentall Kennedy,” said Daniel Fournier, chairman of the board and chief executive officer of Ivanhoé Cambridge. “It was the product of an effective and mutually beneficial relationship.”

CalPERS said Ivanhoé Cambridge’s record of successful long-term investment with Bentall Kennedy also was a factor in its decision.

“Ivanhoé Cambridge has been a significant owner in our firm for almost 20 years,” said Gary Whitelaw, group chief executive officer of Bentall Kennedy. “We have been very privileged to learn from their talented people represented on our board and within their real estate operations. The seamless transfer of their ownership to a new strategic partner is beneficial for all involved.”

“We welcome the experience, strength, and global perspective that CalPERS now brings through its significant ownership in our firm.

Our deeper relationship will be valuable to both organizations as we pursue our shared goal of successful and sustainable long-term investment performance,” Whitelaw said.

“This important endorsement confirms our position amongst the industry leaders across North America. Through this close association with world class plan sponsors such as bcIMC and CalPERS, our organizations will continue to learn from each other to the benefit of all clients, tenants and employees in both Canada and the United States,” said Whitelaw.

CalPERS has been a Bentall Kennedy client for more than 15 years, and will continue to utilize its research and investment services.

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.

44 www.canadianapartmentmagazine.ca

Putting the “quality” back in “air quality.”

Because if your building’s not healthy, neither are your tenants. truth is, we’ve made our buildings so energy efficient that dust, humidity, volatile organic compounds and hidden gases are trapped indoors. and unless treated properly and regularly, the air in your buildings can become a reservoir for dirt and potentially dangerous contaminants and a source of irritation for your tenants.

Clinicair is here to help with a specially selected suite of the latest state-of-the-art services and products to identify and resolve iaQ problems in multi-unit buildings, businesses, and medical and dental offices. and every member of the Clinicair team attends rigorous training and is certified by Healthy indoors Partnership (HiP), the Canadian professional iaQ association.

CliniCair is Proud to offer

Contact Clinicair today to schedule medical-grade duct cleaning and indoor air quality assessment services from Canada’s only professional air quality specialists.

For a free estimate call 647-777-1044 Toll Free: 1-877-318-3588

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Newsline

Toronto real estate boutique to merge with national firm Sacks LLP, a chartered accounting and consulting firm specializing in serving the real estate industry will merge with MNP LLP, one of Canada’s largest chartered accounting and consulting firms, effective Sept. 1, 2012. Both firms were looking for an opportunity to enhance services for their real estate industry clients across the country and in the Greater Toronto Area.

“We were looking to grow our real estate and construction practice and couldn’t have found a better fit than Sacks LLP,” said Daryl Ritchie, chief executive officer at MNP. “In addition to being industry leaders, Sacks is a great fit with our culture and shares the same vision, values and commitment to providing personalized services.”

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Based in North York, Sacks LLP has served the private real estate industry for more than 20 years. In 1991, partners and brothers, Richard and Barry Sacks began building on their combined 40 years of experience in accounting and advisory services to develop one of the most prominent real estate accounting and consulting firms serving the Greater Toronto Area.

“In today’s competitive marketplace, our clients are focused on acquiring real estate and maximizing returns. We let them focus on what they do best while we do what we do best - ensuring that they retain as much of their profits, past and present, as possible while managing risk,” said Barry Sacks, Partner, Sacks LLP. “With deep expertise in corporate finance, taxation, accounting and risk management across the country, as well as affiliates around the globe, MNP adds more resources and services to complement our niche.”

Ritchie added that this merger is a perfect example of how two firms can come together to better serve the real estate industry.

“The real estate and construction industry has certainly experienced its share of challenges over the past few years, but it has been our focus to help them overcome these challenges and take advantage of emerging opportunities. Together, our firms can offer more resources and experience to help our clients stay competitive and profitable.”

Morguard REIT boosts public offering Morguard North American Residential Real Estate Investment Trust said that, due to increased investor demand, it has amended the terms of its previously announced public offering of trust units. The REIT has reached an agreement with a syndicate of underwriters co-led by RBC Capital Markets and TD Securities, with RBC Capital Markets acting as book runner, to issue to the public, subject to regulatory approval, on a bought deal basis, 12.7 million trust units at a price of $11.85 per unit representing gross proceeds of $150.7 million.

As part of the transaction, Morguard Corp. has agreed to purchase approximately $50 million of the units being offered, (4.2 million units), at the offering price. Morguard Corp. currently holds an approximate 67.6 per cent interest in the REIT through ownership of all of the Class B LP units of the limited partnership used to acquire interests in multi-unit residential properties in Canada and the United States. The REIT holds all Class A LP units of the limited partnership.

After the offering Morguard Corp. will hold an approximate 56.2 per cent interest in the REIT through ownership of units and Class B LP units.

Morguard said net proceeds from the offering will be used to repay indebtedness, to fund future property acquisitions, and for general trust purposes.

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People on the Move Greenwin appoints CFO Greenwin Inc., central Canada’s leading real estate firm, named Catherine Moran, chief financial officer.

Moran has more than 20 years of experience in managing, analyzing and reporting on complex financial and management operations.

Holding a Bachelor of Commerce from the University of Toronto and her Chartered Accountant designation from the Canadian Institute of Chartered Accountants, Moran started her career with companies including PricewaterhouseCoopers and NetStar Communications Inc. She has since held senior financial posts at Alliance Atlantis Communications and Counsel Corp.

Moran joins Greenwin from TransGlobe Apartment REIT, where she held the title of VP of Finance, Operations.

In this role, Moran was responsible for the financial accounting, reporting and budgeting of 185 residential rental properties located across Canada.

As Greenwin’s CFO, Moran will be responsible for all financial and accounting aspects of Greenwin’s residential and commercial portfolios as well as budgets, processes, controls and the supporting IT systems.

48 www.canadianapartmentmagazine.ca

True North Apartment REIT names Leslie Veiner CEO True North Apartment Real Estate Investment Trust is pleased to announce that its trustees have appointed Leslie M. Veiner chief executive officer, effective Aug. 27.

Veiner has held senior management positions in the Canadian real estate industry and most recently served as CFO of TransGlobe Apartment Real Estate Investment Trust.

TransGlobe REIT was one of Canada’s leading TSX listed, multi-residential real estate investment trusts which owned a portfolio of 175 residential rental properties containing approximately 21,735 suites principally located in urban centres in Alberta, Ontario, Québec, New Brunswick and Nova Scotia. It was taken private on June 29, 2012.

“We are really pleased to have Les assume leadership of True North. He brings extensive real estate, capital markets, and finance experience which are all key ingredients to forge True North’s success. I will continue to work closely with him on our acquisition program,” said Daniel Drimmer, chairman of the board of trustees of the REIT. As president of Starlight Investments Ltd., the REIT’s asset manager, Drimmer will continue to play a leading role in the REIT’s acquisition program, including both third party owned properties as well as properties owned by entities controlled by him.

Veiner’s services are being provided and paid for by Starlight Investments Ltd. as part of the asset

management arrangements between Starlight and the REIT. As part of Veiner’s compensation package and following the effective date of his appointment, the REIT intends to grant to Veiner options to subscribe for up to 300,000 trust units of the REIT in accordance with its TSXV-approved unit option plan. Such options shall vest over a three-year period commencing upon the first anniversary of the date of grant.

B.C. Real Estate Council elects new officials R.E. Michael Ziegler of Newport Realty Ltd., Victoria, has been elected chairman of the Real Estate Council of British Columbia for the 2012/2013 term. Marshall J. Cowe of Royal LePage Coronation West Realty, Coquitlam, was elected vicechairman.

There are 16 members of the Real Estate Council including three members appointed by the provincial government. Thirteen members are chosen through an election process open to all real estate licensees in the province.

The elected members are comprised of nine brokers and three representatives from each of the various provincial counties and one individual is elected as the strata/rental property management member.

The three government appointed public members are Bruce Turner of Courtenay, John Nagy of Delta and Barbara Barry of West Vancouver.

Newly elected to the council for a two-year term is David Rishel, Re/Max Little Oak, Abbotsford.

Re-elected council members for a two-year term are: William Binnie, Royal LePage Northshore, West Vancouver; Marshall Cowe, Royal LePage Coronation West Realty, Coquitlam; Subhadra Ghose, Re/Max of Nanaimo, Nanaimo; Susan McGougan, Re/Max of Nanaimo, Nanaimo; and William Phillips, Whistler Real Estate Company Limited, Whistler.

Greenwin names new CEO Greenwin Inc., central Canada’s leading Canadian real estate firm, named Kris Boyce chief executive officer. As CEO, Boyce will oversee all aspects of the operation and management of Greenwin’s commercial and residential portfolios.

With more than 28 years of property management and real estate experience, Boyce is a fixture in the rental housing industry. Having held several senior positions throughout her career in both the private and nonprofit housing industries for such companies as Chartwell Seniors Housing REIT, Durham Region NonProfit Housing, and Canadian Apartment Properties REIT, Boyce ‘s most recent post was senior vice-president of Residential Operations Canada with TransGlobe Apartment REIT where she oversaw upwards of 21,000 rental units.

“We are confident that Kris’s expertise both in property management and human resources will continue to create a solid foundation for the future success of Greenwin, its clients and employees, and the company’s philanthropic

People on the Move initiatives,” said Kevin Green, president of Greenwin.

“I started my property management career at Greenwin 24 years ago,” said Boyce. “I feel fortunate to be part of a company with so much heart; with employees who are compassionate and respectful of their communities - and each other. This is very much like a homecoming.”

Boyce is an accredited member of the Institute of Housing Management, a member of the Human Resources Professional Association, and the recipient of FRPO’s 2003 Property Manager of the Year Award. She is also a trainer in Coaching for High Performance through Performance Coaching

Inc., an organization that delivers leadership, coaching, and selfmanagement training to corporate audiences.

Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) One of Canada’s largest owners of multi-family rental communities, recently named Randy Daiter Vice-President, Operations. Randy has over 25 years experience in the Canadian real estate industry.

Firm Capital Corp. appoints COO Firm Capital is pleased to announce that Sandy Poklar joined Firm Capital Corp., as COO; Managing Director, Capital

Markets and Strategic Developments. As part of the senior management team, Poklar will oversee operations, help with strategic growth, manage client relationships, and seek out investment opportunities in all areas of real estate, mortgage finance and the capital markets.

Poklar brings a wealth of knowledge to Firm Capital.

Poklar is a chartered accountant, having practiced at Deloitte & Touche and then at KPMG as a real estate and financial services tax specialist. In 2003, Poklar moved to the capital markets, first as an equity research associate analyst at Canaccord Adams, helping initiate coverage on 32 real estate entities. Subsequently,

Poklar joined TD Securities Real Estate Investment Banking group, whereby Poklar helped cover Firm Capital. After TD, Poklar was a vice-president in the Real Estate Investment Banking group at Macquarie Capital, also covering the Firm Capital relationship.

Brett Miller named Jones Lang LaSalle’s Canadian president Jones Lang LaSalle appointed Brett Miller President of its Canada operations. Based in Toronto, Miller is responsible for overseeing and growing the firm’s business across.

Miller joins from CBRE where, as Regional Managing Director, he ran the firm’s Eastern Canada division for more than a

decade and grew the firm’s presence significantly. In addition to overseeing five offices, he led major investment transactions and launched several business lines.

Prior to this position, he ran the new business division of News International Newspapers in London and founded a home delivery services company in Paris. Miller began his career with real estate developer and manager Canderel Limited in Montreal in 1986, where he gained experience in finance, leasing and development.

Miller holds a bachelor of commerce degree in real estate from McGill University in Montreal and an MBA from INSEAD, Fontainebleau in France.

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 August 2012 49 Untitled-1 1

12-01-24 9:59 AM

Smart Ideas

Smart ways to screen tenant credit

(Courtesy of the Canada Mortgage and Housing Corporation)

Every landlord wants to find good tenants — ones who pay the rent on time and take care of their rental property. Finding the best tenant can be offset by the need to have the premises rented within a narrow timeframe. While time to show the unit, accept and review applications and do background checks may be limited, a hasty decision could cost you money in the long run. If the wrong tenant moves in, you may end up losing money due to damages or disputes.

Beyond credit information, try to discover what kind of tenant will be living in your unit. Ask former landlords about the tenant’s character and past rentpayment patterns. Consider talking to even the last two or three landlords to get a clear idea.

Here are five checks for screening tenant credit: • Check the applicant’s credit bureau history and banking history.

• Confirm the applicant’s employment situation.

• Check the applicant’s tenancy history/evictions, if available.

• Check court records, if available.

• Check the applicant’s references and consider contacting previous landlords going back two or three tenancies.

50 www.canadianapartmentmagazine.ca

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