CAM Who's Who Edition

CANADA’S NATIONAL PUBLICATION FOR APARTMENT OWNERS AND MANAGERS

VOLUME 12 / NUMBER 2 / MAY/JUNE 201 5

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Who’s Who 2015 See page 15 for this year’s TOP 100 ranking

SOARING TO

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NEW HEIGHTS PA R T O F T H E

Skyline’s Jason Castellan has sights set on future growth

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Editor’s Note

Growing and Changing: The Apartment Industry Shifts Gears

/cammediaedge /cdnapartmentmag /mediaedgecam

It’s an exciting time to be in the Canadian apartment business. With record low interest rates making rental construction cheaper, and changing demographics and home affordability pushing more residents to rent, the purpose-built apartment scene is taking off from coast to coast.

2014 saw hundreds of new rental towers rise up where condominiums once exclusively reigned. According to CBRE, Canada welcomed 24,000 new rental units last year—up 52 percent from 2013—spurring murmurs of a “quiet rental resurgence.”

From “quiet resurgence” to “loud and clear,” today the rental industry is bustling with new activity. Flip over to our Who’s Who section on page 15 and peruse our ranking of top 100 property managers and owners. Certainly there has been no lack of growth for the companies comprising this list.

Sitting at number 13th overall is Skyline Apartment REIT. I had the pleasure of interviewing CEO Jason Castellan at his head office in Guelph, Ontario, and hearing about his impressive rise to one of Canada’s industry leaders. Read our Industry Influencer section and see what the future has in store for his bustling operation that all began with a single student dwelling.

As usual, Canadian Apartment Magazine is full of tips and ideas to help you manage—and market—your buildings better. Check us out at www.reminetwork.com for exclusive stories relating to commercial real estate in Canada. Follow us on Twitter or like us on Facebook to receive regular business updates. And feel free to reach out; we’d love to hear from you!

Editor

Erin Ruddy

Associate Publisher

Senior Designer

Mitchell Saltzman

Designer

Jennifer Carter

Production Manager

Rachel Selbie

Annette Carlucci

Production Coordinator Karlee Roy Contributing Writers

aula Gasparro, Derek Lobo, P Jessica Green, Croydon Richmond, Chaim Rivlin, Andy Schwartze, and Chris Seepe

National Sales

Circulation

Michelle Lumb, Sean Foley Stephanie Philbin Maria Siassina

For sales information call (416) 512-8186 ext. 248 Canadian Apartment Magazine is published six times a year by:

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Requests for permission to reprint any portion of this magazine should be sent to Melissa Valentini Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions.

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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.

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CONTENTS COVER STORY 22 Industry Influencer

Jason Castellan discusses the rise of Skyline Apartment REIT and his company’s plans for future growth

By Erin Ruddy

FEATURES 15 Who’s Who 2015 26 Inside the Residential Tenancies Act

By Chris Seepe

COLUMNS 10 Transactions GTA Market Report

By Lorenzo DiGianfelice 12 CMHC Condos for Rent

By Paula Gasparro 28 Portfolio The Future of Rental Apartments

By Derek Lobo 32 Management Distinguish Yourself by Giving Back

By Jessica Green 32 Insurance Picking the Right Middleman

By Andy Schwartze 44 Marketing Time for a Re-Brand

By Chaim Rivlin 27 Newsworthy Economic Downturn has Rental Repercussions

By Erin Ruddy

DEPARTMENTS 4

Editor’s Note

48 Ask the Expert 50 Smart Ideas

COLUMNISTS Paula Gasparro, Jessica Green, Derek Lobo, Andy Schwartze

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THIS MONTH’S ONLINE EXCLUSIVES ALL THE BUZZ

Addressing Ontario’s affordable housing crisis Ontario’s affordable housing wait list continued to swell in 2014 with more than 3,600 applying for rent-geared-to-income (RGI) accommodations.

In the wake of these record-high statistics, the discussion surrounding affordable housing has never been louder.

New York City has bumped Toronto as North America’s leader in multi-residential construction.

FROM THE GREEN BIN

Energy benchmarking in Canada Energy benchmarking can play a key role in the market transformation of the built environment, and soon mandatory energy disclosure will also be an important tool.

The apartment building sector favours an alternative to the BOMA BESt environmental program.

EXPERT ADVICE

Builder’s use of Toronto city streets back on agenda A motion that contemplates curbing builders’ use of city streets during construction is back in the hands of Toronto’s deputy city manager. A comprehensive report is expected next month that will consolidate this and other motions aimed at reducing gridlock.

In a new report, an economist downplays Canadian household debt.

CONNECT WITH US ON:

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Transactions

GTA Multi Residential Market Summary

By Lorenzo DiGianfelice

The first half of the 2015 investment year is nearing its end. As of June 15th, a total of 33 apartment transactions occurred in the GTA, comprising 1,900 suites and representing $367 million in deals.

The average price per suite was $193,425 and the average cap rate was 4.25 percent. In total, the sales volume was much lower and off pace compared to the $890 million posted in all of 2014. However, the values are higher than the $140,800 per suite and 4.95 percent cap rate posted in 2014.

So far in 2015, cap rates range from 3.0 percent to 5.7 percent.

There have been a number of deals under the 3.5 percent cap rate level. These are located in AAA locations with huge upside—some even with development potential.

Cap rates continued to compress but at a much slower rate than in the past. The high price per suite in 2015 has been slightly skewed upwards as a result of a few large high quality asset sales.

What is pushing cap rates even lower?

Cap rates are influenced by interest rates. At the start of 2015

(January) bond rates were at 0.6 percent and since then they have moved up 80 percent to 1.08 percent. As such mortgage rates have moved up with little affect on cap rates.

There has always been an imbalance of supply (sellers) and demand (buyers) in the apartment market. There are generally more buyers than sellers. This imbalance has been much more pronounced in 2015 than 2014. The pace of deals in 2015 isn’t on par with last year. In all of 2014 there were 92 deals completed, which is about 50 percent more than what’s being estimated for yearend 2015. As well, in 2014 over 6,300 suites changed hands—far less than what is anticipated for 2015.

Right now there are many more buyers chasing fewer and fewer buildings. This is the major factor for cap rate compression given the recent rise in interest rates. This trend will not last as buyers will, in the short term, begin to readjust their buying criteria in light of higher borrowing costs, higher taxes and energy costs.

This article was written by Lorenzo DiGianfelice, Owner and Broker of Record at Commercial Focus Realty Inc. and he specializes in the sale of apartment buildings with over $3.5BB of sales to his credit. Contact Lorenzo at: ldigianfelice@cfrealty.ca 10 www.canadianapartmentmagazine.ca

Transactions

Rental Vacancy Rates and Rents across Canada According to new data released from CMHC, the highest average monthly rent in Canada in April 2015 was $1,345 for a two-bedroom, primary purpose-built apartment in Vancouver. Calgary had the second highest with $1,319 per month, followed closely by Toronto at $1,269.

The average monthly rent for a two-bedroom unit in Canada stood at $949. Trois-Rivières, Que. had the lowest average monthly rent at $571 per month, followed by Saguenay, Que. and Sherbooke, Que. with $583 and $607 respectively.

The average vacancy rate for primary purpose-built apartments rose to 2.9 percent in April 2015, from 2.7 percent last year—an insignificant change suggesting stability.

“The stability of the national vacancy rate is due to offsetting regional trends that reflect the negative impact of lower oil prices on rental demand leading to higher vacancy rates in oil-producing provinces, particularly Alberta and Saskatchewan,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre in a news release.

“However, vacancy rates decreased in most of the major centres of Ontario and British Columbia, reflecting stronger economic conditions,” he continued. “In Ontario, improving employment conditions for young adults aged 15 to 24, a key source of rental demand, and a stable supply of rental units placed downward pressure on vacancy rates, while

increased immigration to British Columbia, another key source of rental demand, more than offset an increase in the province’s rental market supply.”

Areas with the lowest vacancy rates were Guelph, Ont., with 0.6 percent, Victoria, B.C. with 1.2 percent and Vancouver with 1.4 percent.

Moncton, N.B. had the highest vacancy rate at 8.8 percent followed

by Saint John, N.B. (8.4 percent), and Gatineau, Que. (6.2 percent).

Toronto’s vacancy rate dropped slightly to 1.8.

The CMHC’s Rental Market Survey is conducted twice a year, in April and October, in all communities of 10,000 or more.

The April survey covers apartment and row structures containing at least three rental units. Unlike the fall survey, it does not report 1 14-03-18 10:14 informationDavroc_Condo_March_2014_FINAL.pdf on smaller geographic zones within centres and the AM secondary rental market.

May/June 2015 11

CMHC

Condos for Rent

What the Numbers tell us about Condominium Investment Properties in Toronto and Vancouver

By Paula Gasparro

FOR RENT

FOR RENT FOR RENT

FOR RENT

Condominiums account for an increasing share of the Canadian housing supply as they address the needs of a diverse range of clientele—from first time home buyers, to empty nesters, to investors looking to rent out their units for income. According to CMHC, about 29 percent of condominium apartments in Toronto were being rented out in 2014. Despite higher rental costs, many Canadians continue to seek out condominiums over purpose-built rentals because of their perceived benefits: namely that they are newer, upgraded units in prime locations.

While we know what motivates condo tenants, less is known about what motivates condo investors. To better understand the behaviors of domestic condo investors, CMHC undertook its Condominium Owners Survey (COS) — a survey of condo owners in Canada’s two largest condominium markets: Toronto and Vancouver. The survey shows: • Most condo investors are in the market for the long term and expect to keep their last purchased secondary unit for more than five years (52.6%). Many have held their last purchased unit for six years or longer (48.3 %).

12 www.canadianapartmentmagazine.ca

• Of the 42,191 households surveyed, 83.8 percent said they owned (and resided in) one condominium, while the remaining 16.2 percent owned a primary residence and had at least one secondary condominium unit.

• Nearly three-quarters of these investors owned just one secondary unit. Slightly over half said they purchased their secondary unit to generate rental income—about 55 percent of which anticipated the value of the investment unit to increase over the next year.

• Those reporting that their secondary unit was rented had a higher incidence of holding

three or more secondary units.

• Nearly 90 percent of the investors said they did not anticipate purchasing more units within the next year.

• Over 45 percent of respondents said they had no mortgage on their last purchased unit at the time of the survey (August 2014).

Comparing investors in Toronto and Vancouver While survey results were similar for Toronto and Vancouver, some differences exist among investors in each of the Canadian markets. In particular:

CMHC

FOR RENT FOR RENT

FOR RENT

FOR RENT

• More Toronto investors expected the value of their last purchased condominium unit to increase than did Vancouver investors.

• A larger share of investors in Toronto had bought at least one locally-owned secondary unit in presale than in Vancouver.

• More Toronto investors were anticipating the purchase of additional units in the next year than Vancouver investors.

While survey results for Vancouver remained essentially unchanged from the previous year,

there were some significant changes in the responses of investors in Toronto. 64 percent of investors in Toronto expected the market price of their last purchased

unit to rise. At the same time, a smaller share of investors in Toronto said they planned to hold their last purchased condominium unit for more than five years.

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. CMHC For more information on CMHC’s Condominium Owners Survey Report please visit www.cmhc.ca.

Follow CMHC on Twitter @CMHC.ca

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TOP

IN THE CANADIAN APARTMENT INDUSTRY

TEN MANAGE ONLY

NUMBER OF UNITS

1

MetCap Living Managment Inc.

22,764

2

DMS Group, The

16,438

3

Greenwin Inc.

13,706

4

Gateway Property Management Corporation

12,293

5

GWL Realty Advisors

11,519

6

Briarlane Rental Property Management Inc.

11,326

7

Vertica Resident Services

11,000

8

CLV Group

9 10

Thank you to those companies that submitted information for our 2015 ranking of multi-res owners/managers in Canada. We appreciate your input. Every effort has been made to ensure the accuracy of the figures published. These are Canadian Apartment’s rankings based on data that was supplied to us but not independently verified.

OWN ONLY

NUMBER OF UNITS

Timbercreek

15,765

1

CAPREIT

35,454

2

True North Apartment REIT

8,827

2

Boardwalk Rental Communities

34,626

3

InterRent REIT

7,659

3

Realstar Management

31,840

4

Healthcare of Ontario Pension Plan Inc. (HOOPP)

2,866

4

Starlight Investments

30,500

5

5

Oxford Properties Group

1,936

Homestead Land Holidays Ltd.

Lanesborough Real Estate Investment Trust

6

Minto Properties Inc.

14,129

6

1,870

7

Brown Group of Companies Inc., The

1,436

Société de Gestion Cogir

8,506

8

Dorset Realty Group

794

Sterling Karamar Property Management

7,842

9

Westcorp

620

10

I.G. Investment Management, Ltd.

605

19

LE MILLE NEUF, MONTREAL QC

Q. A.

NUMBER OF UNITS

1

9,212

#

MANAGE & OWN ONLY

24,255

7

Killam Properties Inc.

13,427

8

Skyline Apartment REIT

11,935

9

Northern Property REIT

10,491

10

Drewlo Holdings Inc.

9,997

#

43

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May/June 2015 17

CANADIAN APARTMENT WHO’S WHO 2015 UNITS RANK

TOTAL

MANAGE

BUILDINGS OWN

BOTH

TOTAL

MANAGE

% BY REGION

OWN

BOTH

WESTERN CANADA

ONTARIO

QUEBEC

<30

<30

1

CAPREIT

35,454

35,454

495

<30

30-60

2

Boardwalk Rental Communities

34,626

34,626

230

>60

<30

3

Realstar Management

31,840

31,840

176

<30

>60

<30

<30

4

Starlight Investments

30,500

30,500

400

<30

>60

<30

<30

5

Homestead Land Holidays Ltd.

24,255

24,255

198

6

MetCap Living Management Company

22,764

22,764

>60

<30

<30

7

Greenwin Inc.

17,894

13,706

>60

<30

8

DMS Group, The

16,438

16,438

9

Timbercreek

16,055

290

10

Minto Properties Inc.

14,129

14,129

11

Killam Properties Inc.

13,427

13,427

12

Gateway Property Management Corporation

12,492

13

Skyline Apartment REIT

11,935

14

GWL Realty Advisors

11,519

11,519

56

15

Briarlane Rental Property Management Inc.

11,326

11,326

138

16

Vertica Resident Services

11,000

11,000

17

Northern Property REIT

10,491

10,491

318

18

Drewlo Holdings Inc.

9,997

9,997

56

4,188

163

>60

25

136 15,765

12,293

1

199

211

11,935

>60 222

<30

>60

200

<30

>60

168

<30

<30

6

>60

<30

<30

136

<30

>60

<30

<30

>60

<30

<30

<30

<30

65

<30

>60

>60 >60

RANKED APARTMENT MANAGEMENT COMPANY

Y

CM

MY

CY

CMY

K

MetCap Living knows the importance of your property investment. With over 27 years in professional property management and experience in owning and managing all aspects of multi-unit housing, we have the expertise to boost your NOI. From Marketing, Leasing, Utilities and Site Management, Collections and Accounts Receivable, we tailor our services to your needs.

We manage over $2 Billion in assets owned by private families and institutional investors. Our focus is on revenue growth and vacancy reduction, while maintainting strict control over expenses. We also To ensure the health of your bottom line, contact: Kazi Shahnewaz, Director, Business Development Cell: 647.887.5676 k.m.shahnewaz@metcap.com www.metcap.com 18 www.canadianapartmentmagazine.ca

<30

>60

<30

#1 M

<30

>60

MetCap_WhosWho_2015_CPM.pdf 04/01/2015 2:40:23 PM

C

> GREATER THAN < LESS THAN

MARITIMES

CANADIAN APARTMENT WHO’S WHO 2015 UNITS RANK

19

TOTAL

Oxford Properties Group

MANAGE

9,538

20 CLV Group

9,212

21

Mainstreet Equity Corp.

9,161

22 True North Apartment REIT

8,827

23 Société de Gestion Cogir

8,506

BUILDINGS OWN

BOTH

1,936

7,602

9,212

TOTAL

MANAGE

OWN

6

15

BOTH

231 9,161

228

8,827

83

8,506

QUEBEC

30-60

30-60

<30

>60

<30

<30

30-60

<30

<30

>60

24 Park Property Management Inc.

8,268 7,842

26 InterRent REIT

7,659

27 Berkley Property Management Inc.

7,256

6,978

278

89

3

28 Shelter Canadian Properties Limited

6,610

6,388

222

166

4

>60

<30

29 Globe General Agencies

6,492

85

>60

<30

30 Centurion Apartment REIT

5,671

40

<30

>60

31

4,975

76

>60

<30

589

33 Devon Properties Ltd.

4,167

4,167

34 Pinedale Properties Ltd.

3,961

35 Bentall Kennedy (Canada) Limited Partnership

3,917

3,917

36 Rancho Management Services Corp.

3,543

3,469

37 Colliers International

3,281

3,281

38 Westcorp

2,996

608

39 Healthcare of Ontario Pension Plan Inc. (HOOPP)

2,866

40 Prospero International Realty Inc.

2,854

2,854

41

2,562

977

42 Regional Group of Companies Inc., The

2,400

2,400

43 O'Shanter Development Company Ltd.

2,250

450

44 Brown Group of Companies Inc., The

2,062

626

45 WJ Properties

2,021

46 Apollo Property Management Ltd.

2,000

47 Greenrock Property Management Ltd.

1,997

48 Dorset Realty Group

1,944

49 Lanesborough Real Estate Investment Trust

1,870

50 Bayshore Property Management

1,672

51

1,629 1,450

53 Southwest Properties Ltd.

1,250

4,842

1

3,564

2

19

>60 >60

285

2,866

>60 22

75

229

5

8

5 10

18 10

<30

<30

>60 >60 >60

1,997

11 30

>60 >60

50

>60

21

>60

1,629 1,450

30-60

>60

24

1,672

<30

>60

15

1,870

<30

>60

2,021

794

<30

>60

60

2,000

<30

>60 30-60

51

1,436

30-60

>60 67

1,800

<30

>60

30

74

1,585

30-60

>60

22

1,768

<30

>60

20

3,961

1,150

>60

90

620

<30

>60

86

4,975 1,284

52 G3 Property Solutions Inc.

240

MARITIMES

>60

6,492

4,848

Preston Group

71

125 7,659

32 M&R Holdings

Old Oak Properties Inc.

1

ONTARIO

25 Sterling Karamar Property Management

Hollyburn Properties Ltd.

8,268

WESTERN CANADA

>60

68

7,842

> GREATER THAN < LESS THAN

% BY REGION

6

>60

16

>60

1,250

26

1,111

>60

54 State Building Group

1,111

55 Medallion Corporation

1,100

1,100

9

15

>60

56 Tandem Property Management

1,008

1,008

3

>60

57 Capilano Property Management Ltd.

991

58 CitiGroup Properties Limited

980

980

22

>60

59 Twin City Management Ltd.

948

948

43

>60

991

19

>60

>60

May/June 2015 19

CANADIAN APARTMENT WHOâ&#x20AC;&#x2122;S WHO 2015 UNITS RANK

BUILDINGS

TOTAL

MANAGE

OWN

60 AWM-Alliance Real Estate Group Ltd.

916

907

9

61

913

913

15

62 Associa Canada

790

790

24

>60

63 Canadian Urban Ltd.

712

712

6

>60

64 BlueStone Properties Inc.

675

65 I.G. Investment Management, Ltd.

605

66 Equitable Real Estate Investment Corp.

584

584 477

Kroma Management Ltd.

BOTH

TOTAL

MANAGE

14

1

OWN

% BY REGION BOTH

9

>60 >60

28

67 Compass Commercial Realty

557 552

552

9

>60

69 Jay Patry Enterprises Inc.

511

511

31

<30

70 Ramland Group of Companies

500

500

71

490

94

72 Atlantis Realty Services, Inc.

487

487

73 Martello-Trusted Real Estate Advisors

457

457

74

444

185

Arnon Corp.

75 Gistex

430

76 Pacific Quorum Properties Inc.

418

418

77

Ashelron Ltd.

396

259

15

>60

68 Northland Properties Inc.

Shindico Realty Inc.

5

>60

7 3

>60

7

<30

6

<30

>60

9

>60 3

430 3

417

417 37

371

3

24

>60

79 Canlight Hall Management Inc.

336

300

36

12

1

>60

80 Warrington PCI Management

320

320

81

Bedford Properties & Estates Ltd.

316

316

9

82 Goodwood Property Investment Ltd.

300

300

2

83 Gulf Pacific Property Management Ltd.

300

300

4

84 Lionheart Property Management Inc.

295

295

117

85 Fiera Properties

292

86 Shepherd Village Inc.

263 204

203

203

89 Summa Property Management

201

201

90 17A Properties

177

91

172

172

92 Taft Management Inc.

165

158

93 Glenview Management Ltd.

161

94 Equity Hill Properties Group

121

95 iA Groupe Financier

115

96 Sluis Properties

112

Lloyd Zerker Realty Ltd.

97 Marklyn Management

64

98 Loncom Property Management

64

99 Parkhurst Asset Corp.

15

100 ICC Property Management Ltd.

14

20 www.canadianapartmentmagazine.ca

3

>60

7

>60 >60 >60 30-60

30-60 >60

4 263

204

>60 1

>60 >60

1

>60

177

7

>60

4 7

>60

9

161 121

1

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1

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6 115

3 112

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>60

30-60

30-60

5

>60

64 44

20

2

15 14

<30

>60

408

87 NewWest Enterprise Property Group Inc.

<30

>60

78 The Vancor Group Inc.

88 LaSalle Investment Management

<30

>60 10

292

<30

<30 >60

2

QUEBEC

>60

2

80

ONTARIO

>60

675 605

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Industry Influencer

THE SKY IS THE LIMIT

By Erin Ruddy

From Guelph, ON, to Dawson Creek, B.C., Skyline Apartment REIT continues to break new ground and soar even higher, securing its place among Canada’s top performers in our annual Who’s Who. Jason Castellan, Co-Founder & Chief Executive Officer, advises that this is only the beginning— experience and a clear focus is leading Skyline’s ambitious team to new heights.

22 www.canadianapartmentmagazine.ca

Industry Influencer

December/January 2015 23

Industry Influencer

Skyline Apartment REIT Facts and Figures: Current IFRS value of $1.3 billion 142 properties 46 communities 6 provinces (AB, BC, NL, ON, QC, SK) 11,935 suites 643,650 square feet of commercial space

The Skyline story isn’t new, but like any inspiring story, it’s certainly worth repeating.

In the late 90s, three enterprising university students rented out the upper bedrooms of their student rental home as a way to earn some spare cash. Today, those same three individuals head up one of Canada’s fastest-growing real estate companies, the Skyline Group of Companies, with nearly $2 billion in assets under management.

For this issue of Canadian Apartment Magazine, I had the pleasure of speaking with Jason Castellan, Co-Founder & Chief Executive Officer of the Skyline Group of Companies. Named one of Canada’s “Top 40 Under 40” in 2008, and one of the country’s 40 Most Promising Entrepreneurs by the Ivey School of Business, Jason is the embodiment of entrepreneurial drive and achievement, qualities he says he shares with his business partners, brother Martin Castellan and good friend Roy Jason Ashdown.

Holding degrees from both the University of Guelph and York University, Jason resides near the charming city of Guelph where the Skyline head office has laid its roots. Coming in at number 13 in our Who’s Who list of top performing companies, it seemed fitting to feature one of the brains behind this booming operation as our issue’s Industry Influencer.

24 www.canadianapartmentmagazine.ca

About the Skyline Group The Skyline Group of Companies is comprised of several entities that oversee its real estate investment, development, asset management and property management interests, including a Wealth Manager, an Asset Manager, a Mortgage Financier, and a Property Manager. Each of these entities is fully owned and operated by Skyline, and exclusively serves the company’s three private REIT investment portfolios: Skyline Apartment REIT, Skyline Commercial REIT and Skyline Retail REIT.

Industry Influencer

You and your business partners go way back.

Tell us how it all began.

We launched our student rental business in Guelph in the early 90s, while we were students ourselves. It started as a way to offset our own rent; we’d sleep in the basement and rent out the upper bedrooms to other students. Then, one by one, we started buying houses. We’d finance them, maintain them, and do the whole “A to Z” in terms of managing them. Eventually, we obtained our real estate licence and became our own best customer.

Once we amassed 52 houses, we found that they’d become very cumbersome to manage. We realized an apartment building could give us 52 units under one roof, with just one lawn to cut, one furnace, etc. However, this also meant bigger costs. In 1999, we started syndicating—bringing on investors to help us buy apartment buildings. Then, in 2005, we discovered that managing those pools of investors was getting cumbersome as well. So, in 2006, we amalgamated the properties and launched the Skyline Apartment REIT, with $83.9 million in real estate assets under management.

How has your company evolved since then?

Two years ago, we crossed the threshold of $1 billion dollars in assets. We’ve internalized our management function, which has been an important efficiency and a great benefit to our unitholders. Everything is clearer today—we know what works and what doesn’t. We have a great team that specializes in all areas of the business: from making acquisitions and raising the capital needed for them, to doing the due diligence, to mortgage financing, to property management. In the past few years, we’ve entered many additional markets across Canada, and are actively looking at opportunities to grow.

How has your close relationship with your business partners (one being your sibling) affected your success?

The disadvantage of working with your brother is that you fight like brothers; the advantage is that you get over things quickly.

Marty is good at burying the hatchet, while I’m the hothead. And [Roy] Jason, well, we’ve been partners for so long, it’s like he’s a brother too. We’re a good mix, and that’s been a big key to our success. We are able to grow and achieve much more as a group, using all our strengths, then we would have been able to do alone.

Student housing has been a big story lately. As pioneers in the field, what are your thoughts on the surge of development?

In Skyline’s early years, we were buying student rentals on very thin margins, gauging the profitability by how many cases of beer we could buy. We kept it very simple with basic housing; we did not have a deep business plan by any means. Times have changed; students aren’t as independent as we were, when we were operating student rentals, and there are countless services and amenities catering to their needs, plus premiums that are being built into the properties. Student housing is not an area of interest for us anymore; we’re more about value investment.

What types of acquisitions does Skyline focus on?

Our bread and butter is the secondary and tertiary markets— cities like London, Kingston and Windsor, which we like to call “OHL hockey towns.” We don’t have any Toronto properties, and for a good reason: we are avoiding competition with the institutional, publically-traded entities. We also like to buy at a reasonable size and scale. If we already own several assets in a community, we may go for the smaller buildings, but if we are just venturing into a new community, we need larger-scale acquisitions to be able to gain traction.

Does Skyline have any plans to build?

We don’t build; we have people build for us. We can make a strategic partnership with any developer, whereby we’ll help finance the developer through the development process in order to take the financing burden off their shoulders. This way, they can do what they do best—build—and then when it’s ready we’ll begin takeover for that project.

What do you, as CEO, consider your biggest success to date?

I’m very proud that Skyline was recently recognized as one of Canada’s Best Managed Companies. Those are nice awards to receive—they speak to the talent of the people inside this company. We started with just the three of us, and have grown to a staff of over 500—so many of whom are just as passionate as we are about this business. We have a clear focus now of what we need to do together, and I think that’s a success.

What are some of the challenges you’ve faced?

There have been many challenges for us along the way, but I think the biggest challenge recently is that cap rates have come down, and, as a result, we are paying a lot more for our buildings. We have to look at how we can finance them over a long enough term, so that even if we’re paying top dollar for them, by the time they come up for renewal, we’re further ahead by owning than if we’d waited for better times and lower prices. We are still buying presently, so we do feel that the value is there, but cap rates have compressed so much that we’re paying at the highest end that we’ve ever seen in the apartment business. Coming to grips with balancing those rates, and the terms of those mortgages, is the challenge. That being said, if everything comes together for Skyline as it’s supposed to, this year (2015) will be our biggest year of buying.

What would you say makes Skyline unique from its competitors?

There are many other companies like ours that buy in secondary and tertiary markets, but when we buy, we plan to be the last owner of the building. We don’t have an agenda to sell. We are an inward company, and, as we get bigger, we will bring services in-house as much as possible. We enjoy the control and agility that comes with of having our hands on all aspects of our business. Vertical integration and a fullservice business model is what we are about.

May/June 2015 25

Feature

Inside the Residentially Tenancies Act

Elements of Legislation Favour Tenants over Landlords

By Chris Seepe

Many landlords will be surprised to learn that the Ontario government operates an agency that primarily targets landlords accused of breaching the Residential Tenancies Act (RTA). Called the The Investigation and Enforcement Unit (IEU), the 18-person agency aims to respond within 24 hours—a stark contrast to the onerous three-to-twelve month process landlords must undertake when submitting a complaint through the Landlord and Tenant Board (LTB).

The Ministry of Municipal Affairs and Housing’s (MMAH) website states, “There are 40 core offences listed in the Residential Tenancies Act, 2006 (the Act) that apply to residential tenancies.” Of those, a closer look reveals that 34 provisions specifically benefit tenants (against landlords) while the remaining balance the rights of both the landlords and tenants. How many uniquely benefit the landlords? Zero.

Equally surprising is that the Act includes a provision allowing canvassing politicians (or their agents) to solicit votes on a landlord’s property—yet it does not outright protect the landlord’s entitlement to collect rent.

With the news regularly reporting critical rental housing shortages in Ontario, it seems surprising the government is not seeking ways to encourage the private sector to build more purpose-built rental housing. Condominium development continues to outpace rental while the lack of affordable rental housing is becoming a crisis. More emphasis should be placed on helping, and not hindering the sector through oppressive legislation.

The Ontario Government’s IEU is a similar agency to the LTB, with a mandate to inform landlords and tenants about their alleged breaches of the RTA. According to its mission statement, “the Unit’s mandate extends to enforcement, which may involve formal investigations leading to prosecutions of alleged offenders in the Ontario Court of Justice (Provincial 26 www.canadianapartmentmagazine.ca

Offences Court).” If the complaint is within the agency’s jurisdiction, it will set out to make contact with the offender—for free—and strive to resolve most complaints within 24 hours.

However, unlike the LTB, which spends a good portion of its operational hours and taxpayers-financed budget, adjudicating non-payment of rent (about 90 percent of all filed LTB complaints are from landlords, 75 percent of which are about nonpayment of rent) roughly 85 per cent of the IEU’s complaints are from tenants.

Of the 20,000 to 25,000 phone calls it receives annually, approximately 10 percent become cases—76 per cent of which target the landlord, which isn’t surprising given 79 percent of listed RTA offences are in favour of tenants. The breakdown of IEU cases is as follows: • 38% are against landlords for withholding vital services • 21% are against landlords for changing locks • 10% are against landlords for failing to provide rent receipts • 7% are against landlords for allegedly entering a tenant’s premise illegally • 6% are against tenants for refusing a landlord’s entry after proper notice • 3% are against tenants for changing locks • 15% are for all other offences Though some tenants assuredly have legitimate complaints—and yes, slumlords do exist, slumlords are the exception, not

the norm. Landlords must start speaking up and asking their elected officials why there seem to be different standards for tenants and landlords within the eyes of the law.

Other questions the Act raises: • Why are landlords not legislatively entitled to collect rent for the vital housing service they provide?

• Why are rent rates (income) capped but legitimate operating and capital cost expenses not permitted to be recovered?

• How can the RTA legislatively require a landlord to provide electricity consumption information to a tenant while privacy legislation prevents a landlord from obtaining that required information from utility suppliers?

• Why can a fire department fine a landlord for a Fire Code offence committed by a tenant?

• Why can a municipality add onto a landlord’s realty tax bill a utility bill not paid by a tenant?

• Why is there no financial deterrent against tenants trashing a property?

Chris Seepe is a commercial real estate broker and broker of record at Aztech Realty in Toronto, specializing in income-generating and multi-residential investment properties, retail plazas, science and technology related specialty uses and tenant mandates. (416) 525-1558 Email cseepe@aztechrealty.com; website: www.aztechrealty.com.

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Portfolio

Photos courtesy of Bonneville Homes

The Future of Rental Apartments With Purpose-built Construction Picking up Pace, Technology and Design are Central to Success

By Derek Lobo

Technology has a big part to play in the evolution of the purpose-built rental apartment industry.

But until we are in the midst of change, it can be hard to predict what is to come.

Think back to what the purpose-built sector looked like just ten years ago.

Vacancy rates were much higher. There was very little new construction. Student housing had only just emerged as a significant rental market, and even then, it was confined to the United States.

At the time government regulations for purpose-built rental apartments had eased. There were no longer rent controls on new unitsâ&#x20AC;&#x201D;and on old units, rent controls were applied to the renter only 28 www.canadianapartmentmagazine.ca

and not the unit. The time had come to build new apartments.

It took a while before new apartment construction got rolling in Canada. What held us back during those years was a lack of knowledge about the state of the industry and the opportunities it offered. But as people learned more, more people entered the market, and as more people entered the market, the more exciting the market became.

Last month at the North American New Apartment Construction Symposium Series in

Portfolio Toronto, there was much discussion around changes in the building code and the arrival of new technologies, which together promise larger markets to invest in, faster approvals, and better returns on investment.

Eric Bonneville and Pascal Harvey, the copresident and the director of development respectively for Bonneville Homes, spoke about their revolutionary modular building construction system. The growing company builds homes, apartments, and hotels using techniques that simplify and speed up the construction process—saving time and money while producing buildings that are every bit as strong and attractive as conventional ‘stick-built’ developments.

“We’ve been building modular residential buildings for fifty years and we got into multifamily residential twenty-five years ago,” Bonneville said. “My grandfather started this company as a developer. He was the guy who rolled up his sleeves and got to work. He wanted to build housing that was affordable for the average person, and so he built a factory and started to build housing. When my father inherited the company, he looked at ways to improve the quality of the housing we were building. When I came in as co-president, my goal was to make the housing more appealing, build bigger modules and build units for multi-family residential buildings.”

How modular building construction compares to traditional on-site construction Bonneville refers to traditional construction as ‘stick-built’ or one-dimensional construction.

“The designs come and everything has to be built on site,” he explained. “Then there’s the panelized construction where you bring in wall panels and components to assemble onsite. That’s two-dimensional construction.

Our type of construction is three-dimensional.

We bring volumetric cubes onto the site.

The cubes themselves incorporate all the finishes—the countertops, the faucets, the electrical, the plumbing, the sprinkler system, all of it. Ninety percent of the building is done in the factory and just needs to be put together.”

The cost of transportation If you’ve ever seen modular homes being hauled down the highway in convoys, it’s an image that sticks in your head, and one that also conjures images of dollar signs.

But, according to Bonneville, it’s not a transportation cost—it’s a transportation

savings. “Let’s say we build and then transport a four-storey, 24-unit building down the highway,” he said. “We can do this in 28 truckloads. Now consider the materials that have to be trucked to a traditional construction site—all the doors, the windows, the walls, the cabinets, everything—all of which has to be shipped separately. To build the same building on site, you’d need over 150 truckloads to deliver it all, so in fact, modular construction costs a lot less overall to ship.”

Modular building construction can build any

ADVICE YOU

type of building imaginable, but Bonneville noted that the time to bring in modular design into a development is right at the beginning of the design phase. “When we design a modular building, we work with architects and other professionals from day one,” he explained.

“We make sure that, without limiting these professionals in the design process, they can benefit from all the advantages the modular system has to offer. We help professionals integrate their designs into modules, simplifying the process and maximizing their return.

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Portfolio

Complex and beautiful design Many people believe that modular buildings are blocky and lacking in design appeal.

Bonneville politely disagreed. “A modular building is a building like anything else. We build to the exact same building codes and the exact same specifications. We can integrate the same designs that any architect wants to bring to his or her building. People don’t want a flat façade, and neither do we. We can have portions of buildings jutting in and out, with units cantilevered and so on. We do this with our modular system at no extra cost; all you need isCoinamatic_CAM_Dec-Jan_2015_FINAL.pdf to have a module that’s a little bit shorter or a little bit longer. If you try to do the

same thing with on-site construction, you’d need more structural components.”

Bonneville’s designs are spreading throughout Canada and the United States.

The changes to the municipal building codes allowing six-storey wood-frame construction have created an ideal market for Bonneville’s construction methods. The company’s success is the result of five decades of hard work, believing in your vision and exploring every avenue for improvement. And as Bonneville looks to the future, he sees further evolution.

“Right now, wood-structure building 1 15-01-23 3:21 PM construction is limited by the building code to just six storeys,” Bonneville said. “But there are

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30 www.canadianapartmentmagazine.ca

projects out there in Quebec and the United States with wood going up to thirteen storeys or sixteen storeys. I can see the building code being modified for more than six-storey woodframe buildings. I’m thinking at least nine.”

“More than that,” he added, “We’re working on modules that conform to the noncombustible code, built with light steel. This will give us the possibility to build modular high-rise buildings. I believe the sky’s the limit.”

Technology and innovation promise to change the way our cities are built.

Apartment buildings will rise more quickly and at lower cost – both financially and to the environment. Ten years ago, we couldn’t have predicted the current state of the apartment industry, and ten years from now, it’s fair to say the same will be true. However, there will be plenty of opportunity in that future, especially if we grab that opportunity now, in the present.

Derek Lobo is the CEO of Rock Advisors Inc., Brokerage, an Ontario-based commercial real estate company that focuses on the apartment sector. For more information call 905-331-5700 or email him at dlobo@rockadvisors.ca.

Management

Distinguish Yourself

by Giving Back Community Involvement that Makes You Stand Out

By Jessica Green

It’s a fact: companies that take the time to give back and get involved with their communities see benefits that extend far beyond the good feeling that comes from helping others. A 2013 study by Cone Communications found that 82 percent of consumers take social responsibility into consideration when deciding whether or not to do business with a certain company.

As a landlord and property management company, Greenwin Inc. has found that getting involved in the communities that their residents call home has helped to make big differences in their lives.

“For us, it’s not about working on projecting a certain image,” says Kris Boyce, CEO of Greenwin Inc. “We know that we have a responsibility to help foster healthy, happy communities for our residents and employees.”

Indeed, Greenwin has positioned themselves as a community leader by keeping their eyes and ears open and addressing needs as they arise.

By being flexible, understanding and creative, Greenwin builds safe, inclusive neighbourhoods.

32 www.canadianapartmentmagazine.ca

Understand your communities In Toronto’s Black Creek neighbourhood, Greenwin saw an urgent need to help revitalize The Oaks, their properties located in the at-risk community. The efforts started with the Outreach and Revitalization Association (ORA), established to enrich the overall quality of life in the community by housing initiatives and social programs.

“The first step to building a strong community is to provide social enrichment and opportunities for education,” says Boyce.

“At The Oaks, we started a number of social initiatives, including sports, mentoring programs, breakfast programs, after-school clubs and computer literacy training. These programs have since been rolled out across many of our other communities.”

The Oaks is also host to the Spider’s Web Youth Empowerment Initiative, spearheaded by local boxing legend Spider Jones. “Our after-school programs put the power back into the hands of youth, who oftentimes feel that they have nowhere to turn,” says Jones. “We work with them to develop self esteem, confidence and overall well-being through boxing and other activities.”

Don’t do it alone An Allstate Foundation survey found that 100% of respondents felt that employee volunteering helped to improve their company’s image. Further, by getting your employees on board, it helps to forge stronger employee

Management

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Management bonds and makes them feel even better about the place they work. With ORA, Greenwin knew that they would need to rely on the help of the community to launch essential programs and projects.

That’s why they reached out to others, including fellow property managers, real estate investors, urban planners and local law enforcement. “It’s important to build a network of like-minded individuals and companies that share your goals and values,” says Boyce.

Greenwin also encourages their employees to get involved, whether it’s through fundraising drives or participating in group charitable activities, such as the SickKids HeatWave Volleyball Tournament.

“Giving back makes everyone feel good,” says Adriana Keresztes, VP Residential.

“When employees feel positively about the company they work for, they are more invested and far happier. It also gives them the opportunity to learn new skills by giving their time to a charitable cause.”

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.

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CBRE Limited - National Apartment Group

: : David Montressor*, Executive Vice President 416.815.2332 david.montressor@cbre.com

Think big Don’t be afraid to go big with your charitable plans. Two years ago, Greenwin launched their Charity Golf Tournament in support of the Israel Tennis Centers.

While putting on a large golf tournament is a tremendous undertaking, the payoff is well worth it. “We have now put on two charity golf tournaments with Greenwin in support of the Israel Tennis Centers Foundation, and the results have been outstanding,” says Toby Rosner, Executive Director, Canada, Israel Tennis Centers Foundation. “We were able to rally a number of different companies and organizations to support coexistence programs for Arab and Jewish children in Israel and it has made a remarkable difference. From the tournament itself to the silent auction, the money raised is helping to promote the social, physical, and psychological well-being of our kids.”

Define your values Every company should have a set of core values that helps to define who they are and allows them to navigate the corporate world in a responsible way.

By implementing these values into your charitable initiatives, you are forging a brand identity that will stay with you throughout everything you do. Your values, and the way you express those values, allow employees and consumers to connect with you in an emotional way.

But don’t just give to a certain charitable organization once—develop an ongoing relationship with them by getting involved each and every year when they need it most.

Giving back certainly helps to build up your brand image, but your ultimate goal should be developing a corporate culture that is built on giving back to the community. It allows you to build longlasting relationships, create employee pride and build stronger and healthier communities for generations to come.

* Sales Representative CBRE Limited Brokerage

www.cbre.ca/nag-toronto Vancouver

Calgary

Edmonton

Winnipeg

London

Kitchener

Toronto

Ottawa

Montreal

Saint John

Halifax

34 www.canadianapartmentmagazine.ca CAM AD - Half Page Island June 2015.indd 1

6/8/2015 4:32:28 PM

Jessica Green is the founder of Cursive, a Toronto-based communications consulting firm that specializes in brand messaging with an emphasis on digital media strategy.

Deal Profile: the concierge Deal snapshot:

First National acted as concierge for a deal that generated ample funds to help the seller address financial issues and earned the buyer $150,000 annually with zero cash in.

Client objective:

A First National client owned a building, but he was overleveraged. Concerned for his business and financial viability, the client was under pressure to sell the building for more than it was worth to save the rest of his portfolio. However, there was a high degree of vacancy in the building, and construction/refurbishment that had begun could not be completed.

The solution approach:

Seeing an opportunity to find the less-apparent value inherent in the deal, the First National team pursued a deep analysis on the property. The numbers told an interesting story. At the time of sale, the building was worth $5 million, yet after refurbishment, the team estimated its worth at $8 million.

Structuring the solution:

Another long-standing First National client saw the value of the deal and decided to move forward with the purchase. The plan was to renovate the building and wait for 12 months to fill the vacancy. Once the building was full, the buyer client would refinance the building with a long-term mortgage based on what the building was worth after the improvements. The buyer client ended up with a scenario where he was making $150,000 per year on the property with zero cash in.

Formula for success:

Lateral thinking enabled the First National team to â&#x20AC;&#x153;conciergeâ&#x20AC;? this deal, surfacing an opportunity to bring the seller and buyer together in an inventive way. The buyer would not have known about this deal had the First National team not brought it to him. And the seller had been trying to find a buyer for some time, with little luck. The other lenders that he approached were limited in their value mindset, only focusing on what the building was worth at the time of its sale.

The key idea:

Foresight played a critical role in getting this deal done right. By looking beyond what existed and seeing the potential future value, the First National team was able to help one client salvage his financial health, while another increased his net worth significantly. Once the opportunity was apparent, the First National team applied its strengths to see it through â&#x20AC;&#x201C; consulting, prioritizing the relationship and delivering no matter what.

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Insurance

Picking the Right Middleman Understanding the Intermediaryâ&#x20AC;&#x2122;s Thankless but Necessary Role

By Andy Schwartze

For more insurance tips, visit

36 www.canadianapartmentmagazine.ca

The U.S. economy is one of the most prolific supporters of the intermediary systemâ&#x20AC;&#x201D;all those agents, brokers, wholesalers and other players who are seriously questioned yet never tossed out in spite of constant speculation about the economic value they contribute to a transaction. In the world of commerce, these intermediaries play an important part in the sale of goods (and a few services) even though they have minimal, if any, infrastructure or capital at risk. They generally do not control sources of supply, nor do they have any dominance over the purchasers. They simply exist to grease the axles of commerce.

Insurance

Why did we create them and what purpose do they truly serve? For what reason does a building owner hire a property manager? How is it that a retailer buys shelf product from a wholesaler?

Why is it that, after a prolonged absence from the lending world, the mortgage broker is back, and doing very well?

We do not buy cars from the manufacturer; we go to the authorized dealer. Bank loans are applied for through a weakened bank branch that must present the request to an anonymous lending officer located somewhere upstream—or through an independent broker. Securities are acquired via an agent of some kind, be it a self-managed trading account or a private client advisor.

Insurance is purchased from an agent or a broker (the important difference will be explained further on) and your local grocery store is nothing more than an intermediary distribution point for the

many manufacturers and producers of foods. Everywhere we go, we find ourselves dealing with intermediaries and not with the actual providers of the goods that we seek. Why does this system seemingly work so well?

I believe the answer starts with the word “confrontation.”

Somewhere along the lines of developing a more sophisticated distribution system, the benefit of paying someone to negotiate the deal must have become apparent for a number of reasons. In particular, when one peels back the more obvious advantages, the real benefit kicks in when a deal runs into difficulty—or “goes south.” Buyer and seller, who at that point have notably opposing interests, find it easier to avoid the emotional entanglements of serious conflict by having an intermediary massage the problem. By taking a more detached approach to the issue

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and having developed a more detailed knowledge of the businesses that are on both sides of the transaction, the intermediary has an opportunity to keep order between buyer and seller and bring some sort of resolution to whatever problem has surfaced. The modest amount being paid, for that negotiation being provided, is easier to build in to the product cost than the unexpected, and often ill-timed, costs of relationship destroying legal action.

Capable intermediaries calm troubled waters. They know their buyers and they know their sellers, and are thus able to provide a level headed balance to the transaction, not to mention the importance of educating one side to the realties and limitations of the other.

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service rendered can be very valuable for the small relative cost incurred. We have learned, over time, that not everyone falls into that category and thus licencing has emerged as a mechanism to control the quality of the service and also to boot out those who have lost track of what their role is. Not all middleman services are licenced, although many are. But the role of these contributors to economic activity should never be underestimated. The good ones know and understand what the realities are on both sides of the transaction. They take the time to educate buyer and seller about one another and they are not afraid to rein in unreasonable attitudes so that business can continue to run smoothly.

For the players in business transactions, the importance of finding the right intermediaries to work with is critical. One needs to understand what they contribute to the transaction and accept the value of that contribution. Picking the right middleman is every bit as important as ensuring that one deals with the right buyers and/or sellers, depending on which side of the transaction you are on.

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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.

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Marketing

Time for a Re-Brand Hit Refresh on your Branding Efforts, from Online to Outside

By Chaim Rivlin

When spring arrives, often the appearance of our properties becomes top of mind. From landscaping to exterior painting, our to-do lists become longer as the outside becomes more of a focus, and current residents want to enjoy the space beyond our walls while weather permits.

But how much thought have you given to the appearance of your brand?

Before a potential tenant even sees your property, that tenant will encounter your brand in some shape or form, whether itâ&#x20AC;&#x2122;s on your website, in a rental magazine or on your social media platforms. They will begin formulating an opinion about your properties well before they have ever set foot inside one of your buildings. For this reason, itâ&#x20AC;&#x2122;s imperative to keep your branding efforts as fresh as possible. Have you got a dated logo or colour scheme? Are your outdoor signs in desperate need of a fresh coat of paint?

Potential tenants will notice these seemingly

40 www.canadianapartmentmagazine.ca

small aspects and use them to decide if they want to rent with you. According to a recent study by WebDAM, 65 percent of people are visual learners who will use what they see to make a judgement call on you and your properties. Isnâ&#x20AC;&#x2122;t it time you gave yourself a fighting chance?

Website When deciding where to focus your rebranding efforts, start with the path a potential tenant will normally take when researching places to live.

More often than not, they are going to search

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online—and this is where a fresh, intuitive website will help you to stand out from the crowd. “When we looked at what would make our website better, the first thing we decided to revamp was our landing page,” said Jeff Birman of Cando Apartments. “A strong landing page encourages apartment seekers to spend more time searching your website, as they can find all of the information they want and need with ease.”

Cando Apartments’ landing page features a search widget front and centre, allowing users to start their apartment hunt immediately.

“An important aspect of our website was to capture the attention of a number of demographics and audiences on one page,” says Jessica Green, Director of Corporate Communications for Greenwin.

“We decided to add a section that was specifically for students so they wouldn’t have to waste time clicking around and trying to guess if an apartment they were interested in would be close to their school.” Consider the audience you want to speak to, and give them the tools to find what they need immediately.

Social media You have probably heard this before, but let’s say it again: if you want to succeed, you simply must have a social media presence. In fact, according to Hubspot, if your company page on Facebook has over 1,000 likes, you will receive nearly 1,400 visits to your website each day.

“We have found that the more engaged we are on social media, the more our website has received traffic,” said Steven Clarke of CAPREIT. “To us, social media is a way to show our personality while communicating what we have to offer that no one else does. We also never shy away from responding to any negative feedback on social media, which helps to build confidence in our brand.”

Indeed, a recent American Express study found that 88 percent of consumers are less likely to do business with a brand that ignores complaints on their social media accounts. This tells us that social media is powerful and shouldn’t be ignored. It’s not just the content, but it’s how your brand looks. Ask yourself: are we projecting a professional image?

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Marketing Are we showing potential tenants who we are through creative and engaging banners and campaigns? If not, perhaps it’s time for an overhaul.

Signage With the online world conquered, it’s time to shift focus to the way your brand is incorporated into your properties, hitting home where it really counts.

Street signage should reflect the image you have carefully crafted online, including your logo, your colours and your motto.

“Having a cohesive image in every possible aspect will help with brand recognition,” said Sheryl Erenberg, of Sheryl Erenberg & Associates, a leading Canadian rental and marketing consultant. “The goal is to get to the point where consumers can identify your brand simply by logo or colour alone.” After a long and harsh winter, your street signs are probably in need of a little love. If they are constructed of wood, give it a fresh coat of paint. If they are constructed of metal (the preferred

material for longevity), don’t be afraid to get out there and give them a good scrubbing with soap and water. A person walking or driving by will see this sign and immediately form an opinion about the quality of your property based on how well kept and informative the signage is. A recent infographic put together by RentSeeker.ca found that 53 percent of people responded to yard signs, so don’t allow them to fall into disrepair.

Marketing collateral The final piece of the brand makeover puzzle is your marketing material— from brochures to the ads you place in newspapers and trade magazines. As with the outdoor signage, your marketing collateral must reflect the same brand image as your online efforts. A lack of cohesive branding not only creates confusion, but looks sloppy. If you will be using these materials at local events and charitable drives, you absolutely must put your best foot forward.

Now that you have the tools to begin your brand refresh, it’s time to start

brainstorming. What do you have that helps to put you one step ahead of the competition? Take that information and craft a brand image that reflects you in an unforgettable way.

RentSeeker.ca offers Landlords & Property Managers and Owners a Full Suite of Marketing Services. Visit us at www.RentSeeker.ca and contact us anytime at: Hello@RentSeeker.ca.

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Newsworthy

Economic Downturn has Rental Repercussions How Low Oil Prices and Slow Housing Starts will Affect Alberta’s Apartment Market

By Erin Ruddy

CMHC’s latest housing market report forecasts a dip in new-home construction over the next two years due to low oil prices taking their toll on the economy. Oil-dependent provinces, like Alberta and Saskatchewan, will feel the effects the most—particularly on the heels of the record-setting year that was 2014. In Alberta, reductions are forecast for both single-detached and multifamily starts, with the decline being most pronounced in the multifamily segment. If these indicators are accurate, what ramifications will they have on the rental market?

44 www.canadianapartmentmagazine.ca

Newsworthy

“Right now we don’t know what the slowing economy will mean for the rental market,” says Amit Grover, Vice President, Multifamily, at Colliers in Edmonton. “Back in 2008, during the credit crisis, we expected to see rapidly declining prices in the single family market as well as the rental market— neither of which really happened. While house prices did decrease slightly, rental rates stayed at relatively the same levels with the help and re-introduction of rental incentives. In my opinion, if the housing market does slow in Alberta, it will have little impact on the rental market.”

In October 2014, CMHC’s Rental Market Report cited that the average apartment vacancy rate in Alberta’s urban centres was 2.1 percent—up from 1.6 percent in October 2013. The rise in vacancy rate was attributed to a combination of two factors: an increase in rental supply and the dip in net migration, which had reached a record high of 86,922 in 2013.

Despite this, Grover says changing demographics and the affordability of homes are apt to affect rental rates in a positive way. “Baby boomers are downsizing and simplifying their lives,” he notes. “It’s not uncommon for them to move from their larger homes into smaller, newer rental product. Less hassle and no yard maintenance. Millennials, on the other hand, are just fine being renters. They want more urban locations; they want to ride their bikes and dine out. The last thing they want is to be house poor. A five per cent or so reduction in home prices will not change the situation for either of these groups.”

Grover points out that a decade ago, the Edmonton market was said to be comprised of 70 percent ownership and 30 percent rental—a trend that has shifted in the last 10 years. “We are now closer to a 65 percent ownership, and 35 percent rental,” he notes, adding that, “this trend will continue as first time buyers are priced out of the market, regardless of slight price adjustments.”

Increased purpose-built rental supply In 2014, both Calgary and Edmonton saw an abundance of new apartments come on stream, which Grover warns may have some

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implications as competition heats up. “We have built more rental product in Edmonton in the last two years than we have in the last 35 years,” he says. “Given this, purpose-built rental may see slight declines in rental rates but nothing too drastic.”

While Grover shows a degree of optimism, the media is showing anything but—plying Albertans with tales of woe, warning them of the challenging times that lay ahead.

“The headlines keep telling us that we’re going to see a big downturn,” he says. “House prices are plummeting, jobs have been lost by the thousands, etc. The truth is, we haven’t seen drastic changes in our market as of yet. Anecdotally, most of

the larger apartment owners I’ve talked to claim that vacancy rates have only marginally increased.”

Still, all the doom and gloom makes deals tougher to put together. Grover notes that the Buyer/Seller gap in Alberta has increased since last year. “Buyers claim that the world has changed. Oil has plummeted and a new NDP government is in majority power, so expect the worst. Sellers, on the other hand, just aren’t seeing the change as their buildings remain full. Buyers want better deals and sellers just aren’t ready to give in.”

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Ask the Expert

Effectively Managing Vacancy

Andrew Lowe Director, Multi-Residential, Oxford Properties Group

Occupancy Techniques That Work It should be every company’s goal to maximize revenue and minimize vacancy loss regardless of overall property value strategy. Knowing this, what are some leasing strategies to ensure maximum occupancy potential? We asked Andrew Lowe, Director, Residential Real Estate Management, Oxford Properties Group for some tips and insight into managing vacancy.

In the apartment business, every day a suite is not generating income is lost income. To that end, the art of balancing rate and occupancy is the challenge and creates a healthy friction.

Is carrying a bit of vacancy to capture a higher average rental rate preferable to keeping a building as full as possible to manage to a low vacancy level? Though every company has its own strategy, there are four “states” or conditions surrounding vacancy that need to be effectively managed: 1) Vacant, no income – the suite is currently unoccupied, with no future prospect 2) Vacant, under renovation – the suite is in the process of being “turned” or prepared for the next incoming resident 3) Notice to vacate – the suite will be leased back-to-back, with no revenue lost 4) Vacant, leased – the suite is currently vacant but has been leased for a future date

For more expert tips, visit

48 www.canadianapartmentmagazine.ca

Vacant, no income: Use this opportunity to personally inspect your empty suites. You can only “expect what you inspect.” If you are not inspecting, chances are the quality of the suite is not aligned with your prospects’ expectations. Front line leasing staff must have an intimate knowledge of the local market. Rental surveys and competitive shops should be conducted on a regular basis in order to remain competitive. Make sure marketing initiatives are current and driving traffic. Review prospect feedback with your leasing staff. Inquire as to what is preventing a rental—rate? Quality? Lack of incentive? It may require a fine tuning of rental rates, incentives, or product offering to ensure your property and the suite in question is positioned well to be rented.

Vacant, under renovation: When renovating a suite, set aggressive completion timelines. A large percentage of the population has a hard time seeing the end result, and as such, you may lose prospects—or lose them because you cannot meet an immediate move-in requirement.

Notice to vacate: Zero vacancy loss is the ultimate achievement. If back-to-back renting is part of your business strategy then make sure your leasing staff do not over sell and under deliver. Set realistic expectations during the rental stage. Explain what work will be outstanding after move in and how best to get temporarily settled until all work has been completed.

Vacant, leased.

Establish maximum forward leasing timelines based on suite type popularity and lease to move-in lead time trends. The shorter the lead time or the greater the popularity of the suite type, the less likely you are to have a longer vacant, leased timeline. Typically, no greater than 30 days.

Lastly, to maximize occupancy potential, a successful leasing strategy needs to put an understanding of the market comps, market rents and incentives and a rental grid with differentiated pricing in place. These practices need to be present to translate strategy into execution. Leasing staff must be well trained to sell; properly answer phone calls; show suites; have a complete understanding of services and conveniences within the area; and have knowledge of the competition and how the property is positioned in the market.

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Smart Ideas

Highlights from Webcon

By Steven Chester Canadian Apartment Magazine attended the sessions at Webcon, a Canadian Rental Marketing Conference held in Toronto on May 14th. This year’s event boasted over 400 attendees, including marketing managers, operations managers, property managers and building owners from across Canada’s apartment sector.

Notable speakers Keynote speaker Jay Baer led off, the sessions, telling the audience about how today’s fragmented attention spans, with consumers utilizing multiple screens for entertainment, have resulted in a massive competition for attention. Baer focused on “useful marketing” explaining how being useful to consumers can create a network of followers—and potential tenants.

Other notable speakers included Sean Cunningham of Google and TV host and video marketing expert Sunny Lendarduzzi. Cunningham talked about brand building in a digital age and the importance of search and mobile optimization.

With the average person checking their mobile phones 150 times per day, and 250 million apartment-related searches each year, the importance of your digital presence has never been more critical, said Cunningham, noting 71 percent of consumers last year visited a physical business after performing a Google search on their mobile phone.

Online video Lenarduzzi reinforced the importance of online video. With Canadian online video views already up 36 percent over last year, 78 percent of people are watching online videos every week. It’s time to shoot those videos if your company isn’t already—websites with video boast an extra two minutes of dwell time compared to those that don’t.

Rounding up the event was Justin Alanis of Rentlytics; Chris Johnstone of Cwjstone.com; Holli Beckman of wcsmith; Morgan Remmers of Yelp; Mike Whaling of 30 Lines; Scott Andison of FRPO; David Eisenstat of tgcpr; Max Steinman of Landlord Web Solutions; Michael Trendota of Varsity Properties Inc; Richard Dolan of Real Estate Investment Network and Jeff Riddall of gShift.

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