The Maclab portfolio, comprising 874 apartments and townhomes in Edmonton, has been acquired by Avenue Living. (Courtesy Avenue Living)

Calgary-based Avenue Living Asset Management Ltd. has acquired three portfolios in the Edmonton area, comprising more than 1,500 residential rental units, for about $275 million, RENX has learned. The investments more than double the company’s presence in the capital of Alberta.

“We’re agnostic to geography. We’re going to go where the fundamentals hold up. We’re across the Prairies right now because the Prairies have some of the most affordable real estate across Canada, and on the flip side, some of the most reasonably-priced rents,” said Jason Jogia, the company’s chief investment officer and chief executive officer of the Avenue Living Opportunity Trust.

“We have taken a significant position in properties and plan to continue to double down on the Prairies because there’s a lot of room to run.

“We’re buying where the people are and where they want to live. The Prairie provinces have robust service and employment sectors. What they lack in population density, they make up with infrastructure. We aim to serve those people.”

Avenue Living and the acquisitions

Avenue Living was founded in 2006 with the purchase of 24 rental units in Brooks, Alta. and today the company has more than 12,000 units across its portfolio primarily in Alberta, Saskatchewan and Manitoba. In the past year or so, it also entered the U.S. market and now owns more than 800 units there.

The company also has commercial real estate, agricultural land, and mini-storage units and has more than $2.5 billion in assets under management.

The Edmonton-area transactions include the purchase of Avalon Court and Amberwynd Apartments (Spruce Grove) from BCIMC (QuadReal). Avalon Court has 227 apartments while Amberwynd Apartments has 104 units.

Avenue Living also purchased the Maclab portfolio in Edmonton which  includes 874 apartments and townhomes in seven different complexes.

Finally, it acquired the Huntington portfolio, from a private group of investors based in Edmonton and Calgary. This includes 361 townhomes on one piece of land.

Edmonton is Avenue’s largest market

Dave Smith, chief executive officer of Avenue Living US Real Estate and the chief operating officer of Avenue Living Asset Management Ltd., said prior to these transactions the company’s Edmonton portfolio was about 1,400 units. Currently, Edmonton is the company’s largest market.

Dave Smith, chief executive officer of Avenue Living US Real Estate and the chief operating officer of Avenue Living Asset Management Ltd. (Courtesy Avenue Living)

“We’re considering it one portfolio,” Smith said, “we really look at it as one strategy to acquire best-in-class workforce housing, townhomes and apartment units.

“We just see an opportunity to continue to acquire great real estate in very strong locations in a market that we see a lot of long-term value. Very stable. From an industry perspective, given the concentration of education (universities), government, we see it as an opportunity to scale our platform in a market we’ve been active in over the last 16 years.”

Smith said the new Edmonton properties are well located to benefit from strong employment hubs.

“From our perspective we’ve always had a long lens on the Edmonton market . . . What we see in Edmonton is a lot of stability through the last 18 months . . . It looks like a large transaction at one point in time but really we’ve been very active in the market, looking at opportunities, underwriting opportunities, developing relationships with the brokerage community and our peers,” he explained.

“Long-term” investments in market

“So the timing is not like one specific reason for right now other than we just continue to be active and scale our business in a market we have a long-term lens on . . . We look at a lot of opportunities in the market but we’re very disciplined in our pricing and how we structure transactions – obviously continue to act in the best interests of our stakeholders.”

Smith said Avenue Living is also looking at a few additional, smaller transactions in Edmonton and will continue to source investment opportunities in the market.

Since 2015, Avenue Living has invested $340 million in capital expenditure projects, repositioning buildings across the Prairies, bringing improvements to vintage buildings and neighbourhoods. The company is able to buy assets below replacement costs, renovate those assets, and then reposition them for the same demographic, but provide a higher offering and ensure they remain cost-effective for that tenant base.

When asked if there would be capital expenditure plans for the newest Edmonton properties in Avenue Living’s portfolio, Smith said: “Not materially. We see an opportunity to acquire strong in-place cash flow and some minor improvements along the way as the market continues to improve. Those improvements would be upgrading suite finishes to align with evolving market demands.”

EDITOR’S NOTE: This article was edited to remove a quote referring to the scope of the deal. The information from Avenue Living was incorrect.