In a turnaround that is almost unnoticed in the real estate world, Dundee REIT has built itself back to bigger than it was prior to the recession through a strategy of making smart acquisitions and moving faster than its competitors.
“Last year we did about $900 million of acquisitions, and this year we will do more,” Michael Cooper, CEO of Dundee REIT, said at CIBC’s North American Real Estate Equities conference in Toronto. Dundee, which has made a series of shrewd acquisitions during the downturn, does recognize that the market has changed dramatically over the past year or so. “It’s more expensive now,” Cooper said.
One of the founding executives of Dundee Realty Corp. in 1996, Cooper noted that since the sell-off of two-thirds of the company in 2007, Dundee REIT is now bigger than it was before at $3.5 billion in assets (with a 90% office, 10% industrial mix). “We’re now bigger than we were in 2007, we have higher quality assets than we had then, we’re providing higher yield to our shareholders, we think we have got more growth in the portfolio, so we are pretty pleased where we are.”
The Dundee chief said that the company added $146 million of debt this year. “It’s all 10-year debt, all under 5%, so we think that is pretty good. Between now and 2021, we are sure that will not only look good at times compared to what debt is available then, but it is pretty safe to have that much debt,” he said. Dundee is also eyeing the equity markets for more funds for acquisitions, but noted “the hard part is finding the right assets.”
In Dundee’s second go-round, the REIT has focused on buying more buildings in the central business district and to “buy the scraps from the pension funds.” It has competed successfully against deep-pocketed funds by being quick and nimble, he said. “We can act quickly and we don’t have to put a group together.”
Property Biz Canada is an RENX publication launching in May 2011.