It has been a busy couple of weeks at Canadian Apartment Properties Real Estate Investment Trust (CAPREIT). The trust has said goodbye to outgoing CEO David Ehrlich, bought more than 1,100 manufactured home pads in 13 communities across Canada, and on Wednesday saw Mark Kenney formally take on the CEO’s position.
Kenney has been with CAPREIT (CAR-UN-T) for more than 20 years, most recently serving as chief operating officer and president. He will also sit on the board of trustees. This completes the leadership transition at CAPREIT first announced last fall.
Kenney has been heavily involved in recent years in policy, building and directing the property management team, and overseeing marketing, procurement and development. In his most recent role, Kenney oversaw CAPREIT’s extensive operations and acquisitions in Canada and Europe, including involvement in the recent deal to become the majority owner and manager of European Commercial REIT (which is being rebranded to ERES).
“We are fortunate to have within our organization a high level of talent to support our succession planning,” said Michael Stein, CAPREIT’s chairman of the board, in a release Wednesday. “Mark has led CAPREIT’s operations team since Day One, and has a deep understanding of our industry and our organization.”
Kenney is energized by the new responsibilities, noting in a statement he is “eager to take on this new role as CEO and trustee.”
Prior to joining CAPREIT, Kenney held senior positions as Realstar Management Partnership, Greenwin Property Management and Tridel. He is a board member of the Federation of Rental-Housing Providers of Ontario and St. Hilda’s Towers; and a founding board member of the Greater Toronto Airports Authority. He holds a Bachelor of Economics degree from Carleton University in Ottawa.
Ehrlich retired after holding the CEO’s position since 2017. He moved up to the top role following the death of CAPREIT’s founder and longtime CEO Thomas Schwartz.
CAPREIT buys 13 communities
Earlier, CAPREIT announced a deal to buy 13 manufactured housing communities in Ontario, Alberta and British Columbia, for a total of 1,104 sites. The deal was worth $66.4 million.
“We previously had close to 6,000 units,” Kenney told RENX in an interview just a few days before taking over as CEO. “This will take us over 7,000 units, or lots, and we have ambitions to continue to grow.”
He said the trust now owns 45 manufactured home parks across the country. Generally, CAPREIT owns the property on which the home sits, while the occupant retains ownership of the building, Kenney said.
The deal included 407 sites in Ontario at six locations in Port Elgin, Eden, Lindsay, Dunsford, Cobourg and Thunder Bay. In Alberta, the deal included 615 sites, or pads, at six locations in Cold Lake, Brooks, Wainright and Lac La Biche, and one property with 82 sites in West Kelowna, B.C.
CAPREIT said the Ontario component of the deal was at 100 per cent occupancy and the Western Canadian properties were 84 per cent full.
CAPREIT loves the manufactured home business, Kenney said.
Stable cash flow
“The business provides extremely stable cash flow and allows us to have superior cap rates,” he said. “The business historically has not seen the same capital appreciation that apartments have, but that’s changing.”
Some of the newly acquired sites do have opportunity for additional homes and redevelopment, he said.
CAPREIT has developed a national manufactured home division, which made it the right fit for this deal.
“To be able to get over 1,000 units in one transaction is just a very unique opportunity,” Kenney said. “There are only a few companies that have a management platform that spans Canada and we have a dedicated department for this.”
A manufactured home is typically built in a controlled environment and then relocated to a housing park.
“It’s a cheaper form of housing for somebody to purchase and then they rent the land from us,” Kenney said. “Our business is the land rent business, as well as selling the homes.”
CAPREIT specializes in apartment buildings with a particular focus in Vancouver, Montreal and Toronto. In total, Kenney said the trust currently has more than 53,000 residential units across the country.
— With files from Don Wilcox