The Victoria, B.C.-based Gant co-founded League in 2005 along with Emanuel Arruda. In just two years the duo purchased more than $200 million “worth of real estate on behalf of member partners without any investment brokers or outside investment banks” and then set up the associated REIT and the IGW REIT LP in 2007.
“We originally started doing shopping center syndications, one by one, to build up a portfolio and then we combined them all together in a private REIT,” said Gant.
“It is somewhat rare in Canada. The reason it is rare is because the real estate guys typically don’t have the contacts to put together the unit holder base to get a REIT of any size.”
Despite his relatively young age (and Gant’s partner Arruda is only 41), the two mean have managed to acquire approximately $600 million in assets under three corporate structures.
League buys a public REIT
Last year, the opportunistic duo moved into the public REIT world. “We saw that the publicly traded REITs were actually trading at discounts to their physical assets,” he said. “If we compared what we could buy out in the marketplace in terms of real estate to what the values of the publicly traded REITs were at, it actually made more sense to a publicly traded REIT than buy direct real estate.”
That rationale led League Assets to purchase Charter REIT which in November had a name change to the Partners REIT which is controlled and operationally linked to League Assets.
Today, League’s $600 million in assets breaks down to $230 million with the private IGW REIT, $218 million in individual limited partnerships and $152 million in the public Partners REIT.
Different strategies, one team
Partners REIT currently owns 18 retail shopping centers across the country “from Montreal to Kelowna.” League, set up as the asset manager, on a contract basis manages all of the real estate portfolios as well as development and redevelopment activities and opportunistic, short-term real-estate focused projects such as buying bargain-priced mortgage securities and solar rooftop contracts offered by the Ontario government under its green energy program.
“We have two distinct buckets, one is a large stable of income-producing asset and then we have a good chunk of opportunistic-type projects where we are going for higher returns in a fairly short period of time, two or three years,” said Gant.
Despite operating different REITs, Gant said a “one team” approach is used. “We look at all of our properties together when we manage our real estate. So they are different REITs but it is the same people working on a portfolio of properties.”
Despite his relatively young age, Gant already had a varied career in real estate prior to founding League Assets. “I was in engineering, I started in real estate development doing a number of condo development projects and bought an interest in a property management company and was doing my own investing initially and then just grew it into a full real estate operation.” He met is partner Arruda in 2004 and together they bought their first shopping center project by the end of that year.
Busy times ahead
Gant foresees “significant” growth ahead for the REITs managed by League. “The retail asset class in Canada is fairly fragmented still. There is 2100 assets across the country, there is a pretty significant base of existing retail that we can go after. There are certainly some larger competitors but there is lots to go after so we can grow our portfolio pretty significantly and we will do so over the next two years and at the same time continue to look at new development projects which will end up creating high quality assets.”