Madison Avenue Expanding K-W Multi-Res Base

Vertical integration and a business plan that focuses on sticking close to its home market of Kitchener-Waterloo are two strategies that are paying off for multi-residential developer and operator Madison Avenue Group.

The creation of three partners who have been working together for the past three years, the Kitchener-based company owns about 300 apartments units in 40 buildings in the K-W area.

Madison Group also does some condo construction and conversion of apartments to condos, however the main focus of the business continues to be restoration of apartment buildings with a particular focus on the Kitchener downtown core. “The area had a bad reputation, it is in a tremendous upswing right now and we are sort of leading the way in downtown restorations,” said Madison Group partner Adam Overing. Among Madison Group’s current downtown projects is restoration of a 40-unit apartment building in Kitchener.

The K-W area, home of Research in Motion and dubbed the “technology triangle” for its concentration of technology companies and universities, is a strong market for multi-res owners, noted Overing. “The fact is that the universities that are in Waterloo are a nice stabilizing factor, they tend to drive a very young, intelligent work force that come out of the universities.”

Madison Group’s tenants and condo buyers tend not to be students, but rather new entrants into the area’s work force. “Most people who come to Kitchener-Waterloo area as developers focus on the student market,” he said. “We are focused on sort of the next phase of peoples’ lives. They are done university and are in their first job. They have enough to rent a high-end apartment or condo…and we can provide that.”

As with most markets across the country, new purpose-built multi-res buildings are a rarity as developers focus on condo construction. Madison Group is, however, in the midst of constructing a 36-unit stacked townhouse complex in Kitchener that it intends to own and rent for thelong term.

The decision to keep and rent out the complex rather than sell the units illustrates Madison Group’s operating strategy. “As much as we are developers, we are also primarily investors,” said Overing. “Whenever we can hold real estate and continue to manage and hold it ourselves, that is our preference. Selling in my eyes is a last resort.”

Vertical Integration

Madison Group typically buys neglected buildings and restores them with the intention of attracting young professional tenants looking for upscale accommodation. Madison Group’s ownership of a construction company provides the basis for this rationale. “We are able to do renovations very efficiently,” he explained. “That is why we can get away with doing these renovation projects that normally people see as giant challenges that they would never like to get involved with.” The developer also operates a property management company which works closely with the construction arm to ensure that the projects are successful.

The developer’s strategy of restoring existing buildings has been driven by the fact that the business case for constructing new apartment buildings is not there in addition to the fact that most property coming to the market requires plenty of work. “A lot of the existing rental stock that is out there when it comes to apartment buildings are in serious need of a facelift,” said the Madison Group partner.

The three partners, Overing, Stephen Litt and Andrew Teeple, all have about a decade experience in the real estate industry and came together to form the company three years ago. “We pride ourselves on being extremely dedicated to this area as well as real experts,” said Overing. “We work very closely with city staff and all three partners, you could ask about any property, and we would know about it.”

The developer is now casting its eye beyond Kitchener-Waterloo for expansion and is considering nearby Guelph as a potential market for expansion in south-western Ontario.


Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

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Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

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