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ViveRE investing in ‘new sector’ of seniors housing

A former junior mining exploration company turned multifamily real estate investor is carving out...

IMAGE: ViveRE Communities Inc. logo.A former junior mining exploration company turned multifamily real estate investor is carving out a niche in the seniors housing sector. ViveRE Communities Inc. (VCOM-X) has grown out of the former NSX Silver company, slowly but steadily adding to its portfolio of rental apartment properties since 2017.

NSX Silver was having trouble attracting capital in 2015 so it sold its silver exploration rights and began looking for alternatives. In July 2016, it received a proposal to move the company into the multifamily real estate business,  focused on the opportunities presented by an aging population.

A subsequent private placement in August 2016 brought a group of real estate professionals and investors to NSX, and the vision was put into motion.

10 million Canadians over age 65

“There are presently approximately 10 million Canadians over the age of 65 and, by 2030, all of the baby boom generation will be over 65,” ViveRE chief executive officer Mike Anaka told RENX. “They have financial capacity and are looking for flexibility and convenience in their choice of residence.

“While properties catering to the needs and wants of this demographic exist in bedroom communities across Canada, to our knowledge no one was consolidating or cultivating the growth of these properties into retirement communities.

“Our plan to launch a real estate company focused upon this emerging niche of 55-plus renters was well-researched and tested with asset managers and pension funds. The consensus was that it could become a new sector of senior housing.”

A team of investors with real estate and capital markets knowledge as both managers and developers was assembled when the company decided to move into real estate.

The Halifax-based company also took skill sets and geography into consideration when compiling its board of directors, whose membership has representation from St. John’s to Vancouver.

“Every board member is an investor, as is management,” said Anaka, who previously had a 35-year career with PwC and has experience in financial reporting, transactions, corporate finance and companies ranging from startups to multinationals.

What ViveRE is looking for

ViveRE is focused on acquiring clusters of low- and mid-rise mid-market properties with elevators, community rooms, gyms, workshops and gardens in secondary markets. The plan is to create what it calls “naturally occurring retirement communities” or “NORCs”.

These buildings should have condominium-quality finishes and be close to health-care facilities, shopping and public transit. The resident base should already have a significant 55-plus cohort.

“Our residents are renters by choice and our buildings are their homes,” said Anaka. “They treat the buildings with care and respect, developing community friendships and staying for extended terms.

“In the same way they chose the homes and neighbourhoods where they raised their families, they are looking for smaller, more personal building environments with social activities, physical fitness facilities and the opportunity to continue with hobbies and gardening.

“To meet their desire for choice and convenience, ViveRE will offer a menu of services covering ICT (information and communications technology), homecare and healthcare. The services purchased will be at the choice of the resident and not one-size-fits-all.”

Properties in Saint John, Moncton

ViveRE’s first acquisition was a 31-unit building at 41 Noel Ave. in Saint John, N.B., purchased in 2017 for $4.9 million. It followed that in April this year with the acquisition of an adjacent 42-unit property at 50 Noel Ave. for $7.9 million.

The company has purchase options for two more apartment buildings on the same street, one of which is under construction and expected to be completed in the spring.

“The Noel Avenue properties have all of the features we were looking for,” said Anaka. “They are very close to Saint John Regional Hospital, on public transit and newly built.”

ViveRE also recently closed on two properties at 542 and 550 Ryan St. in Moncton, which have a combined 46 units, for $5.49 million.

The Ryan Oak Estates have been fully occupied since they were completed in 2012, with rents well under market and room for growth. The average age of residents is 71.

“Both Noel and Ryan Street have the finishes and amenities that appeal to the demographic ViveRE is looking to attract,” said Anaka. “We are currently working on implementing services in these NORCs.”

Finally, ViveRE announced on Dec. 3 it has an agreement to acquire a newly constructed 20-unit building at 75 Emma St. in Oshawa, from Emma and Albert Development Inc.

It is comprised of one two-bedroom, and 19 three-bedroom apartments, a community room, fitness centre and a library.

Located within walking distance of the Oshawa city centre, the Emma property is near health facilities, recreation and shopping. ViveRE is purchasing the property for $7,300,000, with a cap rate of 5.25 per cent.

Monthly rents are projected to range from $1,850 to $2,450.

ViveRE’s growth plans

Anaka envisions ViveRE’s acquisition size and pace picking up as it develops critical mass. The short-term target is to reach 500 units by the third quarter of 2020 and to add at least 500 additional units in each of the following two fiscal years.

“We see purpose-built development as a component of our growth strategy, best executed with developer partners, not directly by ViveRE,” said Anaka.

ViveRE uses third-party building management, either keeping existing building managers in place or using partner Novacorp Properties Limited wherever possible.

Anaka said ViveRE is leveraging strategic partner Trimaven Capital Advisors’ real estate, structure and capital markets knowledge, while iQ Commercial Mortgage Strategy is working with the company on its debt requirements.

ViveRE has traded at between seven and 25 cents per share over the past year and has a market cap of $8.64 million.

Anaka said ViveRE has a dedicated and growing number of investors, with early institutional and family office investment.

“Transaction volumes to date have been relatively light. However, we are satisfied with the growing interest and performance.”

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