The business model for Calgary-based Avenue Living Asset Management is a simple one. Purchase mid-market multi-residential properties that need some work in secondary markets in Western Canada. Spruce them up and thereby add value to them. Increase rents and income.
That model has served Avenue well under the leadership of Anthony Giuffre, its co-founder and CEO, who has guided it to where it is today: a company with assets of about $1.2 billion and 375 buildings.
Its humble beginnings trace back to 2006 when it purchased its first property in Brooks, Alta. – 24 rental units for $3 million.
“In 2006, the real estate market in any centre with ties to oil and gas was red hot, which didn’t leave much room for the little guys trying to break in. We had to run under the feet of the giants, which we did by exploring secondary and tertiary markets,” says Giuffre.
“Avenue Living began with the purchase of a modest, 24-unit building in Brooks, which we renovated and turned into a good earner within six months. We still have that building… We’re big believers in the value proposition of the Prairies, with properties diversified across 18 markets.”
In the fall, the real estate company announced its biggest-ever deal, bringing its portfolio to more than 8,000 residential units in Alberta, Saskatchewan and Manitoba.
It purchased the Delton Townhomes development in north central Edmonton, consisting of 280 homes on 17 acres of land. It was a $43.5-million purchase and signalled two things to the market: Avenue is in aggressive expansion mode and it is expanding its core base to target opportunities in major market areas.
It has set its sights on buying at least 3,000 units more this year, primarily in Calgary, Edmonton, Red Deer and Regina. Those major markets – including Winnipeg – represent 35 per cent of the company’s portfolio, but that primary market portfolio will likely grow to more than 50 per cent as the company expands its asset base.
Its current residential portfolio includes about 4,300 units in Alberta, 3,600 in Saskatchewan and 256 in Winnipeg.
“Our five-year plan is to achieve essentially a doubling of our portfolio,” says Giuffre. “We entered Calgary in 2018. First time in 12 years. The cornerstone of our business is chasing yield.”
But he says recently, “we’ve seen some geopolitical risk, headline risk, pipeline risk, the flight of capital from Alberta, or major markets with the overhang of office space, the oil industry not driving as it has in yesteryear.” * That has “put a pause on some of your typical multi-family investors feeling comfortable with the Alberta and Saskatchewan geography. It went from the Alberta advantage to arguably the Alberta disadvantage.”
But Giuffre says “from the buy side from the Avenue Living’s perspective, this creates opportunity…when you have less pressure on the machine on the buy side all of sudden you have liquidity. With liquidity issues in those markets, fewer buyers, you might see opportunity.”
The company is also benefiting from increased rental demand, as potential homebuyers pause in the face of rising interest rates, tougher mortgage regulations and elevated home prices.
Avenue Living’s portfolio also includes more than 400,000 square feet of commercial real estate space and just under 30,000 acres of agricultural land. It has just over 300 employees in property management, capital and project management, sales and leasing and maintenance, as well as a dedicated call centre that operates seven days a week.
Giuffre co-founded Avenue Living with his brother Dr. Michael Giuffre and Carl Diodati.
Giuffre, who was born and raised in Calgary, is the youngest of seven children, coming from a family steeped in the entrepreneurial spirit. He has called himself a “consummate entrepreneur” with a penchant of starting smaller businesses at a young age.
Early on in his career, he was involved in the restaurant industry and re-manufacturing appliances. But real estate reined him in. It began when one of his siblings, a Realtor, asked Giuffre to help him out while he took some holidays.
Giuffre got his real estate licence and met Diodati, who was one of his brother’s clients, leading eventually to their connection in creating Avenue Living.
In its history, the company has navigated through turbulent economic waters and done so very successfully. First there was the financial crisis of 2008-2009, which hit the global economy and had an impact everywhere. After the economy climbed out of that economic malaise, it wasn’t long before another economic crisis developed. The collapse in oil prices in late 2014 led to recessions in Alberta in 2015 and 2016.
“We’re proud of the fact that we’ve built a business that arguably is recession-proof in a bunch of headwinds… We’re not necessarily the shiny prize. We don’t buy big, fancy buildings but what we are able to determine getting back to our niche was that our business was there to stay,” says Giuffre.
“Brick by brick, building by building, we’re in all of our investments for the long-term. We’re one of the largest owner-operators of multi-family residential real estate in Western Canada. Staying true to our entrepreneurial roots, we’re driven by a philosophy that includes investing with value focus, operating with discipline, monitoring appropriate diversification and pursuing opportunities with an unconventional approach.”
In 2016, Avenue Living established three investment offerings with diversified investment strategies – Avenue Living Core Trust, an open-ended mutual fund trust; the Avenue Living Opportunity Trust, a closed-ended mutual fund trust; and the Avenue Living Agricultural Land Trust, a closed-ended mutual fund trust.
*This story was corrected from the original version, which incorrectly said the “flight of capital into Alberta”.