Former Saskatchewan premier Brad Wall recently joined Calgary-based Avenue Living Asset Management as a special business adviser, as well as a trustee to the Avenue Living Real Estate Core Trust. The company has more than $1.3 billion in assets with more than 8,500 residential units across Western Canada. Calgary’s Business has a two-part question-and-answer with Wall. Today, he talks about Avenue Living. Tomorrow, he discusses the economy and politics.
Why did you decide to join Avenue Living?
Wall: A couple of reasons. One, this is very compelling story of a Prairie success considering where they were in 2006. That’s really not that long ago. Twenty-four units then. And now probably by the end of the year 10,000 multi-family residential units – Saskatchewan, Alberta and Manitoba. That’s very compelling.
I think Anthony’s (Giuffre, Avenue Living CEO) leadership and his vision, it’s hard not to get enthusiastic about that and like I say it’s a great Prairie story.
I was grateful in my old job that there were investors who were willing to yes invest in multi-residential in the major centres but in the case of Avenue Living would also make a point of investing in tertiary and secondary markets, including my hometown of Swift Current, where they have a great property here. I like that.
I like the fact that their vision is they acquire a property, there’s the immediate renovation, and there’s ongoing renovation of our existing properties to make sure that they’re in the affordable range of workforce housing, as they say. But also they’re nice. My family, my dad and his brother were in the trucking business but they diversified here in Swift Current and had a few rentals. I think they practised the same way at the micro level – much smaller level. But they made a point of having nice places to offer at reasonable prices in this particular space.
I like the fact they have this bold vision for the future whether it’s fibre optics to the residences, whether it’s taking advantages of all the roof line they have – I think they have the second highest number of buildings in all of Canada so that’s a lot of roof line for potential solar. I like that.
And perhaps most compelling in all in terms of the future story is their desire to take this model and replicate into the United States in that midwest, central part of that country. I think there’s huge opportunity when you consider the scale. Same sort of story. Centres that might be under-served by a business offering this kind of quality residential.
What will your role be with Avenue Living?
Wall: A couple of things. I’m going to be a trustee with the Core Trust. And then they’ve asked me to be an adviser to the company. And so I’m going to be happy to do that
There’s always a government component, a regulatory component, to the multi-family residential business. So perhaps I can offer them some advice, some strategic advice, in various intersections they’ll have with various levels of government. Hope I can be able to do that as well in my old job, you learn maybe by some mistakes and some successes about effective communications both at the stakeholder level and broader communications. Maybe I can offer some advice on that as well.
Why do you think Avenue Living has been so successful in such a short period?
Wall: I like the model. First of all the people they have in leadership – Anthony specifically – they have a great vision. It’s a bit unique and as I said off the top, they have not been afraid to go into markets, places like Swift Current, places like Medicine Hat, that others maybe kind of overlook. I just think they were willing to go into these places. Of course, they’re still in the major centres as well but they’ve been willing to diversify into those other centres and I think that has differentiated themselves from others and obviously proven to be a very successful formula.
How does the state of the economy play into what Avenue is doing in terms of attracting and growing its tenant base?
Wall: That space that they’re after – that workforce housing – it’s fairly robust demand or at least strong. Sustainable demand even through recessionary times. Witness what happened with this company. Through recessionary times they have been growing. They’re adding more units – 10,000 by the end of the year at a time when there are some headwinds in the Alberta economy even as Saskatchewan is gathering some strength in it.
I think it’s the space that they’re in in particular. We have had a (mortgage) stress test decision by the federal government that has really I think dampened first-time homeowners from being able to move more quickly into homeownership. I think that makes the entire rental space even more important. That’s part of the story as well.
– Mario Toneguzzi for Calgary’s Business