Apartment Buildings…An Investor’s Dream        Domenic Mandato, President         Real Buildings, Real Investments, Real R...
Real Buildings, Real Investments, Real Returns TM
Forward-Looking Statement•   This Presentation contains forward-looking statements. These statements relate to future even...
AGENDA• Who is InvestPlus Properties• Global Real Estate• Apartment Building Landscape• Key Trend Affecting Apartment Buil...
Who is InvestPlus Properties• Buy, Renovate, Convert, Hold Apartment Bldgs• In business since 1999• Limited Partnership/JV...
Canadian Real Estate Prices    1980 – 2010 YTD   Real Buildings, Real Investments, Real Returns TM
Global Real Estate Status     Courtesy: Scotia Bank Housing Report 2010 Q1  Real Buildings, Real Investments, Real Returns...
Why Real Estate is So PowerfulAnd Why Apartment Buildings     Can be Lucrative!     Real Buildings, Real Investments, Real...
Leverage!Real Buildings, Real Investments, Real Returns TM
20% down - 80% mortgage450%       No Growth – No Cash Flow                                                            400%...
20% down - 80% mortgage        3% Growth – No Cash Flow1600%                                                        1500%1...
The Multiplier Effect!  Real Buildings, Real Investments, Real Returns TM
Multiplier Effect• As an Asset the more income the building  produced the higher it’s value• Based on 7% Cap rate, $1 rent...
How Risky is the Apartment    Building Business    Real Buildings, Real Investments, Real Returns TM
Lender & Banks Financial RiskThe order of risk for Lenders and Bankstoward real estate investment is:         1.   Land   ...
Canadian Apartment    Landscape Real Buildings, Real Investments, Real Returns TM
Canadian Apartment Landscape                            No. Of Structures (by Building Size)Metropolitan Area    Under 6 6...
Canadian Apartment Landscape                       No. Of Dwelling Units (by Building Size) Metropolitan Area Under 6 6 to...
Market Share            (20-200+Suites or 830,000 suites)                                        Suites Owned             ...
Canadian Apartment            Landscape Split70                  1,305M suites in Canada                                  ...
Canadian Apartment          Suites/1Million People140,000                                                               12...
The Cost of Buying vsBuilding Apartments  Real Buildings, Real Investments, Real Returns TM
Buying Below Replacement Cost   InvestPlus                                          Cost to build a                       ...
Construction Cost                                    Feb 2011                                 Land Cost Not Included in Pr...
Condo Completions - GTA  Real Buildings, Real Investments, Real Returns TM
Purpose-Built Apartment   Completions - GTA Real Buildings, Real Investments, Real Returns TM
Edmonton CMA – Multi-Family Starts                          Almost 4000 Multi-                            Family Units in ...
Edmonton CMA –Rental Housing Starts                                Only 300                              Rental Housing   ...
What About Existing Rental Product?  Real Buildings, Real Investments, Real Returns TM
Edmonton CMA – Condo Conversions                                  2007 the peak yearSource: CMHC – Multi Family market tre...
Calgary Condo Conversions   Since 1994 a loss ofalmost 17,000 rental units  to condo conversions.                  Source:...
Another Key Trend Calgary Happening            Right Now!• In 2010 there were 13 sales• Average price per suite: $142,000•...
Population Increase Real Buildings, Real Investments, Real Returns TM
Canada’s Population (Millions)                        Population Growth Last 28 years                    (36% Increase)36....
Population Growth in Canada           Canada’s Population          grew faster in 2008 &          2009 (1.2% Annually)    ...
Historical & Projected Immigration        Canada, 1972-2036                                   Projected                   ...
70% of All Immigrants to Canada          move to GTA    Real Buildings, Real Investments, Real Returns TM
NEW TREND IN IMMIGRATION IN         ALBERTA   Real Buildings, Real Investments, Real Returns TM
Real Buildings, Real Investments, Real Returns TM                                                    39
Home Ownership Vs     Renting Real Buildings, Real Investments, Real Returns TM
Cost of Home Ownership Vs Renting                               Greater Vancouver                                         ...
Buying & Renting Gap In U.S.                                         $256    Real Buildings, Real Investments, Real Return...
National Average Vacancy      2.6% in 2010        Courtesy: CMHC –Fall 2010 Rental Market SurveyNational Average Vacancy  ...
Average Apartment Vacancy                 Real Buildings, Real Investments, Real Returns TMCourtesy: CMHC –Canadian Housin...
Factors Why Owner- Occupied Multi-UnitDwelling is on the Rise  Real Buildings, Real Investments, Real Returns TM
Shares of Owner-Occupied Dwellings    by Dwelling Type 1986-2006                                      Canadians Are       ...
From 1981 to 2006, the number of   owner-occupied condominiumsincreased more than five-fold—from        171,000 to 916,000...
Changing Composition of Household• Strong Income & Employment Growth• Improved Lending Conditions              Low intere...
Changing Composition of Household • Growing number of non-traditional   Family Households       Young adults moving out  ...
Decline in Average Household size    Real Buildings, Real Investments, Real Returns TM
APARTMENTS  – ONE OF THE MOSTPROFITABLE BUSINESS FOR  THE NEXT 10 YEARS?   Real Buildings, Real Investments, Real Returns TM
Four Reasons1. Buying building below replacement   cost2. Strong immigration & Population   Growth3. Widening Home Ownersh...
Decrease Supply of Rental Product      Real Buildings, Real Investments, Real Returns TM
Apartment Buildings…An Investor’s Dream                Follow us on        Twitter   : DomenicSMandato      Facebook : Inv...
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Domenic mandato apartments_an_investors_dream_20110618

  1. 1. Apartment Buildings…An Investor’s Dream Domenic Mandato, President Real Buildings, Real Investments, Real Returns TM Real Buildings, Real Investments, Real Returns TM
  2. 2. Real Buildings, Real Investments, Real Returns TM
  3. 3. Forward-Looking Statement• This Presentation contains forward-looking statements. These statements relate to future events or the Partnerships future performance. All statements other than statements of historical fact are forward looking statements. Forward looking statements are often, but not always, identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "targeting", "intend", "could", "might", "continue", or the negative of these terms or other comparable terminology. These statements are only predictions. In addition, this Presentation may contain forward-looking statements attributed to third party industry sources. Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward looking statements will not occur and may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The forward-looking statements contained in this Presentation are expressly qualified by this cautionary statement. The Partnership is not under any duty to update any of the forward-looking statements after the date of this Presentation to conform such statements to actual results or to changes in the Partnerships expectations except as otherwise required by applicable legislation. Real Buildings, Real Investments, Real Returns TM
  4. 4. AGENDA• Who is InvestPlus Properties• Global Real Estate• Apartment Building Landscape• Key Trend Affecting Apartment Buildings – Supply vs Demand?• Apartments – One of the Most Profitable Business for the Next 10 years? Real Buildings, Real Investments, Real Returns TM
  5. 5. Who is InvestPlus Properties• Buy, Renovate, Convert, Hold Apartment Bldgs• In business since 1999• Limited Partnership/JV Investment Opportunities• Invested across Canada• Transacted over 240 doors worth almost $23M• Focused in Western Canada and bullish in Alberta Real Buildings, Real Investments, Real Returns TM
  6. 6. Canadian Real Estate Prices 1980 – 2010 YTD Real Buildings, Real Investments, Real Returns TM
  7. 7. Global Real Estate Status Courtesy: Scotia Bank Housing Report 2010 Q1 Real Buildings, Real Investments, Real Returns TM
  8. 8. Why Real Estate is So PowerfulAnd Why Apartment Buildings Can be Lucrative! Real Buildings, Real Investments, Real Returns TM
  9. 9. Leverage!Real Buildings, Real Investments, Real Returns TM
  10. 10. 20% down - 80% mortgage450% No Growth – No Cash Flow 400%400%350%300%250%200%150%100% 88%50% 40% 0% 5 10 25 Number of Years of Investing Real Buildings, Real Investments, Real Returns TM
  11. 11. 20% down - 80% mortgage 3% Growth – No Cash Flow1600% 1500%1400%1200%1000%800%600% 400%400%200% 150% 0% 5 10 25 Number of Years of Investing Real Buildings, Real Investments, Real Returns TM
  12. 12. The Multiplier Effect! Real Buildings, Real Investments, Real Returns TM
  13. 13. Multiplier Effect• As an Asset the more income the building produced the higher it’s value• Based on 7% Cap rate, $1 rental increase = $170 increase in building value Or• $25 increase on a 50-suiter=$214,000 increase in value Real Buildings, Real Investments, Real Returns TM
  14. 14. How Risky is the Apartment Building Business Real Buildings, Real Investments, Real Returns TM
  15. 15. Lender & Banks Financial RiskThe order of risk for Lenders and Bankstoward real estate investment is: 1. Land R 2. Land Development I 3. Industrial & Commercial Development S 4. Industrial & Commercial K 5. Residential Apartment Buildings 6. Residential Homes Why? Tenants. Tenants pay the bills, pay down our debt and pay our investors. Real Buildings, Real Investments, Real Returns TM
  16. 16. Canadian Apartment Landscape Real Buildings, Real Investments, Real Returns TM
  17. 17. Canadian Apartment Landscape No. Of Structures (by Building Size)Metropolitan Area Under 6 6 to 19 20 to 49 50 to 199 200+ TotalHalifax 741 684 289 198 8 1,920London 839 378 246 271 14 1,748Calgary 867 944 389 120 20 2,340Hamilton 499 564 194 222 30 1,509Winnipeg 326 746 504 213 29 1,818Ottawa 1,027 1,153 169 229 69 2,647Edmonton 77 1,347 920 224 21 2,589Quebec City 3,371 3,285 567 144 11 7,378Vancouver 532 1,540 1,307 532 14 3,925Toronto (CMA) 3,053 2,274 1,082 1,306 363 8,078Montreal (CMA) 30,008 22,892 2,622 794 96 56,412Total 41,340 35,807 8,289 4,253 675 90,364Source : CMHC 2008
  18. 18. Canadian Apartment Landscape No. Of Dwelling Units (by Building Size) Metropolitan Area Under 6 6 to 19 20 to 49 50 to 199 200+ Total Halifax 2,789 6,931 9,040 16,548 1,994 37,302 London 3,109 3,655 7,077 22,283 3,188 39,312 Calgary 3,440 10,056 11,570 11,070 5,280 41,416 Hamilton 1,906 5,511 6,183 22,107 7,031 42,738 Winnipeg 1,269 8,761 15,081 20,031 7,904 53,046 Ottawa 3,707 9,809 5,205 24,217 17,581 60,519 Edmonton 315 15,975 25,395 19,193 5,179 66,057 Quebec City 13,180 30,629 17,214 12,856 3,031 76,910 Vancouver 1,923 17,521 41,549 42,373 3,299 106,665 Toronto (CMA) 11,073 21,555 35,585 131,246 103,532 302,991 Montreal (CMA) 109,512 193,221 77,966 71,584 26,532 478,815 Total 152,223 323,624 251,865 393,508 184,551 1,305,771Source : CMHC 2008
  19. 19. Market Share (20-200+Suites or 830,000 suites) Suites Owned & Managed Share of MarketBoardwalk (50-200+ suites) 35,277 4.40%Realstar Realty (est) 27,000 3.25%Transgloble 26,500 3.19%Capreit 27,614 3.33%Timbercreek 9,500 1.14%Morguard 7,401 0.89%Skyline 5,000 0.60%Mainstreet (20-150 +suites) 5,500 0.66%Harpar (est) (20 -100 suites) 3,500 0.42%Total Estimated market share owned bybig players 149,715 18.04%
  20. 20. Canadian Apartment Landscape Split70 1,305M suites in Canada 60%6050403020 18%10 4% 5%0 BC AB ON QC Real Buildings, Real Investments, Real Returns TM
  21. 21. Canadian Apartment Suites/1Million People140,000 124,000120,000100,000 No Rent 80,000 Control in Alberta 60,000 40,000 17,700 22,140 21,500 20,000 - BC AB ON QC Real Buildings, Real Investments, Real Returns TM
  22. 22. The Cost of Buying vsBuilding Apartments Real Buildings, Real Investments, Real Returns TM
  23. 23. Buying Below Replacement Cost InvestPlus Cost to build a Market Value Purchase Price comparable building today Real Buildings, Real Investments, Real Returns TM
  24. 24. Construction Cost Feb 2011 Land Cost Not Included in Price Soft Costs Cost per Suite Cost to Build (Permits, Total Estimated Average 2bdrm common area, Cost to build 900 sq-ft etc.)Wood Frame $171,000/ Walk-up $160/sq-ft Current Rents $195/ $30 - $35/ sq-ft $190 to sq-ftLow rise (2.5 Suite storey) Don’t Justify New Rental $ 35 - $45/ $220 - $230/ $198,000/ High Rise $185/sq-ft Construction sq-ft sq-ft Suite Real Buildings, Real Investments, Real Returns TM
  25. 25. Condo Completions - GTA Real Buildings, Real Investments, Real Returns TM
  26. 26. Purpose-Built Apartment Completions - GTA Real Buildings, Real Investments, Real Returns TM
  27. 27. Edmonton CMA – Multi-Family Starts Almost 4000 Multi- Family Units in 2010Source: CMHC – Multi Family market trends Jan 2011 Real Buildings, Real Investments, Real Returns TM
  28. 28. Edmonton CMA –Rental Housing Starts Only 300 Rental Housing Units in 2010Source: CMHC – Multi Family market trends Jan 2011 Real Buildings, Real Investments, Real Returns TM
  29. 29. What About Existing Rental Product? Real Buildings, Real Investments, Real Returns TM
  30. 30. Edmonton CMA – Condo Conversions 2007 the peak yearSource: CMHC – Multi Family market trends Jan 2010 Real Buildings, Real Investments, Real Returns TM
  31. 31. Calgary Condo Conversions Since 1994 a loss ofalmost 17,000 rental units to condo conversions. Source: Calgary Inc. Dec. 2008 Real Buildings, Real Investments, Real Returns TM
  32. 32. Another Key Trend Calgary Happening Right Now!• In 2010 there were 13 sales• Average price per suite: $142,000• 6/13 were purchased for affordable housing initiatives – Homeless Foundation Real Buildings, Real Investments, Real Returns TM
  33. 33. Population Increase Real Buildings, Real Investments, Real Returns TM
  34. 34. Canada’s Population (Millions) Population Growth Last 28 years (36% Increase)36.034.032.030.028.026.024.022.020.0 1981 1986 1991 1996 2001 2003 2005 2007 2008 2009 Courtesy: Stats Canada Main Demographic Indicators… 1981 to 2009 Real Buildings, Real Investments, Real Returns TM
  35. 35. Population Growth in Canada Canada’s Population grew faster in 2008 & 2009 (1.2% Annually) than any time since 1991 -Canadian Housing Oberserver 2010 Real Buildings, Real Investments, Real Returns TM
  36. 36. Historical & Projected Immigration Canada, 1972-2036 Projected 40 Million People in Canada by 2036 Real Buildings, Real Investments, Real Returns TM
  37. 37. 70% of All Immigrants to Canada move to GTA Real Buildings, Real Investments, Real Returns TM
  38. 38. NEW TREND IN IMMIGRATION IN ALBERTA Real Buildings, Real Investments, Real Returns TM
  39. 39. Real Buildings, Real Investments, Real Returns TM 39
  40. 40. Home Ownership Vs Renting Real Buildings, Real Investments, Real Returns TM
  41. 41. Cost of Home Ownership Vs Renting Greater Vancouver $1,154 Real Buildings, Real Investments, Real Returns TM Sources: REBGV, Bank of Canada, Statistics Canada, CMHC
  42. 42. Buying & Renting Gap In U.S. $256 Real Buildings, Real Investments, Real Returns TM
  43. 43. National Average Vacancy 2.6% in 2010 Courtesy: CMHC –Fall 2010 Rental Market SurveyNational Average Vacancy 6.2% in Q4 2010 Courtesy: preliminary figures from real estate research firm Reis Inc April 2011 Real Buildings, Real Investments, Real Returns TM
  44. 44. Average Apartment Vacancy Real Buildings, Real Investments, Real Returns TMCourtesy: CMHC –Canadian Housing Observer 2010 & Rental Market Survey
  45. 45. Factors Why Owner- Occupied Multi-UnitDwelling is on the Rise Real Buildings, Real Investments, Real Returns TM
  46. 46. Shares of Owner-Occupied Dwellings by Dwelling Type 1986-2006 Canadians Are Choosing a Condo-Living Life StyleCourtesy: CMHC –Canadian Housing Observer 2009 and adapted from Stats Canada Real Buildings, Real Investments, Real Returns TM
  47. 47. From 1981 to 2006, the number of owner-occupied condominiumsincreased more than five-fold—from 171,000 to 916,000 Courtesy: CMHC –Canadian Housing Observer 2010 and adapted from Stats Canada Real Buildings, Real Investments, Real Returns TM
  48. 48. Changing Composition of Household• Strong Income & Employment Growth• Improved Lending Conditions Low interest rates Real Buildings, Real Investments, Real Returns TM
  49. 49. Changing Composition of Household • Growing number of non-traditional Family Households  Young adults moving out  Divorces  Single Parent-Family Real Buildings, Real Investments, Real Returns TM
  50. 50. Decline in Average Household size Real Buildings, Real Investments, Real Returns TM
  51. 51. APARTMENTS – ONE OF THE MOSTPROFITABLE BUSINESS FOR THE NEXT 10 YEARS? Real Buildings, Real Investments, Real Returns TM
  52. 52. Four Reasons1. Buying building below replacement cost2. Strong immigration & Population Growth3. Widening Home Ownership vs Rent Gap4. Changing Composition of Household Real Buildings, Real Investments, Real Returns TM
  53. 53. Decrease Supply of Rental Product Real Buildings, Real Investments, Real Returns TM
  54. 54. Apartment Buildings…An Investor’s Dream Follow us on Twitter : DomenicSMandato Facebook : InvestPlus Properties Toll Free: 877-663-8772 www.investplusproperties.com Real Buildings, Real Investments, Real Returns TM Real Buildings, Real Investments, Real Returns TM

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