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C A N A D A ’ S O N LY N A T I O N A L P U B L I C A T I O N F O R A P A R T M E N T O W N E R S A N D M A N A G E R S

VOLUME 6 / NUMBER 2 /AUGUST 2009

MetCap Focused on Maximizing Revenue PM#40063056

Aims to be Canada’s most effective apartment property manager

Storm Clouds Gathering?

Who’s Who 2009 Survey Results

Keep Fire Safety Plans Up to Date


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C A N A D A ’ S O N LY N A T I O N A L P U B L I C A T I O N F O R A P A R T M E N T O W N E R S A N D M A N A G E R S

V O L U M E 6 / N U M B E R 2 /S E P T E M B E R 2 0 0 9

22 Cover Story

MetCap Focused on Maximizing Revenue Aims to be Canada’s most effective apartment property manager The management team at MetCap Living believes that focusing on revenue growth, while controlling expenses and strategically reinvesting in the properties they manage, will maximize long-term net operating income.

MetCap Focused on Maximizing Revenue PM#40063056

Aims to be Canada’s most effective apartment property manager

Storm Clouds Rising?

Sign Sign, Everywhere a Sign

Apartment Building Fire Safety Plans

contents...

09193_CAM_Aug09.indd 1

9/1/09 10:29:32 AM

8

Storm Clouds Gathering? Property and casualty insurance providers are not legally obligated to provide insurance policies. Your carrier may love you one day and spurn you the next.

12 Elevator Machinery Guarding A newly released, 61-page best-practices guideline gives advice on how

to properly guard moving equipment in elevator rooms.

16 Keep Fire Safety Plans Up to Date Regular contact with your local fire services department will ensure

that your fire safety plan is up-to-date.

20 Who’s Who 2009 We rank the top apartment owners and managers in Canada. 36 Sign Sign, Everywhere a Sign Lawn signs are a valuable marketing opportunity. Each car that passes your building could be a potential customer.

38 Don’t Let Pests Become Your New Tenants Proactive pest management techniques can discourage pests from

entering your building.

40 Energy Saving Alternatives to Generic Low-E Glass The US Department of Energy, in partnership with Canadian authorities, is implementing changes to its Energy Star program which will require windows to exceed current performance requirements.

40 Multi facts 42 Regulations

4 Canadian Apartment Magazine


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editor’snote

Maximizing Revenue For MetCap Living, one of Canada’s largest third-party property managers, managing buildings efficiently and profitably is the company’s top priority. Focus on the bottom line has allowed MetCap to transform itself from an owner/manager to a pure third-party multi-residential manager. In the process MetCap has added 4,000 units to its portfolio, bringing the total number of units under management to 12,000. Company President and CEO, Brent Merrill, says the key to being a successful third-party manager is having a diverse and experienced team. The company offers a full slate of services, but maintains a personal level of service to its clients. As part of that personal service, Merrill is available to all of his clients until midnight, seven days a week. Along with availability, Merrill also takes a hands-on approach to setting rents. Each Tuesday he personally sets the rent for every vacant suite in the company’s portfolio. Merrill says setting the rents is his most important job as it ensures that each client gets the maximum rent possible. All this is accomplished while maintaining a vacancy rate of less than two percent. Elsewhere in this issue, Captain Ken MacMillan of Toronto Fire Services, explains how regular contact with your local fire services department will ensure that your fire-safety plan is up-to-date. Our marketing writer, Carissa Drohan, offers some timely advice on signage. Every car that passes your property is a potential customer and the right signage can be a valuable marketing opportunity.

PUBLISHER Kevin Brown

ASSOCIATE PUBLISHER Marc L. Côté

EDITOR Randy Threndyle

SENIOR DESIGNER Annette Carlucci

DESIGNER Ian Clarke

PRODUCTION MANAGER Rachel Selbie

CONTRIBUTING WRITERS Carissa Drohan, Telford D. John, Bruce Lang, Ken MacMillan, Bill Melville, Andy Schwartze

CIRCULATION MANAGER Cindy Younan circulation@mediaedge.ca For sales information call (416) 966-4874 Canadian Apartment Magazine is published six times a year by:

5255 Yonge St., Suite 1000, Toronto, Ontario M2N 6P4 E-mail: info@mediaedge.ca

Tel: (416) 512-8186 Fax: (416) 512-8344 President Kevin Brown

Randy Threndyle Editor randy@hushmedia.ca

Copyright 2009 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140X Circulation ext. 232 Subscription Rates: (GST Included) Canada: 1 year, $46.30 2 years, $82.60 Single Copy Sales: Canada: $8.00 Reprints: Requests for permission to reprint any portion of this magazine should be sent to Marc Côté

Correction An article in our Jan/Feb edition entitled Elevator Machinery Guarding and Safety, written by David Balmer, failed to acknowledge that the related photographs are the sole property of Telford D. John. The design shown is also the product of Telford D. John and Associates and is currently patent pending in the USA and Canada.

6 Canadian Apartment Magazine

Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions. Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor. Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada


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insurance

Storm Clouds Gathering?

Reduced business activity could restrict insurance coverage

Property and casualty insurance providers are not legally obligated to provide insurance policies. Your carrier may love you one day and spurn you the next. By Andy Schwartze

As a professional member of the financial services industry, one of my more important jobs is to keep a sharp eye on the economic realities that drive our lives in one direction or another. There isn’t a single credible member of the financial services community who is not acutely aware of the surrounding influences that can easily upset a well thought out program of investment, or hedging. And, as we all know, hedging is just another word for insurance. In the property and casualty industry, no insurance is mandatorily offered to the public, with one exception; one that is of little meaningful interest to much of the business community. The auto insurance industry, through the pooled facilities of the (quite aptly named) “Facility Association” must insure anyone who, holding a valid Ontario driver’s licence and being a regular driver of a specific vehicle that is licensed for the road, asks for automobile insurance. In the other “non government” auto insurance provinces, these insurance avenues for the typically unacceptable insured also exist. It’s simply a matter of money. Auto insurance has become a right under law. Yet, start looking for any other form of coverage from this particular segment of the insurance industry and you will quickly find that you are dealing with providers who are neither legally obligated, nor necessarily willing to give you what you are asking for. Property/casualty carriers, driven by cyclical influences, will love you one day and spurn you the next. (Don’t tell me—you just thought of your bank.) 8 Canadian Apartment Magazine

As it happens, there’s little difference in the attitudes of both these financial services sectors. Indeed, those who follow trends in both sectors are often amazed at how similar they have become over the past 25 years. Consider that insurance agents and brokers now have very limited authority granted them by the insurance company provider, with whom they must clear all policy arrangements before confirming these to the client. Bank branch authority has been deliberately eroded to the point that the branch employee sitting behind the desk takes orders and information, and enters it on the computer so that “underwriting” can consider the loan. The decision is then communicated to you, once it has been made, by the powerless minion from whose back you tear a strip if things don’t work out just the way you had hoped. In both cases, customer contact is with someone who has little, if any, authority and the decision is made “up the line” by someone who does not personally know, and probably never will know, the applicant customer. Both industries have had to learn the high cost of customer nepotism. The great Lloyd’s London syndicate insolvencies of the late 1980s and the real estate recession of the early 1990s were the final lessons learned. So, we now operate in an indifferent world of computerized underwriting, and the best that the financial services world can offer us is depersonalized personal service, invisible decision makers, telephone trees, online applications and form letters. How do we read the signs that tell us whether


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insurance

Andy’s Tip Attractive insurance accounts: • Carry out recommendations • Insure full replacement values • Insist on high deductibles • Maintain solid balance sheets

or not these newly crafted delivery systems are going to be friendly, or hostile? While I too have had many experiences with the banking system, it is not one that I work in and there are surely better qualified commentators available. However, it can be said that banks either love you or want nothing to do with you. This very same comment can be made about property/ casualty insurers. And, just as the banking system has shown us in this past 12 month period, that it can rapidly and resolutely seize up, so too can the property/casualty insurance industry. It’s not the fact that both industries have cyclical realities they need to live with, that’s normal. It’s the speed with which these can cause underwriting attitudes to change that are the danger as, from one day to the next, they either give us everything, or give us nothing. Astute users of both sectors know and respect this and govern their businesses accordingly. Excessive borrowing—by over-leveraged consumers— are poison to the banks. Low interest rates and a dead economy are equally poisonous to the property/casualty business. T-bills are the typically allowed investment vehicle that insurers are able to hold (unlike their life counterparts, the property and casualty guys are required to maintain high levels of liquidity) and low interest rates do nothing to bring added revenue to the insurer’s bottom line. Dead economies reduce business activity, thus reducing insurance premiums that are activity based. 10 Canadian Apartment Magazine

Tough times force insureds to lean on their coverage more while also pushing for lower rates. Liability claims rise, as more plaintiffs take to the courts to try and raise some extra cash. It’s the property and casualty industry’s version of a “confluence of events”. If things get really bad, the doors slam shut and all one can do is press one’s nose to the window. These nasty cycles result in some businesses losing their insurance altogether (thus voiding their credit agreements) or having their coverage severely restricted, or nastily repriced (upward, of course). While it is not yet blatantly obvious, this “confluence” is lurking. Interest rates are low, returns on equity are below 6 percent (a red-flag level) and the “claims curve” is still climbing. It is possible that the inevitable appearance of inflation will temper what might otherwise be a soon to seize up property and casualty sector. But if rates stay low and the economic activity level continues to shrink, or even stay flat, we could find ourselves in a much more disciplined and price demanding insurance market. I will not predict just yet, but the storm clouds are gathering. CA M Andy Schwartze, BSc, MBA, CIP, is an insurance broker specializing in property management and real estate. He is a former President of the Insurance Institute, has taught in the community college system and provides continuing education to other brokers. He can be reached at andy@takecover.ca.


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elevatorsafety

Elevator machinery guarding A new addition to worker safety

A newly released 61-page best practices guideline gives advice on how to properly guard moving equipment in elevator rooms. By Telford D. John

For some it was a surprise, for others a welcome resolve to a very controversial issue plaguing Ontario building owners, property managers and elevator contractors alike. Yes, I am referring to the Elevator Machine Room Equipment Guarding, Best Practices Guideline released on June 1 2009. The guideline, which was created by the Elevating Device Advisory Council, is meant to give elevator owners in Ontario advice on how to properly guard moving equipment in elevator machine rooms. As has been noted in previous stories in Canadian Apartment Magazine, the proper guarding of equipment in elevator machine rooms is part of a focused effort on the part of the Ontario Ministry of Labour (MOL). It is the elevator owner’s responsibility to ensure equipment guarding provisions are installed and compliant with the requirements of Ontario Regulation 851. This 61-page best practices guideline did not evolve easily. In fact it is the result of over two years of many long 12 Canadian Apartment Magazine

and heated discussions between industry stakeholders within the committee. Although the committee included over 300 years of experienced and respected elevator personnel, not everyone shared a common viewpoint on this controversial issue. Fortunately the committee elected the highly respected and organized elevator consultant Mr. Cliff Ayling, the Principal of Ayling Consulting Services Inc., to chair the committee and he succeeded in keeping the group focused and on track. When the final draft document was unanimously accepted by all committee members in February of this year a sense of proud accomplishment and resolve emanated throughout the room. We feel the document is the most comprehensive machine room elevator guarding guideline in Canada, and one that could serve as a model for other provinces. As pointed out in the introduction statement by the Technical Standards and Safety Authority, an Ontario-


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elevatorsafety

“With the acceptance of the guideline, a new addition to worker safety in Ontario was born.�

based organization charged with maintaining elevator safety in the province, this is a living document. With the acceptance of the guideline, a new addition to worker safety in Ontario was born. Within the machine room there are several moving pieces of equipment. Since elevators operate intermittently, sudden start-up of equipment could easily entangle non-experienced personnel that could be in the machine room. (Remember, emergency personnel must have immediate access to the machine room. Other building maintenance and security persons often enter for other reasons.) As a member of this task group my initial concern was to ensure that any guarding provisions were derived by elevator professionals and installed by licensed elevator contractors. It was becoming all to common to hear about regulatory infractions by building owners and property managers who would contract non-elevator companies to provide something in an attempt to appease the Ministry of Labour or insurance underwriters. This practice was not only in violation of the Elevating Devices Act of Ontario (Ont. Reg. 209/01) but also, in many situations, extremely unsafe. In some instances fabricated pieces were attached to critical safety 14 Canadian Apartment Magazine

elements of the machine. In other cases, guards that severely restricted elevator maintenance practices were installed. In one example a 300-pound steel crate encompassed the machine. A chain fall was required to remove it. On another, entire machines disappeared behind a new drywall enclosure. In both cases, serviceability for elevator maintenance and public safety were severely compromised, additional hazards were introduced and no protection was offered to the elevator worker in the design once removed. I would also at this time make reference to dust covers and rope retainers. These items are added to some machines but are not machinery guards. In fact most introduce further nip point and shearing hazards that must be mitigated. Not all guarding systems will be the same and the guideline offers some examples and suggestions. The cover page indicates one of my earlier designs in 2005, while page 56 demonstrates a current refinement. Internal nip point guards are integrated into these assemblies. (My design concept is patent pending in the USA & Canada.) It is important to note however, that the cost of adding guarding may

not just be with the initial installation of guarding but may also alter the current elevator maintenance contract. This is primarily due to the possibility of excessive time loss for regularly scheduled maintenance when guards are installed that are not user friendly. Such conditional inclusions may be present in the contract. Therefore it would be wise to review the type of equipment guarding with your current maintenance company or qualified elevator consultant before making your final decision. In my opinion there is no such thing as a 100 percent foolproof machinery guarding system or procedure as even a machine that is locked out of service could cause tripping or abrasion hazards. It was therefore the committee’s best efforts with reason and sensible practicality that prevailed to bring the best practices guideline to life. It, in conjunction with present elevator safety practices, will dramatically improve the safety of all workers that enter a machine room. CAM

Telford D. John is a TSSA-licensed elevator consultant with 36 years in the elevator business. He can be reached at 905-723-9425 or by email at: telford@tjaelevator.com.


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fireprotection

Keep Fire Safety Plans Up to Date

Maintain open communications with your local fire services department By Captain Ken MacMillan

A recent Fire Safety Plan (FSP) article published in Canadian Apartment Magazine prompted a request for a fire service response and update article. My comments and response will reflect the requirements contained in the Ontario Fire Code (OFC). Building owners who utilize the National Fire Code or other Provincial Fire Code Regulations should check with their local fire service to confirm the requirements as they pertain to their specific location. The OFC came into existence on November 21, 1981. There have been a number of revisions over the years and Ontario Regulation 213/07 is the current version. Article 1.2.1.1. of the OFC states: “Unless otherwise specified, the owner is responsible for carrying out the provisions of the Code.” With respect to the above OFC reference, fire safety plans (FSP) have been required in many apartment/condominium buildings since the mid-1980s. Therefore, it would not be prudent for a building owner to claim ignorance of the OFC requirements regarding the implementation of an approved fire safety plan in their building(s). Especially given the intent of the above noted OFC requirement and considering the length of time the OFC has been in existence. There has been some reluctance on the part of building owners to approach their local fire service to discuss fire code issues, including fire safety plan implementation in their buildings. In many municipalities the local fire service is responsible for enforcing the fire code regulations. However, the majority, if not all fire departments are not seeking to address fire code issues through the court system. This is only used as a last resort by the fire service, when a building owner chooses not to comply or fails to comply within the prescribed time frames to make the necessary 16 Canadian Apartment Magazine

OFC corrections. This would also apply to the completion of an approved FSP, when required. Therefore, it is extremely important that the building owner maintains an open line of communication with the fire service when addressing known fire code issues. At the end of the day, the fire service is looking to work with building owners to make your building safe from the ravages of fire and to gain compliance with the fire code. A fire safety plan is considered a passive form of fire protection. This means that the plan in itself does not activate alarms or sprinkler systems. Passive fire protection works behind the scenes to prepare the supervisory staff, building occupants and the life safety systems for the possibility of a fire emergency. In essence, the FSP is the key component (outside the OFC) when a building owner is seeking to provide a fire-safe environment for their building occupants. Once approved, a FSP must be properly implemented within the building. This includes ensuring the distribution of the approved emergency procedures to all building occupants and supervisory staff (those staff designated under the fire safety plan). In order to ensure all parties understand what to do in the event of a fire, proper training must be initiated by the building owner and carried out as required to keep all parties apprised of their responsibilities in the event of a fire condition occurring in the building. Once a FSP is approved, the OFC requires that: “The FSP shall be reviewed as often as necessary, but at intervals not greater then 12 months, to ensure that it takes into account of changes in the use and other characteristics of the building.” Therefore, it is not the responsibility of the fire service to knock on building owners’ doors to ensure that their FSPs are current and up-to-date. It is the owner’s responsibility.


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Yearly reviews required At least once per year the building owner is required to review the approved FSP to ensure its continued accuracy. Minor changes to the approved FSP such as supervisory staff names, phone numbers, locations of persons requiring evacuation assistance or other phone numbers do not generally need to be forwarded to the fire service. This information is to be made available to arriving fire crews. Minor to moderate changes to building life safety systems require that these be submitted to the fire service for review and insertion into their copy of the approved FSP. Finally, major changes to the approved FSP such as a new addition to the existing building, complete new fire safety system installations or building change of use will require that a completely new and/or revised FSP be submitted to the fire service for review and approval. Once again, building owners are advised to check with their local fire service to obtain the specific requirements pertaining to their situation. As a building owner, some might be inclined to ask: ‘Other than being a fire code requirement, what is the benefit to me in implementing an approved FSP in my building?’ Legal issues aside, there is a strong moral responsibility for a building owner to provide a fire safe environment for building occupants. Consider a major fire in the GTA in the late 1990s. A small fire initially contained to one unit was allowed to escape the unit into the hallway through the suite door, left open by the occupant when he evacuated. Eventually it breached the stairwell fire separation door contaminating the entire stairwell. This resulted in the death of six building occupants who themselves, were apparently unaware of the basic emergency procedures to follow. Some people chose to turn back and head up towards the top of the stairwell (when the smoke became unbearable) as they attempted to initially exit the building at grade level. Unfortunately, roof top access is not generally considered as part of the required “means of egress” and six people 18 Canadian Apartment Magazine

perished in the fire. For the record; an approved roof top means of egress is allowed through the building permit application under the building code. Once approved, it is maintained under the fire code. It would have to be included in the approved FSP. A review of the inquest pertaining to this tragedy indicated that the building occupants that attempted to leave a smoke filled stairwell lacked sufficient basic fire emergency training to make the correct choices to save their own lives when it mattered most. These were preventable deaths had basic fire emergency procedures been reinforced on a regular basis. New computer-based technologies, like online selfserve programs, continue to push the envelope in terms of providing new avenues for building owners to increase their basic overall fire safety knowledge. This includes the advent of computer-based FSPs. These provide a knowledge base and tools to create a FSP. Plans are easily editable and allow for collaboration with fire safety consultants, should the need arise. Once the plans are completed, they can be printed and submitted for approval. The online portal can be set up to alert the building owner when fire drills should be performed or to update lists of physically challenged tenants. The fire service will seek to work with these new technologies as long as it can be shown that lives will be saved, the regulations are met and hopefully the necessary budgets are put in place to allow fire services across Canada to utilize these computer-based advances in our own efforts to promote the continued fire safety of life and property.

Conclusion In conclusion, fire safety plans are first and foremost designed to save the lives of building occupants in the event of a fire emergency. New technologies are making the process much easier leaving no reason to avoid producing or updating FSPs. As a building owner; take the time to produce a quality FSP and have it approved by your local fire service. Once returned to you, review the FSP and train designated supervisory staff on their duties. Distribute the required building occupant sections of the FSP and arrange to conduct a fire drill based on the approved FSP. Evaluate the outcome of the fire drill, including a post-fire drill review with all FSP designated staff. It is advisable to consult with your local fire service before commencing the fire drill to ensure that you, as the owner, are clear on what needs to be accomplished. This is especially true if you intend to allow for building occupant participation. Following these basic FSP procedures will help to assist in saving people’s lives should a fire break out in your building. CA M Captain Ken MacMillan is a 20-year veteran of the Toronto Fire Services Fire Prevention Division. If you have questions or comments, he can be reached at 416-338-9452. The content of this article are the writer’s opinions and should not be construed as representing the views of any or all fire services across Canada.


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WHO’S WHO 2009

C A N A D I A N A PA RTM E N T M AGA ZI N E

09

The 6 th Annual Canadian Apartment Magazine Who’s Who Survey Results

For the last five years Canadian Apartment Magazine has listed the Top Ten Apartment Leaders according to results of a survey sent out for Canadian Property Management magazine. We changed the survey this year to reflect the uniqueness of our industry. The most obvious change is the Unit/Suite count rather than measuring in square footage and we’re now listing all survey results not just the top ten. As with anything new there is a starting point and we invite everyone in the Apartment Industry to participate next year so we can show our strength and growth year over year.

Apartment Manage - number of units

Apartment Own Only - number of units

Gateway Property Management Corporation

17,500

El-Ad Group (Canada) Inc.

11,000

Greenwin Property Management Inc.

14,300

Lanesborough Real Estate Investment Trust

3,333

Cogir Management Corporation

12,702

Sun Life Assurance Company of Canada

3,333

Metcap Living Management Inc.

12,222

Canadian Urban Ltd.

898

The DMS Group

12,222

Dorset Realty Group Canada Ltd.

694 115

Briarlane Rental Property Management Inc.

8,888

Industrielle Alliance, Ass. Et Services Financiers Inc.

Shelter Canadian Properties Ltd.

8,324

Gateway Property Management Corp.

40

GWL Realty Advisors

7,865

Huntingdon Real Estate Investment Trust

15

Vertica Resident Services

6,579

Berkley Property Management

5,555

Apartment Own & Manage - number of units

The Regional Group of Companies

5,000

Boardwalk Rental Communities

34,444

Minto Developments Inc.

4,964

Transglobe Property Management Services

29,351

Moreguard Investment

1,874

CAPREIT

27,747

PAN Group Properties

1,215

Realstar

25,600

Homestead Land Holdings Ltd.

21,111

Minto Developments Inc.

8,705

Park Property Management Inc.

8,153

Drewlo Holdings Inc.

7,777

Timbercreek Asset Management

7,000

Morguard Investments

6,889

Globe General Agencies

5,673

Skyline REIT

5,574

Oxford Properties Group

4,444

CLV Group

4,444

Greenwin Property Management Inc.

3,100

O’Shanter Development Company Ltd.

2,600

PAN Group Properties

24


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coverstory

MetCap Focused on Maximizing Revenue Aims to be Canada’s most effective apartment property manager By Randy Threndyle

The management team at MetCap Living believes that focusing on revenue growth, while controlling expenses and strategically reinvesting in the properties they manage, will maximize long-term net operating income.

22 Canadian Apartment Magazine


August 2009 23


coverstory

“Our management of properties is 24/7.” Back Row, Left to Right: Bruce Stewart, Anne Meinschenk and John Tsangaris Front Row, Left to Right: Brent Merrill and Lucy Tao

Over the years MetCap Living has undergone many changes. Founded in 1988, the company began its existence as a developer of office buildings and shopping centres. In 1991, the company’s founder, Michael O’Gallagher shifted MetCap’s focus to multi-residential buildings. Over the next 15 years the company acquired 8,000 multi-residential units, mainly in Toronto and Montreal. O’Gallagher had planned to build a multi-family residential organization that would be the envy of its peers. “We should all take enormous pride in the dynamic enterprise we’re building. Providing great neighbourhoods for people to live and grow is a meaningful goal,” he said 24 Canadian Apartment Magazine

Unfortunately, O’Gallagher’s sudden death in 2003 forced a change in the company’s business strategy. The estate decided to sell all of the residential units but retain the management side of the business. Previous to the sale Metcap had managed all of its own buildings. Brent Merrill, a chartered accountant who had been the Vice-President of Finance, became MetCap’s President and CEO. Merrill had joined the company in 1990. In March 2005 Merrill purchased MetCap from the estate. Under his leadership MetCap has grown, adding an additional 4,000 units to the portfolio bringing total number of units under management to 12,000. “We now manage over $1 billion worth of residential real estate,” he says.


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coverstory MetCap sold most of its multi-residential units to ELAD Group Canada, one of the country’s largest real estate companies, but retained the contract to manage the buildings. That transformed the company from an owner/ manager to a third-party management business specializing in multi-residential buildings. Over the intervening years EL-AD has sold some of the properties it purchased from MetCap. Late last year it sold 4,700 units to a consortium of buyers. Despite that, MetCap has increased the number units in its management portfolio. “We manage many properties for EL-AD and while some of those units were recently sold a number of them are currently under contract with our existing clients. We are now in the unique position where we have the opportunity to take additional work from existing and new clients when in the past this was not always possible. We have a tradition of never taking on more than we can handle. We prefer our growth to always be manageable and never at the expense of our existing clients,” says Merrill. Today, says Merrill, the company’s goals are twofold. “For our clients we focus on revenue growth, controlling expenses and reinvesting strategically in our properties to maximize net operating income over the long term. For MetCap as a company our goal is to become the Canada’s most effective and knowledgeable manager of apartment properties nationwide. We simply want to be the best at what we do.” MetCap’s ability to transform itself, while maintaining top notch customer service, has been central to its success, says Merrill. “In a nutshell MetCap provides boutique style service with all the support and advantages of a large infrastructure.”

26 Canadian Apartment Magazine

He adds, “MetCap’s vast resources allow us to have experienced teams in marketing, leasing, customer service, technology, financing, engineering and architecture. All of these teams work together to obtain superior results for our clients.” In addition, all members of the team are “engaged and accessible,” he says. “Our management of properties is 24/7. Both our clients and our residents expect this type of service. And we deliver!” To emphasize the point Merrill says he is personally available to all clients on his cell phone until midnight seven nights a week. Although MetCap has all the advantages of a large manager with its substantial infrastructure the company prides itself on delivering a personal service to all of its clients. MetCap is one of the only third-party managers in Canada that sets the rents for all available units in its entire portfolio each and every week. Each Tuesday Merrill and his leasing team review the rents for every available suite in the entire portfolio. Where necessary, rents are adjusted to reflect market conditions. “In this way you have the President of MetCap actively involved in the leasing of every single unit under our care which is why our market rents remain so competitive across all 12,000 units,” says Merrill. “I can’t think of a better person to set rents than the President of the company that manages your property. I have over 19 years of experience with MetCap and have been setting rents for more than 10 years. I can’t think of a more important job for me to do than to ensure each of my clients gets the maximum market rent possible while working to keep vacancy at or under two percent. If we can


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coverstory

“We set targets on what cash flow should be and we try to meet or do better than those cash flows.”

Vice-President of Finance, Lucy Tao

always accomplish this goal, we will always have satisfied clients,” he says. Setting the rents personally makes all employees in the company attentive to Merrill’s attention to detail with respect to the leasing. As a result everyone is fully aware of the expectations and deadlines required of them each and every week. “It is this type of focus that makes our company successful and ensures our clients meet their net operating income targets,” says Merrill. Merrill says MetCap’s clients are all “unique” and value the fact that the company offers a full slate of services from which to choose. “Many like our focus on rental income growth, but others like our ability to save money from our bulk purchasing programs, while others enjoy the benefits of our cost saving capital expenditure programs,” he says. “Many clients take advantage of our ability to buy and manage gas contracts in house. And some well, they just like the fact that they can call me until midnight, 7 days per week. Our ability to provide financial, marketing, leasing, engineering, operations, customer service and technology services to all of our clients at a moments notice is what they value the most. Our accessibility, attention to detail and great people comes a close second.” In order to ensure that accessibility and attention to detail are maintained throughout the organization, Merrill has assembled a team of managers, many of whom have been with the company for many years. 28 Canadian Apartment Magazine

Financial Results Lucy Tao, Vice-President of Finance for MetCap Living, joined the company in 1996. At the time, she says, the company had just begun to acquire multi-family residential units. Tao says while the focus of the company has switched from ownership of multi-residential properties to thirdparty management, they still manage a property from the perspective of an owner/manager. “The reporting process we had in place from when we owned our buildings is applied to our third-party management,” she says. To that end the company has worked to create detailed financial statements for its clients. As an example, each year the company goes through a budget process in which all departments, are involved. “It’s quite a sophisticated budgeting process,” she says. Each department gives its input and the finance department puts the budget together and presents it to the client. “What I’ve found is a lot of individual owners don’t actually do that. They don’t actually have a budget. They are just running their business based on how much cash is in the bank,” she says. “We set targets on what cash flow should be and we try to meet or do better than those cash flows. Ultimately what owners want to see is distributions. My role is to manage the cash flow and maximize net operating income.” Every month the client receives a statement comparing the actual results to budget. If there are areas of variance, where performance didn’t match budget, she institutes a variance analysis. For instance, if gas costs were higher than


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coverstory

budgeted, they investigate the reasons for the increase. First they look at historical analysis—comparing gas costs over the past three years to the present. If that does not provide an adequate reason for the increase, then they investigate the building to see if there is a problem with the boilers or controls in the building. “There could be a physical plant problem, so we take it one step further,” she says. “It’s not just accounting. Both finance and operations review the results before we meet with the client.” When meetings are held with clients, the reports are tailored to the client’s needs or interests. “Some want all the details. Some want to be involved in the operations. Some just want to know their cash flow and their bottom line, so we adapt to whatever they want or what they are interested in,” says Tao. In order to maximize net operating income the budget includes plans on how to increase revenues, especially in buildings that are new to the company’s portfolio. First, MetCap looks for ways to increase the leasing rates in new buildings. “We do a lot of buildings that have vacancy problems, so we set a goal on what our optimal vacancy percentage would be down the road.” says Tao. They also look for ways to maximize revenues through better contracts with cable and laundry companies and ways to maximize parking revenues. In terms of expense controls the company’s size allows it to get good prices from most suppliers. MetCap also has in-house staff who deal exclusively with utility contracts. They manage the process where the company either locks in or floats in an attempt to do better than the market rate for energy. Another service the company offers that helps to increase an owner’s bottom line is a collection agency known as Suite Collections Canada Inc. It is a full-service collection agency that offers services mainly related to landlord tenant issues. If a tenant doesn’t pay the rent, Suite Collections will deliver a notice to the tenant and if needed, issue an application for eviction. They will also attend court if needed. Since Suite Collections is a full-service collection agency, they can also register debts against tenants who have skipped out on the rent. Once registered with the Credit Bureau of Canada, the debt stays on the books for six years. “In the past what we found was that when we took our receivables to collection agencies—because of the high 30 Canadian Apartment Magazine

volume, small dollar amounts of receivables—it was hard to get anyone to pay attention and really work them,” she says. “That’s why we started to do our own. It’s worked out very well. We’ve found it is a service that a lot of people do need. A lot of landlords would just give up on a bad debt. Suite Collections is dedicated to working these debts.”

Operating Income Paying careful attention to the bottom line also plays out on the operations side of the business. John Tsangaris, Vice-President of Operations, says, “You succeed in the property management business if you reduce your operating expense.” A 37-year veteran of the property management business, Tsangaris says before MetCap takes over a building they take a careful look at the property to get as much information as possible on the physical condition of the building. They speak to the owner about work that has been carried out, or might be necessary and any issues with city audits. “We try to get as much background information as we can,” he says. Once that is done, he carries out an analysis of the property and develops a budget to manage the property. Using that information he develops both a five-year capital expenses plan and an annual operating budget. The budget is based on a very simple premise. “You always have to keep in mind that you need to meet the cost and distribution requirements of the owner,” he says. “Over time you balance the budget with the net operating income in a way that at least would meet or exceed the threshold or benchmark of similar buildings in the market.” The goal, he says, is to develop a long-term relationship with the owner. “We have a lot of pride in our ability to manage,” he says. “We believe at the end of the day that it’s going to be a long-term relationship.” As part of the assessment he takes a look at potential energy savings for water and electricity. When possible he works in partnership with utility companies to take advantage of discounts or incentive programs. Simple retrofits like low-flow plumbing fixtures and energyefficient lighting are also assessed. MetCap also looks to areas were the company can take advantage of economies of scale. “We are a big company and we do have some leverage with certain suppliers and contractors, so we believe we can get the best price possible,” he says.


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coverstory When it comes to apartment turnover, MetCap tries, wherever possible, to rent the units back to back. Tsangaris says if the tenant agrees to take over the apartment as is, the company signs a promissory declaration that work on the unit will be completed within two weeks after the tenant moves in. If it’s not a back-to-back rental then the company expects that all units will be rent ready in two-week’s time. That, says Tsangaris, reduces the vacancy rate for the owner. He cites the back-to-back rental program as one of the reasons that the company has been able to maintain a two percent or less vacancy rate across its entire portfolio. An additional area of concern, says Tsangaris, is curb appeal. “We believe this will make a person walk into the building and say, I want to rent. They won’t look at the roof because they wouldn’t know. But they will look at the corridor and the landscaping. We’re really big on that. We make every effort to make the owner a believer in that approach.” Another simple fix is done by simply cleaning and painting the common areas and exterior of the building and picking up garbage that may have accumulated around the property. When the company develops a five-year plan for the building, one area of capital improvement that is a priority is life safety. A fire alarm panel may meet code, says Tsangaris, but if the panel is 30 or 40 year sold, it is often difficult or impossible to get replacement parts. “I don’t want to find myself in a position where I have a problem and I can not correct it or rectify it.” Even although an old panel may meet code it is better to replace it, rather than face a malfunction during an emergency, he says. Other capital improvements, such as heating plants or balconies are replaced on an as needed or as can be afforded basis. “We prioritize using a balanced approach. The key is to be able to prioritize correctly,” he says.

Information Technology Collecting information that is of use to the building owners is the responsibility of Bruce Stewart, MetCap’s Information Technology Director. Since the earliest days of the company, MetCap has taken the view that collecting information in a timely fashion would reduce operating costs, says Stewart. “We really have a belief in gathering information that is useful, but also getting it out into the hands of the people who need it.” To that end, the company was one of the first in Canada to put a computer screen in every building it owned or managed. The company first started installing computer links in the 1990s. Over the years the company has worked to refine its systems and increase the value of the data being collected. Stewart says having a computer link in every building gets onsite managers and superintendents more involved in every aspect of managing the building and helps give owners a better idea of what is going on in their buildings. Stewart, a chartered accountant with 10 years in public practice before joining MetCap, says, “We really do things 32 Canadian Apartment Magazine

Vice-President of Operations, John Tsangaris

Director, Information Technology, Bruce Stewart

in terms of information. I almost try to stay away from the technology part of my title, because to me, the computers are just the tools that help you gather useful information and then arrange it in a useful fashion to put in front of someone.” However, says Stewart, gathering the information is only half the battle. Owners, especially institutional owners, need information as quickly as possible. In the past, he says, owners were willing to wait until the end of the month for information or the end of the reporting period. Information was often a few weeks old by the time they received it. Today, he says, owners often want information supplied more quickly, sometimes even before the end of the reporting period. Institutional owners, he says, realize that if they wait until the end of the reporting period, to review the numbers, it’s often too late to fix the problem. Stewart is also working to use the company’s computer system to help track energy consumption. While MetCap has instituted energy tracking software in several buildings owned by institutional investors, private investors have been slower to take advantage of the benefits. While MetCap’s


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coverstory computer network has the ability to track numerous aspects of energy consumption many buildings do not have control systems capable of gathering energy consumption information in an electronic format. “They (owners) may know in the back of their minds that they should do this because energy costs are going up, but they’re still a little afraid of the capital costs. With our track record we can go to other owners—who we manage for, or would like to manage for—and say, ‘Here’s an example of what it looks like. Here’s what your experience might be if you chose to put this equipment in your building, and here’s where we think the payback might be.’ We assure them and give them some concrete examples.”

New Business Bringing new customers into the MetCap fold is the responsibility of Anne Meinschenk, the Director of New Business. She says clients are attracted to MetCap because the company offers a full slate of services including finance, marketing, leasing, customer service and IT staff. Meinschenk says customers also value the fact that the company has a full-time engineering staff, as well as a collection agency. “We are a full-service, one-stop shop,” she says. “We’re a large manager, but we run like a boutique operation. We have lots of backup and support, so you get the personal attention of a smaller operation.” Merrill says he made a decision four years ago to hire Meinschenk, a business development expert, in order to help the company expand its business. “Anne came to us with over eight years of experience working with private landlords and property management companies,” he says, adding: “Our people essentially sell themselves. But naturally being accountants, engineers and leasing personnel, we needed Anne to explain the whole package to our clients. Once they understand how we operate it’s a pretty easy sell. In fact our track record speaks for itself. We have brought many, many buildings of our new clients from over 10 percent vacancy to two percent. In fact we have even brought a couple buildings in difficult areas from 50 and 70 percent vacancy to two percent. Success breeds success as you know!” Meinschenk says that a common reason for an owner to hire a professional property manager is if the owner is having trouble with vacancies. The MetCap promise for turning around buildings with high vacancy rates is known as the Guaranteed Vacancy Reduction Program. “We offer our clients a simple guarantee: either we keep your property at or under two percent vacancy while achieving market rents or you can rescind your agreement with us in 60 days. Our weekly rent setting program and unique marketing program are what keeps our buildings full at better than market rents,” says Merrill. Meinschenk says if someone has been managing the building themselves, they are usually looking for a property manager because they need help in a number of areas. Since the company offers a full slate of services, they have been able to turn a number of buildings around. 34 Canadian Apartment Magazine

Director of New Business, Anne Meinschenk

As an example, she says, upgrades often begin by improving the lighting and increasing the signage on the building. Typically, they also extend the leasing hours, putting a leasing agent on duty from 8 am to 8 pm, Monday to Friday until such time as the building is stabilized and the building staff are trained to do the job themselves. When needed, leasing agents may be on duty over the weekend or are floated into a building for a day or two as needed when turnover is high. Metcap has a pool of leasing agents which can be sent to any building on a moment’s notice. Another way to improve the lease-up rate in larger complexes, is to separate the leasing office from the property management office. That way leasing agents are able to give top priority to potential tenants. With the company’s back-to-back rental program, leasing agents are able to concentrate on units that are rent ready. “We’ve found time and time again that it’s really the inside of the suite that matters. We have a standard that we want the apartments to meet and we make sure all the units meet that standard, but we are cautious and prudent with the owner’s budget,” says Meinschenk. “Where some owners get in trouble is they are afraid to put money into the suites,” she says. Once they fall behind in repairs, they have difficulty in renting the units. “That makes it worse, because now they are doubly afraid to spend the money.” Typical improvements include painting, sanding the floors, and replacing faucets or light fixtures. Rather than replace a kitchen, the company looks at painting kitchen cupboards and changing door handles. “We try to be cautious to make sure the apartment is in clean, decent shape without being over the top.” As to the future, Merrill says that while the company continues to be one of the largest third-party property managers in the Toronto market, they have recently expanded to provide services to landlords throughout Ontario from Windsor through to Belleville as well as in Quebec. “Our plan includes expansion nationwide in the next five years,” he says. CA M To Learn more about our “Guaranteed Vacancy Reduction Program”, contact Anne J. Meinschenk, Director, New Business Development MetCap Living Management Inc. Office 416-340-1600 x 467 Cell 416-993-4305 Fax:416-340-1593 www.goodwithnumbers.net


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marketing

Sign Sign, Everywhere a Sign

Lawn signs a valuable marketing opportunity

By Carissa Drohan

A few years ago Skyline was approached by a third-party

Visible Text

advertiser and asked to participate in their new lawn sign program. The deal: They would pay the cost of the production and installation if we would allow the signs to be installed on our properties. Free signage, we thought. What a great deal! I happened to walk by the signs the day they were installed and I found it hard to figure out if it was advertising the apartment or the website. All I could see from the road was a big website address and almost nothing about the building. After discussing this with my colleagues, we felt that we were not getting enough exposure. We can do better we thought—let’s make our own signs. Now, a few years later, we have come to realize the immense value of signage and that of our own front lawns. That’s right, lawns are valuable. The fact is the traffic that passes by an apartment building everyday gives that location great value. Think about it. How many cars pass by your building everyday? How many residents, guests and employees do you have as an audience? A large portion of this traffic could be potential renters but if you don’t have a lawn sign promoting your building then it is a huge missed opportunity. If you did have a sign, imagine how much traffic you could drive to your website. Imagine the branding you could do for your company. Imagine the number of phone calls you could receive about your building. My suggestion is to stop imagining and start doing. It has been my experience that signage is a key driver of traffic to our website. Our traffic numbers go up in correlation with new signage on our new building purchases. As well, we have seen an increase of rentals that were generated through our signage. In fact, we’re now seeing 30 to 35 percent of our leads and leases coming from signage. Now, I know those third-party signs are appealing for cost reasons but think about the long-term cost savings of installing your own sign. You can generate increased traffic to your website, increased calls to your building, increased branding for your company and increased visibility in your community. So, let’s look at some elements that create an effective lawn signage campaign.

Your prospects will be viewing your sign from the roadway so you want to make sure all the text is clear and legible. Passersby will have on average three seconds to read the sign. For maximum impact you’ll want your letters and words to be three-inches high for every 30 feet away the reader will be.

36 Canadian Apartment Magazine

White Space Don’t clutter your sign with too much information. A reader will only have a brief few seconds to read the sign and needs to be able to decipher what information is important. A lot of white space will make important information easy to read.

Website Make sure your website is clear and readable. What if you don’t have a website? In this day and age there is no reason not to have a website. You don’t need something too cutting edge, even just a simple one-page website will still work to provide the renter with additional information and photos. If you don’t know how to make one, simply go to Craigslist or Kijiji and post a request for a designer. You’ll be sure to find someone who can provide a basic site for a reasonable price.

Photos If you can afford to have a larger sign made, photographs can make a great addition. Photos help get a renter beyond the front door. This will increase the odds of a visit and of a rental. As I’ve stressed before, make sure your photos are free of clutter and present the apartment in the best light possible. Signage can be used to educate, inspire and capture a renter’s attention. It accounts for 30 percent of Skyline’s rentals and should account for 30 percent of your own. It has long-term cost savings and the real estate is free. So my suggestion to you is to create a small website, create a sign and drive that traffic to your own listings. You will then realize the value of signage and the value of your lawn. CA M Carissa Drohan is the Marketing Coordinator at Skyline Apartment REIT. You can contact Carissa at cdrohan@skylineonline.ca or call 519-826-0439.


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buildingmaintenance

Don’t let pests become your new tenants Incorporate Proactive Pest Management to Keep Pests Away from Apartments By Bill Melville

As an apartment operator, your job is to ensure your homes are inviting to residents, visitors and future tenants. However, one visitor you don’t want to see in or around your property is a pest. While tenants and their guests are always welcome, as the weather gets warmer, make sure pests don’t invite themselves to stay for summer vacation. There’s no question pests are a nuisance. However, did you know they can also be a threat to the health of your residents and staff? One of the filthiest pests, flies transmit bacteria such as Staphylococcus, E. coli, and Salmonella every time they land. Stinging pests can cause allergic reactions, severe and even deadly for some. To help protect your residents and your property’s reputation, don’t let pests take over this summer. The first step to pest prevention is understanding the reasons apartments attract pests, so you can then make the right decisions for your property.

Apartments Provide an Attractive Home for Pests So why are pests attracted to your property? Like humans, pests seek 38 Canadian Apartment Magazine

to have their basic needs met – food, shelter, and water. Apartment buildings provide these necessities for humans, and unfortunately, pests aren’t picky about leftovers. Pests seek out uncovered food inside apartments in addition to exposed trash left at outdoor picnic and common areas. Water features and landscaping can provide water and shelter for an extended pest stay.

Managing Pests in an Apartment Complex Now that you know what pests are looking for, be proactive about pest management and restrict pests’ access to those elements. Integrated Pest Management (IPM) offers a more environmentally friendly approach to pest management by using preventive tactics such as sanitation and facility maintenance. Proper facility maintenance can help discourage pests from ever entering your buildings, and good housekeeping can help eliminate sources of food, water and shelter that attract pests in the first place. Work with a pest management provider to create an IPM program that best meets the needs of your apartments.

The Dos and Don’ts of Effective Pest Management As you begin work with a pest management professional on your IPM plan, remember these important dos and don’ts that everyone can follow.

Do incorporate the following actions into your pest management plan: Make it difficult for pests to gather around your property by cutting bushes and trees away from apartments – landscaping that touches buildings creates an easy bridge for pests to enter. Install a gravel strip around each building to create an open space where pests won’t be able to hide. Rodents don’t like to be out in the open and the gravel creates a rocky terrain difficult for smaller pests to cross. Eliminate extraneous moisture sources pests may be attracted to, such as dripping pipes, leaky HVAC units and broken washing machines. Mice only need a small amount of water to survive. Contact a maintenance professional to make the necessary repairs on your property. Seal any unnecessary small holes or cracks in the building’s foundation.


buildingmaintenance If a pencil can fit, pests will too, so fill the holes with weather resistant sealant. After all, it only takes a hole the size of a dime for a mouse to enter, and rats only need an opening the size of a quarter to make their way inside. Install #16 window screens. As residents open their windows to enjoy fresh spring and summer air, pests can enter unnoticed. Cockroaches and other crawling pests only need a three centimeter opening to squeeze through. Keep common areas clean. Vacuum floors and wipe down counter tops to help reduce food residue and debris likely to attract pests. Clean up spills immediately, even if it is just water. Hose down parking lots, sidewalks and pool areas regularly to eliminate pest-attracting debris. Cover trash and recycling bins and keep them tightly sealed. Keep dumpsters at a distance from your apartment buildings and request a frequent pick up to regularly remove trash, a pest favorite, from your property.

Incorporating these pest summer without having to share your management tips into your facility apartments with unwanted pests. CAM maintenance and housekeeping practices can save you unnecessary Bill Melville is Quality Assurance Director hassle and help protect your property’s for Orkin PCO Services. He has 35 years reputation. Although pests may be of experience in the industry and is an attracted to apartment complexes, acknowledged leader in the field of pest they don’t have to become your management. For more information, email CARMA_CondoBusiness_01-19-2009_CS2--F.pdf 2/3/09 at 5:41:35 PM new tenants. With the right team Mr. Melville bmelville@pcocanada.com and plan in place, you can enjoy a or visit www.orkincanada.com.

Actions you don’t want to take when it comes to pest management include: Don’t wait until you have an infestation to take action. An infestation can be costly to your reputation, causing complaints and even worse – vacancies. Be proactive in taking the steps to prevent pests from ever making a home on your property. Don’t go at it alone. Work with your pest management provider to create and implement the best IPM program for your property. The most successful programs are based on open communication between you, your staff and your pest management provider. Don’t rest on the job. Once you’ve put a prevention plan into place, continue learning and educating tenants and staff about good housekeeping and sanitation practices to get everyone on board with pest control. A reputable provider will train your staff on best practices for pest prevention. August 2009 39


energymanagement

Energy Saving Alternatives to Generic Low-E Glass 25 to 35% of energy wasted due to inefficient glass By Bruce Lang

Generic low-e glass provides insulating performance of about R-4 in a world in which R-19 insulated walls are the norm. Property managers should know that there’s a dramatic performance gap between what low-e glass provides and what green building practices promise in saving energy and reducing heating and air conditioning operating cost. Despite heavily insulated walls and ceilings and the popularity of low-e glass in the United States and Canada, 25 to 35 percent of the energy used in buildings is wasted due to inefficient glass. So, it should come as no surprise that glass is responsible for up to 10 percent of the total carbon emissions annually and is a major contributor to global warming. Generic low-e insulating glass— consisting of two pieces of coated glass separated by a sealed air space—achieves a maximum thermal insulation value of R-4. Even low-e insulating glass in which argon or other inert gases are used to fill the internal air space and further impede heat transfer will not enable low-e glass-equipped windows to achieve increased requirements in conservation performance. The “e” in low-e, which stands for “emissivity”, is the ability of a surface to radiate energy. A low-e glass coating reflects heat, reducing heat transfer between panes of glass, improving insulation performance. Low-e coatings are rated for the amount of heat they radiate by using a scale of measurement called U values—the lower the number, the less heat is radiated and the better the insulation performance of the glass. 40 Canadian Apartment Magazine

Coated glass is available today with emissivity ratings below 0.03. Lowering emissivity from 0.03 to 0.00 will have a negligible incremental improvement on glass performance. The truth is that low-e glass thermal performance has reached practical limits. Low-e coated glass has become a minimum performance baseline and no longer represents a path to “improved” energy performance. The incremental performance benefit of using low-e glass is ZERO, because it is already assumed as a required product. Clearly, further improvements in glass thermal performance will not come from enhancements in low-e coatings. With window insulating performance at its current levels, improving window performance represents a significant opportunity for tremendous energy saving. Accordingly, with input from Canadian authorities, the US Department of Energy (DOE) is implementing changes to its Energy Star program which will require windows to exceed current performance requirements. DOE’s phased revisions to Energy Star’s window performance standards are scheduled to debut in August, 2009 with more demanding followon standards in 2013. The new performance standards should make it clear that generic low-e insulating glass no longer provides a level of energy efficiency required to “transform the market”, an expectation of products validated by the Energy Star program. To appreciate the energy-saving capability of currently available alternatives to generic low-e glass, it

is necessary to understand a bit about the use of glass in the modern era. For most of North America’s history, singlepane glass was the norm, providing protection from weather more than insulating against heat loss in winter and heat gain in summer. Though patented in 1865, insulating glass—two panes of glass separated by a sealed air space—was not widely adopted until the middle of the 20th century. Insulating glass came to be considered the energy-efficient alternative to single pane and became the glass of choice in heating-intensive climates. In the early 1980s low-e coatings were introduced to the market. They are designed to increase insulation performance by impeding non-solar heat transfer such as heat generated by a heating system or in the ambient air. Enhanced low-e coatings reflecting direct solar radiation, that often is a problem for properties with significant glass on their south and west sides, also became available. Fortunately glass can be equipped with both types of dual performing coatings which should be the defacto standard in properties in which both heating and cooling are necessary. Windows with one or both types of low-e coatings have supplanted windows with traditional insulating glass to become the “energy-efficient” standard for multi-residential housing construction and renovation. With further advances in glass coating technology expected to provide minimal performance improvement, the focus has now shifted from coatings to cavities. Just as the introduction of single-cavity insulated glass provided a


energymanagement breakthrough in performance beyond monolithic glass, the introduction of multi-cavity constructions, consisting of two or even three insulating cavities, is providing the next performance breakthrough for insulating glass. Two multi-cavity alternatives to generic low-e insulating glass are currently available. One is triple-pane glass, consisting of three panes of glass and two low-e coatings. The good news is that by using a third pane of glass to create a second insulating cavity, triple-pane low-e glass improves generic low-e insulating glass performance from R- 4 to R-9. The bad news is that triple-pane glass is heavier than standard insulating glass, requiring stronger window framing and increasing costs accordingly. A superior alternative consists of suspending a low emissivity and solar reflective film inside of an insulating glass unit. Without the weight disadvantages of a third pane of glass, film can create two, three or even four insulating cavities that maximize light transmission and provide conservation performance ranging from R-6 to an amazing R-20 to meet the unique requirements of new construction and renovation projects. Such internally-mounted low-e coated films do not replace low-e glass. They leverage the benefits of film-based coatings and glass-based coatings to create a lightweight, multicavity insulating glass that offers a new level of performance. Most units incorporating film today utilize low-e coated glass to minimize solar heat gain, while using coated film technology to maximize insulation performance. A variety of inert gases are used to fill the internal air space and further impede heat transfer. Performance at the edge of the insulating glass unit, traditionally where insulation is least effective as compared to the center of the glass, is improved by using thermally insulated spacer materials to separate the glass, often referred to as “warm edge” construction. In addition to superior insulating performance, suspended-film insulating

glass blocks UV radiation, reduces noise, and increases occupant comfort more effectively than low-e glass alone. Clearly, film-based, multi-cavity insulating glass is tomorrow’s state-ofthe-art window glass available today. It has been saving energy in hundreds of Canadian homes and in multiple buildings on the campus of Durham College in Whitby, Ontario, in St. Gabriel’s

Church in Toronto, and at B.C. Cellular in Burnaby, British Columbia. CA M Bruce Lang is Vice President of Marketing and Business Development at Southwall Technologies, Inc., Palo Alto, CA. He can be reached at blang@ southwall.com. Southwall’s Heat Mirror suspended-film insulating glass units are available in Canada and world wide from over 50 window and insulating glass manufacturers.

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August 2009 41


multifacts National Rental Vacancy Rate Edges Higher The average rental apartment vacancy rate in Canada’s 35 major centres increased slightly to 2.7 percent in April 2009, from 2.6 percent in April 2008, according to the spring Rental Market Survey released in June by Canada Mortgage and Housing Corporation (CMHC).

Completions of condominiums, which continue to attract renter households looking to move into homeownership, are decreasing demand for rental housing. Also, some of the completed condos compete with rental units if they were purchased by investors who then rent them out. “These two factors have put upward pressure on the vacancy rate,” said

Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “However, this has been balanced by higher levels of demand for rental housing.” The results of CMHC’s spring survey reveal that the major centres with the lowest vacancy rates in April 2009 were Québec City (0.6 percent), Regina (0.7 percent), Winnipeg (0.9 percent), Saguenay (1.1 percent), and Trois-Rivières (1.1 percent). With respect to British Columbia, only two centres had vacancy rates below two per cent; Victoria at 1.2 percent and Vancouver at 1.9 percent. At the other end of the spectrum, the major centres with the highest vacancy rates were Windsor (15.5 percent), St. Catharines – Niagara (5.3 percent), and Abbotsford (4.8 percent). The highest average monthly rents for two-bedroom apartments in new and existing structures were in Vancouver ($1,154), Calgary ($1,106), Toronto ($1,093), Edmonton ($1,059), and Victoria ($1,043). Of all the major centres, these five were the only ones with average rents at or above $1,000. The lowest average monthly rents for two-bedroom apartments in new and existing structures were in Saguenay ($494), and Trois-Rivières ($512). Year-over-year comparison of rents can be slightly misleading because rents in newly built structures tend to be higher than in existing buildings. However, excluding new structures provides a better indication of actual rent increases paid by tenants. Overall, the average rent for two-bedroom apartments in existing structures across

42 Canadian Apartment Magazine


multifacts Canadaâ&#x20AC;&#x2122;s 35 major centres increased 2.9 percent between April 2008 and April 2009. Rent increases were larger in Saskatoon (15.5 percent) and in Regina (11.4 percent). CMHCâ&#x20AC;&#x2122;s spring Rental Market Survey also found that the average rental apartment availability rate in Canadaâ&#x20AC;&#x2122;s 35 major centres was 5 percent in April 2009, up slightly from 4.9 percent in April 2008. A rental unit is considered available if the unit is vacant (physically unoccupied and ready for immediate rental), or if the existing tenant has given or received notice to move and a new tenant has not signed a lease. Availability rates were highest in Windsor (18.0 percent), London (7.9 percent), St. Catharines â&#x20AC;&#x201C; Niagara (7.9 percent), Guelph (7.0 percent), and Sherbrooke (7.0 percent). The lowest availability rates were in Winnipeg (1.4 percent), Regina (1.8 percent), and Victoria (2.5 percent).

FRPO Welcomes Rental Housing Tax Rebate

â&#x20AC;&#x153;FRPO commends the McGuinty government for acting quickly and addressing our concerns about the impact of the HST on new rental housing projects,â&#x20AC;? said Vince Brescia, President and CEO of FRPO. â&#x20AC;&#x153;It is very encouraging that the Ontario government recognized the need to treat new rental housing fairly with new owner-occupied housingâ&#x20AC;?.

The proposed rebate would apply the provincial portion of the HST at a rate of two percent on the first $400,000 of the purchase price of a new rental home and at a rate of eight percent on the portion above $400,000. This rebate for new rental housing would be provided for the same types of new residential rental properties for which a GST rebate is currently available.

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The Federation of Rental-housing Providers of Ontario (FRPO) has welcomed an announcement by the Ontario government of a proposed enhancement to the new housing rebate that was announced in the 2009 Ontario Budget. To support affordable rental housing in Ontario, the province is proposing to provide a rebate for new rental housing, similar to the proposed rebate for new homes. It will help builders and purchasers of new rental housing transition to the new harmonized sales tax (HST) that takes effect on July 1, 2010 .

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4/22/2009 4:37:58 PM


multifacts “It is only fair that new rental housing should qualif y for the same rebate as ow nership housing,” said Brescia. “The government’s decision to make rental housing eligible for the new housing rebate w ill have a positive impact on housing affordability in Ontario”.

Metroland Acquires Apartment Rental Websites Metroland Media Group Limited, Torstar Corporation’s largest subsidiary, has purchased four Canadian online apartment rental websites including; www.gottarent.com, www. gscrentals.com, www.apartmentcorner.com, and www.247apartments.com. Gottarent.com will become the online rentals destination for the Toronto Star, Hamilton Spectator, Waterloo Region Record, and over 100 Metroland Community Newspapers. The partnership is expected to help property managers and landlords find more potential renters to fill vacancies. The family of Gottarent websites is estimated to attract over 350,000 renters each month. The service provides online renters with over 2,000 listings

CMHC & Conventional Mortgages for: Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects Vancouver Brian D. Kennedy or Jonathan Wong Phone: 604-685-1068 Fax: 604-683-2787 Email: vancouver@peoplestrust.com Calgary Dennis Aitken or Doug Eveneshen Phone: 403-237-8975 Fax: 403-266-5002 Email: calgary@peoplestrust.com Toronto Michael Lombard Phone: 416-368-3266 Fax: 416-368-3328 Email: toronto@peoplestrust.com ™

www.peoplestrust.com 44 Canadian Apartment Magazine

monthly. Gottarent’s Advanced Source Tracking (AST) system, allows all phone and email inquiries to be measured on a monthly basis. The former primary owners of Gottarent, Mr. George Cottage and Mr. Jon Russo, will remain with Metroland and Gottarent as senior managers. Mark Rousseau, Managing Director of New Ventures, will oversee integration and ongoing development. “This is a tremendous opportunity for all Canadian landlords to take advantage of Internet advertising” says Cottage, adding “I look forward to the partnership ahead.

Ontario Vacancy Rate Increases to 3.3 Percent The Canada Mortgage and Housing Corporation Rental Market Survey data, released in June, “Demonstrates how economic uncertainty and increasing supply of rental housing is creating choice and availability for renters”, says Mike Chopowick, Manager of Policy at the Federation of Rental-housing Providers of Ontario. The survey shows that the Ontario-wide vacancy rate increased from 3.1percent last year to 3.3 percent. Economic uncertainty and increasing rental housing starts are among factors cited by CMHC behind the change. The availability rate, a better indicator of rental apartment supply, also remained high at 5.4 percent. It shows that affordability is improving, and rental housing consumers have choice and availability. “Slowing job prospects, especially in manufacturing centres, along with rising apartment completions, are impacting rental demand,” said Chopowick. Full calendar year rental housing completions increased by 36 percent to 3,870 units in 2008 compared to 2007, adding to the supply of new rental suites for tenants across Ontario. CMHC’s data also shows that Ontario rents increased modestly between April 2008 and April 2009. Rent increases were closer to the consumer price index after years of remaining below the annual rate of inf lation. For tenants, rents in Ontario compare favourably to the average monthly rents for two-bedroom apartments in cities such as Calgary ($1,106) or Vancouver ($1,154), which had higher average rents than any Ontario city. Average monthly rents in Toronto were $1093.


marketing multifacts “It is clear now that economic conditions and the level of housing supply is putting upward pressure on rental vacancy rates in Ontario,” said Chopowick. “Weakened labour market conditions are resulting in reduced demand for rental housing and leading to higher vacancy and availability of apartments.”

Toronto Approves Stringent Green Roof Rules Green roofs will be required on new buildings in Toronto starting next year after a vote by city council in May overwhelmingly adopted the most comprehensive rules of any city in North America. By a vote of 36-2, council approved measures that developers warn will add to costs. Stephen Dupuis, chief executive officer of the Building Industry and Land Development Association, said the biggest concern for developers is the cost of adjusting to the new requirements during an economic downturn. “Cost is an issue,” he said. “The market is so pricesensitive now.” Mr. Dupuis cited a 50-percent drop

in condo sales in Toronto last April, to 398 units from 798 units in the same month a year ago. The new rules kick in for new residential buildings constructed after Jan. 31, 2010, that are at least 2,000 square metres and at least 20 metres high or six storeys. Industrial buildings were given a reprieve until Jan. 31, 2011, when they will have to set aside either 10 percent of the roof or 2,000-square metres, whichever is less, for sod and other eco-materials. Deputy mayor Joe Pantalone (Ward 19, TrinitySpadina), who led the charge for tougher rules, called the new requirements for green roofs “an opportunity rather than a handicap.” He noted that roofs make up 21 percent of Toronto’s surface area, raising the temperature of the urban environment and pushing up demand for electricity in summer months. Garden roofs, he added, help conserve rainfall, reduce energy demand and add to the beauty of the city. With the resounding vote, Mr. Pantalone said, “You will see other municipalities now looking to Toronto and emulating us for the greater good of humanity.”

November August 2009 2008 45


regulations

Dispute resolution service expands to Calgary and central Alberta Tenants and landlords in Calgary and central Alberta now have access to a fast and inexpensive way to settle disputes outside the courtroom. The Residential Tenancy Dispute Resolution Service (RTDRS) is expanding to Calgary and more than 200 communities in central Alberta including Red Deer, Drumheller, Stettler and Rocky Mountain House. “This program has proven to be a valuable resource for both tenants and landlords in communities where it was introduced,” said Service Alberta Minister Heather Klimchuk. “It saves people time and money by avoiding a formal court process for disputes and frees up the court system for other matters.” Tenants and landlords wanting to resolve disputes about issues such as security deposits, rent arrears, evictions and damages can have the matter heard by a tenancy dispute officer. The fee for the service is $75. The decision by the tenancy dispute officer is binding on both parties. “The service is less expensive, less formal and faster than the regular court process,” said Klimchuk. “It has a great track record and we’ll be making the service available province-wide by 2010.” RTDRS began as a year-long pilot project in Edmonton in 2006. It was the result of a review of the Residential

Tenancies Act. The service became permanent in June 2007 and its success led to expansion into Grande Prairie, Fort McMurray and northern Alberta. Since the pilot began, the RTDRS has handled 6,800 cases and helped reduce court time in Edmonton Provincial Court from two days per week to one day per month. The Calgary RTDRS office will be located on the main floor of the Rocky Mountain Plaza, 230 — 7th Avenue SE. RTDRS hearings in the central Alberta region will be conducted by teleconference, allowing tenants and landlords to participate in hearings from their own home or office. “Holding hearings by telephone means people in remote communities can have their disputes heard faster without having to travel long distances to a larger centre,” said Klimchuk. The entire process takes between seven and 10 days for most matters. More information on RTDRS, including a full list of communities where the service is available, can be found online at www.rtdrs.alberta.ca or by calling toll-free 310-0000 then dialing 780-644-3000. CA M

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46 Canadian Apartment Magazine


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Canadian Apartment Magazine August 2009 Issue  

The multi-unit residential market in Canada is filled with opportunity, as well as constant change. That's why Canadian Apartment Magazin...