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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 4 / NUMBER 4 / SEPTEMBER 2007

Brad Smith President Briarlane Rental Property Management Inc. www.briarlane.ca

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Skyline Expands its Horizons: Green Improvements Fuel Growth Spruce It Up: Retrofit Strategies that Add Value Get Your Plumbing Systems Ready for Winter

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Make The Move to Skyline... Skyline Apartment REIT is a private Real Estate Investment Trust with assets now worth $175 million and growing. With its strategy of rural consolidation, Skyline continues to identify accretive opportunities and is making the "whole worth more than the sum of the parts". As manager of the REIT, Skyline Incorporated, employs a common sense strategy that addresses the risks of real estate investing and ultimately drives the bottom line income to achieve stable and growing cash distributions while maximizing REIT Unit value. Skyline's experience has proven that real estate should not be vulnerable to public markets. As a private REIT, Skyline Apartment REIT is sheltered from this volatility. The founders of Skyline, having been raised in smaller communities, have a philosophy that the backbone of Canada is built on the character and the strength of various diverse communities. Skyline Apartment REIT now provides an opportunity to invest in these cities and towns with confidence that the properties have been hand selected and professionally managed by the Skyline team. Call today to learn whether Skyline Apartment REIT is right for you.

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Wishing Skyline REIT continued success in 2007.

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16 Cover Story

Skyline Expands its Horizons Concentrating on smaller communities in southern Ontario, Skyline Incorporated has built a multi-residential portfolio of 3,000 units. The company’s decision to fund green improvements to its buildings has helped to improve its bottom line.

contents... 12 Tenant Insurance Key to Reducing Risk Having the right insurance coverage is essential to managing your risk. A building owner should take steps to ensure that their tenants carry appropriate insurance.

26 Condo Conversion - A Growing Trend In markets across the country, the trend toward converting apartment properties to condominiums continues to gain momentum. Condo developers are paying a premium to acquire and convert rental properties.

28 Get Your Plumbing Systems Ready for Winter A bit of preventive maintenance in the fall goes a long way toward securing your plumbing systems for the winter season.

32 Cogeneration Fuels Markham Development Both residential and commercial customers will benefit from the Town of Markham’s commitment to creating its own district energy system. It will eventually service 20-million-square feet of space.

36 Spruce It Up Retrofitting buildings can optimize your asset. Making environmentally friendly or “green” changes can save you money and create a healthier environment for your residents.

40 Green is Good Marketing Upgrading your building to increase energy efficiency can be a marketing opportunity. If you’re spending money, find a way to tell current and prospective tenants, about the improvements.

44 Reducing Your Vacancies If your building has a high vacancy rate, a third-party manager just might have all the tools needed to help you turn things around.

24 Multi-facts 46 Regulations september 2007 9


editor’s note Invaluable Market Intelligence

PUBLISHER

Marc L Côté

The Canadian Apartment Investment Conference is one of the industry’s most important events and always attracts a top quality group of speakers and attendees. This year is no exception. Speakers at this one-day conference provide multi-unit residential owners with an invaluable assortment of information and market intelligence. This year Benjamin Tal, Senior Economist, CIBC World Markets kicks off the conference with a presentation on the short and long-term outlook for the economy in major cities across Canada and the United States. Peter Norman, Director, Altus Clayton will provide an analysis of rental housing supply and demand across the country over the short and medium term. The conference ends with an executive round table discussion. Senior real estate investors will give their views on the present and future direction of the Canadian rental market sector from an investment perspective. For those of us who work in the multi-residential field, this annual conference provides an excellent opportunity to gain insight into how the market is performing and where it is taking us. In this issue we take a look at Skyline Incorporated. The company recently restructured under the private REIT model. Headquartered in Guelph, Ontario Skyline has quietly amassed a portfolio of over 3,000 units. Under the company’s recently launched Portfolio Efficiency Plan, renovations will be carried out that will create environmentally friendly units and buildings. Our regular marketing contributor, Jason Leonard tells us that upgrading your building to increase energy efficiency can be a marketing opportunity. Making a positive impact on the environment will have a positive impact on both new and prospective tenants. Property management expert, Anne Meinschenck offers readers tips on how to reduce vacancy problems. Proper marketing, staff training and renovations go a long way toward keeping your suites fully occupied. CA M

EDITOR

Randy Threndyle DESIGN

yidesign inc. CONTRIBUTING WRITERS

Paul Abrams Jeremy Amernic Stephen J Bronetto Robert Helyar Jason Leonard Anne Meinschenk David G Truscott For sales information call 416.966.HUSH

Canadian Apartment Magazine is owned by MediaEdge Communications Inc. and published six times a year by hush Media

5255 Yonge Street, Suite 1000 Toronto, Ontario M2N 6P4 Email: info@mediaedge.ca

Tel: 416.512.8186 Fax: 416.512.8344 Copyright 2007 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140x Circulation ext. 230 Subscription Rates: (GST included) Canada: 1 year, $44.94 / 2 years, $80.79 Single Copy Sales: Canada: $8.00 Reprints: Requests for permission to reprint any portion of this magazine should be sent to Marc L Côté.

Randy Threndyle Editor

randy@hushmedia.ca

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.

Quoteworthy “In many cases recycling has become part of everyday life for our residents. They want to do their part.” – page 23

10 Canadian Apartment Magazine

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


CHOOSE ROGERS AND GIVE YOUR TENANTS THE HOME THEY’RE LOOKING FOR. When you choose Rogers as your communications and entertainment provider, you’re choosing to partner with a leader. Through our continued partnership, Rogers will carry on delivering excellent value for your tenants.

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BENEFIT FROM CHOOSING MULTIPLE ROGERS PRODUCTS – HOME PHONE, WIRELESS, INTERNET AND DIGITAL CABLE. TM Trademarks of Rogers Communications Inc. or of Rogers Cable Communications Inc., used under license. ®YAHOO! is the trademark of Yahoo! Inc., used under license. All other trademarks are the property of their respective owners. © 2007 28-12


risk management

Tenant Insurance Windstorm Owner Key Hits to Reducing Risk in the Pocketbook by David G. Truscott

Having the right insurance coverage is essential to managing If your building is damaged by a windstorm, or other act of nature,your yourrisk. insurance policyowner can provide to repair the damage A building shouldmoney take steps to ensure that and income replacement if tenants are forced to move. their tenants also carry appropriate insurance. by David G. Truscott

As any apartment building owner would know, having the right property and liability insurance in place is an essential part of the risk management program for their rental property business. While all the bases should be covered when it comes to identifying exposures to loss, and for putting proper measures in place to hopefully avoid losses from ever happening, when it’s all said and done, a significant portion of a building owner’s financial risk is transferred to the shoulders of their insurance company, by way of a properly structured insurance program. Speaking of the transfer of risk, wouldn’t it be a smart idea to transfer some of the potential for loss to the shoulders of the tenants in your building? After all, if a loss, a lawsuit, or an incident of property damage, were to occur, it usually involves a tenant in one way or another. Why not take steps to make them responsible? Consider, for example, an upstairs tenant leaves the water in the bathroom running a little too long (like an hour or two when they’ve gone out and forgotten to shut off the taps). In a highrise environment, an occurrence of this sort could result in thousands of dollars in damages, not to 10 Canadian Apartment Magazine


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mention the cost and inconvenience to the tenants living below or near the source of the problem. Your building insurance policy will likely respond on your behalf, subject to your applicable deductible, but in an ideal world, if the problem was caused by the negligence of the tenant, then the tenant should be responsible for the resultant damage, its cost of cleanup, and cost of restoration. While we now have “fire-resistive” buildings, we all know that a fire does not need to break out for our building to incur significant smoke damage. There are tenants who are capable of clouding up their apartments (and often the hallways too) through unexpected cooking incidents. Restoration from occurrences of this sort should again be the responsibility of the tenant wielding the recipe book. How do we go about putting the blame (and the expense) where it belongs? Look to your lease. Your written agreement with your tenant will set out what their responsibilities are, and, in a well-structured lease, those responsibilities will include the tenant’s responsibility to maintain proper tenant’s insurance. Their insurance policy will describe who is included as an insured individual. The policy will include coverage for the tenant’s belongings, and it will include personal liability coverage for those insured individuals to protect themselves against losses for which they are legally liable.

page copy of their tenant’s insurance policy that indicates, at the very least, the following: • The name of the tenant showing them as named insured, as set out in the lease; • Insurance company name and policy number; • Effective date and expiry date of coverage; • The description of the policy, such as “Tenant’s Package Policy” or Renter’s Coverage”; • The amount of coverage, especially for what you deem to be an appropriate limit in the section known as “personal liability”; • Proof that the landlord has been added to the liability section as an “additional insured”.

With your tenant’s insurance in place in accordance with the conditions set out in their lease, you are then in a position to deflect lawsuits directed at your operation through to the tenant’s insurer in cases where it is appropriate to do so. For example, if “Tenant A” suffers loss or injury caused by the negligence of “Tenant B”, the injured tenant may choose to sue you, the landlord. This would normally involve a claim being dealt with and paid for through the landlord’s insurance policy. However, if “Tenant B” has proper tenant’s insurance in place, which includes an endorsement showing the landlord as an additional

If the problem was caused by the negligence of the tenant, then the tenant should be responsible for the resultant damage, its cost of cleanup, and cost of restoration. Your lease should include insurance conditions that will make it easy for you, your legal representative, or your insurer to recover costs for damages for which your tenant is legally liable. In addition to providing coverage for the individual tenant’s property, those conditions should include: • Personal liability insurance; • An endorsement for inclusion of the landlord as additional insured; • Cross liability; • Undertaking of the tenant to provide the landlord with a copy of the tenant’s package insurance policy at each renewal.

There could be other conditions included for the landlord’s greater protection, but it is worth noting that it is far easier to get a new or renewal tenant to accept and comply with a relatively short list of conditions. The longer the list, the less likely the tenant is to comply. All too often, when the tenant has taken possession of their leased unit and their payments are made on time, it’s easy to forget about following up for those insurance documents that your tenant promised to provide. Don’t be afraid to ask for them. What you’re looking for is a single14 Canadian Apartment Magazine

insured with regard to liability on their policy, then you, as landlord, may be able to defend the claim against you by using “Tenant B’s” insurance, rather than using your own policy. This risk management strategy is useful as it can reduce the number of times that you may need to call upon your own insurance for a liability claim. That can translate into lower insurance costs for your rental property. Remember, a prudent building owner will not only make sure their own building insurance is in order, but they will take steps to ensure that their tenants carry appropriate insurance in accordance with the terms set out in their lease agreement. The insurance conditions that the landlord chooses to include in their lease would best be decided by consultation with their lawyer and their insurance broker. C A M

David G. Truscott, CAIB, CRM is the President of Risk Review Inc., a risk management consulting practice. Their website and contact information for David can be found at www.riskreview.ca


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â&#x20AC;&#x153; Skyline is currently distributing a nine percent return that is generating significant interest.â&#x20AC;? 16 Canadian Apartment Magazine


Skyline Expands its Horizons

by Randy Threndyle

Consolidate, Renovate and REIT the Benefits.

Concentrating on smaller communities in southern Ontario, Skyline Incorporated has built a multi-residential portfolio of 3,000 units. The company’s decision to fund green improvements to its buildings has helped to improve its bottom line. Operating in an area of the country where few large multiresidential apartment owners venture, Skyline Incorporated has quietly amassed a portfolio that has recently topped 3,000 units. While all the units are in southern Ontario, home to the largest concentration of multi-residential units in the country, most of Skyline’s buildings are not in large metropolitan areas. Headquartered in Guelph, Ontario, Skyline has made a conscious decision to avoid the Greater Toronto Area and concentrate instead on smaller cities like London, Guelph, Kingston and St. Catharines. But those are the bigger centres. The REIT also owns buildings in towns like Port Elgin, Collingwood, Bobcaygeon and Owen Sound; communities with populations of less than 25,000. In total, the REIT now has over 40 buildings in 18 communities and is driving for significant expansion in the upcoming years. Concentrating on smaller communities in southern Ontario has been a deliberate strategy says Jason Castellan, Skyline’s Chief Executive Officer. “We’re small town guys,” he says. “We understand the small town markets.” Part of this strategy includes assessing which communities to invest in. Skyline looks for buildings in what are described as sustainable communities; cities and towns with good employment prospects and growing populations. Skyline’s investors seem to agree with that assessment. Last June the company amalgamated 17 private corporations into one private real estate investment trust. Since then they have been making significant acquisitions, steadily increasing their presence in communities throughout southern Ontario. The

REIT’s assets are currently valued at $175 million, but the goal is to push that figure to $500 million by 2010. If current figures are any indication, they should well meet that goal says Chief Operating Officer Roy (Jason) Ashdown. Skyline now has 43 buildings and has more than doubled its portfolio over the past12 months. “While growth is our goal,” says Ashdown, “the company’s main focus is to maintain a stable distribution to the unit holders. Skyline is currently distributing a nine percent return that is generating significant interest from investors.” The private REIT format sits well with the company’s investors, some of whom are former owners of buildings that Skyline has purchased. These owners have reinvested some or all of the sale proceeds back into the REIT. The former shareholders also found value in the new format. The shareholders made the unanimous decision to transfer into the new private REIT business model. One advantage of a private REIT is that it allows the company to steadily grow through acquisitions, which in turn creates a better return for investors. “Under the individual corporation system,” says Castellan, “one building would be generating surplus cash, but the partners couldn’t move it to another building where improvements were needed. Each of the company’s 17 corporations owned a set group of buildings and the corporations didn’t overlap.” As a private REIT, all the buildings are in one group and money can be deployed to existing buildings in need of repair or new buildings that the REIT acquires. “Now we can move september 2007 17


“For every four or five blue chip properties that the REIT buys, it is able to take on a repositioning project.”

money and deploy the capital where it can create the highest rate of return,” says Castellan. “For the most part,” says Ashdown, “Skyline is concentrating on buying quality properties that can generate positive cash flow from day one. Our purchases need to be accretive. By buying those buildings, we are consistently able to generate returns and generate cash flow for our investors.” The REIT model also gives the flexibility to look at other opportunities that the individual corporation model of investment didn’t offer. It can now consider buying lesser quality buildings in target communities for the purpose of repositioning. These buildings are often in need of repairs and require large capital injections to be repositioned for success. The benefit 18 Canadian Apartment Magazine

here is that they are often purchased for a significant discount because of poor quality and performance. “For every four or five blue chip properties that the REIT buys, it is able to take on a repositioning project,” says Ashdown, “and once the building is renovated and upgraded, it can become a very valuable asset to the Skyline unit holders. The key here is doing the research and considering the market variables and limits. There is always a detailed plan developed before considering a repositioning and we are able to accurately forecast the potential value in each project once completed.” One example of a repositioned property is Huron Street in London, Ontario. This property was very poorly managed and needed significant capital improvements. Skyline bought the


“At the end of the day the residents are happy to see improvements and to have owners that care about the property.” building for $4.5 million and invested over $650,000 to improve and market the property. Today the property is valued at $7 million, showing a return of $1.85 million in asset value to the investors in only 24 months. Typical improvements to these projects include common area renovations, a controlled entry system, new windows, new flooring and paint in the hallways, landscaping, and exterior renovations. They also invest in new signage, staff training and marketing. Other improvements include refitting elevators and replacing inefficient building systems. In June, the REIT purchased two buildings located on Vine Street in St. Catharines for $6.8 million. The buildings and the 185 suites are currently being repositioned. The buildings, says Castellan, “Provides an excellent opportunity for our investors. This complex will shine once Skyline has the opportunity to do the much needed renovations and upgrades.” The Vine Street complex was built in the mid-1960s and still had its original boiler, light fixtures and windows. The renovation will bring the building into line with Skyline’s Portfolio Efficiency Plan which aims to create more energy-efficient buildings; thus, more environmentally friendly buildings. “The Portfolio Efficiency Plan,” says Ashdown “Takes into account anything that can add value to the bottom line by driving down expenses and/or reduce any negative effect on the environment.” That includes reducing water, gas and hydro consumption, installing energy-efficient appliances, lighting and heating systems, and waste reduction programs. Ashdown estimates that the renovations on the recently purchased Vine Street property will take between 18 and 24 months to complete. While the renovations can be an inconvenience for residents, Ashdown says once they realize the improvements are both helping to increase their comfort and improve the building’s environmental footprint, they are usually more than willing to put up with the nuisance of construction. Once the improvements are complete at Vine Street, Skyline can add value by repositioning the property. Castellan says market research has indicated that once this building is improved, there is a significant opportunity to attract the local seniors’ market as this property is located in a highly populated seniors area of St. Catharines. The potential new residents will be willing to pay higher rents for the newly renovated suites. “One of the first things we do is concentrate on curb appeal. Research suggests that over 25 percent of tenant satisfaction comes from curb appeal. If residents can drive up to this building and be proud to call it home, they will be willing to pay a premium for that,” says Castellan. Skyline is currently in the process of painting the entire building and renovating the elevators. In addition, all common 20 Canadian Apartment Magazine

hallways will get new carpets and lighting. Work will also be done on the balconies, the grounds and the parking areas. “That’s all the stuff you see on the surface,” says Ashdown. In the background, however, the company’s Portfolio Efficiency Plan is going to work with the implementation of new boilers, lighting, fridges and toilets. “These are the things nobody sees or rarely think about, but they add significant value,” says Ashdown. “Those investments have to pay off,” says Castellan. “You have to give your tenants something. Tenants understand value. They will pay $30, $50 or $100 more a month in rent if they feel the value is there. If the elevator is nice, if the walk down the hallway is nice, if there are security cameras, if it’s comfortable, and so on.” “At the end of the day the residents are happy to see the improvements and to have owners that care about the property. Some buildings have been neglected for the last 20 years,” says Ashdown.

An area of improvement where tenants have been more than happy to see changes made are improvements to the building and suites that are environmentally friendly. “While environmental improvements are something of a buzzword in the industry,” Castellan says, “Skyline has found that tenants are eager to align themselves with an owner who cares about the environment and energy efficiency.” “We’re not trying to hide the fact that our Portfolio Efficiency Plan improves our bottom line. The residents know that, but by improving our bottom line and reducing our consumption, we’re reducing the negative impact to the environment. If our tenants are proud to be a part of that, they’re onboard,” he says. The company is now looking for ways to implement recycling. Like many older buildings, much of the Skyline portfolio was built in the era when all garbage went down the chute and into the dumpster. Today, many tenants are environmentally


PREMIER ELEVATOR CONGRATUL ATES SK YLINE REIT AND EXTENDS BEST WISHES FOR SUCCESS THROUGHOUT THEIR FUTURE


aware and are asking for recycling programs. “In many cases,” says Ashdown, “recycling has become part of everyday life for our residents. They want to do their part.” Skyline is currently developing a program that will allow tenants to recycle much of the waste that formerly went down the garbage chute. One program they are looking at would see the company giving every new resident a move-in package designed in a reusable recycle bin. The move-in package would include recycling information as well as many other items that a resident could use on move-in day. Basically a welcome gift for residents with a long-term benefit. Since Skyline’s buildings are spread over many towns and cities, the recycling plan may take several months to finalize as each municipality has its own way of handling waste and recyclables. Added to that, Skyline deals with several different waste haulers. “Like the residents,” says Ashdown, “our waste haulers understand our commitment to recycling and waste reduction, and are more than willing to work with us and our residents.” “It’s often about education and choices,” says Ashdown. “If we give our residents the facilities, they will make use of them and ultimately reduce the amount of waste that ends up in our dumpsters and eventually in the landfill.”

Reducing water usage is another way that residents and building owners can conserve. New low-flow toilets save up to 15 litres of water per use. When combined with a low-flow shower head and sink stoppers, they can reduce water usage significantly. Castellan credits the environmental program with increasing resident satisfaction saying, “We’ve received numerous letters from residents where they commend us for our efforts.” “When you’re able to market and educate 3,000 households on all the little lifestyle changes and when you also lead by example, it can have a huge impact,” says Castellan, “If residents reduce their combined consumption by as little as three or five percent, it has a massive impact on the environment and on the bottom line. The laundry room is another area where Skyline has found they can reduce energy consumption, improve customer satisfaction and improve revenues. Skyline consistently upgrades the laundry rooms and equips them with high-efficiency machines that use less water, less soap, less hydro and are more suitable to wash clothing in cold water. Besides reducing energy consumption, new laundry rooms increase resident comfort resulting in far less business going to the outside laundromat. Ashdown estimates that a high quality laundry room reno-

“ In many cases recycling has become part of everyday life for our residents.” One area where environmental improvements have had a huge effect on the bottom line is through the implementation of the Portfolio Efficiency Plan. Under this program refrigerators that are more than eight years old are generally replaced. New refrigerators use about $35 worth of electricity per year. By comparison, one older refrigerator found at a newly purchased property was estimated to be using $250 worth of electricity per year. “While some owners might wait for an apartment to change hands or an appliance to break down before replacing it,” Ashdown says, “given the energy savings to be had, that just doesn’t make any economic sense.” Lighting is another area where Skyline is committed to saving energy. It recently purchased over 20,000 compact fluorescent light bulbs embossed with the Skyline logo. These bulbs where then installed in all the residential suites. A 13-watt CFL bulb replaces a standard 60-watt incandescent bulb, and produces a savings of over 75 percent. “Tenants used to buy their own light bulbs,” says Ashdown. “Now we’ve offered to pick up the costs of the energy-efficient bulbs. If a resident brings us a burnt out bulb with the logo on it, we’ll give them a new one. This is another incentive for our residents to join our commitment to the environment.” Along with the CFL light bulbs the company has also mandated to make sure sink stoppers are always supplied. This ensures you don’t have to run water while you shave or brush your teeth. “People are surprised when you tell them that running the water while brushing your teeth wastes up to15 bathtubs full of water every year,” says Ashdown, “when you start to inform them they really want to get involved.” 22 Canadian Apartment Magazine

vation returns a 25 to 50 percent return on investment. “If you make the laundry rooms nice, the expense is being retuned through increased resident usage. The increased usage more than justifies the expense and it pays a return on investment.” Two other areas where Skyline has found that improvements increase resident satisfaction and add to the bottom line are replacing old boilers and windows. Castellan estimates that replacing older windows and boilers creates an energy saving of about 15 to 40 percent. Replacement windows and boilers also have the effect of making the heat more consistent and the units more comfortable. That in turn increases resident comfort and satisfaction. When all these things are combined they cut costs in a very important way, but equally important is the reduction of resident turnover. Turnover is often the largest expense any multi-unit residential building faces. “Every time a tenant moves,” says Castellan, “it costs money.” The apartment needs to be marketed and painted and often the carpets and countertops are replaced. There is also the risk of the unit sitting vacant while the repairs are being completed. “The longer you keep your residents happy and comfortable in their suite, the better off you are. Resident retention means everything.” he says. Through the combination of quality purchases, property repositioning and quantified capital improvements, Skyline believes they have a simple recipe for success. They will continue to take advantage of what they consider to be the undervalued real estate markets of southern Ontario. Through the implementation of efficiency plans and the repositioning of selected properties Skyline will not only ensure customer satisfaction and retention, but will generate a healthy return for REIT investors. CAM


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multifacts CFAA Board Appoints New Officers At its recent Annual General Meeting in Edmonton, the Board of the Canadian Federation of Apartment Associations appointed new officers for the upcoming year. They are: Chair: Avrom Charach, Winnipeg

the cost of helping tenants directly with their affordability problems is less than the cost of subsidizing the building of new housing. The Canadian Federation of Apartment Associations represents the owners and managers of more than one million residential rental units in Canada, through 17 organizations across Canada.

Secretary/Treasurer: Jonathan Brimmell, London Chair of the Membership and Finance Committee: Clarence Rusnell, Edmonton Chair of the Government Relations Committee: Vince Brescia, Toronto Past Chair: Jean-Francois Bigras, Montreal President: John Dickie continues, representing the CFAA on a permanent basis in Ottawa. At the meeting, held in June, the group put forward the following policy statement. More than one million Canadian renter households are considered to be in core housing need. However, most of those households are in core need because they need to spend more than 30 per cent of their incomes on housing. Since existing housing is more economical than new construction, CFAA suggests that the governments will achieve the optimal housing result for the most people if they adopt the following policies: • Provide fairer tax treatment for the rental-housing industry to lower the cost of rental housing and make rents more affordable; • Increase funding for shelter allowances and portable housing allowances to address the incidence of very low incomes; and • Focus funding for new construction programs on housing for special needs that cannot be met by the private sector. CFAA’s believes this policy would lead to a better situation for tenants, landlords and taxpayers. Tenants would gain more housing and landlords would see better after-tax returns and a greater ability to buy or sell as their investment goals change. Taxpayers would save money, as

Pan Group Takes Over Valiant Portfolio Pan Group Properties announced in August that it has purchased Valiant Property Management (VPM) a third-party property management company. Pan Group will take over the management of the former VPM portfolio of commercial, residential and self-storage properties located in the Oshawa and Durham area east of Toronto. PAN Group has retained the same team of management professionals, who were previously voted the best property management company in Durham Region for four years consecutively. As a result, email addresses have changed. If you previously dealt with one of the VPM staff, their new email address is the person’s firstname@ pangroup.ca. For more information contact Dean Pandurov, CEO, Pan Group at dean@pangroup.ca.

TransGlobe Expands its Portfolio TransGlobe Property Management Services announced the newest addition to the residential segment of its portfolio in September. The nine-storey, 101-suite building is located at 2283 Eglinton Avenue East in Toronto. It is the company’s ninth residential acquisition in the past six weeks. Following the acquisition, TransGlobe’s President Daniel Drimmer said, “The GTA has been the site of an important push in our expansion plans. It is the main Canadian population centre and we try to offer our residents as many rental options here as possible. This building also happens to represent what we look for in a residential property convenient location, accommodating layouts and a mature, residential neighbourhood around it.”

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multifacts Over the coming months the company will implement an extensive renovation plan which will transform the building. “Despite its vast potential, we really feel that this property needs to be refreshed, said Drimmer. “That is why we will completely revamp it and bring it on par with our quality standards.” The company expects to make more purchases in the Greater Toronto Area. Over a six week period this summer, the company purchased eight other buildings in Ontario and British Columbia. They include: Ontario • Two buildings in London totalling 332 units • A 90-suite building in Mississauga • A 36-suite building in Toronto • A 28-suite building in Cambridge British Columbia • Two buildings in Abbostford, totalling 110 units • A 59-suite building in Mission • A 44-suite building in Ladysmith

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june 2007 25 21 august


what’s hot what’s not

Condo Conversion ...a growing trend

A condo conversion is the process of converting an income property or other land held under one title into individual units for sale. This entitlement is generally derived from approvals granted by state/provincial and/or local municipal authorities. Often other relevant agencies such as conservation authorities are involved. Any type of existing structure can be converted to condominium, including residential, commercial and industrial. Condominium conversions can be made to former office buildings, warehouses or other commercial properties as well as existing rental residential premises. As of 2006, the trend of converting apartment properties to condos continues to gain momentum. Low interest rates that have affected the apartment industry are driving the biggest condominium conversion boom in two decades. In markets across the country, condo developers are paying a premium to acquire and convert rental properties into condominiums. The eighties saw a huge wave of condo conversions; however the trend had died by the early nineties. Then, early into the new millennium, condo conversions came back. There were many factors that led to this revival but the main one was low interest rates. At these rates mortgage payments were often lower than rents and as a result those who were previously not eligible for home ownership could now purchase a condominium. Also, condo units can be a good alternative investment for investors who cannot afford to invest in single-family homes or a multifamily unit. In recent years the condo industry has been booming in Canada with dozens of new towers being erected every year. Toronto is the centre of this boom with approximately 17,000 new units being sold in 2005. This is more than double Miami’s sale of 7,500 units in the same year, which placed them second. As limitations continue to be placed on new development; developers are being forced upward and to consider more conversions rather than new construction. Outside Toronto, other strong areas of growth in Ontario are Kitchener-Waterloo and London. In an effort to cash in on Saskatoon’s growing housing shortage, the city received nine applications (a total of 386 units) to convert properties to condos in early August. This brings the total number of conversion applications received by the city this year to 24; this is a total of 951 units that will be leaving the rental market. By early May of this year, nearly 1,000 rental units had been converted to condos in Saskatoon since 2002. Seventy five percent 22 Canadian Apartment Magazine 26

by Robert Helyar

of these conversions were done within the last three years. A study completed in 2005 indicated that approximately onethird of these units had been returned to the rental market. The market for residential condominium conversions typically occurs when the price of single-family homes increase beyond the ability of the fi rst time home buyer. There are various types of investors when the conversion market is hot. An experienced developer may purchase a building, get the property condo-titled and upgrade the building to have the units sold individually. Another situation may be a small owner who wishes to sell so they start the entitlement process and sell the building at a condo premium to a developer who will finish the job. There are also incentives for a multi-family owner to do a condo conversion when they are ready to sell. The buildings can demand a higher selling price if there is a condo conversion and the units are sold separately. Condominium conversions can also result in significant tax benefits for a property owner as they allow an owner to take advantage of the lower realty taxes for single-family property units as compared to multi-family units. While condo buyers are typically renters, condo conversions benefit multi-family property owners by shrinking the supply of apartments, so conversions won’t necessarily lead to a jump in occupancy rates. However, the release of these upgraded, converted units back into the rental market can hurt multi-family property owners as it raises the standard above the current product; therefore creating stronger competition as renters will most likely prefer the upgraded suites. The upward climb in home prices has forced the multi-family property owners to adjust the price per unit of their property. Still, critics argue that while multi-family buildings can command a much higher selling price if there is a condo conversion and the units sell separately, they price low-income residents out of the market and widen the affordability gap.

Robert Helyar is the President of DALA Group of Companies and has held a number of executive positions with development and real estate holding companies. His numerous professional credentials include Registered Property Manager and Senior Certified Valuer.


august 2007 23


maintenance

Get Your Plumbing Systems Ready for Winter by Paul Abrams

A bit of preventive maintenance in the fall goes a long way toward securing your plumbing systems for the winter season. Mark Twain once said “never put off till tomorrow what you can do the day after tomorrow.” The fact is that it’s easy for busy managers to put things off for another day. Who among us hasn’t procrastinated at one time or another? But when it comes to seasonal and preventive maintenance for an apartment building, procrastination can invite unnecessary expense and even outright catastrophe. This is especially true when it comes to your building’s plumbing system. It’s easy to overlook the plumbing...until the water stops flowing or the drains stop draining. Those are two very good reasons to follow a seasonal plumbing maintenance schedule. Now for the wakeup call. Winter is approaching fast! Those light jackets and chilly fall breezes should serve as friendly reminders to get busy preparing your facility’s plumbing for the extreme cold, snow and ice that is just around the corner. Don’t wait until the weatherman forecasts the first winter storm to start this project. If it turns out that your building needs professional attention and you wait until the eve of the storm to seek help, you’re likely to learn a hard lesson about the high cost of last-minute action. Below are some helpful tips for winterizing plumbing systems.

• Check all roof drains and downspouts to be sure there are no blockages caused by leaves and debris. Leaves accumulate quickly during the fall season. But when these seemingly harmless blockages get wet and freeze, they can cause serious ice dams that will allow snow and ice to build up on rooftops. And if the roof supports the weight until the melt off finally begins, you’ll need to worry about potential flooding. • If your building is equipped with interior shut-off valves leading to outside faucets and fixtures, close the valves for the season and drain the lines before cold temperatures arrive. • Outside fountains and sprinklers also need draining and hoses should be disconnected from faucets to prevent ice blockages from forming. • If you need to use of outside faucets or fixtures during winter months, make sure they aren’t dripping or leaking. Make the necessary repairs or call a plumber before freezing temperatures arrive.

• Professionals recommend seasonal drain-down procedures in the fall for all unheated areas.

• Insulate pipes in unheated or under-heated areas such as garages or crawl spaces. Apply heat tape or thermostatcontrolled heat cables around pipes that are exposed and prone to freezing. Make sure that use of such equipment is allowed at your building.

• Cooling towers on rooftops, as well as pipes and drains in parking garages, should all be drained.

• Keep furnace or heater thermostats set no lower than 13 degrees C (55 degrees F) to prevent pipes from freezing.

Routine tasks are critical:

28 Canadian Apartment Magazine


• If your buildings are equipped with a standard water heater, attach a hose to the faucet located low on the side of the tank, then drain several gallons of water from the tank into a nearby drain. This procedure will flush out sediment buildup, which can cause corrosion and reduce heating efficiency. Also, carefully test the water heater’s pressure relief valve by lifting up on the lever and letting it snap back. The valve should allow a burst of water from the tank into the drainpipe. If not, call a professional to have a new valve installed. Hot water from the valve can spray and scald if the valve isn’t operating properly so be careful performing this inspection, or better yet, call in a professional plumber to do it for you. Note that if you’ve never tested the pressure relief valve on the water heater before and the unit is more than three years old, there’s a good chance the valve seat has become hard and inflexible and won’t re-seal properly. As a result, it will drip with regularity. You may need to replace the valve if leaking persists. • Check the temperature setting on the water heater thermostat. It should be set no hotter than 52 degrees C (125 degrees F) for optimum performance and safety. Lowering the temperature setting reduces your energy use, reduces the likelihood of scalding someone and reduces risk of damage to the tank caused by overheating .

Keep emergency maintenance materials on hand • If a window is broken or missing or if a wall collapses, have materials on hand such as tarps, plastic sheeting and plywood to thoroughly secure these exposed areas.

• Keep handy a selection of screws, nails and a basic selection of tools such as a hammer, pliers, crescent wrench and screwdrivers. These can be invaluable during an emergency.

• Identify and seal any cracks or splits in walls, doors or window frames located near pipes. Remember, even a small opening to the outside can allow enough cold air inside to freeze nearby pipes. And once a pipe is allowed to freeze, even a tiny split can unleash 250 gallons of water per day from a pressurized water supply line.

• Keep mops, wet vacs and absorption materials on-hand to contain and clean up running or leaking water, especially where the customers or visitors might be walking.

• Use warning signs, cones and caution tape to alert pedestrians of danger in the area.

• Install flood alarms in areas that are prone to

Have a game plan for emergencies: • Make sure you have emergency access to the building. • Have keys on-hand for all areas of the property. • Have the phone numbers handy for the fire and police departments as well as your preferred plumbing and drain-cleaning provider and other important contacts. • Identify and have access to the main water shutoff valve on the property to circumvent all water flow around the facility. • If the problem is limited to one part of the building, have a plan so that you can segment the operation in order to allow water to flow in areas not experiencing the problem. In an emergency, this can make the difference between shutting down a single apartment or building and shutting down your entire business. C A M

Paul Abrams is the public relations manager for Roto-Rooter Services Company, the largest provider of plumbing and drain cleaning services in the U.S. and Canada. For more information, contact Stanley J. Collini the owner and operator of Roto Rooter Plumbing and Drain Service in Toronto. To contact Stanley, visit www.rotorooter.com or call him at 416-503-4444. 30 Canadian Apartment Magazine

flooding or areas that are “out of the way.” This will help you react quickly to a leak before it becomes a disastrous flood. Check with your security system advisor about integrating flood alarms into your facility’s security system.

Depending on the size of your facility or the size of your staff, you should assess whether you can control a potential problem or if outside help should be called in. Many plumbing companies offer winterizing services, and often there’s no substitute for a professional plumber, especially if you don’t have the time or the inclination to undertake the project on your own. But with a little tenacity, some common sense and a plan of attack, these tasks can be completed quickly and easily.


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energy conservation

Cogeneration Fuels Markham Development Community Thermally Connected

by Jerry Amernic

Both residential and commercial customers will benefit from the Town of Markham’s commitment to creating its own district energy system. Utilizing cogeneration, the system will eventually service 20 million square feet of residential, commercial and institutional space.

Two things happened in recent years that have helped spur the concept of ‘district energy’ as a viable energy source for large residential buildings. First, the deregulation of Ontario’s electricity sector allowed municipalities to run their own competitive energy companies. Second, the now infamous ice storm of January 1998 served notice, especially in Ontario and Quebec, that we should be less dependent on the current, electricity grid. The upshot was that not only government wanted to fi nd new ways to generate and distribute energy, so did developers. In 1999, not long after that ice storm, the Town of Markham, Ontario created its own energy company called Markham District Energy Inc. The idea was something that is quite common in Europe, but not so much in North America, namely, to connect 32 Canadian Apartment Magazine

an entire community thermally as opposed to electrically. What’s more, it would lead to greater efficiencies and be environmentally friendly. Today Markham Centre is the largest, planned, mixeduse development in Canada. When complete, it will be home to more than 25,000 residents and 17,000 employees who will work and live in 20 million square feet of commercial, institutional and residential buildings. The whole project is designed in a way that reflects the needs of sustainable development. In fact, ‘sustainable’ is the key and energy is a major component. At the heart of Markham District Energy is its cogeneration plant. This is where electricity, fuelled by natural gas, is produced for the local distribution grid. Thermal energy is recovered from


The Markham district energy program was modelled on Europe and we’d like to see more of it the generator and used to heat and cool buildings. This is how it works. In winter, the recovered heat goes to producing hot water for space heating and domestic hot water while, in summer, the thermal energy drives absorption-chilling technology to produce chilled water for space cooling. And so, hot and chilled water is distributed to homes and buildings through an underground network of piping; the thermal energy is transferred to the buildings in order to heat and cool them and to produce domestic hot water. The first of four planned energy production plants is already up and running. It consists of high-efficiency, natural gas boilers, chillers and a natural gas cogeneration facility with waste-heat recovery technology. When fully developed, it is expected that the district energy system will achieve an overall efficiency gain of 50 percent, resulting in a corresponding 50 per cent reduction of local emissions. The bottom line? District energy, which is priced competitively with conventional energy costs, will provide significant operating advantages for the host buildings.

Dorsay Development Corp., became the first residential building connected to the system and the first one in Canada to be EcoLogo-certified for heating and cooling being served by a district system. EcoLogo certification means that Environment Canada recognizes the project as a leader in delivering energyefficient heating and cooling systems. Phase I of Circa is now complete and construction of the 16storey Phase II should begin this summer. The total development involves 935 units, all of them connected to Markham’s district energy system. As with IBM, the developers of Circa - Tridel and Dorsay - didn’t have to install any boilers and chillers. “The Markham district energy program was modelled on Europe and we’d like to see more of it,” said James Ritchie, Senior Vice President of Tridel. “The biggest benefit is that you have zero emissions from your residential building. It also provides reliable heating and cooling even during blackouts, and let’s not forget that district energy came about in Markham because of blackouts. And since you don’t have to put in any chillers or

Customers Come on Board

boilers, you free up valuable real estate in the building. All in all, we think it’s a good idea.” Liberty Development Corporation was the next residential developer to get involved in Markham Centre. Construction of Phase I of its development began last fall and the project, when complete, will involve four buildings and 589 units. All of them will be connected to Markham District Energy. “District energy makes a lot of sense for residential developers,” says Bruce Ander, President of Markham District Energy. “Since December 1, 2000 our district energy system has not had a single hour of downtime. The system is cost competitive, reliable and environmentally sound, and you can defer capital so it’s a good package for developers.”

The first customer for Markham’s district energy system was IBM Canada’s new, 600,000-square-foot, software research laboratory. Being served by district energy meant IBM didn’t have to build its own power plant with boilers and chillers, and could defer a major capital outlay, saving a lot of space in the process. The idea with district energy is that the system’s plants are located around the perimeter of the development and that’s exactly what is happening with Markham Centre. With IBM on board, next came companies like Motorola Canada and Powerstream. Not surprisingly, developers of residential buildings were paying close attention. A new luxury condominium complex called Circa, developed by Tridel and

september 2007 33


by Larry Rothman

Advantages of interest to developers and owner-managers of residential buildings include the following: • Defer capital by not having to build plants with boilers and chillers • A better and simpler building to operate because of no need for on-site equipment or for maintenance contracts with outside firms, which means lower maintenance costs • Provide residents in individual units with year-round control over indoor climate systems, which is a major selling point • More efficient systems since less energy is wasted, resulting in reduced emissions • A better long-term, return on investment.

Residents who now live by in Randy Circa Phase I can expect their Threndyle heating and cooling costs to be five to ten percent less than in a conventional condominium unit, according to Ander. What’s more, their building is not emitting harmful carbon dioxide. Ander says nowhere in North America has district energy been developed with a greenfield development to such a scale as it has in Markham. “Markham Centre was essentially a big 1,000-acre field,” he says. “There were no roads, no infrastructure, nothing. But district energy has been linked at the hip with the urban planning process from the very beginning. We installed district energy piping under the roads when the road network was being built.” Markham Centre should be completed around 2021. At that time 20 million square feet of building space will be on 34 Canadian Apartment Magazine

the Markham District Energy system with 250 energy customers. Local power generation will be 28,000 KW, courtesy of four power plants, and the primary fuel source will be a combination of natural gas, biogas and solar. There will be 35,000 tons of chiller capacity and some 200 kilometers of thermal-distribution piping. Is this the wave of the future? It might be. Last fall Markham’s Warden Energy Centre CHP was one of seven cogeneration power projects in Ontario to sign contracts with the Ontario Power Authority. This was the culmination of the first phase of a competitive 1,000-megawatt procurement process, the first of its kind in Canada. This is what Paul Bradley, Ontario Power Authority Vice President of Electricity Resources, said at the announcement: “The projects are diverse in type and location, providing electricity and efficient thermal energy to Ontario industry and communities. They represent the high efficiency we should be striving for in Ontario’s future power projects.” CAM

Jerry Amernic is a Toronto writer and public relations consultant who works with many organizations in the public and private sectors. He is also the author of several books, including the novel ‘Gift of the Bambino’. His next book, due to be released this fall by Key Porter, is ‘DUTY - The Life of a Cop’, a collaborative effort with Julian Fantino about the life of the former Chief of the Toronto Police Service and current Commissioner of the Ontario Provincial Police.


MG-07169 CanAptMag Ad.indd 1

8/15/07 10:47:10 AM


asset management

Spruce It Up

by Stephen J. Bronetto

Retrofitting for Full Asset Potential Retrofitting buildings is a way to optimize your asset. Making environmentally friendly or “green” changes can save you money and create a cleaner, healthier environment for your residents. A Retrofit Strategy is the optimization of existing buildings. There must be fundamental strategic reasons that prompt the change such as a concept, a belief, a philosophy, or an event. “Green” living is a validation that will affect the costs, ease of installation and aesthetics of your retrofit design. Generally retrofit strategies are divided into two basic areas. One strategy is the modification of physical as well as hardware assets. This includes repair or replacement of internal operating systems or the physical appearance of the building and or the property. The other is to modify people’s behavior through education programs and financial incentives such as conservation and recycling. Changing demographics are affecting the real estate market. The fact is that the population of Toronto, like the rest of the western world, is getting older. People are having fewer babies than their parents did and older people are living longer. That combination of demographics is the basis for the observable fact that our population is aging, which means simply that the average age is increasing. Even though all indications point to larger apartments being needed for densification, the real long-term trend is toward more efficient, comfortable surroundings in intimate structures. The renewed interest in older locations of the city has more to do with the proximity and location of the land, rather than the building’s structural values. Green buildings are energy efficient, environmentally friendly and healthier for the occupants. The trend towards green buildings is continuing in the marketplace and HVAC (heating, ventilation, and air conditioning) retrofit strategies 36 Canadian Apartment Magazine

should address important issues such as indoor air quality, energy efficiency, and tenant living accommodation concerns. Also, the aging population is advocating this trend and it will become even more popular in the next few years. The issue of ultimately saving costs may even surpass the apartment image. The business case for going green is increasingly clear and goes directly to the bottom line. Owners and their managers are beginning to realize it’s also about the competition for those who want a better living environment and are willing to pay for it. So changes to the building and the property are inevitable.

What are the three most common issues for Retrofit Strategy? 1) Age of the building. 2) Operations of the building. 3) Increased long-term value of the building.

Exterior and interior renovations regenerate life into a tired building. For retrofit design considerations, a strategy evaluation matrix and recommended systems is extremely important. Historically owners would tear down older buildings not looking at the true value of the existing location. If the building is older, then your question is to review and seek out the highest and best use of the property. If the building is well located and in reasonable operating shape, it may need to be retrofitted rather than replaced, with few physical building operating changes. The rehabilitation of older apartment buildings through retrofit strategies preserves the original state and character of the building and addresses tenant concerns for better living


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Window films will improve energy efficiency, reduce solar gain (heat build up) and block ultraviolet radiation environments within accessible areas. Sometimes using simple cost saving alterations like paint and carpet in the lobby and on the occupier’s floors will create a newer bright look for your building. These alterations can be coupled with newer energy-efficient lighting such as compact fluorescent lamps, which are simply miniature versions of full-size fluorescent lights. A 22-watt light has about the same light output as a 100-watt incandescent and is up to four times more efficient using 50 to 80 percent less energy and lasting up to 10 times longer than incandescent bulbs. To optimize the value of compact fluorescent lamps, it is best to use them in areas that are lit for relatively extended periods of time. (Fifteen minutes or longer.) The increasing use of fascia glass in today’s buildings is evident. Besides the benefits, some of the side effects are glare, rapid fading of interior carpets, furniture and draperies, heat build up and higher energy costs. Window films will improve energy efficiency, reduce solar gain (heat build up) and block ultraviolet radiation. Most of the sun’s heat is transmitted in the form of invisible infrared and ultraviolet radiation and the films are able to isolate and reject heat, in some cases by up to 95 percent, while allowing visible light to pass through. The fi lms allow for a variety of applications, finishes and coatings that can dramatically change the exterior look of your building. As rising fuel prices increase the operating costs of apartments, owners and managers are looking into ways of retrofitting their properties with technologies to improve energy efficiency and save costs. Why? 1) The reduction and eventual elimination of fuel and water waste. 2) Lowering the cost of maintaining air conditioning, heating and hot water systems. 3) Technology is selected to be economical thereby reducing the amount of time needed to achieve a return on the initial investment.

There are still many buildings and properties where excessive HVAC costs are due to outdated monitoring and control systems. Owners and their managers are turning to computer systems to assist them and reduce their fuel costs. The physical process consists of a monitoring and control unit that uses outdoor and indoor temperature sensors as well as electric and electromechanical controls. That permits boilers to cycle only when building interiors actually need heat. Besides saving significant amounts of fuel, this technology enhances tenant satisfaction with more automated heat flow throughout the building. Using computer-based HVAC systems allows for ongoing control with the ability to phone into the computer and set day or night the temperatures and other parameters, such as daylight savings time throughout the apartment building. All of this 38 Canadian Apartment Magazine

is recorded into the computer system making it easier to track up-to-date information as well as historical and peak use in the building. This business practice is both efficient and smart. This leads to better air circulation and fi ltration methods to clean the air within a building. Ventilation strategies are often required to be integrated throughout the building. There needs to be a requirement for proper ventilation, the exchange of indoor air with outdoor air, to reduce indoor moisture, odors and other pollutants. Excess moisture generated within the building needs to be removed before high humidity levels lead to physical damage or mold growth. The use of localized exhaust fans to quickly remove pollutants as they are generated is an important tool for improving air quality and ventilation effectiveness. The building will smell fresh and clean.

Water conservation, such as more efficient water-using fi xtures and appliances or the use of recycled water can reduce water consumption costs. An older idea that is gaining momentum is to recapture water to replenish your building’s grounds and soil moisture. If every owner contributed to this kind of water rerouting, they could retain larger portions of woodland areas next to their site and maintaining lush foliage around buildings. It could reduce the need for municipalities to seek water use bans. Take a look at your building and what do you see? The uniqueness of real estate is sometimes isolated and static, but for you to realize the benefits from your investment, the building must reach its true potential. Retrofitting the building’s operations to its level of optimization and bringing its character back to life is like a spruce sprouting from the ground developing into a tree full of rich green branches. CA M

Stephen J. Bronetto is President of BonaMax Realty Inc. and is a real estate advisor with 23 years experience in the commercial, industrial, retail and real estate investment sectors. He has completed a wide range of acquisition/disposition, and leasing arrangements for North American clients. Stephen can be reached at 416-817-4377 (Mobile) or sbronetto@bonamax.com


Does Your Laundry Room Attract Residents? Huebsch helps properties provide the exceptional laundry services residents desire in three easy steps. Follow the steps below and watch your laundry save energy and become an amenity residents love to utilize.

Step 1: Choose your level of energy and water savings. High Efficiency — '07 Topload Washer

Ultra High Efficiency — '07 Horizon® Front Control Washer

• Special water saver cycle uses only 90 liters • Automatic temperature control NEWad reduces hot water costs Big Lo r! Doo • Modified Energy Factor — 42 liters/kWh/cycle Water Factor — 8.8 liters/liter • High-speed extract — 710 RPM

15.5"

• Uses just 56 liters of water per cycle • Modified Energy Factor — 61 liters/kWh/cycle Water Factor — 0.7 liters/liter • ENERGY STAR® qualified • High-speed extract — 1,000 RPM

Savings*

Savings*

Water — 29% Energy — 39%

Water — 57% Energy — 66%

Step 2: Choose a user-friendly control. NetMaster ® Control (NMC)

Micro-Display Control (MDC)

• Fast cycle turn — 30 minutes or less • Displays cycle time countdown to maximize cycle turns • Hot, Warm or Cold temperature selections

• Fast cycle turn — 27.5 minutes or less • Programmable vend price in .25 increments • Guides user from start to finish • Superior cleaning with full-fill wash and rinse followed by a final spray rinse

Step 3: Add the technology. Micro-Display Control

NetMaster ® System

• • • •

• Two-way communication and programming to retrieve laundry room activity data • Secured, automated audit system • Special bonus cycle incentive vending and time-of-day price promotion

Non-resetable cycle and coin counter Electronic diagnostics Dryer top-off feature Coin or card vending

ct C o n t a ay! Us Tod

*Savings compared with '06 topload washer models.

(920) 748-3121 www.huebsch.com/property

Commercial Built to Last Longer

®

Job No: 2007-3958


marketing

Green is Good Marketing by Jason Leonard

Upgrading your building to increase energy efficiency can be a marketing opportunity. If you’re spending money, find a way to tell both current and prospective tenants, about the improvements.

Last month we examined what three property management companies were doing to create awareness for their environmental initiatives. The ideas were somewhat elaborate and were certainly well planned and executed. Not every company however has a marketing department that can dream up these campaigns. Not every company has the budget to create a big splash. Most companies however are upgrading their buildings with a focus on environmental issues. So how do you turn these expenses into a marketing opportunity without adding additional expense?

First, let’s take a look at a few common updates being made: 1. Toilets are being replaced with new water saving units 2. New windows are being installed 3. Appliances are being replaced with “Energy Star” rated units 40 Canadian Apartment Magazine


Leave The Driving To Us! The road to effective property management is full of unsuspecting twists and turns, as well as bureaucratic roadblocks; so, let MetCap Living take the wheel. With over twenty years of proven success, the MetCap Living team will ensure you get to where you want to go, relaxed and free of concern. We know your world, because we travel that road on a daily basis. Marketing, leasing, accounting and site management—in fact, anything and everything you require to provide a better living experience—MetCap Living can deliver. We’ll tailor our expertise and well established infrastructure, to meet the specific needs of multi-unit properties. Think of us as your personal chauffeur. Always ready. Always professional.

Trust MetCap Living–We’ll be there! To find out more about our property management services please contact Anne Meinschenk, Director of New Business Development, MetCap Living 416-993-4305 or anne.meinschenk@metcap.com


The list of common upgrades is long but the fact remains, most of these changes leave a positive impact on the environment. Rather than looking at these improvements as nothing more than bottom-line issues, smart landlords will turn these investments into marketing opportunities. If you’re spending money on improvements, why not find a way to tell your current clients and prospects about your efforts? Why leave a unique marketing angle out of your mix when including it can be so easy?

Simple Ideas 1. List your building’s improvements in your prospect package or information sheet. 2. Include your environmental policies and improvements on your website. 3. Use environmentally themed headlines in your advertising. 4. Include specific building improvements in your advertising where possible. Implementing ideas is where most people falter. It means making changes from what has become routine and that can cause some people not to act all. Choose to make a few simple changes and test to see if it yields any results.

A Closer Look Adding comments about your recent improvements in prospect packages or information sheets can be as simple as listing a few bullet points with a catchy headline. If you have a website, it’s highly recommended you add a section outlining your building upgrades and better yet, your environmental policy. If you don’t have a policy in place yet, take the time to write one. Remember, it doesn’t need to be elaborate. All you require is a basic message stating your company’s position when it comes to making improvements that affect the environment. Adding environmentally themed headlines to your current advertising is where you get to have some fun and be a little creative. If you don’t feel like you have it in you, just ask your advertising representative if they can help you out. Of course there are an unlimited number of headlines you could create. The key is to make it catchy. You should also deliberately tie the consumer benefit to the environmental one. In other words, if it’s good for the environment, it’s good for you too! Finally, look for easy ways to include building improvements in the body of all advertisements. With most online advertising, you can include unlimited text so space isn’t an issue. Consider including a summary like this: This building is environmentally friendly • New high-efficiency heating system was installed in 2006

42 Canadian Apartment Magazine

Environmentally Themed Headlines Liisa Kirkham, an advertising copywriter at gottarent.com, says more and more landlords are looking for themed headlines that carry a direct message. When it comes to environmentally themed headlines and subtext, she offers the following examples:

Utilities cost less here Our new windows help reduce energy costs. Good for you and the environment! Don’t flush away your money Our new toilets and showerheads conserve water. Help the environment, reduce waste and save! We think green, to save you green Enjoy new “Energy Star” rated appliances in your new home Great for the environment and your hydro bill!

• All new windows in 2007 help control heat loss • Extensive landscaping improvements including the planting of over 10 trees • New “Energy Star” rated appliances in renovated suites

Not every rental prospect will care about your environmental initiatives but a growing number will. Adding these simple suggestions to your marketing mix won’t negatively affect your advertising, however, it will leave a positive impression with people who do care. C A M Jason Leonard is our marketing feature writer. You can get a free copy of his “Landlords Guide to Using the Internet” by sending your name and address to jason@gottarent.com


November 28-30 2007

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90 L D !

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Greening Existing Buildings: Major Focus

Metro Toronto Convention Centre South Building Greening is a major priority for building owners and managers as they seek to develop and implement strategies and practices that will use substantially less energy, ensure that indoor environments are healthy and comfortable, and reduce GHG emissions. SHOW THE MARKET WHAT YOU ARE OFFERING Greening existing buildings will be a one of the major themes of PM Expo 2007 as we respond to the interests and priorities of the real estate, property management and building industry. As an exhibitor, you will be able to showcase your service, product and/or technology to the market and demonstrate how you can help owners, managers and operators meet their needs and priorities for greener buildings and provide a reasonable ROI. The GREEN PRODUCT & SERVICE RECOGNITION and the PRODUCT KNOWLEDGE CENTRE (new to the Show this year) will help you to facilitate higher profile for the effectiveness of your offerings to the market. The National Green Building Conference will be held concurrently with PM Expo. With over 200 speakers, this will be the largest program ever offered in Canada of seminars and presentations on the best practices, most current strategies and the latest technologies for greening new and existing buildings. Be sure that you are a part of this significant market trend!

90% OF EXHIBITOR SPACE IS ALREADY SOLD! With a total attendance of over 22,500, PM Expo 2006 was sold out for the fourth consecutive year. The space rate for 2007 is $28 per sq.ft.

RESERVE YOUR SPACE NOW!

To reserve your exhibit location or to receive additional information, please contact Jeff Ingram at (416) 512-3811 or send an email to jeff@yorkcom.to Your Customers and Prospects Will Look for You at PM Expo!

Our 19th annual Show is already 90% sold with a very strong line-up of exhibitors. Consider the value of PM Expo and book your exhibit space now!

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Š2007 MMPC Expositions ULC. York Communications/MMPI

MEDIA SPONSORS


property management

Reducing Your Vacancies If your building has a high vacancy rate, a third-party manager just might have all the tools needed to help you turn things around.

Vacancies are by far the biggest challenge facing most independent landlords today. If vacancy issues are not managed quickly and effectively they can easily spiral out of control where it becomes extremely difficult if not impossible to regain control of the building. There are many reasons why buildings have high vacancy rates, the most common of which are ineffective advertising, poor staff training and units that are in need of repair or renovation. One of the keys to solving your vacancy problem is creating an effective marketing and advertising plan. Today, every landlord needs to have such a plan, and it has to be more than just placing a sign on the front lawn of your building. Today’s tenant is increasingly sophisticated and landlords need to recognize the need for change. Up to 50 percent of tenants find their new apartment through the Internet. If your building is to tap into this market, you need to have a website that is both easy to find and easy to use. Third-party property management firms are often very experienced in creating and placing electronic ads that are proven to attract tenants. Additionally, because of the number of buildings third-party companies manage they generally receive bulk discounts on advertisements and are able to get their websites into the top tier of “Google” searches. In short, there is strength and value in numbers. Additionally, prospective tenants often feel a greater sense of security renting from a name they recognize. Think of it this way. If you were looking for a motel, would you prefer to stay at the Holiday Inn, or at Joe’s Motel? Most people feel a little more comfortable with a name like Holiday Inn than they do with Joe’s Motel. A name like Holiday Inn has branding, and provides prospective tenants with the comfort and reassurance that it is a professionally managed building. That’s another advantage that a third-party property manager provides. Another marketing tool where a third-party property manager can help you to reduce vacancies is through the effective use of print advertising. If you buy only a few ads, you are probably paying full price. A third-party property manager buys print advertising in newspapers and specialty rental publications on a weekly basis. Because they are large-volume buyers they get price breaks and preferred positions in the publication. 44 Canadian Apartment Magazine

by Anne Meinschenk

An individual owner who is faced with a high vacancy rate might consider it too expensive to buy larger full-page ads in rental publications. Since third-party managers have already made bulk-advertising purchases, they have the resources to buy a larger ad for your building and have it placed in a prominent position in the publication. Staff training is another area where a third-party manager can help to reduce a persistent vacancy problem. Large metropolitan areas are multicultural. For many people who are renting apartments, English is a second language. If you want to attract these prospective tenants, you need to have staff that can speak languages in addition to English. Suppose you place an ad with one of the many cultural publications available in Canada. If your building manager and the tenant can communicate in the same language, you’re pretty much guaranteed to get them as a tenant. A third-party manager will often have large numbers of employees who live on site at the buildings and who speak two or more languages. For many tenants, being able to communicate effectively with the building staff can work to your advantage in retaining quality tenants which as every seasoned landlord knows is just as important if not more so than attracting new ones. When a tenant has a problem with their unit or a question about rent payment, they are often more comfortable asking questions and receiving answers in their own language. Ideally, when choosing a professional property management company you should look for one that offers their tenants a customer service hotline. Providing your tenants with an alternate voice to answer their questions and concerns can also contribute greatly to their satisfaction and likeliness to stay in your building. The fringe benefit of having a customer service phone number is that management can both log and keep track of the calls that are coming in to determine if there are repeat issues where senior management would need to step in. For example, if the hotline gets 10 phone calls in a day about something within the same building, the management company knows very quickly that there’s and issue that needs to be resolved.


“ Getting prospective tenants to your building is about half the battle.” Extended hours of operation can also help to solve your vacancy problem. In many buildings, the rental office is open from 9 to 5. If a building has a lot of vacancies, a third-party manager will extend the leasing hours and remain open in evening. That allows prospective tenants who work during the day, to visit your building, inquire about rents and look at the suites. Thoroughly trained leasing staff is another service professional management companies provide. Today’s leasing professionals are often trained in the art of closing the sale. They point out the area’s amenities and do follow-up phone calls to prospective tenants. Getting prospective tenants to your building is about half the battle, the other half is in getting them to stay as paying, happy tenants in your building. Owners know they have to spend money on building improvements to attract new tenants and keep existing tenants. But, there are efficient ways of spending your money to get the maximum amount of revenue. Third-party managers know which improvements pay off. For instance, a renovated hallway may look great, but, your tenants don’t live in the hallways. By far, the most important investment you can make in your building for attracting and retaining new tenants is in upgrading the interior of a suite. Another area key to attracting tenants is curb appeal. Nicely groomed lawns and flowers send a message that the building is well maintained and cared for. A third-party property manager will spend your renovation dollars in an effective, prudent manner providing you with a budget to pre-approve before any work begins with your building. The better management firms will also offer an in-house capital improvements team or department that will manage these projects for you. Remember, a third-party manager can help you align your building with

a recognized and trusted brand that will market your building effectively, staff it with trained professionals and budget for insuite improvements. Implementing these ideas can drastically reduce and eliminate your vacancy problems. CA M

Anne Meinschenk is the Director of New Business Development for MetCap Living, a company that specializes in managing multi-unit residential buildings. For more information, please contact Anne at 416-993-4305 or anne. meinschenk@metcap.com

september 2007 45


regulation

Ontario Launches $185-Million Program The Ontario government is launching a housing program that will provide a monthly housing allowance to low-income working families struggling with housing affordability. The Minister of Municipal Affairs and Housing John Gerretsen announced the program in August. “Many of these families will be newly arrived in Ontario, struggling to make their way forward in our province, and we want to offer them a helping hand,” said Gerretsen. The $185-million Rental Opportunity for Ontario Families, known as ROOF, will provide a housing allowance of up to $100 per month to more than 27,000 low-income working families in the province, starting in January 2008. Eligible families must have at least one child under the age of 18, have an Adjusted Family Income below $20,000 per year, and pay more than 30 per cent of their income on rent. Families must not be receiving rent subsidy or social assistance. “Housing allowances are an effective way to help lower-income families with housing affordability,” said Mike Chopowick,

Manager of Policy for the Federation of Rental-Housing Providers of Ontario. “We commend the government for taking this important first step.” “ROOF will go a long way in helping working families who are not receiving social assistance and who are struggling to raise their children with a limited budget,” said Gladys Wong, Executive Director of Neighbourhood Information Post, the lead agency for Toronto’s Rent Bank. Families can obtain an application form for the ROOF program by calling toll-free 1-888-544-5101, TTY line 1-800-263-7776, or by signing up online at www.ontario.ca/ROOF. “ROOF takes an innovative new approach to providing housing assistance to low-income working families struggling to fi nd affordable housing,” said Gerretsen. “This program will make a positive difference in the lives of thousands of households that will directly benefit from receiving an extra $100 per month.” For more information, visit www.mah.gov.on.ca CAM

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46 Canadian Apartment Magazine

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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 4 / NUMBER 4 / SEPTEMBER 2007

Brad Smith President Briarlane Rental Property Management Inc. www.briarlane.ca

Multi-Unit Residential Mortgages

Better Tenant Relationships. Faster Rentals. More Income. As a third party Property Manager for over 30 years, my job has been to make good properties great by increasing revenues, reducing operating costs and managing risk. I can’t run great properties without great suppliers. I want suppliers who understand my business, how I make money, and how I want residents looked after. When it comes to laundry services, I want a supplier that goes further than leasing and servicing equipment. I want a company that has built its business on service to residents.

Coinamatic values its reputation as much as I value my own. With their On Time Every Time ® service and payment reliability, Coinamatic delivers value added amenities for residents and more real dollars for my Clients. Central laundry rooms are invaluable amenities – they show prospective tenants how they are going to be looked after. At Briarlane, we present well decorated central laundry rooms as social centres and promote them as featured amenities. I don’t want armored coin equipment in my rooms. I don’t like the message it sends to prospective tenants. Using Coinamatic’s SmartCity ® card, we’ve also given the visitor parking lot back to the real visitors and encourage residents to park underground, where they should be. For our site managers, we have removed the potential for confrontations over parking, while making them fully accountable for all cash payments for parking on the property. Better tenant relations, faster rentals and more income.

Coinamatic helps me look good! 1-800-361-2646

Canada’s Most Trusted Name in Apartment Services ® www.coinamatic.com

Skyline Expands its Horizons: Green Improvements Fuel Growth Spruce It Up: Retrofit Strategies that Add Value Get Your Plumbing Systems Ready for Winter

IT’S CLOSER THAN YOU THINK...

When we hire a service company, we hire a lot more than a salesperson. Coinamatic has depth in talent, proven collection audit capabilities, leading technologies, innovative services and most importantly, service and administrative personnel that understand their roles in delivering good tenant relations, faster rentals and more revenue.


Canadian Apartment Magazine September 2007 Issue