CANMORE, AB, Oct. 3, 2011 /CNW/ – Prestigious Properties has completed the sale of four properties in Yorkton, SK to Nexus Asset Group Inc. of Calgary for $7.771M for 126 suites in a transaction that is the largest Yorkton apartment building sale in recent history. This benefits Prestigious’ cash-flow in an impressive portfolio of revenue-generating rental properties which now exceeds 1,110 units, $90 million in asset value and over $45 million in equity in Western Canada and the U.S.
A rising player in the North American rental real estate market, Prestigious Properties has developed a highly successful investment strategy which has drawn an enthusiastic response from over 600 satisfied investors. Company president Thomas Beyer is bullish on the company’s business model and pleased by its surging growth profile. “In any economy, and especially in a recessionary environment like right now, there is a need for reasonably priced, well situated and appropriately renovated apartments,” Beyer explains his investment philosophy. “Renting is becoming the economic choice of many because owning a house doesn’t mean automatic equity accumulation anymore, because renting is usually far cheaper than owning and because the threat of rising interest rates remains with us,” he adds. “Buying, selling or upgrading all happen in the life of a real estate firm, and in this case, we happen to be sellers to improve our cash position so we can buy accretive buildings elsewhere, likely Alberta. ”
In a nutshell, Prestigious Properties buys undervalued apartment buildings in urban markets. The company renovates, manages, re-finances and occasionally sells these properties while both equity values and rents increase over time. Under terms of a pre-arranged exit strategy, syndicates may ultimately dispose of the asset for ROIs which have historically ranged in the double or triple digits over a number of years, such as in this portfolio.
Scotty Grubb, VP Business Development and COO for Prestigious Properties, adds: “Echo-boomer demand, in-migration, tightening credit requirements, higher down payments for would-be home owners translate to stronger demand for rental accommodation, rising rents and lower vacancies. We can currently buy apartment buildings for less than 50% of replacement cost, with relatively predictable rental growth and with very inexpensive financing. We will re-focus on our core market, which is Alberta where 70%+ of our Canadian assets are located.”