The CIB investment will represent 80 per cent — or $120 million — of the capital costs. The funds will go toward improving building systems and living conditions in a significant portion of Avenue Living’s portfolio in Canada’s Prairies.
Avenue Living’s Canadian and U.S. portfolios include over 500 lower and medium-density buildings with more than 14,700 apartments and townhomes.
The goal of the retrofit project is to decrease overall GHG emissions by at least 49 per cent. For each individual building, Avenue Living is targeting a minimum 30 per cent GHG reduction.
“Because of the fact that Avenue Living operates, predominantly . . . in Western Canada being Alberta, Saskatchewan, one thing we’ve done is we’ve aggregated a large number of those buildings built before 2000,” said Anthony Giuffre, Avenue Living’s founder and CEO.
“We’ve always retrofitted those buildings, brought them back to a particular standard. An augmented housing supply, not necessarily from the front, like some of our peers do. We focus on the rear, bringing that stuff that was either forgotten about or didn’t have a high utility, we bring it back to (that) point.”
The CIB, founded in 2017, is a Crown corporation created to fund infrastructure projects in the public interest.
The investment is expected to close this fall and the retrofits will begin shortly after.
The CIB partnership
The partnership with CIB began out of a simple desire to complete these projects more sustainably for Avenue’s medium-density housing in Western Canada. Giuffre explained the search for a public-private partnership took about two years, after which he said CIB was “really understanding what we do, how we do it (and) how well we do it.”
To start, the partnership will focus on 50 per cent of Avenue Living’s portfolio of such housing. That translates to “just north of” 6,800 apartments across 132 buildings in the Prairies. Giuffre estimates that will take the company about four years to complete, although the larger plan is to complete retrofits for the company’s entire portfolio by 2027.
The project will focus on on-site renewable energy generation, low-carbon heating and cooling systems, sensors and smart thermostats, optimized air filtration, water and vapour management, as well as energy consumption strategies. However, as Giuffre explained, specific decisions around how to approach each building will be based on their key performance indicators.
“These particular markers within those markets are going to have a dataset, that dataset is going to be able to very quickly illustrate what we need to do to a specific building, whether it’s built in 1985 or 1999,” Giuffre said.
“Everything is going to be a one-off basis. But we’ve been doing this since Day One of our organization in 2006, so this isn’t new to us. We just have a much more intended purpose and I guess, a more refined purpose.”
Beyond the retrofit project
Avenue Living is a signatory of the UN-supported Principles for Responsible Investment (PRI), established in 2005. The organization works to incorporate ESG factors into the business models of its signatories.
According to Giuffre, these factors are integral to the company’s major moves — which includes the CIB partnership — and they “allow you to be able to build a business for the long-term.”
Since its 2006 founding, Calgary-based Avenue Living has grown to over $3.7 billion in aggregate assets under management across four private real estate investment mandates.
The company’s full portfolio includes over 14,700 multifamily units in Canada and the U.S., over 496,500 square feet of commercial space, 82,827 acres of farmland and more than three million square feet of self-storage space.
Looking to the future, Giuffre stressed a commitment to the ESG principles outlined in the PRI.
“It’s very important from our aspect to really be very holistic, and to be able to provide a broad-based view in how we approach operating our business,” Giuffre said. “We’re very aware, very conscious and really wanting to make sure that this fits within a broader base ESG.”