Views of downtown Calgary in April, 2021. Calgary-based Avenue Living Asset Management's pair of IPOs could create public companies worth more than $3-billion.Sarah B Groot/The Globe and Mail
One of Western Canada’s largest real estate fund managers is planning initial public offerings for its $9.8-billion apartment building and self-storage portfolios, a pair of market debuts that could help kick-start a moribund domestic IPO market.
On Monday, Calgary-based Avenue Living Asset Management Ltd. launched strategic reviews of its privately-owned 23,000-apartment-unit portfolio, the Avenue Living Real Estate Core Trust, and the Mini Mall Storage Properties Trust, which owns 270 facilities.
The two Avenue Living offerings could create public companies together worth more than $3-billion, based on the value of comparable publicly listed real estate investment trusts (REITs).
If both Avenue Living trusts go public on the Toronto Stock Exchange, that would match the number of IPOs done on the platform in 2025. The dearth of new listings in Canadian public markets came in a year when U.S. IPO activity surged 54 per cent, with 347 market debuts.
This year, brand-name domestic companies such as WestJet Airlines and drug maker Apotex Inc. are also expected to go public on the TSX.
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Avenue Living executives have recommended the two trusts go public as REITs, the company said in a press release. Trustees for each portfolio are now “evaluating a transition to public markets alongside other strategic alternatives to ensure the optimal structure for long-term value creation.”
Avenue Living expects the reviews to conclude by the end of June. The two processes are taking place independently, and the company said they may result in different outcomes.
Trustees will consider all options, including takeover offers if any materialize. However, Avenue Living said: “A transition to public markets represents the optimal path to achieve permanent liquidity, as both platforms command significant scale in the Canadian REIT space and present a unique opportunity for investors.”
Founded 20 years ago with the purchase of a single 24-unit apartment building in Brooks, Alta., – population 17,500 – Avenue Living now owns properties in six provinces and 22 U.S. states.
There are 40,000 unitholders in the two trusts, mostly wealthy families and institutional investors. Avenue Living co-founders Anthony Giuffre and Jason Jogia and executive team have significant investments and will retain their stakes if the trusts do IPOs.
“This proactive review is about aligning our capital structure with our market leadership and the maturity of the firm,” said Mr. Giuffre in a press release.
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Avenue Living launched the IPO process after both trusts provided double-digit returns to unitholders while expanding at a steady clip.
The apartment trust has returned 10.9 per cent annually since it was launched in 2017, and spent $1.1-billion to acquire 4,697 units over the past 12 months. It owns more than $6-billion of assets.
The Mini Mall trust has returned 11.1 per cent since its inception in 2020, and acquired 3.5 million square feet of storage space over the past 12 months for $887-million. The trust holds more than $3-billion of properties.
Calgary entrepreneur Joseph Giuffre founded Mini Mall in 1977 and Anthony Guiffre, his son, brought the business into Avenue Living six years ago.
Both trusts have investment-grade credit ratings and have tapped credit markets to pay for acquisitions and construction in the past. Avenue Living’s founders said taking the trusts public will give their management team additional access to capital for expansion.
“The private capital markets in Canada have helped nurture the growth of our platform into a multinational firm of institutional size and quality,” Mr. Jogia said. “As we embark on this journey, it is important for our stakeholders that we evolve to a structure that enhances liquidity.”
The two Avenue Living funds will continue to pay monthly distributions but the trustees will halt redemptions during for what is projected to be a six-month strategic review to “ensure the equitable treatment of all unitholders.” The trusts will also stop issuing new equity during the review.
Law firms Torys LLP, Norton Rose Fulbright Canada LLP, and Burnet, Duckworth & Palmer LLP are advising trustees on the strategic reviews. The trustees will also hire investment banks to advise on what promise to be lucrative mandates to run the reviews and potential IPOs.
Avenue Living runs a third private trust, the $150-million Tract Farmland Partners LP, that is not included in the strategic review.
Avenue Living is starting down the road to IPOs during a period when REIT performance is mixed, with numerous property portfolios trading at significant discounts to the book value of their assets.
Underperformers include office REITs, which have struggled to lease space since the COVID-19 pandemic and face relatively high vacancy rates.
Avenue Living is hoping to capitalize on the relatively strong recent performance from apartment and self-storage companies. Units in Canadian Apartment Properties REIT CAR-UN-T, the largest player in the sector, are up 2.4 per cent so far this year.
Shares in StorageVault Canada Inc. SVI-T, which is roughly the same size as the Mini Mall trust, are up 6.5 per cent year-to-date, and the company has a $1.8-billion market capitalization.
Apartment REITs that trade for less than their net asset value have attracted takeover bids from institutional investors.
Tricon Residential Inc. was acquired by Blackstone Inc. BX-N in April, 2024, for US$3.5-billion. InterRent REIT IIP-UN-T is being purchased for $2-billion by its founder and Singapore’s GIC, a transaction launched last year and in the process of getting final approvals.