Our Speaker Anthony Giuffre
Posted by David Holden
Anthony Giuffre is the CEO-Partner of Avenue Living
Rotarian Peter Giuffre introduced his younger brother Anthony Giuffre as our speaker.
 Speaker Anthony Giuffre | Highlights:
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- Premise was Calgary medium income was relatively high and real estate costs were still relatively low.
- Filled room and taught people how to read the real estate math
- However, the market was outstripping their predictions so they could no longer state their assumptions because they were no longer valid
- They needed to redefine themselves and worked towards real estate arbitrage
- They tried to create a stable sandbox where their investors could participate in real estate speculation and give them the ability to make money
- With a stable of investors, bought a series of apartment buildings, upgraded the building systems and offered to their investors the opportunity of improving the units and re-selling them
- If their plan had not worked, they could still rent the units back out of the market – this was their backstop
- Their first 120 days their plan worked but when time came to re-load, the market had advanced on them and that eventually made their plan unworkable (the math did not work so that arbitrage opportunity was finished)
- Recreated themselves again and they found a sustainable opportunity in Brooks Alberta
- Challenges of having an under managed asset (due to distance)
- Smart tenants in 3-bedroom tenants shared accommodations 2 per room for each of three shifts, or 18 tenants per townhome
- Retrofitted and had to deal with cultural differences all from 100 miles was challenging
- 6 months later refinance and were able to recover their capital and do it all over again
- An opportunity in Lethbridge was next including their mortgage guy “knowing a guy”
- Russ was one of their first and still is a major investor
- This forced them to be only a good (liquid) as their last play
- Had to buy underperforming assets, fix them, and rent it at market
- Brad Wall’s government in Saskatchewan created their next opportunity in Saskatoon
- Saskatoon’s housing costs were undervalued
- Their niche was the mid-market, apartment buildings under 20 units
- Ran this niche time and time again with consolidation of the assets across small town Saskatchewan and central Alberta
- Few competitors made this work
- Dr. Nasser was a big Saskatoon investor after asking for and receiving each of the co-founders father names, who he called for a character check
- King making moment
- Staying independent helped them survive
- 2014 came close to a new deal with venture capitalists but the changing environment of the oil price collapse made the plan unworkable. The VC people took a raincheck and are still waiting for the math to work again
- They recreated themselves one more time converting preferred shares to common shares (with the agreement of their investors) which created in 2015 a new Limited Partnership
- In the falling oil price environment there was no one willing to give the $35MM capital they needed so they heeded the advice of if you do not know what to do, do nothing
- So they sat on their haunches and focused on what they had (no new deals)
- From Spring 2015 to Fall 2016 they retrofitted each of the units (over 9,000 of them)
- This improved their business model
- Retrofitted and re-leased those units so they are now at 90% occupancy
- They are in the middle of financing $100MM to find opportunities now
- They started an Agri-fund, with a food shortage, their fund rents farm land back to the farmers and allow non-farmers to participate as investors
- They was a challenger related to who is legally allowed to own farm land but nothing that could not be overcome
- That is our story!
Dan Adams thanked our speaker.