Strategy
Multifamily - Value Add - Development
At Highmark we believe in the multifamily and mixed use asset class. Our business model consists of new development projects and value-add strategy, increasing value of an existing property through improvements, renovations, and operational enhancements.
We believe in Multifamily
- Durable recurring revenue - A large, diversified tenant base provides a robust revenue stream.
- Rental Growth Outpaces Inflation - Rental growth has historically remained ahead of inflation over time. This has provided a margin of safety for real estate investor cash flow.
- Readily available financing - More abundant and secure debt capital through CMHC gov-sponsored programs.
- Strong Inflation Hedge - Rental income from diversified pool of tenants makes multifamily investments a lower-risk proposition than office or retail.
- Population Growth - Canada’s rapidly growing population is projected to reach 44 million by 2030 (38,5M in 2022), fueled by an annual immigration target of approximately 650,000.
Opportunities and Benefits
- Multifamily Carries Fewer Risk: Rental income from diversified pool of tenants makes multifamily investments a lower-risk proposition than office or retail.
- Rental Demand Remains Strong High tenant demand and historically low vacancy rates are coupled with a shift to apartment development momentum and delay/abandonment of plans for younger homebuyers.
- Improvements unlock hidden value: Capital improvement can offer immediate payback via commanding higher rents.
- Refinancing is Tax-Efficient: Investors shouldn’t have to wait until sale to realize gains and property owners can refinance multiple times, that may allow them to collect tax-free distributions each time.
- Canada Housing Crisis: Canada's population growth will continue to drive housing demand and contribute to the existing housing crisis. According to CMHC there is a shortfall of 3.5 million units to balance demand and supply.