Value-Add Properties
Unlocking Value in Real Estate: The Power of Value-Add Buildings
This case study illustrates the lucrative opportunities that value-add buildings present for real estate investors. When looking to acquire a Value-add property, Equiton looks for older buildings in good locations that can be purchased below market value with opportunities to extract value and increase revenue.
Wellington Place – A Prime Value-Add Property in Hamilton, Ontario
For these reasons, Wellington Place was the perfect building to add to our portfolio. Wellington Place, the largest property in our portfolio, is a 1970’s multi-residential building with 364 units located in Hamilton, Ontario. Through our market research and due diligence process we discovered that it’s located in an up-and-coming neighborhood, minutes from transit, the downtown core, the First Ontario Centre, close to hospitals and a short commute to McMaster University. There are also many new development opportunities popping up in this urban area.
We purchased this property off market and 10% below market value for $54.3M in March 2021. During our walkthrough we noticed it needed repairs, renovations, and many updates – but we saw what others didn’t: the potential for dramatic increases in revenue and value!
Let’s explore how we increased the value of this property!
Maximizing Returns: Adding Value to Wellington Place
We unlocked the hidden value of the building by discovering and optimizing underutilized spaces. We renovated an area on the first floor to create a new rental suite and transformed another space into a new commercial unit. Together these reclaimed spaces bring in approximately $4,000/month in rent, adding an estimated $1 M in value to the property.
The rent of one unrenovated suite at Wellington Place was $1,416, after our renovations and improvements we could rent that same suite for $1,925 an increase of 36%.
Increasing Revenue and Value: A Success Story in Real Estate Investment
Equiton initially invested $16M into Wellington Place plus an additional $5.5M in capital expenditure and major improvements in the first 2 years of our 5-year plan. Improvements included a new roof, new windows, upgraded balconies, a new heating system, retrofitted lighting for environmental efficiency and the list goes on! After these improvements Wellington Place was appraised for $84.3M – that’s an increase of $30M from the purchase price and an incredible return on investment of 139% in 2 years! This is the power of a value-add building.
Want to learn more about how to invest?
At Equiton, we understand the importance of making informed investment decisions to maximize your investment portfolio.
Whether you are a seasoned investor looking to diversify your portfolio or a first-time investor seeking to explore the potential of real estate, we have tailored solutions to meet your unique needs. Our investment offerings encompass a diverse range of property types, such as residential, commercial and development.
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Gain valuable insights and delve deeper into our investment solutions below:
Apartment Fund:
Our Apartment Fund specializes in acquiring underperforming and undervalued multi-residential properties and select new developments in Canada and increasing value through active management. Investors in the Fund receive the yield from rental income and participate in the growth of the underlying properties. Targeted Annual Net Return of 8%‑12%.
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Income and Development Fund:
Our Income and Development Fund provides access to a diversified portfolio of institutional grade real estate assets including income-producing (commercial/industrial/lending) as well as development projects. Investors receive cash flow from rental income and interest from loans, capital appreciation from growth of value of properties and special distributions from development projects. Targeted Annual Net Return of 12%‑16% (over 10-year period).
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Development Offerings:
Development projects offer the potential for higher returns. Equiton offers exclusive access to development projects with a 20% targeted average annual net return (paid upon project completion).
The minimum investment amount is $25,000, and investors can use registered funds, making this a great opportunity for Canadian investors.
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Equiton Living properties:
Are you looking to rent an apartment? At Equiton Living, we take pride in offering exceptional living spaces in sought-after communities. We understand the importance of finding a place that you can truly call home – a place where you feel comfortable, safe, and happy. That’s why we go the extra mile to provide high-quality, well-maintained apartments that exceed your expectations. Begin your journey to finding your perfect apartment today by clicking the link below. We can’t wait to welcome you home.
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