CANADIAN APARTMENT INVESTMENT CONFERENCE Exit Strategies: Positioning Properties for Sale Dan Sander Director & Vice President Hollyburn Properties Limited
HOLLYBURN PROPERTIES LTD. Est.1975, Hollyburn is the largest multi-family owner and operator in the City of Vancouver and the Province of BC, Canada. Own and Manage over 5,000 + Multi Family Units in Exclusive Locations in Vancouver, Calgary, Toronto, Ottawa Purchased +$130 Million in the GTA in 2012
ABOUT HOLLYBURN
POSITIONING PROPERTIES FOR SALE ▪ Understanding the maximum potential of your asset
POSITIONING PROPERTIES FOR SALE ▪ Bare trust transaction structures ▪ VTB: Structures ▪ Planning mortgage debt ▪ Capitalizing on Capital Expenditure AGI process in Ontario
AGI CALCULATION EXAMPLE Item Boiler Balcony Elevator Controls Cost $ 100,000 $ 300,000 $ 45,000 Percentage of Total Cost 22.5 % 67.4 % 10.1 % Interest Rate 5.25 % 5.25 % 5.25 % Useful Life (Amortization) 15 10 15 Weighted Useful Life 3.4 years 6.7 years 1.5 years Units in Complex 200 200 200 Units in AGI Application 150 150 150 Rental Revenue of Complex (mo.) $ 200,000 $ 200,000 $ 200,000 Rental Revenue for Units incl. $ 144,000 $ 144,000 $ 144,000 Factor Allocation 72 % 72 % 72 % Monthly Allowance $ 577.00 $ 2,312.00 $ 260.00 Justified Rent Increase 0.04 % 1.61 % 0.18 % Total Justified Rent Increase 2.19 % above guideline increase Cost No Longer Borne Time Frame 12 years
POSITIONING PROPERTIES FOR SALE ▪ Maximizing NOI at time of sale ▪ Position for FDI ▪ Having all ducks in order ▪ Ensuring the right sales process in undertaken
TIMING IS EVERYTHING GOC: 5 Years 2.2 High: 2.16% - September 10, 2013 Low: 1.06% - June 1, 2012 2 This Week: 1.96% - September 23, 2013 1.8 1.6 1.4 1.2 1 GOC: 10 Years High: 2.82% - September 10, 2013 2.75 Low: 1.58% - July 24, 2012 2.55 This Week: 2.65% - September 23, 2013 2.35 2.15 1.95 1.75 1.55
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