Calgary-based residential rental landlord Mainstreet Equity experienced 11 per cent revenue growth in the second quarter of the year, a 10 per cent increase in funds from operations and eight per cent growth in net operating income.
The company reported on Tuesday that its vacancy remained low at 7.4 per cent with 11 per cent of its portfolio (1,434 units) unstabilized.
It said it achieved a rent collection rate of 95 per cent in the second quarter, which is close to its quarterly average.
“Our management team has always been nimble in its approach to changing market conditions. In anticipation of the 2015 economic recession, we implemented a countercyclical growth strategy that involved aggressively acquiring new assets at low cost, which we funded through low-interest debt. We will continue this versatile management approach through the pandemic, which, we believe, now presents Mainstreet with an even greater opportunity to generate value for shareholders,” the company said in a news release.
“Rising operating costs continue to pose a challenge. Paid leave has been extended to team members whose children have not been attending school, while broader social distancing requirements has lowered overall workplace productivity. Costs for additional cleaning, sanitizing, and the purchase of personal protective equipment (“PPE”) also increased expenses. Higher property taxes (including a 20 per cent rise in Calgary), a 35 per cent rise in insurance costs, and a carbon tax, which came into force in Alberta in 2020, added to these temporary cost incursions. Expenses for materials and human resources remain high yet we continue to renovate units (even during these tough times) in an effort to reduce stabilization cycle times, and get ready for the coming high rental season.
“The halt in economic activity in Q2 has delayed what would typically be a season of high rental activity, which we believe could now be postponed until August at the earliest. Temporary closure of the Canadian border has also restricted the inflow of foreign students and immigrants, potentially diminishing income.”
