Skyline's CEO: Private REITs a Success in 2012; Will Continue to Grow in the New Year

Posted On December 21, 2012

Skyline managers with David Suzuki


Skyline's owners and management team members with David Suzuki at the FRPO MAC Awards Gala in December 2012.

Guelph, ON (December 21, 2012) – It has been another year of fast-paced growth and success for Guelph-based real estate entity, the Skyline Group of Companies (“Skyline”). The company launched its Skyline Commercial REIT in January, which has since grown to 37 properties with over 1,670,000 square feet of commercial space in 10 Ontario communities. “Our commercial buying strategy is similar to that of our Skyline Apartment REIT,” says Jason Castellan, CEO and Co-Founder of Skyline Group of Companies. “We’re focused on buying buildings at a discount to new construction cost – buildings that are geographically diverse and that have a largely diverse tenant base (specifically in the light industrial and office asset class for commercial), which has often been referred to as the apartment equivalent of commercial real estate.”

Later in the year, the Skyline Commercial REIT made the company’s largest ever acquisition: a collection of commercial properties across the GTA. “This purchase not only established us in the commercial market, it came with the most valuable resource in this business – great people,” says Castellan. “The new Skyline Commercial Management Inc. (SCMI) team fits our Skyline mould perfectly, and gives us a strong platform moving forward in the New Year.” The GTA portfolio acquisition is only Phase One of a two-phase plan; the second collection of properties, located in Ottawa, is set to close in early 2013, and will bring Skyline’s combined holdings to over $1 billion.

The Skyline Apartment REIT also saw massive growth in 2012, with 15 properties acquired in the second half of the year alone (plus one under contract to close at the end of the month). “Assets properly improved and maintained can realize top value in the market,” says Castellan. “An increase in amenities offered, in-suite upgrades and improvements to common areas collectively yield significant upside to rents and, ultimately, value.” By year’s end, the total value of the Apartment REIT’s 2012 acquisitions will be in excess of $93 million, bringing the overall portfolio value to $723 million.

Castellan is also positive about the results of Skyline’s long-standing Portfolio Efficiency Plan, a set of initiatives to reduce energy, water and natural gas usage. “With an eye on expense reduction, especially on the utility side, we currently benefit by low commodity pricing over the short term and will put ourselves in a strong position when these prices start to rise. A smaller consumption footprint will reduce our exposure to increases in the future and help set us up for lower consumption overall.” In December, the Skyline Group of Companies was awarded the Federation of Rental Housing Providers of Ontario’s (FRPO) Environmental Excellence Award, which was presented at its annual awards gala by renowned environmentalist David Suzuki.

With several acquisitions already under contract for both its Skyline Apartment REIT and Skyline Commercial REIT, Skyline predicts 2013 to be another exhilarating year. "We strive to maintain a long-term vision for all of our properties," Castellan states. "In 2013 we will continue to fix long-term debt to take advantage of current low rates, buy assets with strong earnings now as well as upwards potential with improvements, keep our debt to market value in check, and control our expenses. Through new acquisitions and organic revenue generation, we will continue to grow our bottom line."