Rental revenues for Mainstreet Equity Corp. increased nine per cent to $28.3 million in the company’s second quarter from $26 million a year ago, it said.
In releasing its financial results on Tuesday, the company said the same asset vacancy rate in quarter two of 2018 was 9.7 per cent, down from 9.9 per cent in the same 2017 quarter. The overall vacancy rate, which includes vacant units as apartments undergo stabilization, increased year-over-year to 11.3 per cent from 10.7 per cent in the second quarter of 2017.
“This quarter was a strong illustration of the success of our countercyclical business strategy, which has left Mainstreet well positioned for future growth,” said Bob Dhillon, founder and chief executive officer of Mainstreet. “Despite many years of economic recession, we have continued to pursue our 100 per cent organic, non-dilutive growth model, which has continued to serve the company and our shareholders well.”
Mainstreet owns and manages just over 11,000 rental apartment suites in 10 cities across Western Canada.
In anticipation of a prolonged downturn, the company said it crafted a strategy several years ago to refinance its debt at record-low interest rates and acquire new assets at opportunistic prices.
“This countercyclical strategy allowed Mainstreet to build up a sizable liquidity position, enabling us to acquire more than $250 million in new assets (nearly 2,500 new units), grow our portfolio 28 per cent since the beginning of the downturn in early 2015, and buy back 1,641,704 shares through our substantial issuer bid (SIB) and normal course issuer bid (NCIB) at a discount to our believed true net asset value (NAV).
“We also grew our portfolio seven per cent (to 11,213 units from 10,480 units) over the fiscal year ended Sept. 30, 2017. This growth strategy has led to sharp improvements in our Q2 financial results, despite it being in the low rental season with typically high operating costs,” said the company in a news release.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
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