CAPREIT is one of Canada’s largest real estate investment trusts (REITs) and possibly the only one whose investments reach from the Eastern coast in Halifax, to the Western coast in Victoria, with all major Canadian cities in between represented in its portfolio.

According to COO, Mark Kenney, and CEO, Tom Schwartz, the company’s success comes from having a strong and talented team that understands the value of investing in CAPREIT employees and the buildings it acquires. Many senior staff members have been with the company for more than 10 years – some starting off as frontline workers and growing with the company into positions of seniority through education and experience.

“We have certain areas of specialty that most companies of our type don’t have,” says Schwartz. “We have a very deep human resources department, an extremely talented marketing department, a focused purchasing department and an energy management (department) in house (too).”

“And a dedicated fire and life safety department, which is, to our knowledge, one of a kind in Canadian apartment management,” adds Kenney. “It’s a group that’s dedicated exclusively to the safety of our residents.”

The fire and life safety department is a good example of how CAPREIT goes above and beyond what is expected to provide residents with value. This added value translates into higher rents that make CAPREIT buildings more profitable than many of its industry competitors. Instead of relying on external experts to come in and find safety issues with its buildings, CAPREIT has its own experts that conduct internal safety audits and provide extensive training to site staff and managers to prepare them for emergencies.

Some of the steps the company’s implemented have been noticed and appreciated by residents. For example, CAPREIT often has its management office on the ground level, which allows staff to keep an eye on what’s happening in the lobby and at the front door. In buildings where there are lots of families with school aged children, management has a staff member stand by the elevators when kids get home from school to make sure there’s no pushing or fighting on the elevators.

“It’s pretty simple. If we have the best building, our tenants are going to pay the top rents and we’re going to make the most money,” explains Kenney.

CAPREIT’s attention to detail has given the company many years of financial success that it expects to continue. Because CAPREIT’s a public company, its focus is on maintaining a steady cash flow for investors. CAPREIT claims its commitment to quality and innovation allows the company to grow an increasing stream of income for unit holders.

“We operate at record occupancies across the country,” says Schwartz. “Today, our occupancy across the country is at 98.4 per cent. For a portfolio our size, that’s virtually full occupancy, and that’s occupancy at the highest rents available in the market. Our marketing team focuses on looking at each building, the competitive environment that it operates in and making sure we’re priced right (to) maximize our revenues.”

Feedback from tenants
For CAPREIT, each community is unique and each building’s needs can best be understood through interaction with tenants. Having the management office located on the ground floor is one way staff can regularly interact with residents; however, surveys and letters also play a big part in getting to know tenants.

CAPREIT surveys residents on a regular basis to obtain honest feedback from tenants. The company wants to make sure residents are happy; it doesn’t want to assume anything. CAPREIT also holds regular resident events to reinforce the community and it has dedicated newsletter that goes to every resident in the CAPREIT portfolio on a quarterly basis.

“We’re a strong believer in resident communication,” explains Kenney. “It’s just about listening to the needs or what people want in the building.”

Added value
When speaking with tenants, CAPREIT staff members are trying to learn what kind of improvements would be most beneficial to the building and its community. They’ve found that in many of their buildings, residents are looking for adequate daycare for their kids. So instead of adding convenience stores or gyms, CAPREIT’s found daycares are a more appropriate use of any extra space it has in its buildings.

“That’s all part of listening to what our residents want and it’s an amenity that people really want,” says Kenney. “ It’s a lot of work to get the zoning done and to get this thing organized but that’s the kind of commitment we’re prepared to make for our residents and it’s good for the business.”

Kenney is currently involved in a project that is adding a daycare to a site on Yonge Street in Toronto. CAPREIT took an unused storage locker on the ground floor of one of its apartment buildings and is in the process of making significant renovations to allow the school to be there.

Originally comprised of large storage rooms, the unit has large windows and enough space for CAPREIT to change the use to house an educational facility for preschoolers, which includes an outdoor play area.

“It creates more of a sense of community,” says Schwartz. “CAPREIT’s a long committed landlord. We think of each building as a community and the more we can do to reinforce that community, the stronger the community becomes and the more profitable CAPREIT is.”

Investing in staff
Not only does CAPREIT invest in its buildings, adding value according to community needs, but it invests in its staff, from top executives to frontline workers.

“We think we have the most experienced team in the business,” says Kenney. “Our team has been with us for a long time and we don’t see turnover at the building level, property manager level and senior level that a lot of organizations struggle with.”

CAPREIT keeps its staff members happy by investing in them financially and through training. Such a large company with a diverse portfolio has much to offer a promising employee. Four of the top six executives in Kenney’s office started off as frontline staff. They have advanced through the ranks with training and experience.

“A lot of young people are looking to work for a company they can grow (with),” says Kenney. “We have a lot of people who grew up in Ontario but moved to Quebec, and we’ve moved them back to Ontario from Quebec. We’ve moved people from Ontario to Quebec who have wanted to be closer to their families. We’ve moved people to Alberta, B.C. and to Halifax.”

This mobility within the company keeps employees challenged so that they aren’t tempted to leave, explains Schwartz.

“We don’t have a lot of turnover at the top and I can’t think of a time when a senior operations person actually left us for a competitor.”

Innovation
CAPREIT keeps a leg up on its competitors through innovative websites and the use of social networking. The company recently developed a mobile website that can be accessed through mobile devices. Prospective renters can go on the mobile website as they’re driving through an area and find out which buildings belong to CAPREIT and whether there are any vacancies within the chosen area or a building. It’s a way of advertising to potential residents, says Kenney.

“It will tell you how many units are available and you can go right through the process of renting an apartment on a mobile device. You can be driving anywhere in Toronto and the mobile website will tell you the proximity of CAPREIT buildings and what’s available right on your device. You’re part of the apartment community; all CAPREIT apartments will show up, give you directions and tell you availability across Canada.”

CAPREIT also uses Facebook and Twitter to attract new tenants. According to Schwartz, the company’s print advertising budget has been halved since it started seriously using social media to connect with renters. There’s a full team working on it in the marketing department.

Prospective tenants can use the CAPREIT website to find an apartment in a desired location, find out if there are any vacancies, get in touch with staff and even tour the apartment online before physically visiting the property. There’s an online chat feature on the website allowing curious minds to ask questions and receive answers in real time.

“For all of our floor plans across Ontario, we’re rolling out video floor planning,” says Schwartz. “Once someone has seen an apartment, especially if he/she is shopping around, it can be difficult to remember (it). So you can go back and revisit the floor plan and see where you’ll lay out your furniture. We have 3-D floor plans on the website that are available to print out as well as a video floor plan.”

The websites and video floor plans are also ideal for those who are moving outside of their province. Through the websites, renters can find out all they need to know about an apartment unit so that they can settle their living arrangements before moving without having to travel to spend a few days driving from building to building. This is especially beneficial to students who often attend university or college outside their local region and may not have the time or money to make multiple trips to find accommodation before school starts. CAPREIT has a website designed especially for students that allows them to find vacancies in buildings close to educational facilities.

Green initiatives
Like many landlords, CAPREIT is committed to both green and energy management initiatives. Many landlords replace water-hogging toilets with three litre water savers and replace light bulbs with energy-saving bulbs and fixtures but CAPREIT believes a lot more can be done and goes one step further. The company invests time and research into sustainable energy production and other income sources derived from these energy sources.

“We’ve moved on to biomass heating as a possibility, we’re looking at solar power generation as an income source, we’ve explored wind power opportunities and we were the force that met specifically with the City of Toronto to implement sensor light fixtures in common areas in apartment buildings,” says Kenney.

Biomass involves specially designed boilers that use wood chips as an alternative to oil or gas. It’s a cleaner burning fuel and it’s more efficient. It’s a technology that is popular in Europe, especially Germany, and has been found to hold promise in Canada. There’s ample pellet supply throughout the country since Canada is the world’s second largest producer of wood pellets.

The pellets are made of compressed wood that is fully renewable since they come from specialized tree farms grown for this purpose. The pellet facilities grow poplar trees, a fast growing species, to plant and replant on a constant basis.

Schwartz explains, “The emissions from the wood chips are no different from a gas furnace so they meet the highest emission standards. And we see it as an alternative to gas. Today, gas prices are very low but gas prices have been volatile and there have been periods in our history that natural gas has almost doubled in price because it’s a more sustainable source. A couple years from now, we may be able to define a very strong program in this area. We’ll do our first demonstration hopefully this year.”

Biomass is a fully automated system that holds a lot of promise but it requires a great deal of storage for the pellets. Some CAPREIT buildings have plenty of storage capacity to suit the boilers and pellets. The automated auger feeds what is required to the very clean burning boilers, so it doesn’t require very many chips. It’s in compressed chambers that give off a glow, not a flame.

Schwartz and Kenney have also looked into more familiar green technologies such as solar and wind power. Unfortunately, wind power doesn’t hold much promise but because CAPREIT has such a diverse portfolio, there are many cases for which solar power makes sense as an investment.

“We investigated wind, the technology is not there yet,” explains Schwartz. “It’s something we looked at and decided, at this point, there’s more merit looking at biomass and solar.”

CAPREIT also works with various municipalities to allow for other ways to save energy. They were behind the City of Toronto’s recent acceptance of sensor lighting in parking garages and stairwells. In the parking garages, CAPREIT has put sensor lighting in all the parking bays but not the main drives.

When a resident drives into the garage and pulls into their parking spot, the lights around their parking spot go on. This saves a lot of energy since lights are no longer on 24 hours a day.

In everything it does, CAPREIT pushes for quality. It has gone from a REIT with primarily affordable units to one that specializes in the luxury market and that has expanded to reach all the major metropolitan cities in Canada.

Amie Silverwood is editor-in-chief of Canadian Apartment Magazine.