PV, Mit & Jeff
We talk a lot about turnovers and renovations. Today we want to show you something different: how we create brand new units inside buildings we already own.
Two new units at Oliver, ten more in the pipeline, and a full renovation queue loading up for spring. We don't need to buy another building to grow. We create value inside the ones we already own.
At 57 Oliver St in London, we're taking existing units and splitting them in half to add two brand new units to the building. These aren't turnovers where we're resetting rent on an existing unit. These are net new revenue streams that didn't exist before. Every dollar of rent from these units flows directly into NOI as pure incremental income. Want to see how this translates to returns? Let's talk
brand new units being added at 57 Oliver St. At market rent of ~$1,500/mo each, that's $3,000/mo in pure new NOI, or roughly $720,000 in new building value at a 5% cap rate. From units that didn't exist before.
We got approval to add 2 new units at 57 Oliver St by taking existing layouts and splitting them in half. That takes the building from 12 to 14 units. These are brand new revenue streams. Every dollar of rent is pure incremental NOI because these units simply didn't exist before. And we're not stopping there. We're currently working with the city to get approval for 10 additional units, which would bring Oliver to a total of 24 units. Early feedback from the municipality has been positive, including the potential for reduced development fees. More units in the same building means higher NOI without acquiring a single new property.
Spring leasing season means turnover notices start coming in. As tenants give their voluntary 60 day notice and plan summer moves, our team is already scoping renovations, pricing materials, and scheduling Jeff's crew. The renovation pipeline is filling up. Each turnover follows the same playbook: full gut renovation (flooring, kitchen, bathroom, paint, fixtures), roughly $20K to $22K per unit, completed in about three weeks. Units that were renting at $600 to $900 reset to $1,500 to $1,800 at market rate. These renovations are coming soon and every one adds immediate NOI and building value.
Demand for our renovated units is strong. This week alone, our leasing team has twelve showing requests across the portfolio. Recently renovated units typically receive multiple applications within 48 hours of listing. Our in house team handles every showing directly. No third party property managers. No delays. When a prospective tenant inquires, we respond the same day, book the showing, and run our professional screening process: credit check, employment verification, landlord references. This speed matters. In a tight rental market, the best tenants have options. Responding in hours instead of days means we fill units with quality applicants, faster.
Our maintenance team is in house. Not outsourced. Not contracted out to a third party who manages 50 buildings and treats yours like an afterthought. When a tenant submits a maintenance request, our team responds same day, 94% of the time. Why does this matter for investors? Because tenant retention is the single most important lever for vacancy rates. Happy tenants renew leases. Renewed leases mean zero turnover cost and zero vacancy days. Our portfolio vacancy sits at under 2% while the national average has climbed to 3.1%+. That gap is not an accident. It's the result of professional, in house management where every maintenance call gets handled quickly, every unit stays in good condition, and every tenant feels taken care of.
Purpose-Built Rentals · CMHC Financing + GST Rebate Eligible
Government Grants + De-Risked Capital Stack
Targeted Returns: 24% to 27% Annualized
Cash-Flowing Apartment Buildings · Southwestern Ontario
Targeted Total Return: ~15%
Distributions: 7% Annualized, Paid Monthly
"I compared Foundation Capital to three other private REITs. The thing that stood out was they manage everything in house. No third party managers skimming fees. That operational control is exactly why their returns have stayed consistent."
Thu, Apr 10: CMHC rental market update. Southwestern Ontario vacancy data expected to confirm continued tightness in our core markets.
Apr 16: Bank of Canada rate decision. Markets pricing another hold at 2.25%. Lower rates would further compress cap rates and support property valuations.
Apr 30: Next closing. Lock in before the quarterly unit price update.
Catch this week's live session where we break down what's happening in the market and inside our portfolio. Watch it here or save it for later.
Curious about our leasing process? Want to know how we screen tenants or what a renovated unit looks like versus the original? Reply to this email. We answer the best questions in Thursday's Investor Q&A.
To your success,
PV, Mit & Jeff
P.S. Tomorrow is Investor Q&A. Got a question about our leasing process, how we screen tenants, or what a renovated unit looks like versus the original? Reply to this email and we'll answer it in tomorrow's note.
