There is a investment opportunity(joint Venture) in Edmonton, I am doing some research now. I need someone to tell me how is this area? It is located at 82 Ave. NW and 91 Street. How's the rental market in this area? What's the cap rate I should look for in this area? Thank you for your input.

Area is ok, say average but slowly, ever so slowly improving with French UofA campus nearby and close access via bus or car to downtown. Whyte Ave east of 103 Street deteriorates quickly but gets better closer to BonnieDoon, and will improve when Valley LRT line comes in along 86 Street going N/S.

More on this LRT here: https://www.edmonton.ca/projects_plans/valley-line-lrt-mill-woods-to-lewis-farms.aspx

Today though: many old buildings and above average vacancies.

OK to invest for the right price ! Sub 100/door ?

Cap rate ought to be 6% with realistic rents and 12% vacancy. Rents today are 20-25% below 2014 !!

Thanks Thomas for your input! For my understanding it is mixed commercial and residental apartment. Is it better or not? I will get more information on vacancy rate now specially for commerical part of the building.

82 ave and 91 street is an interesting area & prospect. 91 street is Rue de Marie-Anne Gaboury which takes you directly to the U of A french campus. 91 street is one of the most interesting regendrifying areas of the city...with a substantial amount of progress. The commerical area in Bonnie Doon has improved drastically in recent years with the traffic realignment. There is potential to target a student market with a redeveloped property as the recent development Le Quartier across from the campus did not focus directly on the students. Really cool neighbourhood pub and other nearby services.

That being said...cap rates are big liars when it comes to older stock property. The hidden cap ex on older property could be huge.

LillianHo said:

For my understanding it is mixed commercial and residental apartment. Is it better or not? I will get more information on vacancy rate now specially for commerical part of the building.

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I would caution against buying a big asset to dip your toes in. Honestly, you need some experience in managing those two assets in terms of anticipated rents, capital requirements for tenant improvements vs. condition of the rental apartments, and operating expenses. It would be extremely ill-advised to attempt a major development / rehab without an intricate, robust understanding of an operating budget for those two businesses. If you get a simple answer to that question, throw it out. It is not that simple.

It is not like just do 10% more than the average person and you will be successful... in reality, you are competing against professional developers and investors who do this full time with far more resources and capital than you are likely to have. It is probably closer to doing 4000% more than the average person because the average person know next to nothing when it comes to development & professional asset management.

Matt, Thank you very much for your time and information. This investment is looking for joint venture partner. I was introduced by an investor friend who know this company and opportunity. Like any other multi-family investment, they will do reno, increase the rent, refinance... With $100,000 investment, projected annual return of 26% for the first 5 years, and then do refinance, get equity back and ....maybe sale or keep for long term.

LillianHo said:

Thanks Thomas for your input! For my understanding it is mixed commercial and residental apartment. Is it better or not? I will get more information on vacancy rate now specially for commerical part of the building.

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Nothing wrong with commercial on bottom. All a function of price, asset quality and tenant profile. Whyte Ave east of 103 Street deteriorates quickly but gets better closer to BonnieDoon, and will improve when Valley LRT line comes in along 85 Street going N/S.

More on this LRT here: https://www.edmonton.ca/projects_plans/valley-line-lrt-mill-woods-to-lewis-farms.aspx

Click on the 48 page brochure. Very detailed stop by stop explanation and background. Construction in progress now and bridge over N Sask. River being built now. Within 6 blocks this project should benefit from this LRT when it opens 2-3 years from now !

Need far more detail here on price, rents (as is and as-could-be), sq footage and asset quality to give a more detailed opinion.

Update information: I decided to pass this JV project. Thanks everyone for your input.