Calgary-based Mainstreet Equity Corp. announced Tuesday that it had a fourth consecutive quarter of year-over-year double-digit growth in revenues, net operating income and funds from operations.
Those results extend a sharp upswing in its operational performance over the past 12 months.
Mainstreet, an add-value, mid-market consolidator of apartments in Western Canada, said its second quarter results, ending March 31, come despite a prolonged and frigid winter that increased Mainstreet operating costs, as well as quarter two being a typically low season in the rental market.
“Our second quarter results point to a very promising upturn in operational results over the past year. We believe this substantial achievement is the direct result of our countercyclical strategy, stretching over the past four years, to create value for shareholders during periods of slow economic growth,” said Bob Dhillon, founder and chief executive officer of Mainstreet, in a news release.
“Our success over the quarter was a direct result of Mainstreet’s countercyclical growth strategy, which management adopted more than four years ago in anticipation of an economic downturn,” said the company.
“The plan included aggressively acquiring underperforming properties during the period of economic slowdown; strengthening our internal resources to more rapidly stabilize apartment units; and locking in the majority of our debt at low interest rates, which both reduces our interest costs (Mainstreet’s single largest expense) and provides low-cost capital to fund future growth.”
During the quarter, Mainstreet saw same asset vacancy rates reduced to six per cent, nearly half the 11.1 per cent in quarter two 2018.
It said rental revenues in quarter two 2019 increased 19 per cent to $33.7 million, compared with $28.3 million in quarter two 2018; this coming alongside a 10 per cent increase in same-asset rental revenues to $29.4 million, from $26.7 million in the second quarter of 2018.
Overall vacancy decreased to 6.5 per cent, down from 11.3 per cent in quarter two 2018, due in part to Mainstreet’s fast-paced stabilization of assets over the year, and despite a record number of acquisitions in 2018 that would typically drive up vacancy rates, it said.
– Mario Toneguzzi for Calgary’s Business