IGRI- Income & Growth Realty Investments DECEMBER 09 www. bus- ex. com 103 and fundamentals that led to her focusing her energies entirely on Canada and its opportunities, moving from Chicago to Toronto. Real estate investment opportunities come in many forms, courtesy of Canada's unique economic diversity, from housing projects in the western part of the country to corporate sale/ leaseback in Ontario and Quebec. " One of the Canadian market's greatest strengths is that each region has a completely different economic focus, offering investors greater protection through a diverse portfolio," Erixon explains. " We are well positioned to respond to the current economic environment," adds Catherine Marshall, head of research and investment strategy. " Our firm excels in markets that other investment companies find hard to maneuver in, and we are relishing the current climate." The opportunism is chiefly responsible for the birth of IGRI; it was formerly part of the Ingenium Group ( more commonly known as Giffels), a leading Canadian architectural, engineering, construction, facilities management and consulting company. By the middle part of this decade, the real property arm of the business had increased its assets under management from $ 150 million to $ 850 million, and the board felt the time had come for this area to have its own dedicated focus. The transition took place in December 2007, and since then the new entity has not looked back. " Today we have approximately $ 630 million in assets under management and are poised to start another buying cycle," says Erixon. " We are very proactive buyers and sellers of real estate, and we capitalized on the property price peak of 2007 through an aggressive strategy that has seen us sell in excess of $ 600 million since 2006. Back then market rent had risen to the point where new construction had become compelling, and we were able to identify greenfield spaces for development as well as existing sites or buildings that we earmarked for redevelopment."
IGRI mitigates the risk of opportunistic investments with careful asset selection, portfolio diversification and skilful application of management expertise. The opportunities are not restricted to the residential market, as roughly 55 percent of IGRI's portfolio is industrial, with 35 percent concentrating on residential and the balance covering land, retail and office properties. It was this measured approach that led IGRI to embark on an ambitious $ 25 million project to convert an old biscuit warehouse in Montreal into 260 residential units. " The site was located near the port in Montreal, an area that was underperforming economically," states Erixon. " Working with the Montreal Housing Authority, we acquired the site in the third quarter of 2006 and began construction that winter to redevelop the site. By the following fall we had sold all the condominiums, and the project proved to be the catalyst for further development of this region." Furthermore, as a result of credit enhancements and the units selling at a higher price than expected, the company saw a spectacular 531 percent internal rate of return ( IRR) on its investment. Such success may not always be par for the course and can take years rather than months to acquire, depending on the complexities of each project. However, it is fair to say that IGRI metered out its own brand of risk management, assembling a team of experts covering a wide gamut of investment types, able to make accurate and educated decisions on the value viability of each possible project. " Our management team spans the whole spectrum of technical expertise, and we possess a rich mixture of best practices, with individuals who are recognized within their areas of expertise," Erixon explains. " Typically, when talking to potential new investors there is a high degree of familiarity with our management team and lots of name recognition. That means there is a quick level of comfort and confidence," adds Steve Rawlin, vice president, marketing and leasing. The task of attracting new investors is, of course, critical to IGRI's future and has been assigned to Erixon and Marshall. " We act as investment managers and co- investors for partners with very different needs and approaches to risk management," explains Marshall, " and we always look to find opportunities that not only provide our partners with higher returns but also fit their risk profiles." That willingness to fit with its investors goes beyond green issues, and IGRI is unique as the only business of its kind to look at co- investment on projects. " It's very reassuring for investors when management has its own money in the deal," says Erixon. " It just helps to ensure that everyone's eye is on the ball with budgets, 104 www. bus- ex. com DECEMBER 09