Citified's Ten on the 10th is a monthly question-and-answer segment connecting our readers with the insight and knowledge of Victoria's most regarded real-estate and business professionals.
The inaugural Ten on the 10th
features Reed Kipp, Partner at Victoria's Devon Properties
. As the largest property management firm on Vancouver Island, Devon Properties' exposure to the purpose-built rental market in Victoria (and beyond) gives its management team a unique perspective on this vital industry and its future.
Asking the questions is Ross Marshall, Vice President of the Victoria offices of commercial real-estate brokerage CBRE
. As a leader in facilitating large-scale commercial real-estate transactions throughout the Capital Region – which include apartment complexes, industrial retail and office properties, and land/development opportunities – Ross and his team are at the forefront of market-leading real-estate transactions on Vancouver Island.
Want to be featured as part of a future Ten on the 10th
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Your business has been a staple in the Greater Victoria community for a while. Tell us how Devon Properties started and where the business is at today.
Devon Properties is a real estate services and property management firm based in Victoria and established in 1981 by Rob Hunter and Ross Kipp (Reed’s father). Fast forward to today, the original founders retired in 2017 and my partner, Dave Craig (who joined Devon as a partner in 2010), and I oversee a team of nearly 100 employees with over 125 properties under management totaling over 5,300 rental units, over 400,000 square feet of commercial space, and over 150 single-family units.
125 properties under management – that’s a lot. Can you tell us a bit more about your portfolio of managed properties?
When you hear “Devon Properties” most people think apartments – which is fairly accurate as 75% of our business revolves around apartment properties. However, our commercial and single-family unit (e.g., single-family homes, townhouses and condos) departments have steadily grown in recent years. We manage such commercial properties as Athlone Court on Oak Bay Avenue and Victoria Professional Building on Cook Street at Yates Street, in addition to single-family homes in Oak Bay, townhouses on Cook Street and condo units in new developments such as The Falls, Bayview Place
and Dockside Green
We understand you and Dave Craig just completed your first full year leading the business – how has the leadership transition been?
We’re really proud of how our leadership transition has taken place. All parties put Devon Properties first, above each of our personal interests, which ultimately resulted in a successful transition. And we are very lucky both Rob and Ross remain close to the business as advisors – their combined 70 years of experience is irreplaceable and they’ve seen almost everything this industry has to offer.
For Dave and I, we have a great synergy and complimentary skill sets, and are very supportive of one another in our shared goals and aspirations for Devon. Most importantly, we have a lot of fun working together and really love what we’re doing at Devon Properties, which makes the ride all that much better.
With the new leadership’s first full year under your belt, what are some of your most important accomplishments so far?
Over the last year we’ve seen a great deal of growth and change across all aspects of our business. Every one of our Devon Properties employees have stepped up to the challenges presented, and we’ve added a number of fantastic new members to our team.
We’re utilizing real estate technology to improve our services, from offering residents the ability to pay their rent online via RentMoola to initial resident screens with Certn. We went through a brand refresh exercise and rolled out a new website, partnering with Neil Tran and his team at Leap XD for both projects. We purchased 990 Fort Street a few months ago and will be moving Devon Properties’ office into the building in January 2019. And we are consuming our property and resident data in new and innovative ways to create competitive advantages for our business. So needless to say, it’s been a busy year.
You have a number of new development projects in Greater Victoria underway with various clients. Can you tell us about these projects?
Absolutely! We are very excited to be actively working on two fantastic new development projects: Radius at Royal Oak
(Jawl Residential / Tri-Eagle Development) and Crossing at Belmont
(Ledcor). Radius at Royal Oak is a 66-unit luxury rental development which we will start actively leasing in October 2018 for an anticipated occupancy date of Spring 2019. Crossing at Belmont is a 152-unit, high-end rental development in Langford as part of the larger Belmont Market
master planned community, and we will start actively leasing in early 2019 for an anticipated occupancy date of Fall 2019.
Let’s talk vacancy rates – things are pretty tight out there for people looking to rent an apartment.
To say things are tight is an understatement. There are approximately 26,000 rental apartment units in Greater Victoria and in 2017 the Canadian Mortgage and Housing Corporation (“CMHC”) reported a 0.7% average vacancy rate in our region – so 182 vacant units in the region in 2017.
From Devon Properties’ perspective, things have become even tighter in 2018. Through the first eight months of 2018 we finished with a 0.35% average vacancy rate and closed September 2018 with eight rental units available out of +5,300.
According to Citified's data, more than 6,000 rental units are planned to come online in the next three years. How will this influx of rental units affect affordability and vacancy rates?
In all honesty, it’s challenging to predict how 6,000 additional rental units
will affect affordability and vacancy rates in Greater Victoria. That being said, these units will come to market over a two to three-year period, during which time Devon Properties believes the fundamentals for a strong rental market in Greater Victoria will continue.
Rising housing prices, low inventories of homes for sale, and stricter mortgage rules, in addition to increasing interest rates, continue to result in more individuals and households renting for longer periods of time. These factors are compounded by increased demand for rental housing product driven by employment growth in the region, high levels of migration (both through immigration and relocation from other markets), and baby boomer downsizers.
What is your rental housing industry outlook for Greater Victoria and more broadly in British Columbia?
No matter Victoria, Vancouver, Nanaimo or Kelowna, people will always need a place to live, raise families and grow old, and we believe the rental housing industry will continue to play a big part in providing housing solutions for British Columbians in the future. In addition, we see more people continuing to rent by choice even if they can afford a single-family home and accompanying mortgage, which will continue to put pressure on vacancy rates despite additional rental units coming to market.
What do you think the biggest challenges will be in the years to come?
From a rental housing industry standpoint, the biggest challenge will be our ability as an industry to meet the demand in the market with the correct level of supply.
From a Devon Properties standpoint, we have to ensure our quality control, consistency and level of service continues to be strong and focused – not only to service our property owner clients, but also in order to attract and retain residents.
What’s some advice you’d give to someone entering the real-estate business today?
Let me first say, I continue to seek advice and counsel from my many mentors, and without these special people in my life I wouldn’t be where I am today. And as one of my most influential mentors told me early on, when you are eventually in a position to do so – pay it forward.
For some advice: over the years I’ve learned the most successful business people all share at least three common elements – they are all extremely smart, driven to succeed and lucky.
With that in mind, understand that what you learned in university or college is a foundation for future learning. Never stop learning. Read always, be it newspapers, books, market reports, etc., and continuously educate yourself. Listen actively and thoroughly to everyone – especially business leaders and those you look up to. Know that being smart or talented comes from your ability to learn, a foundation for life-long success.
Hard work and commitment matter as much or more than being smart or talented. As my Victoria Racquet Club hockey coach use to preach: “Hard work beats talent 100% of the time.” Professional discipline, including the ability to prioritize, focus and produce on a consistent basis, will determine how far you will go. So if you don’t already have a strong work ethic and good work habits, find a way to develop them.
As far as luck, the harder you work and the smarter you get, the luckier you’ll be – it will take care of itself. C
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