addy — an online investment platform that allows Canadians to invest in real estate for as little as $1 — is expanding its reach, entering the Toronto market with a three-building apartment complex.
The latest offering is addy’s 17th investment opportunity and its first property with an issuance surpassing the $1 million mark. The 115-unit apartment complex called Clearview on the Park, located at 2 Greentree Court in Toronto’s York district , features 19 two-bedroom, 61 one-bedroom, and 35 bachelor suites.
Allowing people to make an investment ranging from $1 to $1,500 in a variety of real estate categories across the country, the Vancouver-based tech company has seen its members invest more than $7 million through 14,500 transactions since launching in mid-2020.
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Livabl spoke with co-founder Stephen Jagger for an update on addy’s latest property, and to learn more about how the platform benefits both members and communities, as well as what the future holds for the company.
Tell us about this new property and how addy is branching out to different markets around the country.
The next property is an apartment building complex consisting of three apartment buildings in Toronto, making up 115 units. Investors will be able to invest as little as $1 up to $1,500 into that specific property and own a slice of this apartment building. The renters in the apartment building will actually be able to own a piece of the building that they’re also renters in.
addy is a micro-investment platform that enables Canadians to invest in real estate, and the thing that makes us different from a REIT is that you’re choosing to invest in a specific property. So you either like this apartment building in Toronto or you don’t, or you like the Toronto market or you don’t, but you’re not investing in a basket of properties. We put 1,000 to 2,000 investors in each property and the average investor is contributing $500, so it’s a neat platform to help young people who are completely priced out of the market.
Our last property before Toronto was in Alberta, where we put 1,200 investors into a five-storey rental building in downtown Calgary. It’s nice to be able to show that people are bullish, and we have numbers that show people making investments in different markets.
Have you actually seen people investing in properties they’re currently renting?
We did a property in North Vancouver — a 22-unit apartment building — and when we put that opportunity on the platform, some of the renters in the building invested in the spot they’re already tenants in.
The neat thing about it is these renters have their rental contracts for their space, but now that they’ve also invested in the building, they will get dividends out of that property, and at the end of the day, that money is coming from their rent. So it’s a nice little circle of cash flow.
What does your property mix look like right now?
We’ve offered a variety of commercial properties, industrial properties and apartment buildings, including an RV resort two hours outside of Toronto. [There has also been] an apartment building in Kimberley, B.C., and an 11-building commercial business park in Calgary.
We also offered investors a standalone Starbucks in Chilliwack, B.C. We put 833 investors in that one, and we actually have people who will drive past other Starbucks to go to their Starbucks. That’s one of the benefits that addy brings to a property. Since we bring thousands of Canadians into these opportunities, we call ourselves “differentiated capital” because we enable the community to invest in a property that has a tenant they want to support. In that way, we drive economic benefit to the tenant more than a high-net-worth investor would.
We deal with a wide variety of opportunities with a range of return profiles, so we’re enabling our members to diversify. Typically, either you’re completely locked out of real estate or you bought a house or condo, but the vast majority of people have stretched themselves so thin to make it happen, they’re really pushing to make it all work.
With addy, we allow people to diversify, so they can have a little bit of Calgary or Toronto, Hamilton or Vancouver, industrial or mixed-use, and the nature of the platform lets people diversify their holdings in places or property types they wouldn’t normally have access to.
Where does the $1,500 cap number come from?
We’ve chosen to cap it [at $1,500] because our goal is to eliminate barriers to entry and enable as many people as possible to invest, so the cap gives us as much room as possible for thousands of investors.
Another reason for having the cap is that some people are investing in three-year, five-year or seven-year projected holds, it really depends on the property and what the plan is for it. People can make that investment decision when they’re looking at the details and choose what’s best for them.
addy offers investment in both pre-existing buildings and new developments, was development part of your initial focus?
When we first launched, we started with pre-existing core properties with cash flow that people could invest in, and as time went on, we were asked about development, which is higher risk than buying a building that already exists that’s already tenanted.
Our first development was a purpose-built rental in Mission, B.C., that we put 1,000 investors in. Then we did a condo development in St. Catherines, Ontario, and our most recent one is a new development in Calgary. We layer projects in back and forth depending on the opportunities that come our way and which ones get through our due diligence process.
But there are a variety of opportunities including farm land, student housing [and] retirement homes, so there are lots of different categories and it’s just a matter of finding good opportunities that check some of the boxes we’re looking for.
What does the year ahead look like? How many projects do you have coming on board and which markets are you looking at?
We’re increasing the cadence of properties coming on the platform, turning up the volume on that so people will see two or three properties a month, and that will continue to increase as we get bigger.
As far as locations, we’re looking at Canadian properties — B.C., Alberta and Ontario so far, but anywhere in Canada, it’s just a matter of the right opportunity.