Edmonton-based Elite Real Estate Group has been busy expanding its holdings in recent days with the acquisitions of two local shopping centres as it approaches a half-billion dollars in portfolio value.
Elite recently acquired the Bluequill Shopping Centre in southwest Edmonton for $8.6 million. The centre is fully leased to a mix of long-term tenants which service residents in the area.
Bluequill Shopping Centre is surrounded by residential neighbourhoods and schools and is in close proximity to amenities such as The Derrick Golf and Winter Club and parks.
The company then acquired the Crossroads Shopping Centre at the intersection of Whitemud Drive and Calgary Trail in south Edmonton for $13.4 million.
The asset is historically institutionally owned and is tenanted by Earls Restaurant, ATB Financial Entrepreneur Centre, Burger King and Firefly Restaurant. The location serves as a centre point between downtown and south Edmonton.
Sahaj Chopra, vice-president of the privately owned company, said Elite has more announcements pending.
Further acquisitions planned
“We are unconditional on another acquisition. This is a roughly $25-million deal. It’s an existing multifamily asset in southwest Edmonton.
“With this acquisition we’ll surpass $450 million in assets that we own and manage, and the next goal will be half a billion,” he said, adding that acquisition is scheduled to close in April.
It will be the company’s first multifamily venture. Chopra said the company will open an Elite Living subsidiary to operate the multifamily assets within the overall business.
“We are looking to grow that portfolio. The one that we are buying is over 120 units . . . we are looking for good value-add opportunities in multifamily because, similar to retail, we do see a good future in multifamily in Alberta given the inter-provincial migration,” Chopra explained.
“But I do think there are tons of groups that are over-optimistic on multifamily and that’s why we see the multifamily market on fire.
“We’re very cautious with our capital because it’s all internal capital, we have no JV, no partnership, no investor model.
“We’re just playing with our own money at the end of the day. And no one is going to be more cautious with money than someone who is bringing their own money out.”
Elite was founded about two decades ago by Chopra’s father Pankaj Chopra.
Elite Real Estate Group owns and manages over one million square feet of leased space. With the acquisition of the two shopping centres, Elite holds over $425 million in assets and manages over 370 tenants in about 45 buildings.
Chopra said the portfolio mainly consists of retail centres with the bulk in Edmonton, as well as properties in Calgary and smaller towns throughout Alberta. It has a small office building in Hinton, Alta., and small industrial properties in Vermilion and Lloydminster.
Elite’s retail acquisition strategy
“The Crossroads Shopping Centre, we were really fond of the location and the tenants. Bluequill, if you look at our portfolio, we have created a business model in which we know how to manage and create value in retail shopping centres,” Chopra explained.
“If you look at our retail portfolio, historically the shopping centres we’ve bought even if they were at aggressive caps.
“We have created value and today that aggressive cap is a much higher cap because either we do something where we develop one of the out parcels or we have creative ways to increase the usage of the site or we do some very creative facade upgrades that boost the attractive(ness) of the site.
“So our business model is all created around value addition.”
The company also has three commercial retail development projects under construction in Edmonton. Two are in the Chappelle area, a newer subdivision in southwest Edmonton. One is in the southeast part of the city.
“We’ve developed numerous projects in the past. Our largest project would be Tamarack in southeast Edmonton,” Chopra said.
“It was a site we bought off Green REIT in 2018 and when we bought the site it was GoodLife Fitness and one small, three-tenanted CRU with excess land and today that project is over 75,000 square feet. Now it’s six buildings fully leased out.”
He said there is no standardized checklist when the company seeks to buy property; it’s case by case. However, Chopra said Elite does look for rooftops in the area or high-traffic corridors.
“Tenants are really important to us. We really value national tenants but at the same time we know the value of a local tenant or regional tenant that has been in business for 10 years, 20 years and has a stronghold in the community or neighbourhood that they service,” Chopra explained.
“The expansion that we’ve done in the past 10 years, it’s all been within the major cities of Edmonton and Calgary. It’s not really been out of town. We don’t focus on that as much.
“It’s just properties that we’ve owned forever and they’re cash flowing for us so there’s no need for us to dispose of them. Historically we don’t dispose of properties.
“Our business model, because we’re integrated and we do everything in-house, there’s no need for us to really sell our real estate. So we’ve never sold a shopping centre.”
Elite Capital
The company also operates Elite Capital, a private lending company focused on the financing needs for commercial real estate assets, primarily retail properties.
“We have a strong fundamental understanding of retail. I think what’s critical is understanding the businesses, which are your tenants at the end of the day and their numbers because it’s so cyclical.
“You look at the businesses that perform well over time and you also look at the businesses that can be potential risks in your portfolio,” Chopra said.
“We look at what can be done with the land. Can we create value? Can we develop more? Can we diversify the tenant mix? Can we stabilize? With us, with the 50-plus transactions we’ve done, I think just the fundamental understanding of the operation of retail has helped us and given us our success.”
Chopra is also enthusiastic about doing business in Alberta.
“You probably have the highest chance of succeeding in life being here,” he concluded. “If you compare to Ontario and B.C., No. 1 the cost of doing business is higher (there) . . . The cost of living is substantially lower (in Alberta).
“Your day-to-day is lower, your cost of business is lower and I think opportunity-wise Alberta is the best place to reside in.”