Our First Purpose-Built Rental: Meet Darcy Ulmer

Darcy Ulmer - Partner & Co-founder, Stream Property Partners

We love our General Partners (GP) and the projects that they are working on as each one is unique. Maple View Heights Apartments is next up and it’s a really special one because it’s going to be a purpose-built rental building with 11 affordable housing units.

We met up with Darcy Ulmer, the GP on this project, to learn more about him and how this addy will impact the community.

Getting To Know Darcy

Darcy, we’re so excited to join you here on-site in Mission to check out this development. Before we get started, can you share a bit about your background?

I’m one of the co-founders of Stream Property Partners and on a day-to-day basis I’m the CFO and have responsibility for the overall financial management and operations of the company in that capacity. I’m actively involved in every aspect of bringing our investment offerings to market including sourcing, underwriting, structuring and capitalizing our projects.

Prior to co-founding Stream in 2020, I spent 10 years in the commercial real estate investment business with two Vancouver-based firms, the last one being a Vice President at Churchill International Property Corporation.

What do we need to know about Stream Property Partners?

Stream Property Partners is a commercial real estate investment company based in North Vancouver, BC that I co-Founded in July 2020 with my partners Alan Haigh and Hans Edstrand. Our mission is to provide high-quality investment opportunities that allow investors to pool their money and collectively own multi-million dollar commercial real estate assets like apartment buildings and office buildings. We are typically looking at projects that require between $2M and $5M of investor capital and we arrange financing for the balance of the purchase price.

What are some of your past projects?

We launched Stream in July 2020 and we have syndicated four projects to date and we have $10M of equity under management at present. Our first project was 478 Bernard Avenue in Kelowna, which is a 3-storey office building at the corner of Bernard and Ellis in downtown Kelowna that is anchored by Scotiabank. Our second project was the neighbouring property at 426-454 Bernard which we are presently refurbishing and rebranding to Bernard Place. We call it our “diamond in the rough” because the location on Bernard is outstanding – however the property has significant deferred maintenance which we are cleaning it up and expect to have the property fully leased with a great tenant roster by the end of the year – I can tell you that we are taking a lot of pride in the project because it is really going to transform that block for the better. Our third project is the one behind us which is the site of what will become Maple View Heights Apartments over the course of the next 20 months or so.

What types of real estate deals do you typically do?

We are typically looking for projects where we can add value in some way, shape or form. As was the case with our two projects in Kelowna, we are refurbishing older buildings in order to attract better tenants at higher rents and thus increase the net operating income (NOI) of the property. When we increase the NOI we increase the value of a property for our investors because NOI is what lenders base their lending formula on and it provides an opportunity to take out equity and repatriate capital to investors, or it drives up the sale price if we are selling the property because what commercial property owners are really buying is cash flow.

Getting To Know Maple View Apartments: A Purpose-Built Rental Building

Can you tell us what makes this project unique?

This is what we refer to as a “purpose-built” rental apartment building – as opposed to “condo” apartments. So these are not apartments that people will buy and live in or rent out as an investment, there will be no strata, rather we are going to build, and then own and operate the building and each of the 105 units will be rented to a tenant.

There are several notable things that will set this building apart in the market:

  1. Over the past 10 years just 75 new purpose-built rental units have been completed in Mission – this project will bring 105 new units online in a market that has a 0.5% vacancy rate and desperately needs more units of any and all type.
  2. Under a Housing Agreement with the District of Mission, 11 of the 105 units will be set aside as “affordable” units for a period of 10 years. There will be defined criteria that tenants will need to meet in order to qualify, but broadly speaking they will be based on annual income and the monthly rental rate will be approximately 50% of the market rate for the same unit. So this is directly addressing a critical shortage of affordable housing options in the community as well as the overall need for additional rental units in general.
  3. As a developer we are prepared to pay various fees to the municipality in order to advance our projects and these include development cost charges (DCCs) and community amenity charges (CACs) and we understand why they are there and what they are used for. But we really do feel that purpose built rental apartments are a community amenity by definition. A lot of people are not in a position to own their own home and a lot of people just prefer to rent. So for those people, these rental units are very much “home” and they want the peace of mind that goes along with renting a purpose-built  apartment (meaning there will be amenities in the building like storage lockers, and bike lockers and common areas, and roof top patios with BBQs and shared electric vehicles etc) – in addition to being professionally managed.  So once construction is completed we will retain the services of a property management company that will take care of the day to day operations of the property, including leasing and maintenance and responding to tenant concerns. This provides a level of professionalism and pro-active management that is often missing when you are renting from a passive investor who has a day job and maybe one or two rental units. And in a rental building you will never have three months notice to leave because the landlord’s daughter got married and wants to move into the unit.
  4. This will be a concrete building whereas most 6-storey multi-family structures you see would be wood-framed – you usually only get into all concrete in high-rise buildings. There are multiple benefits that accrue to a concrete building for investors and tenants alike:
    • Concrete buildings are fire resistant and insurance premiums are significantly lower which translates into lower operating expenses and higher NOI
    • Concrete buildings offer significant sound proofing quality between units and between floors and tenants will pay a premium to be in a concrete building
    • Concrete buildings have insulating properties in both cold and hot weather that will lower energy costs for both the tenant and the building owner and enhance the comfort of tenants (and their pets!)
    • Concrete buildings tend have lower maintenance costs over the lifetime of the building
    • Concrete buildings will have a longer useful lifespan – for investors this means a longer investment horizon and a more valuable product when you want to sell

Why this site and why Mission?

Real estate is all about location, location, location – and while it’s cliché it really is true!

When we came across this property we saw right away that it was a great location – it has easy access off of Highway 7, it’s within walking distance to the West Coast Express train station which provides direct daily access to downtown Vancouver for commuters, and it’s in close proximity to an array of amenities including the shops in downtown Mission and the Junction Shopping Centre, which has a Save-On Foods, London Drugs, Canadian Tire, Staples and a Cineplex Theatre.

And overall Mission is growing and that will attract additional amenities over time – and if you can’t find it in Mission, Abbotsford is a 15-minute drive over the bridge.

Mission is one of the fastest-growing communities in BC with a population of about 40,000 that is expected to grow to 48,000 over the next 5 years. So there is a lot growth coming to the community and the eastern Fraser Valley in general and we want be in growth markets. Polygon, which is one the largest and most prominent developers in BC, have acquired a very large tract of land in Mission in order to develop the Silverdale master-planned community that will eventually bring 40,000 people to Mission. It’s a very large project and they are very smart people so we feel that we are in good company here in Mission.

What do you like about addy?

When I first talked to the team at addy I was just impressed by the concept – and I understood it right away because whereas we are providing investment opportunities for high-net worth investors, addy is facilitating the same investment opportunity for investors who want the benefits that accrue to owners of commercial real estate but don’t have the large dollar amounts that are typically required to access Stream projects. For example, without addy in the middle, the minimum investment in a Stream project would be $150,000 – so addy really is a great democratizer in my mind.

A couple of quotes come to mind:

“Don’t wait to buy real estate. Buy real estate and wait.” – Will Rogers

“The best time to plant a tree is twenty years ago. The second-best time is now.” ― Chinese Proverb

Why is addy a good partner for you?

addy is a good partner for us because I think we both want to be in this business for the long-term – and to do something long term it’s really about building the relationship, building trust and a track record with our partners – that’s why we called the company Stream Property Partners – we see our investors as partners – and we love what we do and we like coming into work each day and doing everything in our control to make these projects successful for our investors and to enhance the communities we work in.

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