Mainstreet Equity Corp. is a publicly traded (TSX: MEQ) residential real estate company in Canada. Established in 1998, Mainstreet has grown its portfolio from 272 units with a market value of approximately $17 million to 8,414 units and approximately $1.15 billion market value. Mainstreet positions itself as a value creator by purchasing under-performing properties, renovating them to a branded standard, improving operating efficiencies and repositioning them in the market for greater returns. Mainstreet currently owns and operates properties in Surrey, BC; New Westminster, BC; Abbotsford, BC; Calgary, AB; Cochrane, AB; Edmonton, AB; Fort Saskatchewan, AB; and Saskatoon, SK.
Mainstreet focuses on the acquisition of mid-market multi-family properties. "Mid-market" is defined by size, location, condition, and state of management. Typically, mid-market properties have less than 100 units, making them less attractive to institutional investors. These buildings are often mismanaged and in poor condition, needing substantial renovations to bring them to market standards. The rents in these buildings are generally below market, which tends to attract tenants with weak credit. The state of the buildings and tenant base can create a downward spiral effect, where rents are slashed to attract tenants, but problem tenants create additional issues for the building management.
After Mainstreet purchases these undervalued buildings, we begin o