Centurion Has a Track Record of Success

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Centurion over the years has created tremendous value for its investors all the while creating welcoming homes for our residents.  While no individual example is the entire story, and there can be no guarantee that past results are representative of future returns or opportunites, the following are a few select examples of properties that Centurion has invested in over the years. Potential investors in Centurion Apartment REIT should keep in mind that while Centurion strives to continually increase the value of the properties it owns, that the REIT was designed primarily as a conservative income producing investment  with potential for modest long term capital growth.  Aggressive turnarounds like those below would not generally be conducted in an income fund (although the properties when complete are excellent additions to the REIT) and are included here to in part demonstrate Centurions track record of value creation and operations in the apartment industry.  Future opportunistic high capital growth opportunities such as those below (if pursued) would likely be acquired in a separate fund which would be offered to Centurion Apartment REIT investors first.  Renovation properties, with high potential for growth are great investments, but require cash to be injected rather than be extracted for distributions and are thus generally not suitable for income oriented funds like Centurion Apartment REIT except on a limited basis. As such they are not representative of targeted returns for the REIT.

Example 1: 36 Townhouses in Hamilton

This property was acquired in September 2005 for $2.0 million.  It was renovated with approximately $800,000 in upgrades including power upgrades, in suite renovations, concrete & masonry work, new windows, doors, roof soffits and many new boilers.  It was converted to condomininiums and could be sold as single family homes.  Net operating income was increased from $160,000 per annum at acquisition to $265,000 per annum within 3 years.  It is currently valued at approximately $3.7 million, a value increase of 85%

Example 2: a 47 Suite Apartment Building in Oshawa

277 Anderson Ave was acquired in March of 2006 for $2.115 million. Rents were significantly under market and the building was poorly run and under maintained.  A renovation and repositioning program was instituted which included improved security, lighting retrofits, common area renovations, in suite upgrades, new windows and elevator cab upgrades.  $350,000 was invested in the property over approximately 4 months and income was increased from $160,000 per annum to $250,000.  The building was refinanced about 4 months after acquisition at $3.2 million, extracting nearly all inital capital.  It is currently worth $3.55 million (68% more than purchase price).

Example 3: a 96 Suite Apartment Building in Kitchener

This property was acquired as part of a portfolio purchase of 188 suites in the Kitchener area in July 2007. It was valued at $4.57 million at acquisition. While the property was in an excellent location and had good physical infrastructure, it was under capitalized.  Centurion invested in common area renovations and in suite upgrades to reposition the property as a quality rental building. It was recently refinanced at a value of $6.35 million (39% increase in 18 months) and continues to see increasing building income as older suites are turned into renovated ones.

Example 4: a 360 Suite Apartment Building in Kitchener

262-320 Kingswood Drive was acquired in January of 2008 in partnership with CA Bancorp, a public merchant banking firm (see press release)for $23.0 million.  It had going in net operating income of $1,506,000.  Through significant in suite upgrades, net operating income currently is running at $1.765 million per annum and it is expected that the run rate will hit $2.0 million within the next year as renovations continue to enhance the property´s income stream.

Example 5: a 28 Suite Apartment Building in Brighton

In the summer of 2006, Centurion acquired this apartment for $1 million with 20% down at an extremely attractive price.  It was refinanced in a number of months at its real value of $1.6 million, extracting a 300% return on investment almost immediately.  While this is an extreme  and rare example of the types of opportunities a dedicated apartment investor can uncover, windfalls sometimes do happen. In our opinion, windfalls like these, while rare, are certainly more achievable in real estate than in any other investment class because fewer competitors are in this market (as compared to something like publicly traded stocks).

Centurion carefully analyzes every property acquisition opportunity, to formulate a property specific value creation plan that can be put into action. We follow through with the plan, and tweek the plan according to results achieved.  In other words, we measure results from specific actions and determine whether we are succeeding according to plan.  If not, we revisit the plan and amend accordingly.  While we apply our specific value creation methodology, we have found that we always need to be flexible to change tactics to achieve optimal long term results for minimum cost.

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