Pier 4's integrated approach to upgrading mid-sized buildings shows how disciplined execution can outperform market momentum
This article was produced in partnership with Pier 4
The Canadian rental market continues to divide more sharply than before. Urban cores face affordability strains and regulatory headwinds, while select secondary markets offer room for disciplined investment. Pier 4 REIT, founded in 2020, has positioned itself squarely in the latter category.
The firm targets mid-sized apartment buildings in growing secondary markets such as Kitchener-Waterloo, London, Halifax, and Moncton. These are markets where demand is rising, regulatory conditions are manageable, and the potential to improve long-term value is clear. Pier 4’s approach is rooted in data, structured to balance risk, and strengthened by a fully integrated operating model that connects investment decisions with on-the-ground execution.
Jake Levy, Director of Finance at Pier 4, says the process begins with clarity. “We target buildings that already have strong regional demand and where both our operational model and capital plan can make a measurable difference,” he explains. That focus has guided Pier 4’s portfolio development, informed by disciplined execution and insights drawn from local market conditions.
Where value really comes from
Pier 4 specializes in low- to mid-rise properties, typically between 20 to 80 units, often owned or managed by smaller operators but located in stable neighbourhoods with room for incremental improvement.
Each property is evaluated on rent gaps, occupancy history, utility data, and the condition of core systems such as boilers, windows, and plumbing. A building priced below replacement cost, with in-place rents materially behind the market and located in an area with steady demand, signals an opportunity to improve both performance and liveability.
“We build our plans on what can be achieved in five to ten years,” Levy adds. “Rent growth is important, but so are the details like turnover timing, expense control, and policy changes. All of it has to add up before we move forward.”
Once acquired, Pier 4 applies a structured value-add plan. Suite renovations are completed at natural turnover, based on consistent scopes that balance interior enhancements with cost control. Efficiency-focused upgrades, such as LED lighting, low-flow fixtures, and Energy Star appliances, are standard across the portfolio to reduce operating costs for us as landlords and for our residents. Envelope repairs and higher-efficiency mechanical systems follow based on expected payback periods and available capital.
A Halifax acquisition demonstrated the model clearly. Within months, targeted envelope and mechanical work cut operating costs by more than 20 percent. In London, Ontario, turnover was slower, and policy benchmarks shifted midstream. Rather than altering the investment thesis, the firm focused first on expense work while holding confidence in the longer trajectory. “Buildings, residents, and policy do not always move on our schedule,” Levy says. “We adjust the levers, but we do not abandon the plan.”
Turning execution into advantage
Pier 4’s operating model is fully integrated. This tight structure shortens the feedback loop between the unit level and the REIT’s asset management function, enabling faster decisions and predictable cost controls.
“Through our internal property management team, we can act as our own contractor,” Levy explains. “That lets us control costs, respond faster, and ensure renovation standards are consistent across the REIT.”
Standardization underpins this approach. Pier 4’s property operation teams order materials, manage timelines, and adhere to consistent scopes on every project.
Debt alignment follows similar logic. Bridge financing is often deployed in early stages to fund targeted capital work and accelerate repositioning. Once income stabilizes, the firm transitions to CMHC-insured term loans to secure more favourable rates and reduce refinancing risk. The team manages a ten-year debt ladder to spread maturities and align leverage with asset plans and cash flows.
Sustainability is integrated into operations rather than layered on top. Efficient plumbing fixtures, energy-saving retrofits, and emissions-reducing upgrades are now standard. “If residents pay utilities, we make sure the systems inside the unit help them manage that cost,” Levy notes. A formal ESG program launched this year now codifies those practices and commits to ongoing tracking and reporting.
Consistency in a fragmented market
Pier 4 has stayed consistent to their strategy through rate cycles, ever-changing rental policy, and the realities of operating older buildings. By prioritizing structure and execution over timing and trend, the firm has built a portfolio managed through measurable processes, consistent oversight, and a focus on residents.
The model is not designed to eliminate friction, but to work through it. Rent rolls improve, operating costs decline, and properties become more liveable. Quarterly appraisals create independent reference points, while internal metrics like property-level yield support transparent monitoring and decision-making.
As Levy puts it: “Find the right building, do the work that matters, and give it time to compound.”
If secondary markets continue to mature, could Pier 4’s approach become a template for the next wave of value-oriented real estate investing in Canada?
