First West Properties

Going west┬áFirst West Properties proves that real estate investment can still be profitable in western Canada, despite current economic conditions, reports Brendan A. Smith. When First West Properties changed its name from Aveiro Investment Corporation in February of 2007, president Eric Wesling knew the direction he wanted to take the real estate investment firm. ÔÇ£We changed our name to First West Properties Ltd. because it better reflects the nature of our business and its Western Canadian focus,ÔÇØ Wesling told investors.┬á First West believes that Western Canada is a good place to buy property because demand for the commodities that drive the economies of British Columbia, Alberta, Saskatchewan and Manitoba are on a long-term upward trend. Alberta and British Columbia already account for over 33 percent of CanadaÔÇÖs GDP, and the cities of Calgary and Saskatoon are among CanadaÔÇÖs fastest growing cities.First West Properties had a busy and successful 2008, based on a fundamental investment philosophy focused on high quality investment properties, studying markets for undervaluation with opportunities in short- and medium- term leasing or releasing of commercial properties.┬á In the quarter ended 30 September 2008, First West made three significant purchases, and one major sale. On August 29, the company completed the purchase of Mic Mac Plaza in Lethbridge, Alberta for a total purchase price of $2,606,865. The property is approximately 11,805 square feet of retail space on 1.2 acres of site area with five retail tenants, whose existing rents are well below current market rates. First West expects to increase the rents to market rates at the experation of the existing leases.Also on 29 August, First West closed the purchase of Eastview Shopping Centre in Saskatoon, Saskatchewan for a total purchase price of $3,128,675. This is a strip mall with approximately 23,867 square feet on 1.5 acres of site area with 13 retail tenants. One location was vacant at the time of the purchase and five tenancies were either due to expire in a matter of a few months, or were month to month tenancies. Rents will again be increased to market rates as existing leases expire and as the terms of month to month tenancies are negotiated. These purchases were followed on September 15, 2008, by the acquisition of Braman Warehouse, a 77,000 square foot, light-industrial commercial property in Lethbridge, Alberta. The purchase price of C$2,925,000 represented C$38 a square foot, whereas new warehouse construction costs are estimated at C$85 per square foot. On 29 September 2008 First West completed the sale of a parcel of industrial land in Airdrie, Alberta. The 77 acres of undeveloped land, which First West acquired for C$7.75 million, realized C$9.68 million, a gain of $1,550,697 which was recognized in the companyÔÇÖs financial statements for the quarter. First West Properties was given the green light in January 2008 for an IPO on the Canadian National Stock Exchange (CNQ), but decided to delay an initial public offering until market conditions improve. The decision has proved to be extremely sound, as the markets have remained volatile and both the TSX Venture Exchange index and the TSX Capped REIT Index have suffered huge falls.First West Properties has performed well in difficult times by focusing on a strategy to build a portfolio of assets with potential for short and medium term appreciation, in a geographic area still experiencing growth. The increase in the value of its assets is such that shareholders are to be rewarded with a first cash dividend of 0.25 cent per share on January 15, 2009. At its year end of 30 September 2008, the companyÔÇÖs portfolio had a book value of over C$20 million dollars and a net asset value per share of C$1.33, up a staggering 84.7 percent over the previous year. ÔÇô Editorial research by Ryan Kirkey┬á ┬á