Real estate firm Avison Young plans deals after recapitalization

Avison Young Canada Inc. is plotting growth and acquisitions after creditors swapped debt for equity in the Toronto-based real estate advisory group.

The recapitalization deal cuts Avison Young’s annual cash interest expenses by more than 70 per cent, chief executive Mark Rose said, adding that he agreed with lenders that spending the money on growth was more productive than servicing debt.

“They saw the possibility and the probability of the returns as equity holders,” he said in an interview. The creditors will put in more equity , he added, declining to share specifics or the names of the investors.

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The lenders are “traditional Wall Street” names that are “committed to the company, and excited about what the growth prospects are,” he said.

Founded in 1978, the Canadian company offers real estate management, brokerage and advice . Now it’s planning to push into new market segments, which potentially means substantial deals, Rose said. He’s bullish on the commercial real estate market and argues the bottom of the cycle was around June last year.

“We are full-bore into a recovery,” he said, even if threats of United States tariffs against Canada can prompt clients to hit pause on some plans.

Rose said there’s opportunity for Avison Young to expand further in servicing the build-out of data centres, as well as more upgrades and conversions of offices. Money could be spent on recruiting teams, tuck-in acquisitions and some larger deals, he added. Avison Young is familiar with M&A, having bought more than 50 companies, he said.

The recapitalization will take the firm’s debt to less than three times its earnings before interest, tax, depreciation and amortization, Rose said. “We will be very, very flush.”