Skyline Funds Remain Stable Amid Market Uncertainty

Skyline CFO & Skyline Wealth Management VP on Current Economic Outlook


Wayne Byrd, CFO, Skyline Group of Companies, and Ray Punn, Vice President, Skyline Wealth Management, address the current investment market landscape and the stability of Skyline’s investments.


Ray Punn, Vice President, Skyline Wealth Management, sat down with Wayne Byrd, CFO, Skyline Group of Companies, to address the current investment market landscape and discuss why Skyline’s investments have historically provided stable and consistent performance even in uncertain economic market conditions.

RP: The current economic landscape has posed challenges for many investment funds, especially those held in the public markets. Many consumers, investors, and businesses are experiencing the effects of high interest rates and high inflation, with predictions of a looming recession.1

Q1 2023 saw periods of market volatility as the global financial system came under pressure.2 Meanwhile, all of Skyline’s investments, which are privately held, have remained stable, and some have even grown in value since the beginning of 2023.

Wayne – before we discuss why the performance of Skyline’s investments has outpaced some of its public counterparts, can you briefly explain what Skyline is, and the types of investments it offers?

WB: Skyline Group of Companies (Skyline) acquires, manages, develops, and invests in two types of real assets: real estate and clean energy infrastructure.

Skyline was incorporated in 1999 and as of year-end 2022, manages more than $8.2 billion across its real estate and clean energy platforms. It owns and manages three private REITs, Skyline Apartment REIT, Skyline Industrial REIT, and Skyline Retail REIT –each specialized in a particular real estate asset class. It also owns and manages Skyline Clean Energy Fund, an equity growth fund comprising solar and biogas clean energy assets. Each of these four investments is a pure play product with 100% Canadian assets.

The funds offer both Class A units (available to retail investors through Skyline Wealth Management) and Class F units (available to Portfolio Managers and institutional investors through Fundserv). In total, there are now nearly 6,000 unique investors across Skyline’s investments.

The funds, as well as their service providers, are all housed within Skyline Group of Companies. Service providers include property management (Skyline Living for multi-residential; Skyline Commercial Management for industrial/retail), development (SkyDev), investment dealer (Skyline Wealth Management), and more. This integration not only allows for greater alignment among the funds and services, but it also allows Skyline’s investors to have greater accessibility to the funds’ leadership and management teams.

RP: How do Skyline’s investments differ from publicly traded investments?

WB: Skyline’s investments are classified as private alternative investments. The term “private” refers to their privately held status. As such, they are not sold on the public markets and are therefore less subject to the volatility associated with public market emotion.

This disassociation is further illustrated in how Skyline’s investments are valued:

  1. In general, each real estate asset’s value includes the property’s net income as well as the property’s potential income over the term of the analysis.
  2. Debt and other liabilities are subtracted, which determines the Net Asset Value (NAV)2.
  3. The NAV of the portfolio is divided by issued and outstanding units.

Where a publicly traded stock price’s value may rapidly increase or decrease due to many peripheral factors, Skyline’s investments are only valued through the above method.

Skyline’s investments are also classified as alternative investments, meaning they fall outside traditional investment types such as stocks or bonds. A typical investment portfolio may include several types of traditional investments, and an investor may choose to further broaden their portfolio diversification by adding private alternative investments. This supplementation may assist the investor in achieving lower volatility and potentially greater returns.

Where publicly traded investments are primarily subject to market risk, private investments are primarily subject to business risk. The latter is the type of risk that Skyline prefers to contend with, as it can mitigate that risk to the greatest possible extent with tested and proven acquisition and management strategies among its funds.

RP: We have seen unit value and distribution rate increases for some of Skyline’s investments this year. Meanwhile, several publicly traded competitors are reducing their valuations and distributions. How has Skyline managed to stay ahead in this market?

WB: As private alternative investments, Skyline’s funds experience lower exposure to the public market emotion that has caused the devaluation of other investments. However, there are many additional strategic factors that have resulted in strong performance of Skyline’s funds in this environment.

For example, where some REITs or other alternative investments are diluted by multiple asset classes or debt instruments, each of Skyline’s investments is grounded in a singular class of hard assets: multi-residential, industrial warehousing/distribution, open-air plaza and stand-alone retail, and clean energy under power production contracts. This pure play investment strategy allows each investment’s team to channel its expertise in that asset class, maintaining a curated portfolio through strategic due diligence in terms of property acquisition and disposition.

The fund’s asset classes themselves have been chosen on the basis of stability. For example, Skyline Apartment REIT invests in multi-residential properties (fulfilling the basic need of housing) in Canada’s secondary and tertiary markets, where competition to build is lower. The REIT is helping Canada meet the high demand for new housing by continuing to acquire and develop rental stock in communities with very low vacancy rates. Additionally, to mitigate risk in a high interest rate environment, the REIT employs fixed rates and ladders its mortgages so that no more than 20% come due in any given year.

As another example, Skyline Clean Energy Fund invests in another type of asset altogether: one that generates revenue based on virtually limitless sources of power. The Fund’s portfolio currently comprises a mix of solar assets, which simply require the sun to shine, and biogas plants, which simply require organic waste to be produced. Further, the power produced is sold under long-term government contracts.

RP: Some sectors of commercial real estate, notably offices and enclosed retail malls, have been particularly challenged with the evolution in work and consumer behaviour since the onset of COVID-19. How does this affect Skyline’s investments?

WB: Mass office shutdowns and the adoption of hybrid/work from home models have significantly contributed to the devaluation of Canadian office space. In fact, CBRE reported that Canada’s national office vacancy rate was at an all-time high (17.7%) in Q1 2023. However, Skyline’s investments have been largely unaffected by this shift.

Beginning in 2020, Skyline Industrial REIT (formerly Skyline Commercial REIT) began a repositioning strategy, wherein it aimed to remove all office assets from its portfolio and instead increase its weighting in the growing distribution, warehousing, and logistics sector that is seeing intense demand amid the continual growth of e-commerce. As of March 3, 2023, the REIT has only a few remaining properties slated for strategic disposition.

Skyline Apartment REIT does have a few office assets remaining from a 2009 multi office property acquisition; however, these are predominantly occupied as Skyline Group of Companies’ own office space.

Enclosed retail malls are also experiencing the effects of an evolution in consumer behaviour in conjunction with the mass retail shutdowns of 2020 and 2021. Even at the height of these shutdowns, free-standing and open-air plazas anchored in essential goods and services, such as grocery and pharmacy, remained open due to their provision of basic needs like food and medication—and the need remains for these types of goods and services even in a high inflationary environment.

Skyline Retail REIT has always focused on acquiring these open-air plazas in these communities, maintaining the highest possible concentration of everyday essentials (currently 80% of the REIT’s base rent), and the lowest concentration of discretionary retail types that are more susceptible to changes in consumer behaviour, such as fashion (currently less than 5% of the REIT’s base rent). Additionally, when located in Canada’s secondary and tertiary communities, these types of retail properties often act as key community shopping hubs with low competition. For these reasons, the REIT has continued to experience growth and stability.

RP: Some competitor investment funds are seeing a rise in redemption requests—and freezing or limiting redemptions as a result. What are your thoughts on why this is happening, and how is Skyline managing through this with each of its four funds?

WB: There are various reasons why investors may be choosing to redeem in any market environment. An investor may have the opportunity to rebalance their capital, they may be shifting their investments elsewhere for tax efficiency purposes, or they may need the cash as they approach a milestone or life event such as retirement or a property purchase.

Many investors also redeem due to fear or uncertainty. This apprehension is intensified by global events (and, in turn, public sentiment) causing day-to-day fluctuation of their holdings. Therefore, some investors withdraw their investments—or even avoid investing entirely—because they prefer the security of cash.

This is why some investors choose to add private alternative investments such as Skyline’s funds to their portfolios: these funds are much less affected by events that have no direct correlation to the actual value of the assets; therefore, they have experienced historical stability and growth, even during market downtowns and periods of economic uncertainty. This historically steady performance may be a particularly appealing factor for investors employing a buy-and-hold, long-term investment strategy.

Skyline facilitates redemptions on a monthly basis with no fees. An investor’s units are redeemed at the prevailing market value – which is the underlying value of the asset, minus liabilities, divided by the number of outstanding units.

RP: What is Skyline’s liquidity position and debt management strategy? How does Skyline manage this?

WB: Skyline’s funds maintain a Funds From Operations (FFO) payout ratio of approximately 90%, providing for a 10% reserve toward liquidity needs such as investor redemptions. As previously mentioned, the REITs also each have an internal objective to stagger their mortgage maturity dates so that no more than 20% mature in any given year. During low interest rate environments, the REITs may take 10, 7, or 5-year terms on debt, whereas in high interest rate environments such as those we are currently experiencing, they may take 1, 2, or 3-year terms with the prediction that rates will flatten and decrease within the next 24 months (and in the case of SCEF, it seeks 20-year power purchase contracts). Due to this strategy, the Funds undergo annual refinancing, which provides additional available surfaced equity (cash) that may be used toward redemptions. The Funds’ lines of credit, which are used to facilitate acquisitions, capital projects, seasonality cash flow, and redemptions, are paid down through regular refinancing, excess FFO, and equity raise initiatives.

Skyline and Fund leadership team members meet frequently to review forecasted cash flows. This includes weekly and bi-weekly reviews of cash flow over a rolling 12-week period, as well as month-end finance reviews to discuss forecasting for the balance of the Budget year and if any pivoting is necessary if material impacts have arisen.

Individual investors who want to learn more about Skyline’s investments are encouraged to contact a Skyline Wealth Management Advisor. Skyline’s investments are also available to Portfolio Managers and institutional investors through Fundserv.

  1. Canada headed for recession in second half of 2023, says Desjardins … (n.d.-a).
  2. Q1 2023 market update: Investor sentiment strong despite economic uncertainty. Q1 2023 Market Update: Investor Sentiment Strong Despite Economic Uncertainty | Sun Life. (2023, April 11).
  3. Net Asset Value (NAV) – a figure that expresses the total value of a fund’s assets, minus liabilities.

About Skyline Wealth Management

Skyline Wealth Management Inc. (“Skyline Wealth Management”) is a Canadian investment firm offering a shelf of privately owned and managed alternative investments, specializing in real estate and clean energy assets.

Skyline Wealth Management is the preferred Exempt Market Dealer of four alternative investments:

Skyline Apartment REIT (Fundserv code: SKY2006)
Skyline Industrial REIT (Fundserv code: SKY2012)
Skyline Retail REIT (Fundserv code: SKY2013)
Skyline Clean Energy Fund (Fundserv code: SKY2018)

Skyline Wealth Management distributes institutional-quality investments to nearly 6,000 investors, as well as Canadian investment Portfolio Managers and institutional investors, with ease of access to those who qualify.

To learn more about Skyline Wealth Management and its private investment offerings, please visit

Skyline Wealth Management is part of Skyline Group of Companies.

For media inquiries, please contact:

Bethany Curtis
Manager, Content Marketing and Communications
Skyline Group of Companies
5 Douglas Street, Suite 301
Guelph, ON N1H 2S8
519.826.0439 x231