Okay. Hi, everyone. Can you guys hear me? Beautiful. Now presenting Joseph Nakhla, Tribe.
Familiar faces. Good to see everyone. Hello, hello. My name is Joseph Nakhla. I'm the Founder and CEO of Tribe. Tribe is, if you live in Canada, one of the largest companies you've never heard of. We are a residential living management company. We're what they call technology-backed services. We build a whole bunch of technology intended to help people that live in condos. Those are from the U.S., HOAs, and also we help REITs manage their portfolio of buildings. We're a public company, been at it for a while, and we're in revenue and turned a great profitability corner here, and I'm thankful for you to make the time to learn more about us. By show of hands, who's here lived in a condo where you dealt with HOA, condo corp, and/or lived in a rental building where you had to rent from somebody? Okay, good.
Just for the sake of those that didn't put their hands up, just so you understand or you're oriented, one of almost now four Canadians live in a condo. That's going to be the likelihood of our children as well. Everything is going vertical. This is what's going on around you. They're land, kind of assembling all the land and actually building these big towers and/or lower rise where people are living. These types of communities are governed by federal laws, provincial laws, and believe it or not, they're actually governed by their own laws. There is such a thing where you can live in a place where they not allow to have dogs, or you could live in a building that has specific rules associated with age. We're not big fans of that, but that's the truth.
For that to occur, that actually requires a management company, and that's really where Tribe entered to that space. You probably couldn't name a whole lot of management companies, both on the rental or the condo side. The two that may be known to some of you, and I know some of you are from the U.S., would be FirstService or Associa. Those are the largest multi-billion dollar organizations. But on a national level in Canada, Tribe actually is the third largest, and we've grown in that size over the past five years. We actually had nothing, no assets under management in 2020, and as of today, we're up to $44 billion of assets under management. It's an impressive number, but really it's intended to explain to you the kind of growth trajectory that we've been on. We break them into two big buckets.
It is actually sub-buckets of that. When you drive by a building, and you know people are living there, they are either rental communities or condos. If it is condos, every single person owns a unit, and they fall under that regulation, the heavy regulation I was speaking about earlier. If it is rental, it could be owned by a family office, it could be owned by a REIT, you would be very familiar with those probably, and it could also be owned by what is new now in Canada, new in the last few years, developers, condo developers, that are actually building more and more of these rental towers.
If you are hearing about the doom and gloom of a lot of condos that are not being sold, a lot of those developers reach out to a company like us. Usually us. We are the largest now in terms of that conversion in Canada.
They come to us and say, "I want to convert what was planned to be a condo development and turn it into a rental development." There are different specs, different regulations. We help them turn that into a rental community, and then we take it to the market and find the tenants that move in there, and we clip right through on that journey. in the case of a condo, what gets erected is usually what is called, it depends on where you are from, association, condo corp, or strata. These are all interchangeable in terms of the number of markets that we support. Those particular groups choose a company like us. We come in and we manage those budgets for them. We actually dictate, not in a negative way, but dictate really the capital expenditure of that community over the next 5 years, 10 years.
As of today, we are in the $600 million-$ 700 million of managing cash on behalf of these communities annually right now. Think of that as rails, where we actually decide and help them make decisions on the landscaping, on their change of operations, and the cleaning services. We do not employ any of these people. We actually have the back office and the systems that actually deliver these services for them.
So I started by telling you that we are a tech-backed services company. We actually started in our guts as a software company before we became a property management company. What does that mean? We actually went and built software to be used in these communities. We started with Tribe Home Pro. Again, just show of hands, have you ever bought a brand-new condo from a developer? Probably not a great experience. Usually, they are very difficult.
What happens in that situation is when you are about to receive, just like you buy a brand-new car, when you are about to buy your condo, you were told how amazing everything was going to be, how beautiful it is going to be, then you actually start walking into the unit and realize there is a big gap between what occurred, what you were sold, and what you have.
Well, we built the software now that is officially the largest software platform in Canada to actually help the developer walk you through the unit, continue to find issues, think of them as deficiencies, aggregate them, have work orders around them, and actually build all the workflows associated with that. So when you actually walk around, on average, just to give you a perspective, there is about 14 issues per walkthrough. So when you are walking around, there are 14 things that you are looking to have fixed.
The platform that we have actually picks them all up and actually gives you an update as an owner. Then it morphs into your homeowner manual. The same app that you have turns into a homeowner manual where you actually get all the manuals and all the updates on your unit. When you move into the building, it actually morphs again, not only to help you get all the information about historical of your condo, but actually now becomes a living organism of the building where you can actually book your amenities, get your financials, make payments, vote, all kinds of different proxy workflows. There is even a division within or a component of the app that actually interfaces with what we call the HOA members or the condo or strata members.
It is kind of thousands of features on a platform that encompasses everything associated with the platform. But it is a bit of an iceberg. If you live in the building, you just get a very simple, great interface that you can actually interact with. But then there is a significant amount of workflows that we have built for our own staff. Think of we manage high-end buildings, we manage low-rise, stuff that is $3,000 a square foot, stuff that is $400 a square foot, and different needs occur in these communities. Then we have what we call Tribe AI, which is a benchmarking tool that looks at how the building is actually performing compared to its peers.
If you live in a building, no matter how smart you are, you could be a mechanical engineer, you could be a structural engineer, you will never be able to wrap your mind around how well the building is operating compared to its peers next to it, across the street, what have you. We have actually built tools that can actually manage that so we can catch the outliers. Effect of that is incredible because the buildings we manage spend less money per square foot in multitudes of areas, and that is becoming more and more of a desirable thing, because as the market slows down, people are looking for buildings that are actually well managed, that actually the maintenance fees are not as high, and the same goes for rental buildings. The REITs are all looking for improvement in NOI.
If the rentals get pressure, they actually want to make sure that the cost of operating these buildings are actually not scaling up. On top of all that, because we are a digital company, we have a significant amount of information about who lives in the unit, we have a payment relationship with them, we have a wallet share with them. We also know if they have pets, don't have pets, married, don't have kids, so on and so forth. We even have a credit check on all of them. We actually can put products and services in front of them, and that is an area of the business that we continue to grow. We don't just shove products and services down their throat. We actually look at where they live, what makes sense for them. Is their insurance coming up? Is their mortgages coming up?
And we can actually put products and services, and we curate that based on who you are and what you are looking to achieve from a lifestyle point of view. You would not be here and listen to a CEO who is not going to talk about AI. But in our case, it actually legitimately is a big part of our business. For the record, we started four years ago, bringing AI products.
We used them as simple from a tool as benchmarking, and we have grown that significantly now into tens and tens of workflows around, and it is already impacting our cost of goods. That will continue to occur in the next few quarters, so keep an eye on that. But really, our vision from our point of view is there is literally tens of thousands. Just to give you a perspective, we have 55,000 inbounds every 90 days.
It is 55,000 inbounds coming in from homeowners, tenants, landlords, whatever the case may be. While we think 70% of that, I may be a little generous, maybe 65% of that, two out of three do not really require human intervention. It is just a bunch of workflows that we need to guide you through. It could be as complicated as, "Hey, I am doing a full reno. I just bought the condo. It is from 1985, and it is ready for a complete reno. How do I go about permits for my flooring? How do I go permits for paint? What do I do in terms of if I want to change where the washroom is?" as an example. While we will have all that stuff running for you with workflows, it could be as basic as, "I moved in.
I have a smoker that I want to put out in the--" A smoker, not somebody chain smoking. Smoker as a cooking smoker. "And I want to put it out there. Am I allowed to?" Or, "I have a pet. I know there is a pet size issue." And actually give you the workflow of the examples and give you solutions around that. Our big focus is the resident experience and the benchmarking, and we are already seeing a significant amount of impact on our cost of goods. So what makes us unique is that we are the largest provider of these types of services for residential living in Canada, period. Even though there are two or three companies in the billions ahead of us, well, two companies ahead of us in the billions in terms of size, but they do not offer all the different services that we offer.
We actually have tools for the developers. I spoke a little bit about that, but there is a lot more for them. We have tools for the councils and members, property managers who work for us. We are up to, I believe we have 53 property managers across our portfolio right now, and the reason that is relevant is because we manage about 700 + buildings.
So those of you from Toronto, that number, it may not mean anything to you or might blow your brains. It will blow your brains because you would know in a big building in Toronto, there is one property manager to one building. So we actually do not need one-to-one ratio. Actually, our data shows we are almost at 12 to one. So 12 buildings managed by one property manager. That is the average that we have across our portfolio. Now, the uniqueness of Toronto downtown core is one to one.
That is not something that we think is sustainable across the country. We have the data to prove it. What you are going to see more and more probably in the downtown core of Toronto is with our efforts and others probably replicating what we are doing, you are going to start seeing a ratio of three to one, four to one. That is what I think the downtown Toronto core needs to be at.
So if you live in one of those, like 10 King or whatever, one of those big monster buildings, really what you are dealing with there is a person who is full-time sitting there dealing with all the issues associated with that. Ours are all remote, so we do not have them physically on-site. They are actually dealing with it as quarterbacks with dashboards and actually navigating through all these issues. That is why our gross margin continues to improve.
A lot of traditional property management companies tend to be around the 30%-35% gross margin. We are operating at about mid-40%s right now, and we think our goal should be 55%. So we work with a lot of developers, a lot of REITs. Some names here you may recognize. We are heavily concentrated on Canada. That is not to say our products and services are not suitable for the U.S., very much suitable for the U.S. We have resisted that because we are backfilling into our national footprint right now by winning more and more business. But we have grown through organic and acquisitions as well by buying traditional property management companies and growing them into our service delivery model. Traditional property management company would be on the very, very left-hand side.
Average revenue per door is about $20, about $2 of ancillary services, and $22 altogether, and about 30%-35% gross margin. Put our technology into this building, convert that community into the service delivery that I just spoke to you about at our marketplace, which is high margin products and services. As of last quarter, we are averaging almost $ 38, $35 per month.
This is recurring monthly. And we have about $11 per building, per unit in transactions. So we are, as you can tell, it is about $49, almost $50 revenue per door. It is a completely different model. If you are curious and you are wondering, does that mean they are paying more for us to be in the building? No, actually, we are on average lower than a traditional property management company. So that money is being created through our ability to actually make your maintenance fees lower. Here is the proof.
You will see under energy per square foot, this is population, so yellow would be Tribe, black would be similar exact size buildings compared to us. It is third-party data, not just our data. And you will see here 40% reduction in energy per square foot. You will see also insurance. Buildings that we manage, they get insured for lower premiums than actual buildings that we do not manage. Revenue from reserve fund, it is a fancy way of saying, what do we do with the cash that you are sitting on as a building? Because of our size and our national footprint, we generate more per square foot. And of course, the most obvious one would be admin per square foot. Administratively, we are cheaper.
You don't need as many security people, you don't need as many concierge. Also you don't need all the stuff that gets mailed and all the packages that you receive in the mail. If you lived in a building and you owned, you'll know what I mean by those packages. We make money through two big buckets, revenue segmentation. We have the recurring, so we get contracts with either the REIT or the landlord and/or the condo association and/or we call them stratas, and that's a recurring monthly revenue that we have. In addition to that, we curate products and services. There's hundreds of them. I won't bore you with them, but think of it as you're selling your condo, you're looking for a report, or you're looking for historical, or you live in the condo, you're going to move out, and you want to rent it out.
You actually click on a button, we take that unit for you and put it in the rental pool. We actually charge for all these different products and services. You'll see the rule of thumb is somewhere in the 80% to 20%, 80% is recurring revenue, 20% is transactional. It's pretty consistent. We've seen it go as little as 17%, as much as 22%. You'll see that our revenue and our EBITDA journey has been, and profitability journey has been ongoing. You need to understand the one thing about a property management business, it's high compliance level of business. It's the exact same compliance as those that sell condos or sell homes. You actually have to have physical presence in the markets that you support. For that to happen, we had to actually go land the plane in every single city that we operate in.
We operate in 10 cities right now. For that to occur also, we needed to backfill. We had to build infrastructure, we had to invest. You'll see that's reflected in our investments. As you can see now that we've landed the plane, we put our brand in these markets, we either purchased something in that market and/or started marketing there. We're actually starting to win organically business in there, and it's actually reflected now in our profitability journey. That's reflected here. You'll see that in 2022 is when we were heavy, 2022 and 2023, building an infrastructure. Now we are happy to say that we've turned a corner in terms of getting to the size, backfilling into our size.
It's also important because while we've done that, we've made some acquisitions through the journey, and that required that infrastructure built and acquisitions required some debt. You'll see here our VTB debt and interest expense declining. We've made a big dent in it in the last 12 months. That will continue to improve. That's been a journey of essentially as we get bigger, we get more leverage with the banks, and also the companies that we've purchased continue to perform and we pay down the VTBs. That's also an important metric for us. I won't bore you with the details, but it's not rocket science. You know how companies get bought and how you actually have to connect the EBITDA performance to the VTB. That's been a great journey for us.
I'm just very pleased to say we've never bought a company that did not hit its EBITDA targets. Was it something I said? Oh, good. Okay. That acquisition model is very important. What's good for you to know is that there's about north of 1,500 property management companies operating in Canada. It is incredibly fragmented. When I say to you we're the third largest national player, that gives you an idea of how much we've gone up, but also tells you how fragmented the market is. We do, it's essentially a model of grow organically in the markets that you're already established in. For example, in B.C., we'll make acquisitions if something really juicy comes out. Otherwise, we are the dominant player. We're winning all the condo business, so we'll continue to be there.
In the case of a new market, we just landed here two years ago in the downtown Toronto core. We made an acquisition. Now that brand is getting bigger and bigger. We would continue to look for acquisitions, but we buy them. We digitize them in many ways. We actually, there's some low-hanging fruit as it pertains to efficiencies and actually margin lifts. There's also some really interesting findings that we have in these communities in terms of putting products and services, not only for the building but also for the communities that we manage, add more services, and improve the gross margin from the traditional 30% to hopefully closer to 50%. These are some of the examples of acquisitions. We like acquisitions, obviously, EBITDA positive.
In many cases, we like them to be in the right kind of geography that we either are seeking or complements a weakness that we have in the space that we're in. In some cases, we do like them because they might have a product or service that we don't have. We acquired something in Toronto recently that gave us project management. It's a fancy way of saying think of it as capital expenditure. If you're a family and you own 10 buildings, what's your plan for the next 10 years to keep your 10 rental buildings up to snuff while you need to actually get something with data that can actually show you that you need to update your lobby, maybe make some changes and switches to the kitchens in the rental suites, and then you just can't press a button and get it all done.
You have to do it sequentially. You don't have the capital to actually deploy it all. We take all of our data that's historical, we apply it to that building or this community of buildings that you have, and we give you actually a capital expenditure plan, and we actually just clip on that. We don't do any of the work. We just actually provide it, and we actually oversee it. It runs on our rails, the money goes through our rails, and then we just clip a percentage on that, depending on the size of the community that we're supporting on that. Our cap table is pretty straightforward. We have 50 million outstanding shares. As you can tell here, a lot of it is insiders who've been in the market buying our own stock.
We think it's a steal and a half at $ 0.13 in terms of where the company's at. We're buyers. You'll also notice here that there's some big names. PROPELR used to be called Round13. That might be the brand that everybody here would recognize better. That's a growth venture group, and they've been involved in every round since they've been involved with us. The same goes for myself. I've written checks right through. We continue to be in the market also buying our stock, and I've been there before as an ex-CEO of a previous company where at one point, the street didn't give us the credit that we deserved, and then from $ 0.15 to an exit of $ 3.60. We're very patient. We're fending off private equity. We'll continue to keep building on our infrastructure.
We're a very unique company in the market, both in Canada and the U.S. There's not a single company that offers what we do on a national footprint for both rental and condo and single family, and we'll just continue to backfill into our sites. Our executive management team, myself with background in starting companies. I don't have a gazillion startups. I've only been involved in three, and that's what I do. Scott Ullrich, our CFO, was the CEO and founder of one of the bigger acquisitions that we've made over the years. I told him he can work for one more year, and then he can retire. I promised him and his wife that. I lied to them because he's such a great guy, and five years later, he's just now the CFO and loves it. We just added Jerome Samuels.
He was the Vice President of Integrations at Rogers. If you're familiar with the big acquisition that was made in the West Coast where Rogers purchased Shaw, he was actually leading that. Just a tremendous amount of expertise in integrations. He's come on board. He's been with us for a few months, and his impact has been fantastic in integrating and standardizing all of our processes, both in the technology side and the operations side. It's been amazing. We have Danielle, who's done an amazing job for us on the Corporate Secretary side, and Jennifer oversees all of our operations in the way the corp, Sorry, all of our VP, She's a VP of Marketing, all of our communication and marketing. In the way we operate, we've got rental markets, and we have condo markets.
We have somebody that will run that for B.C., somebody that will run that for Alberta, and somebody that will run that for Ontario, and we're looking to expand further. As these markets continue to grow, the breakdown of the revenue is probably 40% in B.C., 20% in Alberta, and 40% in Ontario. You're going to see the Ontario market continue to grow for us. We've only been here for a couple of years. A great group of board members, every single one of them has written checks and is a shareholder of the organization. Probably some names that you'll have seen from Bay Street, but a lot of hands-on, a lot of great support. I'm a very fortunate CEO that doesn't have any complaints really about its board. What are we going?
We are continuing to profitability, take down our debt, and actually start driving towards cash flow positive, which we see that very much in sight. Continue to expand with our AI. The goal there is to take our gross margin from the mid-40%s, that kind of hovers around, to hopefully the mid-50%s, and then focus on organic growth simply because now that you backfill, now you are in these markets, you need to now take your operations and actually go and win the business against some of the big guys.
Just to give you a perspective, I mentioned earlier, we are the third largest on the condo management in Canada. 20% of our condo business in the last 24 months came from number one and two. We are nibbling at them more than they would like us to. The reason I bring that up is to tell you this is not a size play.
This is actually a service type of delivery play. These guys are buildings that are leaving these monster multibillion-dollar organizations coming to us. They are coming to us for a reason. It is not our price. It is definitely the way we deliver the service and actually the track record that we can actually show. Why us? We think we are strapped in a space that probably before today you were not thinking of in terms of the size. This is a $120 billion opportunity. It is, again, monster in terms of managing condos in Canada and the U.S. Canada alone is starting to knock on $30 billion of annual spend. Just to give you a perspective of how big of an opportunity that is. We are, like I said, one of Canada's largest, very aggressive M&A strategy.
Now I can say with a lot of confidence that we are very good at integrating and squeezing these opportunities, not by just chopping, by actually just backfilling business into them. We have a very strong business model. We have less than 2% churn, which is incredible. That was not always the case. At one point, probably our worst quarter was knocking on, rate-wise, on about 7%. It is not easy. Nobody likes to be woken up and told they are managed by somebody else. We learned how to improve that and make that really a positive. Now that you have got the history to show that since we have bought this company and now that your building is under our management, look how much better the world is, and all of a sudden they become raving fans and actually generate leads for you.
Final thing I will say is, this is a company, it is not a one-trick pony. We do not give a damn if there is a pandemic. We grew through that. We do not care if interest rates go up or down. It does not make a difference to us. We do not care if condos are selling or not selling. All that stuff is just opportunities for us. Since the condos are not selling, which is probably the doom and gloom that everybody hears about, our phones has not stopped ringing by developers building these condos that were working with us and coming to us and saying, "Convert them into rental," and/or we sold half the building. That is probably something that a lot of people are curious about. I get asked that all the time. What happens in a building that is not selling?
Half the people moved in, half the building's operating, and the other half is just sitting down collecting dust. I'll give you the short version. The short version is we're lobbying the government to let these guys, let the developers not have to pay the GST, or HST in some cases, the moment we take over that building for rental. The government is likely going to allow that. Then we'll be able to take, let's say it's a 100 unit building, 80 are sold, 20 are left collecting dust. Developer can't sell them. Tribe will come in, take the 20, convert them into rental. We'll still manage the full building as a condo, but with the 20 units will be turned into rental inventory, and that revenue that will be generated will help the developer stay on their feet.
We're lobbying the government saying, "Do you want to see that? Or do you want to see a bloodbath where the developers actually sitting on that inventory can't pay their LPs?" It's a problem. Plus you want affordability in the market, so you need that inventory in there. Thankfully, the government is really paying attention. I think you're going to see news on that, and you'll see us be very active dropping a significant number of those units into the inventory market. So there'll be good rental opportunities is really what I'm trying to tell you. So stay in tune with us if in case you have kids that go into school somewhere or whatever. We're going to have a lot of inventory available for rent. That's it. Thank you so much for your interest. I'm happy to take any questions. Yes.
At current revenue run rate, are you now on that inflection point of EBITDA breaking even, something that investors should expect to continue?
Yes. Usually, I'm a little bit more coy, but I'm going to say yes.
[inaudible]
Oh, my apologies. Question about the EBITDA positive, how sustainable is it for us? Have we reached that point? The answer is yes. We've reached a point now where I can comfortably say that that's behind us now. It took a lot of work because we needed to backfill into that size, but yes. Yes, sir.
I'm very interested in the fragmentation of your industry. How do you build a moat around your business?
Well, there's multitudes of things. The amount of data that we have per building, walking out the door. Let's say you're a condo corp, and you're sitting there, and you've been with Tribe for three years, and you've accumulated all that data that sits on a platform that's available to you. Do you want to leave that and go to paper again? That's a massive thing. Now, if you're referencing how do we defend ourselves from getting acquired, that's an interesting challenge. Private equity is looking at the space significantly. It's not a surprise. The big, big guys obviously would like to see us folded in. We'll resist that for as long as possible. Yes. Yes.
Oh, we got to go.