Apartment Investors See Value in Ontario’s Growth
September 14, 2022 4 Minute Read
Investment market dynamics have changed significantly since the beginning of the year. But the pace and volume of apartment transactions in Canada has yet to slow down.
A Canadian real estate and asset management company has purchased a 15-building, 1,178-unit Ontario multifamily portfolio that includes apartment buildings in Ottawa, Kingston, Welland and London, Ontario. The transaction closed in early September.
“It’s another example of investment capital seeing value in strong market fundamentals and long-term growth prospects for Ontario and Canada,” says CBRE’s David Montressor, who alongside Tom Schuster and National Apartment Group colleagues Nico Zentil in Ottawa and Kevin MacDougall in London, brokered the deal for his longstanding client.
It’s a significant deal for the Canadian multifamily investment market, which saw $7.1 billion in sales across 1,132 transactions in the first half of 2022, according to CBRE Research.
1580 Adelaide Street in London
The transaction is only the latest large multi-residential portfolio sale for Montressor and CBRE’s National Apartment Group, which has closed $1.55 billion worth of transactions in the last 12 months (excluding deals outside of Ontario).
In 2021, CBRE’s National Apartment Group brokered the sale of the ‘Vancouver Legacy Apartment Portfolio,’ with 15 rental properties for $292.5 million, as well as the high-profile sale of 642 suites at Island Park Towers in Ottawa for $267 million.
In 2020, the group completed the sale of QuadReal’s 1,503-unit apartment portfolio in Halifax to CAPREIT for $391 million.
Each transaction involved the cross-country collaboration of CBRE’s teams in B.C., Alberta, Ontario, Quebec, and Atlantic Canada.
Scale, Quality and Stability
Montressor notes that the latest portfolio sale represented a geographically diverse collection of apartment buildings across Ontario that had been particularly well-managed by one of the nation’s top landlords.
“Scale, quality, and stability were all recurring themes in conversations with interested groups,” he says. “Multifamily has clearly outperformed other asset classes given the positive sector outlook and the momentum shift in the broader investment market.”
"From a macro perspective this deal is reflective of the conviction held by investors specifically because of the rental market’s strong supply-demand fundamentals," he adds. "Canada is a destination country on the world stage. Our immigration policy is calling for 1.3 million new Canadians in the next three years and in Ontario alone we have growth forecasts exceeding 1.0 million people in the next five years."
"Housing is a critical component in supporting the lifestyles of current and future Canadians," says Montressor. "It's a positive indicator that investors are focused on addressing the need for more housing in Ontario and maintaining the viability of older rental housing stock.”
Global construction software development company Trackunit has signed a five-year lease for a 21,000 sq. ft. space at The Cube, a brick-and-beam office building on Talbot St. in downtown London, ON.
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