Fitzrovia Real Estate has closed its first real estate fund, Fitzrovia DevCore Fund LP, which is focused on developing purpose-built rental housing across the Greater Toronto Area (GTA). 

“It's been in the works for almost a year,” Fitzrovia founder and chief executive officer Adrian Rocca told RENX. “It's really an evolution of our separate account business, where we had a number of institutional capital partners that wanted to participate in our class-A, develop-to-core strategy.

"It’s allowed us to have our existing partners participate alongside some new blue-chip investment partners.”

The fund has set a target of $920 million of equity commitments. More than half of that has been secured to date and the goal is expected to be reached before the end of the year.

The fund’s ultimate capitalization represents more than $2 billion of purchasing power that will be used to help alleviate the GTA’s lack of rental supply.

Colliers Capital Markets is acting as financial advisor to Fitzrovia for the fund.

Long-term investors being sought

While DevCore has been received favourably by existing partners and there’s been keen interest from new institutional investors, Rocca conceded there's also “some choppiness” in the current “tricky” fundraising market.

“But we feel confident in our track record and the quality of what we're building, and also the existing sponsorship that we have with our existing partners.”

The goal is to develop, stabilize and hold properties funded by DevCore, so investors with long-term horizons are being sought.

Toronto-headquartered Fitzrovia is a vertically integrated developer and asset manager of purpose-built rental communities across the GTA. It’s involved with site selection, securing proper zoning, design, financing and construction, asset and property management.

“All of those verticals will be applicable and active as it relates to the new fund investment,” said senior vice-president of investments Corey Pacht. 

“That's one thing that's been really helpful and beneficial to us as a platform in raising new funds. Because we control all of that in-house, we think it's created a competitive advantage for our business.”

DevCore’s investment mandate

DevCore’s investment mandate is to acquire well-located, primarily fully entitled sites across the GTA in close proximity to public transit and major employment hubs to develop apartment buildings of at least 300 units.

It will target large-scale opportunities suitable for developing both master-planned, mixed-use communities and high-rise towers with the size and scale Fitzrovia is looking for.

Rocca said Fitzrovia is tracking a pipeline of potential acquisitions across the GTA the fund could be used for, but couldn’t provide any additional details. All new class-A multiresidential acquisitions and developments in the GTA will go through DevCore.

Fitzrovia will also be introducing a value-add strategy and eventually a student housing strategy that Rocca said will employ capital separately from DevCore.

Fitzrovia’s current developments

Fitzrovia partners with public institutions, pension plans and high-net-worth investors who have a bias toward long-term, cash-flow-generating assets.

It launched six years ago and now has almost 7,000 units completed or under development, making it the largest purpose-built rental developer in Ontario. 

The Parker — a 38-storey, 349-unit apartment with ground-floor retail near Yonge Street and Eglinton Avenue East in midtown Toronto — is leasing up and should be fully stabilized by early summer.

The Elm and The Ledbury, 28- and 29-storey towers with a combined 542 units near Queen Street East and Church Street in downtown Toronto, will be fully completed and commence occupation this fall.

Vertical drilling has begun for the east block of a site at the southwest corner of Dufferin Street and Bloor Street West in Toronto, which will be part of a master-planned, mixed-use community. The Marlow, The Quinton and The Belvoir are 19-, 22- and 32-storey apartments with a combined 950 units expected to be completed in Q4 2025.

Alberta Investment Management Corporation (AIMCo) is investing in the project on behalf of its clients and as co-owner of the site’s east parcel alongside Fitzrovia. Hazelview Investments and an institutional partner own the Dufferin and Bloor property’s west parcel.

The Sloane and The Trafford, at 3450 Dufferin St. and across the road from Yorkdale shopping centre near Hwy. 401, are part of a master-planned community with three rental towers and a large integrated public park.

Fitzrovia’s 28- and 30-storey towers with a combined 775 units are under construction and scheduled to be completed in the summer of 2024.

Hazelview and AIMCo are also partners in this project.

Future Fitzrovia developments

The Grainger and The Sanderson, a mixed-use development occupying a city block at King Street East and Sherbourne Street in downtown Toronto, will feature 38- and 40-storey rental towers with a combined 900 units. The goal is to begin construction this year.

Construction is also expected to begin later this year on 6 Dawes, at Danforth Avenue and Main Street, in Toronto’s east end. It will offer 29-, 39- and 37-storey apartments with a combined 1,095 units.

Fitzrovia has filed a zoning application for a 39-storey, 319-unit development called The Roxy that will incorporate a heritage property at 412-418 Church St., just south of Carlton Street, in downtown Toronto.

The company has a couple of other zoning applications to be submitted during the next three to six months that aren’t yet public.