The Tower Hill East apartments in Toronto, now owned by CAPREIT. (Courtesy CAPREIT)

CAPREIT (CAR-UN-T) has paid $110 million to acquire the 141-apartment Tower Hill East building along the St. Clair Avenue West corridor in downtown Toronto, giving it a second upscale property in the prestigious Forest Hill neighbourhood.

CAPREIT is already the owner of what it calls one of its flagship properties, The Thomas, which it says will lead to management and operational efficiencies between the two buildings. That building is located at 355 St. Clair Ave. West, just around the corner from Tower Hill East at 330 Spadina.

“We are very proud to bring this prestigious downtown Toronto property into the CAPREIT family. Pairing these two iconic and well-known properties together under our experienced management team solidifies our presence as a leader in the GTA luxury rental market,” said Mark Kenney, CAPREIT’s president and CEO, in the announcement late Wednesday.

“We are also pleased that the property, and the planned value-add investments we will be making in it, will contribute to enhanced resident safety, reduced operating costs, and help us meet our ESG goals.”

About Tower Hill East

The 141 units include 14 bachelor, 56 one-bedroom, 35 two-bedroom and 36 three-bedroom apartments with an average size of 1,143 square feet. Apartments range from 482 to 3,240 square feet.

The purchase price represents about $780,000 per door.

Historically at near-100 per cent occupancy, at closing there were 15 vacant units in the 23-storey tower. Management estimates current rents are approximately 30 per cent below market.

Tower Hill East is bordered by the Nordheimer Ravine and just steps away from Winston Churchill Park. It has close access to both the Spadina street car line and a nearby TTC subway station.

As part of its financing for the deal, CAPREIT assumed a $34 million mortgage bearing a 1.93 per cent interest rate and maturing on Dec. 1. The vendors opted to accept 100 per cent of the residual purchase price in CAPREIT exchangeable LP units at a price of $56 per unit.

Although this is already an upscale property, CAPREIT does plan significant capital investments to modernize many of the systems.

Planned upgrades including LED lighting retrofits, low-flow bathroom fixture installations, in-suite smart thermostats and a chiller replacement to reduce energy consumption and contribute to CAPREIT’s goal of enhancing its environmental performance, including an estimated 40 per cent reduction in natural gas usage.

ABOUT CAPREIT

CAPREIT is Canada’s largest publicly traded provider of rental housing. The Toronto-based trust owns or has interests in approximately 70,000 residential apartment suites, townhomes and manufactured housing community sites across Canada, in the Netherlands and in Ireland.

It holds approximately $18 billion of assets under management globally.