CAPREIT (CAR.UN-T) has acquired three recently constructed apartment properties in Montreal and Toronto and has a firm agreement to acquire a fourth building, also in Montreal, for a total of $192 million.

The moves come as Toronto-based CAPREIT continues to modernize its extensive portfolio of Canadian apartment properties, selling older, more established properties and recycling the proceeds into newly constructed assets.

“We’re pleased to be adding these four on-strategy, purpose-built rental apartment properties to our portfolio, recently constructed in two of our strongest-performing Canadian markets,” CAPREIT president and chief executive officer Mark Kenney said in the announcement Monday morning.

“Including all closed transactions, our acquisition volume comes to approximately $670 million completed in 2024, the largest number of new builds we’ve purchased in a single year to date. 

“Combined with our closed and upcoming divestments from non-core properties and other ancillary interests, as previously announced, total annual transaction activity will have reached approximately $3 billion by year-end. All this to say, we’ve been extremely focused on the execution of our strategy, we’re proud of the progress being made and we’re looking forward to concluding this transformational year as a newer and better company.”

The Montreal acquisitions

In Montreal, CAPREIT closed on two properties containing a total of 253 residential suites, and has a deal to acquire a 102-suite building, with closing expected in Q1 2025. The three concrete, purpose-built rentals were built between 2016 and 2020, all within 15 minutes walking distance of each other in the heart of Ville-Marie, a central neighbourhood in Montréal. 

The buildings, collectively known as the Mondev portfolio after their developer, are located between René Lévesque Boulevard and Saint Catherine Street, offering access to both transit routes and Highway 136. 

The 355-suite portfolio is being acquired for an aggregate $144 million ($543 per leasable residential square foot). CAPREIT closed on the acquisition of the first two buildings for $104.3 million, funded in part through the assumption of $63.6 million in mortgage debt at a blended rate of 2.2 per cent. 

The third property is being acquired for $39.7 million, and CAPREIT is to assume $22.9 million of mortgage debt at a rate of 2.8 per cent.

The Toronto acquisition

In Toronto, CAPREIT closed on the acquisition of a 61-suite building, constructed in 2021, in the Little Italy neighbourhood. The eight-storey, concrete building is located steps from multiple streetcar lines linking to local subway access points. 

It was purchased for $48 million ($935 per leasable residential square foot). CAPREIT assumed $29.7 million in mortgage debt, at a rate of 4.3 per cent.

“We’re purchasing these high-quality, core-located concrete buildings, constructed by reputable, build-to-hold developers, at strong pricing per square foot that is meaningfully below replacement cost,” Julian Schonfeldt, CAPREIT’s chief investment officer, said in the announcement. 

CAPREIT also announced it has deployed approximately $120.7 million into its Normal Course Issuer Bid (“NCIB”) program. In total, it deployed $313 million during November, remaining one of the most active buyers and sellers of properties in the country.

“We’ve been capitalizing on recent stock price performance and in November, pursuant to CAPREIT’s NCIB, we’ve repurchased $121 million worth of units at a weighted average price of $45 per unit,” Schonfeldt said in the release. “This represents an average discount to NAV of approximately 20 per cent, based on CAPREIT’s reported NAV per unit of $56 as of September 30, 2024. 

“We’ll continue to actively source and take advantage of all opportunities available for CAPREIT to enhance earnings for its unitholders, and we’re excited to maintain momentum on this mission as we head toward the new year.”

About CAPREIT

CAPREIT is Canada’s largest publicly traded rental housing owner. As at Sept. 30, the trust owned approximately 63,400 residential apartment suites, townhomes and manufactured home community sites, including approximately 15,400 suites and sites classified as assets held for sale, across Canada and the Netherlands.

Total fair value of the assets is approximately $16.9 billion, including approximately $1.9 billion of assets held for sale.