Fengate Asset Management is acquiring two prime residential development sites along St. Laurent Boulevard and Richmond Road in Ottawa, where it is planning to build a total of five towers comprising about 1,900 residential units.
Fengate has already closed on 1209 St. Laurent Blvd., where it plans to partner with Canderel Management Inc., to build two 30-storey purpose-built rental towers containing more than 600 units. The partners hope to begin construction at this site within a year.
It also has an agreement to acquire 1047 Richmond Rd., where it will seek rezoning to allow for three towers and up to 1,300 residential units.
Fengate is making both acquisitions on behalf of its investment partners including the LiUNA Pension Fund of Central and Eastern Canada (LPFCEC).
Financial details for the acquisitions and the developments have not been released.
1209 St. Laurent was acquired in an off-market transaction from a local vendor.
Ottawa’s strong rental residential market
“Ottawa’s rental market has continued to outperform other urban areas with high rental growth and stable vacancy, even during the most difficult months of the pandemic,” said Fengate managing director and group head of real estate Jaime McKenna in an exchange of emails with RENX.
“Strong employment fundamentals, the city’s investment in transit and its undersupplied housing market makes Ottawa an attractive investment for Fengate and its investors.”
Both properties lend themselves to transit-oriented development, with 1209 St. Laurent within walking distance of Ottawa’s existing east-west LRT line, and 1047 Richmond Rd. close to a station along the western extension which is now under construction.
The 1209 St. Laurent property is located across the road from the St. Laurent Shopping Centre, one of the city’s largest malls.
“The area has easy access to transit, is within walking distance of numerous retail amenities and is seeing significant growth in the office sector, making it an ideal location to introduce new rental supply,” McKenna said.
“The proposed residential development for the site will offer units at market rent, with a range of suite types and sizes to cater to the needs of a larger market,” Andrew Konev, Fengate’s senior vice-president of development, added.
“We are in the initial stages of planning and we will be seeking a minor zoning amendment for the site. We are aiming for construction to start in the next 12 months.”
Fengate and Canderel partnership
The project will be the first for Canderel and Fengate as partners, though Fengate and LPFCEC have already created other joint ventures in Ottawa. They are currently working with Ottawa-based Regional Group on Greystone Village at 175 Main St., after joining that ongoing multi-phased development in 2019.
“This partnership with Canderel evolved over several years after looking at different projects and we finally found the right fit for our first real estate development together in this site at 1209 St. Laurent,” McKenna said.
“Canderel and Fengate have strong appetites for high-rise residential developments in large urban centres and with this alignment, along with our complementary skill sets, we felt the two firms would make a great partnership for this site.”
“We are thrilled to embark on this strategic partnership with Fengate and look forward to expanding the relationship into many more purpose-built rental projects in the near future,” said Ben Rogowski, COO of Canderel, in a prepared statement.
“The acquisition of 1209 St. Laurent Blvd. is a unique opportunity to contribute to a healthier, more inclusive community.
“We are excited about the potential of this site because we will be able to add modern and functional inventory in a part of the city where most of the rental inventory is over 40 years old.”
The 1047 Richmond acquisition
The 1047 Richmond property will be on a longer development timeline.
“The proposed development for 1047 Richmond Road includes three residential towers, ranging in height from 36 to 40 storeys, with approximately 1,300 residential units,” McKenna said.
“In addition to the residential component, Fengate plans to deliver retail and public park spaces that will be complementary to the surrounding community.”
The site is designated for residential density, but Konev said Fengate is applying for Official Plan and zoning amendments to allow for a project of this scope.
Fengate’s plan is to develop this property itself.
“Fengate will be developing this project, managing it from acquisition to final completion,” McKenna said. “Plans are underway for the current business to relocate and continue their operations on another site.”
The site is in an area which is ripe for such development. RioCan REIT is about to embark on a multi-phased redevelopment at its Lincoln Fields Mall just a couple of blocks away, with plans to replace the aging shopping centre with a mix of new retail buildings and up to five mixed-use and residential towers.
It also fits with one of Fengate’s key residential development strategies.
“The acquisition of the Richmond site is aligned with Fengate’s investment strategy to develop residential real estate assets in transit-oriented nodes,” McKenna said.
“In addition to the adjacent transit station, we saw this as an excellent opportunity to provide enhanced rental supply to the highly sought-after Westboro neighbourhood, which is full of dining, entertainment and retail options.”
About Fengate and Canderel
Fengate Asset Management is an alternative investment manager focused on real estate, infrastructure and private equity strategies with offices in Toronto, Oakville and Houston. Fengate Real Estate, a division of Fengate Asset Management, has been developing and managing real estate assets since 1974.
Canderel is a Canadian real estate investment, development, and asset and property management firm, with expertise in acquisitions, leasing and marketing, and construction.
Based in Montreal, Canderel has regional offices in Toronto, Ottawa, Calgary, Edmonton, Vancouver and Quebec City, and manages approximately 26.7 million square feet.
Since its founding in 1975, Canderel has acquired, developed and managed projects worth close to $19 billion.