Prairie View Pointe in Winnipeg, a new apartment complex acquired by Marwest Apartment REIT. (Courtesy Marwest)

Marwest Apartment REIT (MAR-UN-X) has agreed to purchase the Prairie View Pointe property in Winnipeg from Ironclad Properties for $42 million.

The investment grows the fledgling REIT’s assets by 42 per cent and reflects the Winnipeg-based company’s pride and confidence in its city, said CEO William Martens.

“We’re very excited. It’s a great addition, a great asset. We love it. It’s right here in our hometown. There’s a strong market here,” Martens told RENX.

The Prairie View Pointe Property consists of 153 apartment units located at 2756-2766 Main St., close to a golf course and shopping centres.

The acquisition adds to Marwest’s portfolio of three other apartment buildings, all located in Winnipeg, acquired since the REIT’s inception in April 2021. It is slated to close by the end of October.

Marwest’s first third-party acquisition

It does mark a first for the REIT, however: This is Marwest’s first third-party acquisition.  The three previous acquisitions were of properties that were controlled or managed by other members of the Marwest Group of Companies and were rolled into the REIT at a competitive price, Martens said.

“People want to see we are working on behalf of our shareholders. This acquisition is great for our unitholders because it adds cash flow. As we add more units, we become more profitable as a REIT,” he said.

Marwest intends to fund the acquisition via a combination of cash on hand in addition to proceeds from the early refinancing of its Brio Phase 1 property mortgage and a second mortgage of $4 million on its Kenwood property. Marwest Asset Management Inc. will waive the $420,000 acquisition fee, the REIT said.

The company continues to look for investment opportunities in Manitoba and other locations in Western Canada.

Investing in Winnipeg demonstrates more than civic pride. It’s a good business decision, Martens said.

“The rental market here in Winnipeg is doing very well. All of our assets in the REIT are close to fully occupied,” he said.

Apartment demand remains strong

The increase in demand for apartments benefits from in-migration from other provinces and other countries, and from challenges faced by the housing construction industry, Martens said.

“People can’t afford homes with interest rates where they’re at. Even for the homebuilders, trying to build homes on time for people . . . they can’t get the manpower they need and the supplies they need. It just makes the rental market that much stronger,” he said.

Martens pointed to a recent Globe and Mail editorial that highlighted the housing shortage in Canada.

The editorial said Canada is not building enough homes for its booming population and urged governments to promote rapid construction of multiresidential housing instead of continuing to favour single-family detached homes.

Martens said the editorial shows “the idea of being in the rental market is a great investment for many years to come.”

Prairie View Pointe Property is brand-new and the REIT’s other buildings have all been built since 2007. While that keeps repair costs low for now, Marwest knows that equation will change over time.

“We are stewards of our unitholders’ capital. We’re going to protect them and protect our assets and make sure they last forever. We’re going to always keep them in good condition,” Martens said.

Marwest Apartment REIT

Marwest Apartment REIT is a separate entity from, but has a relationship with, the family-owned Marwest Group of Companies, founded more than 50 years ago by Martens’ grandfather, also named William.

Martens sits on the board of the Marwest Group of Companies with his cousins Cornelius, Armin and Karl — all with their own corporate responsibilities and roles.

The group “has engaged in development, construction and management of income-producing properties, prioritizing excellence in quality and service. Today, Marwest proudly boasts over $1 billion of developed and built commercial, industrial and residential real estate,” according to the corporate group’s website.

Corporate synergy includes having Marwest Management Canada manage all the properties owned by Marwest Apartment REIT.

However, the REIT is not committed to buying properties developed by the construction arm.

“Marwest REIT will look at this as a possibility, but no guarantees, and only if the independent board of directors deemed the transaction in the best interest of the REIT,” Martens said.

Marwest building downtown tower for Artis

Marwest’s construction company is currently building a 42-storey, 395-unit apartment tower at 300 Main St. for the property’s owners, Artis REIT. The property will not be managed by Marwest.

“We’re building the largest high-rise tower in Manitoba right now. It’s coming along very well,” Martens said.

The second tower has been planned for decades to complement the office tower completed in the 1970s as part of what was then called the Trizec development at Portage and Main.

An Earl’s restaurant and a Good Life fitness centre at the tower’s base are already open. A completion date for the remainder of the project has not yet been made public.