Empirio Capital's acquisition of a second multifamily property in Edmonton has allowed the young but growing firm to make a structural change in its property management in the city, bringing those operations in-house as it scales up.

Empirio, which is based in Vancouver, purchased a newly built and fully leased 133-unit rental townhome property in Edmonton from Impact Properties for $47.14 million, increasing its holdings in a neighbourhood where it also owns another property. Homes at McConachie Villas, in a growing residential district at 17620 65 St. NW, average 1,508 square feet.

Eighty-three per cent of the homes have three bedrooms while the rest have two.

“It’s about a block away from our last acquisition, which is Arcadia Place,” Empirio director of asset management Wendy Cheung told RENX. “However, in terms of age, Arcadia is several years old now and McConachie is brand new.”

Empirio’s property management was previously handled by third parties, but the Vancouver-based firm has decided to bring it in-house for the 159-unit Arcadia Place and McConachie Villas.

Impact Properties is a partnership between PK Developments and GSK Properties. 

Edmonton-based PK is a boutique real estate development and investment management company that specializes in multi-family rental housing, with a focus on townhomes and apartments. 

GSK is also based in Edmonton. It has a portfolio of 11 purpose-built rental properties in its hometown and five others in the Alberta communities of Spruce Grove, Stony Plain and St. Albert.

Transaction terms

Calgary-headquartered GreenBirch Capital was the mortgage broker for the transaction, which utilized Canada Mortgage and Housing Corporation MLI Select financing involving a 95 per cent loan-to-purchase-price ratio, a 3.38 per cent net interest rate and a 50-year amortization.

Since McConachie Villas is newly built with a reasonably high degree of energy efficiency, GreenBirch founder and president Nadeem Keshavjee told RENX it received enough points to qualify for MLI Select and only needed 15 per cent of its units to be deemed affordable. 

Townhouse complexes are in high demand in Edmonton and many such properties are selling for more than $400,000 per door, according to Keshavjee. So, he thinks acquiring McConachie Villas for $354,450 per unit at a five per cent capitalization rate was a good deal and noted that Empirio moved quickly on the opportunity.

Edmonton’s purpose-built rental apartment market

“Rents have softened in a number of other markets in the country, but Edmonton is a market where there hasn't really been as much softening,” Keshavjee told RENX. “I think we're also seeing a number of out-of-province buyers coming into Edmonton.”

One of the reasons apartment investors like Alberta is its lack of rent controls. Keshavjee said that’s leading to strong demand for properties in the $30-million to $70-million price range. Supply is tight, so buildings are usually snapped up quickly when they become available. 

GreenBirch previously worked with Empirio on other acquisitions. Keshavjee said Arcadia Place and Calgary’s 263-unit Cedar Ridge Apartments — acquired from Canadian Apartment Properties REIT for $53.88 million in late summer 2023 — have performed well.

Empirio’s residential real estate portfolio

Two-year-old Empirio Capital is focused on larger-scale multifamily rental as well as light industrial, retail and office properties as part of a buy-and-hold cash-flow generating strategy. 

Empirio operates with a core team of six people and, to this point, Cheung has been the sole investor in its multifamily residential real estate portfolio. In addition to McConachie Villas, it also includes:

• the low-rise Arcadia Place apartment building in Edmonton;
• the Cedar Ridge Apartments property, which sits on a nine-acre site at 135 Lynnview Road S.E. in southeast Calgary;
• the 12-unit Peace River complex and the 15-unit Aurora property in Fort St. John, B.C.
• and the 112-pad Bradd Kerr Mobile Home Park and a 62-unit residential property in New Brunswick.

There’s nothing in the immediate acquisition pipeline, but Cheung plans on buying more properties in 2026.

“We are growing, especially in Edmonton and Calgary, so our strategy is to acquire more in the years to come,” Cheung said. “We’re trying to bring in one or two assets a year and create a strong management team.

“Through the scale of what we're creating, we'll be able to bring in more investors to participate.”

There’s intensification potential for excess land on some of Empirio’s properties, so Cheung said the company is also considering development.

Cheung’s other companies

Cheung also heads two other investment companies with real estate portfolios. 

Peak Performance Investment was started in 2008. It owns residential properties in British Columbia and Alberta.

Alture Properties was created two years later to focus more on land subdivision and construction. It has investments in those same two provinces as well as in Toronto.