Fitzrovia Real Estate has made its first new Montreal acquisition with an off-market deal with Brivia Group for the 19-storey, 178-unit Stanbrooke apartment building at 2061 Stanley St., just south of Sherbrooke Street West.

“This is an asset that we’ve been tracking for a while,” Fitzrovia founder and CEO Adrian Rocca told RENX. “It’s well-located, it's got great bones and we can reposition and beautify it through a renovation program.”

While Rocca said Fitzrovia had previously bought into Place Dorchester Apartments at 1160 Saint-Mathieu St., a building owned by an existing partner, he considers the Stanbrooke purchase to be the company’s first new capital deployed in the market. 

Fitzrovia is the asset and property manager for the 17-storey, 215-unit Place Dorchester, which was built downtown near Concordia University in 1970. It includes a fitness centre, an indoor rooftop pool and a four-storey, 36,000-square-foot commercial podium. 

Units in the Stanbrooke, which was constructed five years ago, range in size from studios to three bedrooms. Its amenities include a fitness centre, a rooftop terrace, work and meeting spaces, and indoor parking for cars and bicycles.

Rocca said Fitzrovia will refresh the common areas and amenities at Stanbrooke and Place Dorchester as part of repositioning and rebranding the properties.

Place Dorchester will also undergo some exterior reglazing and landscape work.

Move into Montreal made sense

Toronto-based Fitzrovia has $9.1 billion in assets under management and approximately 8,500 apartment units completed or at various stages of development. It partners with public institutions, pension plans and high net worth investors biased towards long-term cash-flow-generating assets.

Fitzrovia is looking to expand further in Montreal, which has the highest percentage of renters per capita of any major Canadian city, to add to its hometown base. It will also open a Montreal office headed by the recently hired Alex Galarneau-Micone in the new year as part of establishing a larger presence there.

“We think the city's got a lot of similarities to Toronto, which we know well, and we have institutional capital partners that want exposure to the Montreal market,” said Rocca.

“We really like the fundamentals long-term.”

CBRE represented Fitzrovia in the Stanbrooke deal.

While there haven’t been many recent major apartment transactions in downtown Montreal, CBRE vice-chairman Scott Speirs also told RENX institutional investors have a growing appetite for high-quality multiresidential assets in the city and Fitzrovia’s contributions will be welcomed.

“Fitzrovia is a best-in-class residential asset manager and developer with a focus on community, sustainability and exceptional living spaces,” Speirs told RENX. 

“Their arrival in Montreal is great news for our housing market. The bar has just been raised.” 

Fitzrovia DevCore Fund LP

Fitzrovia’s first real estate fund, the Fitzrovia DevCore Fund LP, had set a target of $920 million of equity commitments Rocca had hoped to reach before the end of this year after securing more than half of that total by February. 

Reaching that number has now been pushed into 2024.

Investors have become more reluctant as 2023 has progressed and questions have arisen about the state of the real estate market, but Rocca believes the goal will be attained.

“We have a number of additional investors that are in due diligence and we feel confident that we'll be able to raise some additional capital into that fund in a very difficult fundraising market,” he said. 

“We continue to see interest in not only our track record, but the macro story and our ability to execute within that macro story.”

The Stanbrooke acquisition wasn’t made with the Fitzrovia DevCore Fund LP, but with a separate account the firm has with an institutional investor.

New Toronto developments coming

Despite rising costs and some market uncertainty, Fitzrovia plans to move forward by launching six new Toronto apartment buildings in 2024:

• 39-, 37- and 29-storey towers encompassing 1,095 units in the 6 Dawes community near Danforth Avenue and Main Street;
• an infill development at 191-201 Sherbourne St. where proposed 49- and 47-storey towers combining for 863 units would join existing 23- and 17-storey apartments with a combined 596 units;
• and a 44-storey, 372-unit tower at 412 Church St., just south of Carlton Street.

While the announced removal of sales taxes from purpose-built apartment construction is welcomed by Fitzrovia, Rocca believes it has been somewhat neutralized by rising interest rates.

He thinks governments could still do more to support increasing supply to try to ease the housing crisis.

Fitzrovia is being very disciplined, patient and selective and isn’t eager to deploy capital on more new acquisitions at this point, according to Rocca.

Current Fitzrovia developments in Toronto

Meanwhile, The Elm and The Ledbury — 28- and 29-storey towers with a combined 542 units near Queen Street East and Church Street — should be completed by the end of March.

The Sloane and The Trafford — 28- and 30-storey towers with a combined 775 units at 3450 Dufferin St. across the road from Yorkdale Shopping Centre near Hwy. 401 — should be completed by the end of 2024.

Rocca said construction is progressing well on The Marlow, The Quinton and The Belvoir — 19-, 22- and 32-storey apartments with a combined 950 units at the southwest corner of Dufferin Street and Bloor Street West.