Greyhill Real Estate Limited Partnership (RELP) has acquired five Northern Ontario purpose-built rental apartment buildings from Skyline Apartment REIT for $38.4 million as it expands its reach across the region.

The properties, four in Timmins and one in Haileybury, were acquired in two phases and combine to encompass 236 residential units and 6,770 square feet of commercial space at grade.

The expansion into Haileybury and Timmins reinforces Greyhill RELP's commitment to Northern Ontario by complementing its existing presence in Sudbury and North Bay. With the sale of the five properties, which Skyline Apartment REIT considered non-core assets, the trust has left the two markets.

“This was our first time entering Timmins,” Greyhill RELP managing partner Liam Dougherty told RENX. “We saw this portfolio as an opportunity to get some immediate scale with well-located, high-quality assets.”

Greyhill RELP’s portfolio is now comprised of 22 properties with 565 residential units and about 13,000 square feet of commercial space. It’s valued at approximately $83 million.

Greyhill RELP is part of Greyhill Capital Partners

Greyhill RELP is part of Greyhill Capital Partners, a Toronto-based alternative investments and financial advisory firm launched six years ago that prioritizes opportunities in real estate, technology and oral healthcare companies, and debt.

Greyhill RELP is a private equity firm specializing in acquiring and optimizing multifamily and commercial real estate assets in secondary markets. It has a focus on Northern Ontario and leverages its vertically integrated active management platform to create value for investors and contribute to local community development.

Greyhill RELP’s capital has come primarily through investments from friends and family members to this point, but it’s setting up a mutual fund trust that will enable it to expand its reach.

Good investment opportunities in Northern Ontario

Dougherty is also one of Greyhill Capital Partners’ three co-founders and its chief investment officer. He graduated from Sudbury’s Laurentian University and his family is from North Bay, so he was familiar with the two markets where Greyhill RELP first started investing. 

Dougherty thought better value and yields could be found in apartment acquisitions in Northern Ontario than in the markets on the outskirts of the Greater Toronto Area that he and his colleagues were originally looking at. That thesis has proven to be true so far.

“Value-add multifamily is what we're looking for in Northern Ontario markets,” Dougherty said. “Our growth strategy over the next 12 to 18 months would be to get to about 1,000 units in the markets we currently operate in.”

Those markets have assets that are “overlooked and undervalued,” according to Dougherty, who noted they also have less professional competition to bid against. They also provide opportunities for the 12-person, Sudbury-based property management team to maintain and improve buildings to drive rent growth.

“We have maintenance staff in all the markets we're in, and then the accounting, admin and management of the property managers are all in Sudbury,” Dougherty explained.

Adding to the portfolio

Greyhill RELP’s focus is on multifamily, although there’s ancillary ground-floor commercial space in a few of its properties. 

“We’re actively looking to continue to build our pipeline,” Dougherty said. “We have short- to medium-term visibility on quite a few opportunities. But we're also patient buyers, where we wait to make sure we buy things that make sense for us and our unitholders.”

Dougherty envisions Greyhill RELP’s Northern Ontario portfolio eventually growing to 2,500 to 3,000 units.

“We see a lot of public- and private-sector investment happening from an economic front, which we're bullish on over the next 10 years,” he said of the region. “That's not to say we won't look at other markets, but we have something that's working really well for us and we have a strong operating team.

"So we're going to continue to leverage that while we can.”

Greyhill RELP has explored getting into apartment development but Dougherty said it doesn’t make economic sense at the moment when it can buy existing stock for $150 per square foot and add value to it, while building new product would probably start at around $400 per square foot.

In addition to Greyhill RELP’s apartment buildings, none of which are higher than four storeys, it also owns two manufactured housing communities where residents own their mobile homes but lease the land they’re on.

“Through 2022, as interest rates were rising, this opportunity came up where we were getting very strong yield going into these properties,” Dougherty said of those acquisitions. “There were opportunities to create value and intensify these sites.”