Despite a cooling real estate market, Kin Capital Partners Inc. continues to invest in the Greater Toronto Area, with plans to build more multiresidential projects to meet the region's growing demand for housing.

Managing partner Jacob Iftah confirmed Kin Capital Partners, in partnership with Podium Developments and Secure Capital, has acquired a high-rise, mixed-use development project at Church and Gerrard Streets in downtown Toronto. The property is adjacent to Toronto Metropolitan (formerly Ryerson) University.

Iftah said the intent is to build a 43-storey residential tower with 463 units. He said Kin is the majority partner on this deal. 

“The opportunity from our perspective is enormous. Effectively, the shortage of housing around the university - one of the fastest-growing universities in our province - was very obvious and clear and hence we made the decision to proceed,” Iftah told RENX.

“It’s a very unique opportunity for us to come in and create more housing in a very much-needed node.”

He said plans have been submitted to the city. 

Kin investing in GTA multiresidential

Kin continues to invest in the GTA market despite the difficult macroeconomic times, he said, and this project will help provide additional options for students wanting to live close to the university.

“There’s a shortage of housing in our city. And wherever we can invest and create (a) more significant amount of housing, that’s where we put our capital to work,” Iftah added.

Recently, Kin also announced its partnership with Streamliner Properties, Centurion Asset Management Inc., and Kerbel Group Inc. in a master-planned community at 2900 Steeles Ave. E.

The Shops on Steeles is centrally located along a primary arterial corridor representing the border between Toronto and Markham.

It has close proximity to Hwy. 404 and other regional expressways and transit nodes, providing regional connectivity to downtown Toronto, Markham and surrounding nodes. 

“It has existing zoning for more than one million square feet and quite a bit of income on the property," Iftah said.

"We haven’t submitted anything yet to the city, so (I) can’t really talk about more specifics, but the plan overall is to increase the density on the site from the (zoning) basis that we have right now to what we believe a higher and better use, or more appropriate use, for the property from a density standpoint."

There's plenty to like about Toronto

Kin, a Toronto-based global real estate investor, asset manager and advisory firm, announced earlier this year it had partnered with Israeli-based Mivtach Shamir Holding to invest in major residential developments in the GTA.

Kin was launched in January 2020 as it identified a gap in the market on the equity side, particularly for larger-scale developments in the GTA. Iftah said the company has closed on five investments since it announced its equity platform in May this year.

“We have a dramatically lower amount of construction starts, which puts even more pressure on supply. We are seeing on the other end the government planning to bring record high amounts of immigrants into our city, basically to the country, but a lot of them come to our city,” he explained. 

There is also an interesting trend in job growth, Iftah noted.

“We’ve seen over the past year from a fundamental standpoint the stats on job growth, some U.S. companies coming to Toronto and especially in the tech sector, starting to offer Canadian employees  – because they’re all working remotely – U.S.-based salaries."

On the economic side of the equation, Iftah doesn't expect current conditions to endure.

“When you look at the fundamentals getting better from an investor’s perspective but worse from a resident’s perspective then nothing really changed in our thesis," he said of Kin's approach to development investing. "Real estate development is a process that takes a while.

"It’s not like if you buy land today, you can develop a building tomorrow. It takes a couple of years to go through the process. So from our standpoint, nothing materially has changed.

"We expect to see more pain before it will get better. . . . We don’t see blood on the streets. There may be some one-off opportunities to acquire interesting sites at good pricing, but the fundamentals are so strong.”

Kin Capital remains active 

Iftah did not go into any financial details of the investments, but said equity commitments vary depending on the final business plan. In some cases, it is a majority partner. In other cases, it is a minority partner. 

“We’ve invested in five projects to date (since launching the platform in March). So we’ve been active for six, seven months give or take. Maybe eight by now. We’ve been pretty active.

"The deal volume in terms of square footage that we’ve invested in is probably in the range of nine to 10 million square feet. We’ve got two master-planned communities and three other significantly large projects.

“We still have a pretty long way to go with our dry powder. So we’re still very much actively looking even though we know that a lot of our industry peers have kind of put the pencils down now to see how the world turns out on the other side of it.

"We’re still looking for more opportunities.”