Q Management LP (QMLP) has acquired 12 apartment buildings in St. Catharines, Ont. from Skyline Apartment REIT for $213.5 million.

273 Vine St, St. Catharines. Image courtesy of QMLP.

“We’ve been focusing on the greater GTA and our strategy has been to focus on markets where we see long-term strong demand for rental properties before that demand really gets stabilized,” said QMLP president and chief executive officer Dan Argiros.

“We see St. Catharines as a market that’s transitioning and going from a secondary rental market into a strong urban market.”

The deal, brokered by Primecorp Commercial Realty Inc. CEO Aik Aliferis, marks a return to St. Catharines for QMLP. Argiros said it sold its previous apartments in the city about 15 years ago.

QMLP’s new St. Catharines portfolio

QMLP’s latest acquisitions include a total of 1,157 suites in high-rise concrete buildings averaging around 40 years of age.

“The buildings are essentially located throughout St. Catharines in established rental neighbourhoods,” said John Lago, president of Q Residential, a wholly owned affiliate of QMLP that provides all property management functions across its portfolio.

“Eight of the buildings are within a one-kilometre radius and are part of one community, which we liked.”

Argiros said QMLP has a capital expenditure budget that will be used for such things as energy-saving initiatives, suite and common area enhancements, and improved security for the new acquisitions.

“It’s the standard formula we apply when acquiring a building. We buy it, we improve it and make it more energy-efficient. We renovate the suites and make it a long-term core stabilized asset.”

Skyline Apartment REIT and QMLP

Skyline Apartment REIT was launched in 2006 and its portfolio is comprised of nearly 200 properties across Canada. It entered the St. Catharines market in 2007. It will redeploy the capital from the St. Catharines portfolio sale toward other acquisitions and new-build properties in secondary and tertiary markets.

QMLP and Skyline Apartment REIT enjoy a good relationship and have done business together in the past, including QMLP’s acquisition of 11 buildings with 1,036 suites in downtown Hamilton for $173 million last year.

QMLP is a partnership between Conundrum Capital Corporation and Manulife Asset Management Private Markets, a division of Manulife Financial Corporation (MFC-T). It owns and manages 10,615 suites in 81 high-rise buildings located in cities across Ontario, including the Greater Toronto Area, Ottawa, London, Hamilton and St. Catharines. 

QMLP’s other activities

The St. Catharines portfolio acquisition coincides with the first closing of Q Residential Property Income Fund V (QRPIF V), which occurred in September. QRPIF V is the fifth fund in the multi-family sector launched by QMLP and is open to Canadian and international investors, both of which participated in the first closing.

“It has a combination of some of the same investors from previous funds along with a few new ones, just like all of our other funds,” said Argiros. “It will continue to buy in the greater Toronto and Hamilton and Golden Horseshoe regions.”

Arigiros said QMLP has the capacity to buy an additional $800 million worth of the “right properties at the right terms in the right markets” in southern Ontario.

“We’re constantly looking at our portfolio and constantly tweaking the positioning of the buildings. We invest a lot in the buildings to make them the best buildings in their market segment and we really focus a lot on energy initiatives with energy-reduction strategies, energy-efficiency, renewable energy and whatever we can find to make the buildings more energy-efficient.”

QMLP recently listed an apartment building in Ottawa and another one in Gatineau, Que. with Primecorp and TD Securities’ Real Estate Group.

“They’re two non-core buildings that are outside the parameters of our strategy,” explained Lago.