The Q Residential Property Income Fund VI purchased the 34-storey, 321-unit Parkview Apartments, at 500 Duplex Ave. in Toronto. (Courtesy QMLP)

Q Management LP (QMLP) was involved in selling Continuum Residential Real Estate Investment Trust’s $1.73-billion multiresidential portfolio to Starlight Investments in late 2019, as well as two of the 10 largest commercial real estate transactions in the Greater Toronto Area last year.

However, everything is still business as usual, according to president and chief executive officer Dan Argiros.

“You’ve got to stick to what you know well and keep doing it over and over, and improve it a little bit more every time you do it,” Argiros told RENX. “That’s what we do. Every time you buy a building you learn a little more and you just try to tweak it a little better and don’t try to change it too much.”

QMLP, a partnership between Conundrum Capital Corporation and Manulife Asset Management Private Markets, was formed in 2016. The Toronto-based real estate asset and property management entity owns and manages 5,234 suites in 45 properties valued at $1.3 billion, according to its website.

Q Residential provides property management services to QMLP’s entire portfolio. There are properties in the Ontario cities of Toronto, Barrie, Brampton, Mississauga, Oshawa, Hamilton, London, Ottawa and St. Catharines.

“We’re strong believers in the mid-market, high-rise residential rental sector in the greater Toronto region,” said Argiros. “We like to buy existing buildings and make them better.”

Recent QMLP acquisitions

QMLP acquired the 18-storey, 325-unit Kipling Heights apartment building at 2777 Kipling Ave. in north Etobicoke from Minto for $93 million with its now fully deployed Q Residential Property Income Fund V in January 2020.

Q Residential Property Income Fund VI launched last year and had committed equity of $286 million with its first close in November.

“That money came from Canada and Europe, and mostly from existing investors, but with some new investors,” said Argiros.

QMLP has long-term relationships with many of its investors and has had a consistent group of them for 20 years. It started working with German investors in 2012 and German pension funds four years later, and it’s now seeing interest from investors in other European countries.

“Canada is still seen as a market that’s halfway between the U.S. and Europe in a lot of aspects,” said Argiros.

Q Residential Property Income Fund VI was used to purchase the 34-storey, 321-unit Parkview Apartments, at 500 Duplex Ave. in Toronto, for $157.98 million from Soudan Investments GP Inc. on Dec. 17.

The fund was also used to purchase the nearby 13-storey, 162-unit Erskine Heights apartment building at 141 Erskine Ave. in Toronto from Soudan Investments. The building is located near Mt. Pleasant Road and close to the Eglinton subway station, retail, banks and movie theatres.

Another purchase using the same fund is scheduled to close in the east end of Toronto later this month.

A second and final investment round for Q Residential Property Income Fund VI is expected to close in the second quarter of this year. A decision about launching Q Residential Property Income Fund VII will be made after that.

Adding value through upgrades

The 13-storey, 162-unit Erskine Heights apartment building at 141 Erskine Ave. in Toronto, owned by the Q Residential Property Income Fund VI. (Courtesy QMLP)

The recent acquisitions are similar high-rise concrete buildings that are close to 50 years old.

“They’re very well-located and well-built assets and they just need an update and upgrades to modern standards,” said Argiros. “We’re really strong believers in improving the overall liveability of a property and making a more comfortable and safer building.

“We’re very big on the environmental side with energy footprints. Our energy group has focused on maximizing efficiency. You can improve lighting and improve the quality of heating and save money if you do it right.”

Argiros said there’s still a good supply of product available for future acquisitions, where QMLP can update amenities and suites as necessary.

QMLP has established relationships with owners of small family-run apartment portfolios and many of their acquisitions come from those vendors because the properties fit well with the company’s business model.

“Virtually all of our properties have infill opportunities and we’ve always examined them, but we’ve never really pursued it aggressively,” said Argiros. “We’re not developers. We’re owners, operators and improvers. That’s our formula.”

Impact of COVID-19

COVID-19 hasn’t had a major impact on QMLP or its properties, according to Argiros.

“Our portfolio really hasn’t had much volatility in the last year. All of our assets continue to work well. We’ve had no significant change in our operating parameters in the last year.

“Rent collections have been fine. Occupancy is fine. We’ve had a few tenants come to us and ask for help, and we’ve worked with them.”

Argiros said a few short-term rent deferral requests have come from couples that want to use that money to help their adult-aged, financially struggling children through a rough patch.