Calgary rental housing developer Wexford Developments is nearing a major milestone: $1 billion in completed project value as it sells a Victoria-area apartment building and breaks ground on another, in Penticton, B.C. 

The achievement comes as the company continues a period of strong growth driven by its focus on high-end rental housing across Western Canada and select U.S. markets. 

Kendal Harazny, co-founder and principal with Wexford Developments, told RENX the landmark reflects both an expanding development pipeline and sustained demand for quality purpose-built rental projects in key urban centres.

“We’re in our 12th year of business now, and with our next project breaking ground, we will approach $1 billion of completed project value in our business history, which is a pretty big milestone for us,” he said. “We’ve had some exceptional growth over the last five years, and it’s been a pretty fun ride.

"We just broke ground on a project in Penticton, and that project will push us over the $1 billion completed value of projects.”

The company was founded in 2014.

Repositioning what used to be a diverse portfolio

“When we started our business, we took over a portfolio that had a wide array of asset classes, including malls, land development and highrises. For about the last eight years, we’ve entirely focused on rental housing, sometimes with some retail in it,” Harazny said, noting it also has been involved with some student housing in the U.S.

“We’re in a lot of different cities. About a decade ago, we were looking at rental per capita in a lot of cities, and Canada was very underbuilt for rental housing," he continued. "It felt like there was a niche to build very nice buildings that people are choosing to live in. These are not renters by force; our residents are renters by choice.

"We build very unique one-off projects in the cities we enter. They’re not repetitive or cookie-cutter, and they attract high rents and a great renter pool. That’s what we’ve targeted since Day One, and we’ve had a lot of success targeting the higher-end resident.”

Penticton represents the ninth city in which Wexford has developed in B.C., Alberta and Arizona.

Harazny said in recent years CMHC financing has helped rental developers spark a construction boom. Today that program is not as attractive, but conventional lenders for strong developers are still very active. 

Overcoming challenges to build apartments

“We’re finding construction costs harder and seeing rents come down a little bit in many of our markets, but we’re finding ways to continue to build. Good construction partners and property management partners help, but it’s harder today than it was five years ago,” he said. “It’s coming back to the age-old saying that location matters. A lot of competitors were building apartments anywhere they could, not always in good locations or neighbourhoods, because they would still fill up.

"Those properties are struggling now. So you go back to location, location, location — and quality. If you have a good location and a quality building, your buildings are still staying full and rents are staying strong. Location and quality matter a lot more than they did five years ago when there were lineups to rent a single apartment.”

He said Wexford builds every building to hold forever, so any decision it makes is with that lens. 

“We’ll sell if we get a number that makes sense. One of the reasons our buildings have sold over the last few years, even when the market’s been soft for investment sales, is that we have a reputation for building extremely high-quality buildings. We’ll keep some and sell some — we’re pretty flexible."

The Adelaide apartments being sold

The Adelaide in Esquimalt, in Greater Victoria, is an example of that. The 105-unit purpose-built rental project is 100 per cent occupied, having achieved full stabilization immediately upon completion at top-of-market rents. 

It is being sold - a transaction scheduled to close today (March 27), “at what we believe to be a record-low cap rate for new wood-frame construction in this market – a testament to the institutional grade of the build.”

Wexford had purchased the development site at West Bay Terrace and Dunsmuir Road in 2021.

He said the project is being purchased by a private, long-time Vancouver real estate family. No financial details are being released.

About 18 months ago, Wexford sold its 61-unit Elva building in Calgary to Manulife Financial.

Current and upcoming developments

Harazny outlined active construction for Wexford:

• Hub on Campus: In partnership with Core Spaces, it has broken ground on a major student housing development comprising 818 units and 1,957 beds in 30 storeys in Tempe, Az.;
• Ellis (Victoria West): A 95-unit project featuring 3,000 square feet of prime ground-floor retail. It is on track to complete construction in June;
• Thera at McKinley Beach (Kelowna): A 165-unit lake-view rental development. This project features a best-in-class amenity package for Kelowna including the city's first purpose-built rental building with access to a private marina. Completion is scheduled for April;
• Elkwood (Flagstaff, Az.): Wexford is nearly complete on this 224-unit rental community, on 14 acres.

Harazny said new projects in its pipeline include:

• Essex (Penticton): A 147-unit rental just blocks from Okanagan Lake;
• Currie Barracks (Calgary): A 150-unit rental;
• Beltline Twin Towers (Calgary): A 600-unit, two-tower highrise in partnership with Oxford Properties near Stampede Park. Wexford is pursuing construction financing with a target groundbreaking this summer.