InterRent to buy 5 Montreal apartments, issue $175M in stock

IMAGE: Hampstead Towers is one of five purchases in Montreal this month by Ottawa-based InterRent. (Courtesy InterRent)

Hampstead Towers is one of five purchases in Montreal this month by Ottawa-based InterRent. (Courtesy InterRent)

InterRent Real Estate Investment Trust (IIP-UN-T) is purchasing five apartment properties in Montreal in a series of transactions valued at $204 million. The buildings will increase the trust’s portfolio in Montreal to 20 properties containing 2,735 units.

Ottawa-based InterRent did not release details about the specific properties, but said it has conditional agreements to purchase four different assets all within the City of Montreal. They would add 716 suites and approximately 15,000 square feet of commercial space to its portfolio, for $166 million.

The REIT intends to improve the properties through its asset repositioning program.

In addition, InterRent has an unconditional agreement, originally announced on June 5, to purchase Hampstead Towers. The 26-storey tower contains 121 residential suites and approximately 31,500 square feet of commercial space. It is being purchased for $38 million.

“These acquisitions are all concrete, high-rise assets well-situated within central Montreal,” said InterRent CEO Mike McGahan in a release. “In addition to providing significant value-creation potential through our repositioning strategy, these properties will provide operational synergies given the close proximity to existing properties in our portfolio.”

$175M share offering

As part of its financing for the purchases, InterRent announced it will issue a $175-million share offering.

Scotiabank, Desjardins Capital Markets and BMO Capital Markets will be the lead underwriters on the offering, which will include 12,500,000 units at $14 per unit. An over-allotment option allows for the purchase of an additional 1,875,000 units, which would result in an additional $26 million in proceeds.

“This equity offering allows us to fund these acquisitions while reducing the REIT’s leverage, better positioning the balance sheet as we move forward with some of the other attractive acquisition and development opportunities that we have before us,” McGahan said in the release.

The offering remains subject to standard approvals and is expected to close on July 9.

If the sales and offering proceed as planned, InterRent expects its debt-to-gross-book-value ratio to be approximately 37.6 per cent.

InterRent buying in Montreal

InterRent has been paying a lot of attention to Montreal of late. In February, it acquired five properties in the neighbourhoods of Westmount, Hampstead, and Notre-Dame-de-Grâce totalling 253 suites for $59 million.

InterRent at the time call the portfolio a “desirable suite mix” of bachelor, one-, two-, and three-bedroom apartments. That portfolio had undergone a series of capital upgrades including modernized elevators, new boilers, upgraded balconies and high-end in-suite finishes.

The most recent purchases, if they all close, would increase the REIT’s Montreal exposure to 27 per cent of its total suites.

“The City of Montreal has continued to experience significant population growth with an estimated increase of 1.6 per cent from 2017 to 2018, outpacing the Quebec average of 1.1 per cent and the national average of 1.4 per cent,” the REIT says in the release.

“Montreal also saw a 10-year low in unemployment rates (5.4 per cent) and approximately four per cent nominal growth of disposable income in 2018.”

InterRent sees the city continuing to grow, putting continued pressure on its housing market. The REIT said Montreal attracted 85.6 per cent of immigrants to the province last year.

Statistics Canada estimates 41,314 people immigrated to Montreal between July 1, 2017 and July 1, 2018, representing 13.6 per cent of Canada’s total immigration.

With 18 post-secondary institutions, the city also welcomed approximately 248,000 students, and according to Ryerson University’s Centre for Urban Research and Land Development, Montreal is the sixth-fastest growing metro in North America.

About InterRent

InterRent REIT is a growth-oriented real estate investment trust engaged in the acquisition and ownership of multi-residential properties. 

InterRent’s strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure and offer opportunities for accretive acquisitions.

The REIT owns and manages a portfolio of more than 9,000 suites across 15 cities in Ontario and Quebec.


Don is a veteran editor and journalist with three decades of experience in print and online news, including 20 years at the Ottawa Sun. Most recently, he was the Sun’s…

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Don is a veteran editor and journalist with three decades of experience in print and online news, including 20 years at the Ottawa Sun. Most recently, he was the Sun’s…

Read more





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