InterRent REIT (IIP-UN-T) has created a joint venture with Crestpoint Real Estate Investments to enter the Vancouver market with the $292.5-million acquisition of 15 rental apartment properties, comprising 614 apartments.
The two investors will be 50-50 partners in the acquisition and InterRent will become the manager of the properties, which are spread across several Metro Vancouver municipalities.
The acquisitions are scheduled to close on Jan. 28.
The properties are being financed via a combination of cash and new short-term debt of approximately $190.1 million.
“We are thrilled to enter the Vancouver market, with scale, through the acquisition of this institutional-quality portfolio that is extremely well-located,” said Mike McGahan, CEO of InterRent, in the announcement Monday morning. “The Vancouver rental market continues to exhibit strong, sustainable market fundamentals, with exposure to a growing tech sector.
“We look forward to enhancing these properties with our best-in-class management platform, customer service and community-focused approach. This is a market we have targeted for a long time.”
The InterRent, Crestpoint portfolio
Nine of the properties are concrete mid-rise apartments and the remaining six are wood-frame apartments.
The properties were previously owned/managed by Hollyburn Properties. The private company, which was founded in Vancouver and now also has an office in Toronto, had previously placed 10 of the properties on the market as a portfolio during the fall of 2020.
The properties are mainly mid-rise buildings in premium locations in the Metro Vancouver submarkets of the West End (six properties, comprising 265 units), Kitsilano/Point Grey (three properties, 111 units), Marpole (four properties, 178 units), and South Granville (two properties, 58 units).
The largest buildings are the 72-apartment 8675 French St. in Marpole, and the 61-apartment 1580 Haro St. in the West End. The smallest is the 14-unit, concrete-construction 4640 W. 10th Ave. in West Point Grey.
The properties are situated in core locations within prominent neighbourhoods offering high walkability scores, access to transit, major employment, recreational amenities, universities and downtown Vancouver.
The new partnership
The partnership offers synergies for both companies. Crestpoint is already heavily invested in Metro Vancouver in the industrial, office and retail sectors, while InterRent has extensive multifamily knowledge and holdings across Canada.
“The multifamily space has been an area of interest for Crestpoint and to enter this sector for the first time through a well-diversified portfolio in one of the most sought-after cities in the world is a tremendous opportunity,” said Kevin Leon, president and founder of Crestpoint.
“There is a real benefit to combining forces with a highly reputable, experienced operator like InterRent and the addition of these assets should provide long-term benefits to Crestpoint’s growing portfolio while providing a springboard to accumulate numerous properties in the multifamily sector across Canada.”
The acquisition is the second major announcement for Crestpoint in the past week. Last week, it acquired the South Surrey Business Park in Metro Vancouver, as well as the Centre on Barton retail big-box property in Hamilton.
For its part, InterRent is also the second major Ottawa-based multifamily investor to enter the Vancouver market in recent weeks. Minto Apartment REIT has invested about $12 million into the Lonsdale Square development by a Darwin Properties affiliate, with an option to purchase upon stabilization.
About InterRent and Crestpoint
InterRent REIT is a growth-oriented real estate investment trust focused on the acquisition and ownership of multiresidential 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.
Crestpoint Real Estate Investments Ltd. is a commercial real estate investment manager with $5.3 billion of gross assets under management. Its headquarters is in Toronto.
Crestpoint is part of the Connor, Clark & Lunn Financial Group, a multi-boutique asset management company that provides investment management products and services to institutional and high-net-worth clients.
With offices across Canada and in Chicago, New York and London, Connor, Clark & Lunn Financial Group and its affiliates manage over $85 billion in assets.
EDITOR’S NOTE: This article was updated after publishing to include information about the previous owner of the portfolio.