A joint venture comprising InterRent REIT (IIP-UN-T), Crestpoint Real Estate Investments Ltd., and Vestcor Inc. has acquired a two-tower, 605-apartment property in Brampton which also offers “immediate” opportunity for a major multi-tower densification development.
The property comprises 2 and 4 Hanover Rd., in the Bramalea area of the City of Brampton, which is in the northern portion of the Greater Toronto Area. The acquisition price was $185.5 million according to the announcement.
“We are extremely excited to expand our footprint within the GTA,” InterRent president and CEO Brad Cutsey said in the announcement. “Not only are we looking forward to offering our unique resident experience and to help contribute to the Brampton community, but this acquisition also puts us in a great position to contribute to potential new supply in a constrained market.”
InterRent has a 10 per cent stake in the investment while Crestpoint and Vector hold the majority position. InterRent has an option to increase its ownership to a one-third stake within the first two years after closing.
InterRent will also act as property manager. The property was formerly operated by GWLRA Residential.
The 2 and 4 Hanover Road property
The existing assets are two concrete high-rise towers of 18 and 22 storeys, with 281 and 324 suites respectively. The property was constructed circa 1984 and is fully air conditioned through a central cooling system.
The apartments feature larger-than-average designs averaging over 900 square feet, with two thirds of the suites being two-bedroom units. 2 & 4 Hanover also features a range of amenities including outdoor pool, barbecue area, playground, gym, car wash, and multi-purpose rooms.
The property is just off the Queen Street corridor and is adjacent to the Bramalea City Centre regional shopping centre, which offers over 1.5 million square feet of commercial space. It is just west of Chinguacousy Park, a 100-acre natural outdoor area.
Funding for the acquisition is a combination of cash and the assumption of a $100 million existing mortgage with a major institutional lender. The long-term financing features interest-only payments at 2.17 per cent and a term to maturity of approximately six years.
The purchase adds to an expanding portfolio in the Greater Toronto Area for Ottawa-based InterRent.
Potential for additional towers
“Beyond the existing high-rises, the acquisition also offers immediate opportunity to deliver additional and much-needed rental supply to the GTA,” the InterRent release states. “The community is located on approximately 10 acres of land and with zoning approvals in place for over 350,000 square feet of additional density.
“This will be much needed for the City of Brampton in particular as it is one of the Greater Toronto Area’s burgeoning suburbs, having grown 10.6 per cent from 2016 to 2021, outpacing provincial growth of 5.8 per cent for the same period. Brampton is well positioned to continue this growth trajectory as it attracts a disproportionate share of Canada’s ambitious immigration targets.”
A previously submitted plan for the site includes two new towers of 28 and 12 storeys containing 395 additional apartments. It was designed by IBI Group for GWLRA.
The new towers would stand 299 feet and 139 feet tall respectively.
InterRent REIT is a growth-oriented trust whose 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.
InterRent's primary objectives are to use the proven industry experience of the Trustees, Management and Operational Team to: (i) to grow both funds from operations per Unit and net asset value per Unit through investments in a diversified portfolio of multi-residential properties; (ii) to provide Unitholders with sustainable and growing cash distributions, payable monthly; and (iii) to maintain a conservative payout ratio and balance sheet.