A newly constructed luxury apartment building that’s part of the William’s Court Kanata Lakes Apartments complex in West Ottawa has been sold for $48.7 million by Lépine Corporation to a joint venture partnership involving Killam Properties, KingSett Capital Inc. and AIMCo Realty Investors LP.
ROCK Advisors Inc. Brokerage represented Lépine and negotiated the deal for the 152-suite Kanata Lakes Apartments II, which sold for an average of $320,000 per unit. Suites average 85.5 square metres (950 square feet) and rent for an average of $1,785. The building is located at 1025 Canadian Shield Ave. and features 129 one-bedroom and 23 two-bedroom units.
More than 90 per cent of the apartments — which feature open-concept floor plans, condominium-style high-end kitchens, baths, flooring and fixtures, energy-efficient appliances, washer and dryer, central heating and cooling systems, smart electricity meters, landscaped green roofs and public penthouse floor terraces with barbecues, tables and loungers — are occupied.
A 196-stall underground parking lot connects to all buildings and includes energized stalls for electric vehicles, storage lockers and a bicycle room. The property features 24/7 security monitoring and a live-in superintendent.
Building facilities and future development
William’s Court Kanata Lakes Apartments also includes residences at 1175 Maritime Way and 1047 Canadian Shield Ave. as well as a fully equipped, two-storey, 1,620-square-metre (18,000-square-foot) clubhouse featuring an indoor saltwater pool, state-of-the-art fitness centre with full-time staff and leisure facilities including a spa-inspired lounge areas for tenants. Nature paths with an outdoor fitness circuit connect buildings and a central courtyard with a multi-station play structure.
Small retail and restaurant locations and two more residences will be part of future development on the site. The Kanata Centrum Shopping Centre is two blocks west of the property while Kanata Town Centre is just south of it on the other side of Highway 417.
Lépine Corporation is part of development company Groupe Lépine International, which was founded in 1990 by René H. Lépine Jr. and is loosely affiliated with Groupe Lépine — which was founded by his father in the early 1950s. Montreal-headquartered Groupe Lépine International has been involved in dozens of development projects in the United States, Canada, France, the Caribbean, the former Czechoslovakia and Russia.
“My client recognized the need for an upscale rental complex, with the population in Kanata growing rapidly,” said ROCK president and chief executive officer Derek Lobo. “Kanata is ideal for young professionals who work in the surrounding high-tech sector, as well as for couples who want to downsize.”
The Buyers: Killam Properties and affiliates KingSett and AIMCo
The property is now owned through a joint venture between Killam and affiliates KingSett Capital and Alberta Investment Management Corp. (AIMCo). Lobo says the buyers understand the need for a new, purpose-built rental development, which is especially attractive in a community offering a range of amenities for tenants in luxury buildings.
Halifax-based Killam is one of Canada’s largest residential landlords, owning, operating and developing multi-family apartments and manufactured home communities in Atlantic Canada and Ontario. It owns and operates 17,800 units in 199 properties in a real estate portfolio valued at approximately $1.5 billion.
KingSett co-invests with institutional and high-net-worth individuals through its growth, income and mortgage funds. The Toronto-based private equity real estate investment business has more than $5 billion of assets under management.
AIMCo Realty Investors LP is a limited partnership managed by Alberta Investment Management Corporation on behalf of certain clients. AIMCo is one of Canada’s largest and most diversified institutional investment fund managers, with an investment portfolio of nearly $80 billion.
“Having Derek and the ROCK team on board as the listing brokerage helped us to close the deal with Lépine and acquire a 50 per cent interest in this Kanata Lakes building,” said Killam president and CEO Philip Fraser of the Burlington, Ont. commercial real estate firm that focuses exclusively on apartment brokerage services and student housing. “We’re quite pleased with the outcome.”
New 10-year Canada Mortgage and Housing Corporation-insured mortgage
The purchase price was satisfied with a new 10-year Canada Mortgage and Housing Corporation-insured mortgage of $28.5 million and cash. In connection with the acquisition, Killam has agreed to issue $7 million in common shares to the KingSett and AIMCo joint venture. Proceeds from the private placement will be used by Killam to partially fund its proportionate share of the Kanata Lakes acquisition.
The KingSett and AIMCo joint venture now collectively owns approximately 10.8 per cent of Killam’s common shares.
“We welcome both KingSett, one of Canada’s most successful private equity investors in real estate, and AIMCo, one of the largest institutional investment managers in Canada, as JV partners and strategic shareholders,” said Fraser. “This relationship will enable us to increase our ownership interest in the Kanata Lakes development from a 25 per cent interest in Kanata Lakes I to 50 per cent for Kanata Lakes II. We look forward to exploring future growth opportunities with KingSett and AIMCo.”
Killam acquired a 25 per cent interest in Kanata Lakes Apartments I in May 2012 through a joint venture with Kuwait Finance House (KFH). KFH subsequently advised Killam that it’s not adding to its Canadian holdings and intends to exit the Canadian rental market, including unwinding its ownership interest in its joint venture with Killam. The timing for KFH’s exit is being assessed and Killam is considering its options regarding its interest in the joint venture.