Meridian is a 267-unit, purpose-built rental tower that will also include about 10,000 square feet of retail and office space in a commercial podium. The building is already under construction at 515 Cottonwood Ave. in the Burquitlam neighbourhood.
The partners said in interviews the deal is a 50-50 split, with Townline managing the construction process and both companies co-managing the building once it's operational. Construction is expected to complete in late 2024.
"Townline partners with equity investors for all of our larger projects, and we have successfully partnered with Nicola Wealth in the past," Dan Jekubik, chief financial officer with Townline, told RENX.
"Given our strategic alignment, Meridian was a good fit for our second partnership with Nicola Wealth. We believe the project’s success can be better achieved through collaboration."
It's not unusual for partners to be brought on mid-project, Jekubik said in an email to RENX. "Depending on the project, we may partner at the start of the project, middle, or upon completion if it’s a long-term rental asset like Meridian."
The deal with Vancouver-based Nicola Wealth helps to "de-risk the project."
It also provides convenience because Townline can "approach partners after the project is fully entitled, financed and under construction with a significant share of the construction budget fixed," Jekubik added.
Burquitlam development driven by mass transit link
Both sides of the partnership said access to the region's SkyTrain commuter rail system has helped convert Burquitlam into a high-density residential and commercial urban centre.
The Burquitlam neighbourhood has become a walkable, amenity-rich area, said Melanie Briggs, vice-president of sales and marketing with Townline.
"It's close to education facilities. . . . You're bordered by some really great cities all around," Briggs noted. "You've got Port Moody close by.
"You've got Coquitlam Centre. So, you're really within striking distance of a ton of amenities.
"One of the most important factors for us in deciding on this property was the five-minute walk to the Burquitlam Station."
Briggs said international and urban-to-urban migration continues to surge in the region.
“We chose to develop and construct one of the largest purpose-built rental towers in the Burquitlam area.
"Our goal is to meet the ever-growing housing demand while embracing a long-term investment strategy that resonates with our core values.”
NWRE vice-president of acquisitions Alex Messina agreed access to transit is one of the main drivers of Burquitlam’s emerging density.
The Evergreen Line SkyTrain extension, which connects Vancouver to Port Coquitlam through Burquitlam and Port Moody, opened in 2016.
Teams have collaborated in the past
NWRE also partnered with Townline on the Hudson Place One condo tower, the tallest building in downtown Victoria.
Both teams are like-minded when it comes to execution and strategy: "It was a natural fit and I can see ourselves doing more with them," Messina said.
NWRE is a subsidiary of Nicola Wealth focused on real estate asset management and acquiring and managing properties. Launched in 2005, NWRE’s strategy in Canada focuses on industrial, self-storage and multiresidential, including rental.
It also has an in-house development team focused on Nicola's own projects, according to Messina.
"The reason we are so bullish on multifamily rental is really demographics,” Messina said. “It's the population growth and it's the continued housing shortage.
"So, we see that there's going to be continued demand for well-located modern rental housing. This building effectively delivers — let's call it condo-quality product — that has a good amenity package and a transit-oriented location."
NWRE’s team often works with partners, Messina said, noting that coming on midstream is common. It allows them to co-finance projects of scale while avoiding the risks and delays that come with the permitting and the pre-construction process.
"There was a lot more surety on, kind of, the economic profile."
Founded over 40 years ago by Rick Ilich, Vancouver-based Townline focuses on residential developments in Metro Vancouver as well as Victoria.
It also has an office project currently in Arizona and a few sites in Los Angeles for future residential rental buildings.