Starlight buys Akelius’ GTA apartment portfolio for $176.8M

IMAGE: Starlight Investments is the new owner of this 112-unit apartment building at 74 Curlew Ave., in Toronto. (Courtesy JLL)

Starlight Investments is the new owner of this 112-unit apartment building at 74 Curlew Ave. in Toronto. (Courtesy JLL)

Akelius Canada has sold 12 of the 13 Greater Toronto Area apartment properties it put on the market in April to Starlight Investments for $176.8 million.

The properties include 19 buildings and 626 suites. Many of the properties were peripheral to Akelius’ core portfolio and originally acquired in conjunction with other properties

The deal was brokered by a team led by JLL Capital Markets’ multi-family investment executive vice-president and national team lead Michael Betsalel.

High interest in Akelius portfolio

At an average of $281,529 per door, Betsalel said the units sold for around the price he had expected.

“The cap rate was higher than market, at around 3.8 per cent, based on a lot of stabilization having already occurred,” he added.

Betsalel said there were five portfolio bids and 13 individual bids from asset management firms and private capital sources. He noted the buildings were likely too small for real estate investment trusts or institutional investors.

“There were many offers and part of the reason they went for this bid was that it was clean and from one buyer,” said Betsalel. “There was less transaction risk.”

A separate deal for the 13th Akelius property, a 37-unit site at 1420 Kingston Rd. near the East York/Scarborough border, is expected to close next month.

“It’s becoming more difficult for private capital to compete because the values are higher and you need a lot more financing,” Betsalel said of the hot market for purpose-built rental properties in Toronto.

Apartments received recent upgrades

Each of the properties purchased by Starlight include on-site laundry facilities. The portfolio had received approximately $12.5 million in recent structural and mechanical upgrades by Akelius before the sale.

The properties will be managed on-site by either Sterling Karamar or Greenwin Inc.

Starlight president and chief executive officer Daniel Drimmer told RENX he preferred not to comment on the transaction.

Starlight posted this statement from Drimmer on its website:

“We are extremely proud of the acquisition of this portfolio. The properties represent Starlight’s commitment to offering rental living in the most sought-after neighbourhoods of Toronto. The acquisition of these 19 buildings further enhances our presence throughout the city.”

Starlight is a privately held, Toronto-based, full-service, multi-family and commercial real estate investment and asset management company. It manages more than $11 billion of direct real estate and real estate investment securities.

The portfolio consists of approximately 36,000 multi-residential units across Canada and the United States and more than 6.2 million square feet of commercial properties.

What Starlight purchased

Here are the properties that Starlight acquired:

* 580 The East Mall: 122 units with an average size of 1,001 square feet. Thirty-seven per cent of the suites have been renovated and the building has received capital expenditures of $3.8 million;

* 2701 Eglinton Ave. W.: 49 units averaging 610 square feet. Sixty-one per cent of the suites have been renovated and the building has received capital expenditures of $927,000;

* 2040 Eglinton Ave. W.: 37 units averaging 690 square feet. Forty-nine per cent of the suites have been renovated and the building has received capital expenditures of $600,000;

* 310-312 Lonsdale Ave.: 35 units averaging 665 square feet. Eighty-six per cent of the suites have been renovated and the building has received capital expenditures of $1.1 million;

* 778 Broadview Ave.: 39 units averaging 370 square feet. Sixty-seven per cent of the suites have been renovated and the building has received capital expenditures of $453,000;

* 260 Gamble Ave.: 26 units averaging 554 square feet. Seventy-three per cent of the suites have been renovated and the building has received capital expenditures of $445,000;

* 338-342 Donlands Ave.: 36 units averaging 401 square feet. Forty-seven per cent of the suites have been renovated and the building has received capital expenditures of $359,000;

* 5-9 Stag Hill Dr.: 67 units averaging 747 square feet. Sixty per cent of the suites have been renovated and the building has received capital expenditures of $900,000;

* 327 Chisholm Ave.: 20 units averaging 588 square feet. Forty per cent of the suites have been renovated and the building has received capital expenditures of $183,000;

* 2367 Queen St. E.: 24 units averaging 300 square feet. Fifty-eight per cent of the suites have been renovated and the building has received capital expenditures of $705,000;

* 74 Curlew Dr.: 112 units averaging 720 square feet. Twenty-four per cent of the suites have been renovated and the building has received capital expenditures of $1.5 million;

* and 2029-2055 Victoria Park Ave.: 60 units averaging 1,020 square feet. Thirty-three per cent of the suites have been renovated and the building has received capital expenditures of $1.2 million.

About Akelius

Akelius Canada employs more than 100 out of its Toronto and Montreal offices.

It entered those markets in 2011 and 2014, respectively. While the company is evaluating new Canadian markets, its focus remains on properties in those two cities, where it owns more than 4,000 apartment units.

All of Akelius Canada’s properties are managed in-house.

Akelius Canada is a subsidiary of Akelius Residential Property AB, the largest listed real estate company in Sweden.

It was founded in 1994, employs more than 1,200 and owns 50,000 apartment units in Sweden, Canada, Germany, the United States, the United Kingdom, France and Denmark.

Akelius Residential Property AB says its total asset value is around $18 billion.

RELATED ARTICLES:

* Akelius selling 13-building Toronto apartment portfolio

* Akelius buys four Montreal apartment buildings

* Swedish firm aims to buy 10,000 apartments in next 3-5 years

 


Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

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Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

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