Starlight’s Western Canada Multi-Family (No. 2) Fund has an agreement to acquire a six-storey mid-rise building with 106 apartments in Langford, B.C., a $43.5-million transaction which will fully deploy equity from the fund’s initial public offering.

The property was completed in 2018 and is located at 728 Meaford Ave. in the Victoria-area community.

"We are pleased to add the final high-quality multifamily community to the fund at below replacement cost and to complete the deployment of the proceeds from the fund's initial public offering," Daniel Drimmer, president and CEO of the fund, said in the announcement.

"With the addition of 728 Meaford Avenue, the fund will own nine properties in the municipalities of Langford, Vernon, Nanaimo and Langley, allowing for operational efficiencies across the fund's portfolio.”

Known as Meaford Heights, the building has been operated by Skyline Living. According to Skyline’s website, the property contains a range of apartments from bachelors to three-bedroom units.

Starlight plans to satisfy the purchase price by:

• assuming the vendor's CMHC-insured $20.1-million mortgage at an interest rate of 2.43 per cent;
• second mortgage financing of $8.4 million from a “nationally recognized lender”; and
• $15.9 million in cash.

Starlight expects to close the acquisition by Nov. 14.

Western Canada Multi-Family (No. 2) Fund

The Starlight Western Canada Multi-Family (No. 2) Fund was established in November 2021 to acquire, own and operate a portfolio of “newer vintage” apartment properties in British Columbia and has focused on the Vancouver and Victoria areas.

The initial offering closed in February 2022.

It raised $130 million In equity and now owns a portfolio comprising eight properties and 838 income-producing apartments in the four cities (exclusive of 728 Meaford).

In its Q2 2023 financial statements released in August, the fund reported a positive outlook for the multifamily sector in its target markets.

“The primary markets, including Langford, Nanaimo, Vernon and Langley, possess attractive qualities such as some of the fastest-growing populations in British Columbia with strong demographics of highly educated young professionals and families, diverse local job sectors, desirable dwelling locations with waterfront and mountain views, as well as significant economic growth and a limited supply of multifamily suites creating an environment for continued demand for suites which drive occupancy and rent growth,” the report stated. 

“The fund believes it is well-positioned to take advantage of increasing levels of immigration and favourable conditions.”

It reported a gross book value of $358.3 million for the properties owned as of June 30 and a debt-to-gross-book-value ratio of 67.1 per cent – down 2.6 per cent from Dec. 31, 2022.

The fund had increased its fixed-rate debt to 81.9 per cent, allowing it to lower its weighted average interest rate from 4.35 per cent to 3.72 per cent year-to-date.