Westmount Park Investments and HighSide Companies have partnered to act on hundreds of millions of dollars of commercial and multiresidential real estate development opportunities in the United States and Canada.

Maple, Ont.-based Westmount Park is a family office that has built, operated and invested in a variety of industries, companies and properties for a half century. One real estate project it was involved with was a partnership with Empire Communities on Rain & Senses Condos in Oakville, Ont., which was completed in 2018.

“We’ve had many partnerships like that throughout the years,” Westmount Park chairman and CEO Romeo Di Battista Jr. told RENX.

“Now we've internalized that by investing in HighSide and investing in the platform, and having all our own people, whether it's an industrial division, an extended-stay division, a multires division, and so on.”

Denver, Colo.-based HighSide formed with four projects in 2019 to leverage the real estate experience of its founding partners, CEO Justin Roberts and president Kevin McKinney. It’s been involved with approximately three dozen hotel renovations and does full ground-up development for both itself and third parties.

HighSide has grown from four people to 32 across its investment, development and project management businesses in four years.

The company is subletting space in Vaughan, Ont. for a Canadian office led by development vice-president Mario Greco that will be adding a few more employees this year. The Canadian operation will focus on the same verticals as its American counterpart: real estate investment, development and project management. 

The partnership’s formation

Di Battista and Roberts were introduced last year by Sean Matthews, the CEO of Denver-based audience engagement and marketing firm Agent E, which is affiliated with Westmount Park. Matthews thought the two men and companies would be a good match. He was right.

“I just fell in love with everything he stands for: his honesty; his integrity; his discipline,” Di Battista said of Roberts. 

Westmount Park took a 50-per cent equity stake in HighSide and there are ambitious plans for the partnership, which took about eight months to come together.

“One thing I liked about Romeo and Westmount is they tend to think even bigger than I do,” Roberts told RENX. “It’s a relief that I don't have to convince anybody about what we want to do.”

The partners have been able to raise capital in a difficult, rising-interest-rate environment and close on American extended stay hotel development sites in close alignment with Choice Hotels, where Roberts was formerly vice-president of real estate. 

Roberts said HighSide has been working with Richardson Wealth on raising capital and is also taking advantage of Westmount Park’s existing network and relationships.

HighSide’s development plans

The partnership is already involved with: the development and acquisition of extended stay hotels, with more than 20 projects valued at over $350 million in the pipeline; more than $200 million of multifamily residential development in the pipeline throughout the U.S.; and several early-stage Canadian development projects in self-storage, light industrial and other asset classes. 

The goal is to expand the extended stay hotel business into Canada. Roberts would like to build a portfolio of 70 to 100 assets over the next five to seven years.

A new Westmount Park headquarters, which will include offices for HighSide, Agent E and other subsidiary companies, will be built in Maple. Di Battista said it will incorporate a historical house with a modern two- or three-storey addition.

A self-storage facility is planned near the Finch West subway station in Toronto, with a goal of expanding that business in both countries. 

A light industrial building will be converted to industrial condominiums in Toronto’s Rexdale area.

Plans are being finalized to seek approval to build a 188-boat marina and  a master-planned mixed-use community with multiresidential, commercial and retail elements near Orillia, Ont.

Future acquisition and development opportunities

“The for-sale market in Canada today is tough, given where the banks are, and we think there's a for-rent development and investment play in Canada,” Roberts said. 

Other projects are also under consideration, according to Di Battista.

“We expect to become incredibly dominant in the next 12 months, not just from new deals but from a lot of limping ducks out there that have overextended themselves with different projects,” he said. “The clock's ticking. 

“Their costs have gone up dramatically, so a lot of projects are coming to the table where people are truly stuck. They have to shut things off or they might have to take a partner on. This is going to speed up our process by being able to pick what we feel is best for us to jump into.”

Launching a debt fund

HighSide is looking to launch a debt fund in Canada and the U.S. in Q3 to enable it to move quicker on transactions, with equity from the investment community instead of having to rely on banks.

“We think there's an opportunity in the secondary financing market; so preferred equity, mezzanine financing and potentially even construction financing, but I think our sweet spot is probably mezzanine and preferred equity,” Roberts explained. 

“Banks are pulling back from 75 per cent loan-to-cost to 60 or 55 per cent loan-to-cost, and that creates a lot of gaps in capital stacks for investors, owners and developers. I think that we can get really attractive returns and yields in that space.

“We’ll do it in asset classes that we have a good handle on so that, if there is a business plan issue, we understand what the issue is and how to solve it so our investors are taking as little risk as possible.”

Confidence in the future

“We're massively opportunistic and we're in the market,” Di Battista said. “There's no project too small or too big for us to look at if things make sense.”

Roberts expects HighSide’s 2023 revenues to be double what they were in 2022 and for the company to have a head count in the high 40s by the end of the year — primarily in the U.S.

“We have an embarrassment of riches when it comes to talent within the organization,” said Roberts. “We’ve been successful in recruiting a lot of people here from some of our competitors and other places, and that has been a real windfall, so we are well-positioned.”