Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) has unveiled six acquisitions of apartment buildings and three non-core property divestments totalling $477 million in transactions, a move aligned with its ongoing portfolio modernization strategy.
In Q2, CAPREIT completed and closed the acquisitions of properties across Canada totalling $387.4 million. It also closed or has entered into agreements to close three non-core Canadian properties to non-profit organizations for a total of $89.3 million.
The largest publicly traded rental housing company in Canada, CAPREIT announced in July it would sell its $740-million portfolio of manufactured housing communities to focus purely on being an apartment REIT.
Injecting liquidity into the company to pay off its revolving credit line, modernizing its portfolio and concentrating on the multifamily sector were the rationales for the change in strategy, CAPREIT’s president and CEO Mark Kenney told RENX.
“We’re excited about the ground we’ve covered on our high-grading strategy since our last update, with nearly $500 million in additional Canadian apartment transactions, and we still have significant runway left in the year,” he said in a release accompanying the $477 million in transactions.
As of March 31, CAPREIT owned approximately 64,200 residential apartment suites, townhomes and manufactured home community sites in Canada and the Netherlands. It held approximately $16.7 billion of investment properties.
About the acquired properties
The first completed acquisition is Grafton Park, a 68-unit property in downtown Halifax. It was built in 2019 and acquired in June for $29.4 million. CAPREIT assumed the $14.3 million in mortgage principal outstanding, which matured and was repaid in full.
The second completed June acquisition is a 178-unit high-rise in Edmonton. The View was built in 2023 and purchased for $79.3 million. CAPREIT has assumed the $68.6-million mortgage.
In July, CAPREIT closed on four more properties:
- Hillview in Ottawa, an apartment complex built in 2023 carrying 54 suites. It was purchased for $21 million, and CAPREIT assumed the $15.9-million mortgage;
- The 144-unit, 20-storey Nuovo, a high-rise in downtown Ottawa. It was constructed in 2019 and bought for $78.5 million. The $10.4-million mortgage was assumed by CAPREIT;
- The Pendrell, a 21-storey building in Vancouver built in 2019 and bought for $137 million. It has 173 suites, and CAPREIT assumed the $64.1-million mortgage; and
- Axir, a 64-unit building in North Vancouver. The unencumbered property was built in 2023 and acquired for $42.2 million.
Kenney said the weighted average cap on its latest acquisitions exceeds its dispositions, “which we’re continuing to sell at prices that are at or above their previously reported IFRS fair values.”
CAPREIT’s dispositions
To affordable housing non-profits, CAPREIT sold:
- Parkwood Estates, a 79-unit property in Burnaby, B.C., for $33 million. The buyer was Catalyst Community Development Society, which assumed the $7.9-million in mortgage principal outstanding.
- Brookside Gardens, a 44-suite property in Maple Ridge, B.C., for $18.5 million. The unnamed buyer assumed $9.7 million in mortgage principal outstanding; and
- South Garden in Toronto, an unencumbered 138-suite building being sold for $37.8 million to Scarlett View Housing Corporation, expected to be closed by August.
The sale of its 75 manufactured housing communities was announced earlier this month. Comprising 12,138 housing units, it is being sold to U.S.-based TPG for $740 million.
As that transaction has yet to close, it was not included in Thursday’s announcement.
“We’re also proud to be participating in the preservation of affordable housing in Canada by transferring more of our regulated properties into the hands of non-profit organizations, that can maintain the affordability of these older homes for substantially less than the cost of building new,” Kenney said in Thursday’s release.
“We’ll continue incorporating this as a key strategic priority going forward, so that we can further contribute to the solutions to the Canadian housing crisis in this important way.”