Capstone Developments is building a reputation for urban infill projects on former industrial sites in Montreal, thanks to its Grace residential development in the city’s Notre Dame de Grâce (NDG) neighbourhood.
Grace is the result of an assembly and rezoning of four industrial properties in NDG, on the corner of De Maisonneuve Blvd. W. and three streets that are near one another.
Grace consists of three low-rise buildings – Grace Hampton, Grace Clifton and Grace Melrose – with a total of 110 units. The Grace name is an homage to the Notre Dame de Grâce neighbourhood.
“We’re taking industrial stock that’s not necessarily in an industrial park anymore,” Capstone Developments partner Andrew Pascal told RENX. “A lot of neighbourhoods changed or are in the process of some sort of osmosis” to become residential neighbourhoods. “We’re taking that existing industrial stock and turning it into livable projects.”
Pascal declined to provide the cost of the three Grace developments.
Capstone also plans to build a 48-unit townhouse style project at 2760 Reading in Pointe Saint Charles, which housed the former Arctic Glacier ice factory. The site has been rezoned and is permit-ready.
Creating the land assembly for Grace
Capstone acquired the properties that would later become the Grace development by speaking to the owner of Sutton Plumbing and Heating, which owned most of the sites.
“I was actually getting a car wash (nearby) and got the urge to walk into Sutton” and introduce himself.
Although there were other potential suitors for the sites, Pascal was eventually able to make an off-market deal with Sutton Plumbing for the properties. Separately, he also acquired a garage as part of the land assembly.
As it operates noisy trucks and forklifts, the 70-year-old plumbing supply business was now out of place in the residential neighbourhood. It has since moved to St. Jacques St. W. in Montreal.
NDG is a mature neighbourhood near downtown that is popular with young professionals and families but lacks new residential construction, Pascal noted.
All 3 buildings under construction
Flash forward and Grace Hampton at 6037 De Maisonneuve Blvd. W. is about 95 per cent completed with some tenants living there and others in the process of moving in. Grace Clifton at 6005 De Maisonneuve Blvd. W. is about 75 per cent complete and Grace Melrose at 5775 De Maisonneuve Blvd. W. is about 60 per cent complete.
Each building is about11,000 square feet and has underground parking, with about half the spaces reserved for electric cars. Pascal said the architecture of the three-storey buildings integrates well with the existing neighbourhood.
“We wanted to create something that was welcoming and endearing to the neighbouring buildings,” he said. “It’s not your cookie cutter-style project.”
The development is catering to families, with units having as many as four bedrooms. Units have large windows and apartments on the first and third floors are two floors.
Rents are about $3.12 per square foot. “The pricing is being very well received,” he said, noting there are many similarly priced units in the neighbourhood that are not new product.
Features like weight rooms or fitness rooms are not included, as the neighbourhood is already amenity rich, he said. The buildings are also next to the De Maisonneuve Blvd. bike path.
Capstone’s founders and history
Capstone will manage the properties in-house.
While in school, Pascal’s jobs up were in the construction sector, while partner Robert Tortorici’s family was in the construction business.
During university, the two launched a general contracting business called Provision Construction, which did a full range of projects from residential and commercial to industrial and institutional.
Capstone was formed prior to the pandemic. Its name has both architectural and real estate connotations, calling out both the capstone that is used to complete a building and the cap rate, Pascal notds. “We treat all of our projects as if they are capstone projects. We thought it made a lot of sense for those reasons.”
The company’s first acquisition was 4570 Walkley, a 16-unit multifamily property in NDG that it fully renovated, including the addition of new windows to create additional bedrooms and optimizing space by consolidating wasted space in the hallways.
“There was a demand for renovated product in the neighbourhood,” Pascal said. “That building needed TLC for sure.”
Capstone is focused primarily on the island of Montreal and surrounding areas, but is open to doing projects elsewhere.
“We look for sites in opportunistic, service-oriented areas where there’s a desire for residential product. We seek industrial and commercial assets where we see an opportunity to obtain residential zoning in working with the city to provide those very sought-after housing projects,” Pascal said.