Primecorp Commercial Realty Inc. is pleased to announce the sale of two major multi-residential real estate portfolios in Southern Ontario totaling $302.7 million CAD, in our capacity as Co-Advisor with TD. The GTA and Southern Ontario are key markets where our National Multi-Residential Investment Team, lead by Co-Founders Aik Aliferis and Sam Firestone pay close attention, facilitating mutually beneficial transactions for our valued clients. The two portfolios in this transaction consist of 2,019 suites, in 24 properties, in the pivotal markets of Hamilton and London, Ontario.
Q Management LP Increases Presence in Hamilton & London
With the acquisition of these two portfolios in Hamilton and London, Q Management LP (“Q”) now owns and manages 9,500 suites in 69 buildings in Ontario with the majority located in the Greater Toronto Area, Ottawa, Hamilton and London.
Q purchased a portfolio of 11 buildings, located in downtown Hamilton, from Skyline Apartment REIT, consisting of 1,036 suites for a total value of $173 million. The mid and high-rise concrete buildings range in size from 48 suites to 154 suites and represent a significant addition to Q’s portfolio of high-rise multi-family residential properties in the large Southern Ontario urban market of Hamilton and Dundas.
Hamilton Multi-Res Deal Aligns Nicely with Q's Strategic Objectives
This transaction closed on September 6th, 2017, and aligns nicely with Q’s strategic market focus:
This acquisition fits well with our strategy of assembling portfolios of high-rise multi-family residential properties in larger Ontario urban centres that are well positioned for continued growth. Our goal was to acquire a critical mass of properties in the Hamilton market and this portfolio achieves that… We view Hamilton as a stable market that is enjoying important growth and we are excited to be part of that. - Dan Argiros, President and CEO of Q Management LP
The demand for rental units in the Hamilton area has indeed been increasing in the last few years, fueled by strong employment prospects, especially for young people, an influx in immigration and rising mortgage rates and a tightening of mortgage rules, making rental options more attractive. As such, vacancy rates for rental units in Hamilton are expected to continue falling through 2017:
Hamilton’s average rental apartment vacancy rate edged lower from 3.4 per cent in 2015, to 3.2 per cent in 2016. The average vacancy rate will decline further to 2.9 per cent in 2017. Strong employment among young adults and the inflow of international migrants will increase the demand for rental accommodation. New immigrants typically move into rental accommodation when they first arrive in Canada. – CMHC
This Multi-Res Deal is a Win-Win for Q and Skyline
This transaction between Q Management LP and Skyline Apartment REIT is truly a win-win for both vendor and purchaser. Q will establish itself in the Hamilton area, capitalizing on new opportunities in this growing multi-res market. Skyline is also happy with this large deal and the smooth process facilitated by Primecorp and TD. Skyline plans to re-invest the capital from the sale toward other accretive acquisitions and newly built properties in strategic secondary and tertiary real estate markets, where Skyline Apartment REIT already has a solid presence:
This multi-residential transaction was one of the largest in the country this year… Due to the great efforts of both the Skyline Team and the Q Residential Team, along with key partners Primecorp and TD, the process has been seamless. - Matthew Organ, President of Skyline Apartment Asset Management Inc.
Skyline Apartment REIT
Skyline Apartment REIT is part of the Skyline Group of Companies, a full-service real estate investment and management company based in Guelph, Ontario. Across its three private REITs: Skyline Commercial REIT, Skyline Retail REIT and Skyline Apartment REIT, the Skyline Group has more than $3 billion in real estate assets under management. These three REITs also collectively own and manage nearly 7.5 million square feet of commercial space.
Q Shores Up Hamilton Market Share and Enters London Market
Q Management LP is also under contract to purchase 13 properties from Homestead Land Holdings Limited: This transaction consists of 425 suites in four properties in Hamilton and 558 suites in nine properties in London for a total value of $129.7 million. This acquisition brings Q’s Hamilton portfolio to 1,461 suites and provides the opportunity to enter the London market with a substantial portfolio as well.
Demand for apartment rentals is also strong in London, Ontario, but with an average rental price of $918, for 2016, London offers an attractive alternative to other areas in Southern Ontario, such as the GTA where the average rental price stood at $1,233 (settlement.org).
Homestead Land Holdings Limited
From humble beginnings in Kingston, Ontario, in 1954, Homestead has grown to become one of Canada's largest landlords with a mission to: “provide residents with affordable, secure housing with a standard of care in which they would treat their own family members.” Homestead owns and manages over 25,000 apartments across Southern Ontario and other areas of Canada.
Q Management LP
Q Management LP is a real estate asset and property management entity focused on the Canadian multi-family residential sector. Q’s long-term objective is to significantly increase the size and value of its Ontario based multi-family portfolio and where appropriate, access opportunities in other Canadian markets. Q Residential is a wholly-owned affiliate of Q Management LP providing all property management functions across their portfolio.
Primecorp Commercial Realty Inc.
Primecorp Commercial Realty Inc. is a progressive commercial real estate investment brokerage, management and advisory firm specializing in multi-residential investment sales, commercial investment sales, seniors housing, retail leasing, office leasing, and property management. Primecorp has offices in Ottawa, Toronto, Gatineau, and Montréal and has completed real estate transactions in excess of $6.0 billion CAD in over 56 Canadian cities, spanning two decades, since our inception.