Canada’s REITs on a roll
$170 million apartment buy underlines aggressive real estate investment trust moves
By Frank O’Brien
After posting dismal numbers earlier this year, real estate investment trusts (REITs) have launched aggressive acquisitions, timely mergers and forays into U.S. real estate in turnaround bids.
According to a RBC Capital Markets survey released at this month’s RealREIT conference in Toronto, 29 of Canada’s 56 REITs reported negative numbers in the year’s first half, compared with just two in 2014. REITs, however, are now emerging as nimble players in Western Canada’s commercial real estate arena.
This month, Toronto-based Canadian Apartment Real Estate Investment Trust (CAPREIT) underlined the new moxie with its $170 million purchase of a 22-building, 919-unit multi-family rental portfolio in B.C.’s Lower Mainland.
“This is the biggest Metro Vancouver apartment deal in years,” said Lance Coulson.
The senior vice-president of investment properties for CBRE Ltd. National Apartment Group in Vancouver brokered the deal on behalf of a private B.C. investment group.
Coulson noted it dwarfed the 630-apartment, $140 million sale of Calgary-based Boardwalk REIT’s entire B.C. portfolio he helped broker last year.
A few weeks earlier, Northern Property Real Estate Investment Trust, which has holdings in B.C. and Alberta resource centres, snapped up True North Apartment REIT and a 4,650-suite rental apartment portfolio from Starlight Investments Ltd. That $3 billion deal, announced August 10, created Canada’s third-largest residential apartment REIT.
Other big moves this year include Health Care REIT, with Revera Inc., buying Regal Lifestyle Communities, and steady acquisitions by Canadian real estate trusts into the U.S. market.
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