luxury apartment CAPREIT

CAPREIT acquires luxury apartment in Toronto’s Forest Hill

Friday, September 24, 2021

CAPREIT announced it has acquired Tower Hill East, a “superior-quality, luxury apartment building” on St. Clair Avenue West. The sister property to CAPREIT’s flagship “The Thomas”, this purchase positions CAPREIT with a second iconic property in Toronto’s prestigious Forest Hill neighbourhood.

“We are very proud to bring this downtown Toronto property into the  CAPREIT family,” said Mark Kenney, President and CEO. “Pairing these two iconic and well-known properties together under our experienced management team solidifies our presence as a leader in the GTA luxury rental market. We are also pleased that the property, and the planned value-add investments we will be making in it, will contribute to enhanced resident safety, reduced operating costs, and help us meet our ESG goals.”

The 141-unit luxury apartment offers a mix of bachelor, one-bedroom, two-bedroom and three-bedroom suites, all described as being larger than average. Historically at near 100% occupancy,  there were 15 vacant units at the time of closing. Management estimates current rents are approximately 30 per cent below market.

The property was acquired for $110 million, with CAPREIT assuming a $34 million mortgage bearing a 1.93 per cent interest rate maturing on December 1, 2021. The vendors elected to take 100 per cent of the residual purchase price in CAPREIT Exchangeable LP Units at a price of $56.00 per Exchangeable LP Unit, saving CAPREIT the general underwriting commissions and market discounts associated with raising equity in the public markets resulting in approximately 8 per cent savings.

According to CAPREIT, the acquisition provides extensive management synergies and operational efficiencies between the two St. Clair Avenue properties. Future capital investment plans include: LED lighting retrofits, new low-flow bathroom fixture installations, in-suite smart thermostats and a chiller replacement, upgrades that will significantly reduce energy consumption and contribute to CAPREIT’s goal of enhancing its environmental performance.

Find out more information on this transaction, click here.

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