Evaluating Toronto’s apartment market

Is now the right time to sell?
Tuesday, July 2, 2013
By Lorenzo DiGianfelice

The Greater Toronto Area (GTA) apartment market has remained strong in 2013 (so far). Cap rates are still being compressed but at a much slower rate than in the past. In the last three months, long-term Canada bond yields have moved up slightly, which has increased borrowing rates for apartments. Interest rates have remained quite low but the solid upward movement in rates could be the start of a new trend.

Three sales in the first half of 2013 point to an interesting trend in the apartment industry: Long-term holders are selling all or part of their apartment portfolios. While some of this can be attributed to estate issues, much has to do with profit-taking and redeployment of capital. Perhaps these sellers simply believe now is the right time to sell.

Amedeo Garden Court
CAPREIT purchased 396 suites in south Etobicoke (2521-2453 Lakeshore Blvd. West) for just over $56 million, or $141,000 per suite, from Longo Property Holdings Inc., which owns many apartment buildings and was a long-term owner of this property. Known as Amedeo Garden Court, this project sits on more than 8.6 acres of landand reportedly has additional development potential.

77 Roehampton Ave.
Q Residential offered the most aggressive cap rate in the Toronto market. It purchased 77 Roehampton Ave. for a 3.4 per cent cap rate. The 81 suites are located in a Triple A neighbourhood within walking distance to the subway. The property, which sold for more than $253,000 per unit, was fully marketed with multiple offers. Again, the seller was a long-term owner of the property.

3253-3257 Bathurst St.
3253-3257 Bathurst St. in North York was purchased by WJ Properties for $9.5 million. The site consists of three mid-rise apartment buildings circa 1950s located in a high demand rental area. In total, there are 64 suites, which reflect a purchase price of more than $148,000 per suite. The owners of the property were the original builders. Reportedly, this property was not fully exposed to the market.

Lorenzo Di Gianfelice is the broker of record and owner of Commercial Focus Realty Inc., Brokerage. He can be reached at [email protected].

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