Going west pays off for InterRent REIT as firm's Vancouver portfolio sees big occupancy gains

LIV apartments
InterRent REIT's local holdings include the LIV Apartment complex on Bell Street in Ottawa. (Google Street View image)

Buoyed by robust rental activity in its growing West Coast portfolio, InterRent REIT posted a strong third quarter as occupancy rates continued to rebound from their pandemic-fuelled slump.

In financial filings for the three-month period ending Sept. 30, the Ottawa-based real estate investment trust said its funds from operations – a key cash-flow metric – rose 12.3 per cent year-over-year to $19.3 million. 

That growth was driven by a mix of acquisitions and rekindled demand for rental properties as the economy begins to recover from the crippling effects of the COVID-19 crisis.

As of the end of September, InterRent owned or managed more than 12,200 suites, an 11 per cent increase from a year earlier. And a smaller share of those units are sitting empty, with the same-property occupancy rate of 94.9 per cent up nearly three percentage points compared with September 2020.

That marks a significant reversal from sliding occupancy rates earlier in the pandemic. InterRent singled out “strong leasing activity” in its emerging Vancouver portfolio for much of the bounceback, noting the occupancy rate of its non-repositioned West Coast properties jumped more than four per cent compared with a year earlier.

Meanwhile, rents increased from an average of $1,310 per suite in September 2020 to $1,367 in the same properties this year.

Spate of acquisitions

“We had a strong leasing season late in Q3, particularly in our newly acquired Vancouver portfolio, and we are seeing that strength continue into the early part of Q4,” InterRent CEO Mike McGahan said in a statement, adding the REIT feels “optimistic going into 2022.”

The firm has been acquiring properties at a steady clip in 2021, a trend that continued in the third quarter and beyond.

After buying up more than 400 suites in the second quarter, InterRent closed a $30.1-million deal in late July to acquire 94 suites in Mississauga in a joint partnership with Crestpoint Real Estate Investments.

InterRent has continued to add to its portfolio with a string of deals in this quarter. 

The firm acquired nearly 390 suites in October, buying two properties with 285 units in Toronto for a combined $125 million and partnering with Crestpoint on the $52-million purchase of 104 apartment units in Vancouver.

On Monday, InterRent announced it closed a deal to acquire a 48-unit property with about 5,700 square feet of commercial space in Montreal’s Westmount neighbourhood for $18.5 million.

InterRent’s local holdings include the LIV Apartment towers on Bell Street in west Centretown. The company also owns a 47.5 per cent interest in Trinity Development Group’s proposed three-tower project at 900 Albert St. near Bayview Station after increasing its one-third stake in the development last year. 

InterRent’s shares were down 16 cents to $18.38 in late-afternoon trading on the Toronto Stock Exchange.