Ottawa's Windmill Development Group partners with T.O. firm on $100M green real estate fund

Jonathan Westeinde
Windmill Development Group co-founder Jonathan Westeinde is helping launch a new real estate fund aimed at financing environmentally friendly projects. File photo

A pioneer of green real estate in the capital has teamed up with a Toronto investment firm to create a new fund aimed at developing environmentally friendly projects in both cities that deliver social benefits and solid financial returns.

Ottawa-based Windmill Development Group ​– one of the original companies behind the $1.5-billion Zibi mixed-use waterfront community on Albert and Chaudière islands ​– has banded together with southern Ontario’s Epic Investment Services to form the One Planet Living Real Estate Fund, the two firms said this week.

Two years in the making, the fund is quickly approaching its goal of hitting $100 million in its first go-round, Windmill co-founder and chief executive Jonathan Westeinde told OBJ on Friday. The first phase of the fund is expected to close by the end of March.

“Investors’ appetites in general are getting more (environmentally and socially) focused,” Westeinde said. “We’re really looking at growing this as a platform we can take throughout North America.”

Founded in 2003, Windmill has been a longtime advocate of green building principles at developments such as Zibi and The Plant, an urban agricultural-themed condo and townhome project in Toronto.

Private foundations

The company has tapped into a wide network of investors, including the Atmospheric Fund, a Toronto-based non-profit group that helps finance projects aimed at reducing greenhouse gases. Westeinde said other private foundations as well as a major U.S. “profit-driven organization” are also contributing to the fund, which is aiming to deliver an initial net rate of return of 18 per cent to its investors.

Westeinde, who was on the founding board of the Canada Green Building Council 18 years ago, said attitudes toward sustainable building projects have changed dramatically since he entered the business.

“Capital is taking up the conversation,” he said. “It doesn’t have to be a distinction for capital between, ‘this is sustainable’ and getting a (higher) return. You can do both, and it just has a lot to do with the thinking and pieces that come together to move it forward.” 

Westeinde said joining forces with Epic ​– which manages more than $17.5 billion worth of assets in the office, retail, industrial and multi-family sectors and has offices in six Canadian cities as well as the U.S. ​– gives the fund instant credibility with well-heeled investors across North America.

“It really became a perfect fit because their focus is at the institutional level and really complements our strengths well,” he said.

​The fund’s initial capital will be earmarked mainly for new developments in Ottawa and southern Ontario that adhere to the principles of the One Planet Living framework created by U.K.-based social enterprise Bioregional. 

Such projects are expected to be carbon-neutral, promote local food and agriculture and provide affordable housing among other key elements. Among the developments the funders are looking at is a partnership with the City of Guelph that will showcase urban agriculture in a community known for its thriving agri-tech sector.

Eyeing retrofits

“There will be different themes,” Westeinde noted. “It’s not just about affordability, it’s not just about zero carbon. There’s different elements and we’re highlighting (them) as much as we can in a variety of ways in the developments.”

Windmill and Epic are already looking ahead to a second funding round that will likely zero in on retrofitting class-B and C buildings in Ottawa and Toronto and bringing them up to modern, environmentally sustainable standards.

Westeinde notes that Windmill is already part of a joint venture with the Toronto office of construction giant Ledcor that’s doing just that. He sees it as a way of breathing new life into aging infrastructure while helping the planet.

“We would love to get more inventory like that into our fund pipeline,” he said. “That’s definitely on our radar and something we’d like to spend more time on.”