One of Ottawa’s largest residential landlords is expanding its footprint in two of its key markets, purchasing downtown apartment buildings benefitting from transit lines.
InterRent REIT (TSX: IIP.UN) said this week that it’s entered into an unconditional agreement to buy a pair of neighbouring high-rise apartment buildings at 2121 and 2255 Saint Mathieu St. in Montreal, near Concordia University and the city’s metro system. The two buildings have a combined 249 units and were purchased for $53.75 million, or $215,878 per suite.
“These buildings are well situated within a highly desirable demographic node that will increase our visibility and branding opportunities within the Montreal market,” said InterRent CEO Mike McGahan in a statement.
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Separately, in southern Ontario, InterRent completed an agreement to buy a 74-unit midrise apartment building at 3 East 37th St. in Hamilton. InterRent said it paid $11.25 million, or $152,027 per suite, and financed the acquisition with the assumption of an existing CMHC mortgage totaling $3.25 million. The REIT’s new Hamilton property is located around the corner from an existing InterRent building, which has the potential to create operational efficiencies, McGahan said.
Company officials say they’re bullish on the Hamilton market, which has benefited from the expansion of the regional GO Train service that connects the city with Toronto. InterRent said it’s purchased 1,026 apartment units in Hamilton in the last two years alone.
InterRent, which is affiliated with Ottawa-based property management and real estate services firm CLV Group, is known for buying under-managed buildings in desirable locations and repositioning the properties, analysts say.
InterRent’s shares have recovered significantly since sinking to a 52-week low of $6.97 on the Toronto Stock Exchange last November.
In March, TD Securities upgraded the Ottawa-based firm to buy from hold, in part because of its best-in-class earnings growth outlook, the Financial Post reported at the time.
Meanwhile, in April, CIBC Wood Gundy highlighted “InterRent’s strong track record of creating value from under-utilized assets, backed by a well-located portfolio of defensive multi-family assets” in a report on Canadian REITs.
