Nearly seven years after starting construction on one of Canada’s largest new purpose-built rental developments in a generation, an Ottawa developer has finalized the sale of the project’s final two buildings and exited its investment.
© Courtesy of SVN Rock Advisors
William's Court at Kanata Lakes
“It went well,” said Groupe Lepine president Francis Lépine. “It’s good to wrap up a long-term project.”
William's Court at Kanata Lakes is a five-building, 741-unit on the north side of Highway 417, just east of the Kanata Centrum Shopping Centre.
Two institutional property owners, Killam Apartment REIT and KingSett Capital, began purchasing interests in the Kanata Lakes development in 2012. Additional buildings were acquired in 2014 and 2016, with the final two closing on March 1 of this year, according to SVN Rock Advisors, which brokered the deal.
SVN said the cumulative value of the transactions is $250 million and calls it “the largest real estate transaction in new apartment construction in Canadian history.”
Mr. Lépine declined to say how much the development cost to construct or the company’s return.
His efforts were praised by SVN chief executive Derek Lobo.
“This is the story of a man with tremendous vision,” Mr. Lobo said in a statement. “Lépine saw what was possible when all others could see were open fields. William's Court at Kanata Lakes is a ground-breaking project that promises to change the face of the purpose-built rental apartment industry across Canada.”
The total price tag works out to $337,382 per unit. To put that figure into context, Colliers International reported that the average per-unit price of the 20 multi-residential sales through the first nine months of 2016 was $181,724, up from $126,785 during the same period a year earlier.
Mr. Lépine said it was inaccurate to compare the sale price of a newly constructed building to other multi-residential assets, many of which are purpose-built apartment buildings that are decades old.
The William’s Court apartments are billed as “luxury” apartments. On Kijiji, one-bedroom units were listed Friday for $1,400 and up per month, while two-bedroom apartments were advertised for as high as $2,700 per month.
That’s a significant premium over rental rates elsewhere in the city, according to Canada Mortgage and Housing Corp. data.
A report released in late November said the average monthly rent for a one-bedroom unit in Ottawa in a building with between 100 and 199 units was $1,044. A two-bedroom unit in a similar-sized building was $1,289.
Elsewhere in the city, Groupe Lepine is currently constructing a 307-unit rental complex just off the Vanier Parkway, north of Coventry Road.
Mr. Lépine declined to discuss how the company would use the proceeds from the Kanata Lakes sale, except to say that he’s “not retiring anytime soon.”
However, he struck a bullish tone on rental construction, calling a high-quality building where people want to live “the best investment you can make for yourself.”