Yesterday CAPREIT announced that we have entered into our first joint venture development agreement for a mixed-use project at 1100 King Street West in Toronto’s Liberty Village neighborhood.
The agreement is to acquire a 1/3 undivided interest in the residential component of the project for $60.3M. The residential component will consist of 3 towers and 506 apartment suites (sitting on top of a roughly 160,000 square foot commercial/retail podium that will not be owned by CAPREIT).
Here’s what Thomas Schwartz, President and CEO of CAPREIT had to say:
“We expect our interest in the property, combined with the property management fees we will receive, will be accretive to our cash flow and set the stage for similar partnerships, along with our own new rental developments in the future.”
As a member of the development team at CAPREIT, it feels great to get this one out there.
Click here for the full public press release.
Since 2009 when the U.S. economy started to recover, housing starts (i.e. new residential construction) have favored multifamily buildings over single family housing. Apartment/condominium construction has grown 3 times faster according to the U.S. Census Bureau (via Bloomberg).
A lot of this multifamily construction is assumed to be rental apartments, but this category also includes for sale condominiums. The classification has to do with building typology rather than housing tenure. (I would love to see how the above graph breaks down in terms of the latter.)
The typical explanations for this trend often relate back to Millennials being poor and saddled with student debt. That’s why they’re delaying buying single family homes. But eventually the expectation is that they will resume doing (largely) what previous generations have done.
Money and the economy, I’m sure, have something to do with the above trend. But I’m not convinced that it’s the whole story.
There are also shifts happening with respect to consumer preferences and with respect to how we plan and build our cities. That’s why I’m very interested in monitoring family formations and housing choices.
At the same time, I’m also a Millennial. And whenever I catch myself thinking a certain way, I assume that there are probably other Millennials out there who feel similarly.