RioCan & Allied Sell 8-Storey Strada In Toronto To CAPREIT For $48M

A rare transaction involving not one, not two, but three of Canada’s largest REITs has closed, according to an announcement published earlier this week by one of the parties.

The transaction was pertaining to Strada, an eight-storey rental building with 61 units located at 555 College Street in the Little Italy neighbourhood of Toronto that was constructed in 2021.

Strada was acquired by CAPREIT (TSX: CAR.UN) for $48.0 million, the company announced in a press release earlier this week. As part of the transaction, which CAPREIT says has now closed, it will also be assuming $29.7 million in mortgage debt, which is carrying interest at a rate of 4.3% per annum on the remaining term of approximately eight and a half years.

CAPREIT did not disclose the vendor, but Strada was co-owned by RioCan REIT (TSX: REI.UN) and Allied Properties REIT (TSX: AP.UN), according to an Allied Q3 2024 financial statement. In that financial statement, Allied also said that it had reached an agreement on October 29 to sell its 50% interest in the property for $24.0 million.

The transaction was brokered by CBRE’s National Investment Team in Toronto.

Strada, which includes both a residential and retail component, is adjacent to 559-563 College Street, a mixed-use complex also co-owned by RioCan and Allied.

Strada at 555 College Street in Toronto. / CAPREIT

Alongside the acquisition of Strada, CAPREIT also announced this week that it was acquiring a portfolio of 355 units across three properties in Montréal —1255 Rue De Bullion, 1255 Saint-Dominique, and 1050 René-Lévesque E — for an aggregate purchase price of $144.0 million.

“We’re pleased to be adding these four on-strategy, purpose-built rental apartment properties to our portfolio, recently constructed in two of our strongest performing Canadian markets,” said CAPREIT President & CEO Mark Kenney. “Including all closed transactions, our acquisition volume comes to approximately $670 million completed in 2024, the largest number of new builds we’ve purchased in a single year to date.”

“Combined with our closed and upcoming divestments from non-core properties and other ancillary interests, as previously announced, total annual transaction activity will have reached approximately $3 billion by year end,” Kenney also said. “All this to say, we’ve been extremely focused on the execution of our strategy, we’re proud of the progress being made and we’re looking forward to concluding this transformational year as a newer and better company.”

“We’re purchasing these high-quality, core-located concrete buildings, constructed by reputable, build-to-hold developers, at strong pricing per square foot that is meaningfully below replacement cost,” added CAPREIT Chief Investment Officer Julian Schonfeldt.

According to CAPREIT, the acquisition of Strada for $48.0 million represents a price of $935 per leasable residential square foot, while the $144.0 million for the Montréal properties represents a purchase price of $543 per leasable residential square foot.