William’s Court in Kanata Lakes
This is the story of the largest new apartment construction transaction in Canadian history. Kanata Lakes is a large apartment complex of six buildings in 739 units that was built over a seven-year period. This was an ambitious project, built by an ambitious developer, Francis Lépine. It’s a family company, been in the business for now 40 years.
You know, when I think about Francis, I think building apartments is in his blood. His father was a major developer in Montreal. In fact, Francis, as a teenager, swept out the Olympic Village. Probably one of the largest residential buildings ever built in Canada. So, it’s only right that Francis now turn around, you know, all these years later and build the largest apartment community in, really the most expensive apartment community, in Canadian history. New apartments also have to be a product that’s designed specifically for long-term use. We’ve integrated a lot of new advancements into how do we do, specifically, rental buildings.
Now to do a transaction of this complexity we needed a developer with a vision, but we also needed buyers with a vision. Forward sales require relationship. They require shared vision, trust and transparency between the parties who are going to get this deal done. Look, when we first wrote this deal there was just a hole in the ground on building A. And Francis, us as the brokers, and the buyers had to agree to that vision. Understand that vision, understand the depth of the market, understand the renter profile, understand the rents that were achievable in that marketplace, and none of this could be proven. We just had to, we had to do our studies, which we did, and Francis did many of them with us. And then he re-confirmed that with other people.
A market study must identify all these other options also which would fit your customer profile. Not just any profile, because once you determine with the profile what could be a renter, then what are his options. Killam really wanted to build a REIT with the, with newer apartments.
We have been interested in the, in new products since beginning of Killam in 2002. Anytime you get an opportunity to buy new product, we were very interested. Killam were developers themselves in Eastern Canada and now in Ontario, but they bought into Francis’ vision. They saw the vision and the opportunity to get involved in this large opportunity on the ground floor.
The Kanata Lakes acquisition has been a great opportunity for Killam over the last four years. It has been great product, consistent product, that has been delivered by a very good developer, Lépine, over that period of time. By all accounts, it is one of the nicest and newest developments of its size in Ottawa. Our long-term core fund is focused on a long investment horizon; therefore, we are focused on very high quality, purpose-built product. To be able to acquire product constructed by the Lépine Corporation, which has a fantastic reputation for constructing to the utmost quality, excited us very much. Talking about our partner, KingSett, they got involved in the last two years, and they have been great partners. Their deal flow is second-to-none, and working with them on acquiring these assets has been very straightforward and smooth.
For certain Killam was a very important part of this transaction for us. They bring a national platform to the transaction and are excellent managers in multifamily rental. There were four transactions that occurred over a number of years. And that’s not an easy thing to do, and it required a developer, and an owner, and a property manager, who could all buy into the vision, get over the difficulties when they occurred, and there were some. But once that got done, and Building A got done, then Building B got done, then Building C got done, and then Building D done. And each building leased-up better and faster, as we understood what the marketplace wanted. And, as the Buildings were built, the building’s were adjusted. Derek always follows his clients very closely, it’s not just the broker that will come and disappear when the deal is done. It’s an on-going relationship. But Derek and I go over, close to, 15 years now.
In his role in this transaction, over the last almost five years, he has been excellent. It’s been amazing to see him, in terms of being able to commit the time and resources to every phase of this.
Our best relationships with brokerage firms are really with firms that, not only execute which is obviously critically important, but most important to us are brokerage firms that bring creative ideas, and understand how to structure complex and complicated transactions. Yet again, in this transaction, SVN and Lobo Advisors, have done a fantastic job of structuring something that was complex, over a long period of time. And we’ve been very pleased, not only in this transaction, but in previous transaction with the group.
You know, it’s really been a great experience working on Kanata Lakes. It was a relationship that we built, with the buyer and the seller, and we’re very grateful for the opportunity.