One million square feet, 74 buildings, seven different postal codes: a group of three private investors from Quebec acquired the Norgate apartments in Montreal last week. This is the largest multi-residential acquisition of the year in the metropolis.
Published at 6:00 a.m.
On December 2, the Norgate Apartments site was sold for $197.5 million, or $178,250 per door.
“This historic transaction, which includes 1,108 apartments, represents the largest multi-family acquisition in the Montreal metropolitan area for 2024 so far,” assessed the real estate company JLL, specializing in investment management, in writing after the conclusion of the sale. He was the listing agent.
The buyers are three private investors from Quebec, namely Jean-Philippe Claude, Frédéric Aubry and William Lande. “It’s exceptional, it’s a transaction of a lifetime,” said Jean-Philippe Claude, who is also a trainer at the Real Estate Investors Club of Quebec (CIIQ). “We are really happy to have brought the property back to Quebec, held by Quebec assets,” he added.
Jean-Philippe Claude notably co-wrote the book Transform overpriced multi-unit housing into a dealwith Yvan Cournoyer, president of the CIIQ, in 2020. Owner of buildings since the age of 18, Frédéric Aubry is for his part president of the property ownership and management company Gestion Capital Montréal, owner of several hundred housing units1. Finally, William Lande is the co-founder of Bidgala, an online sales site for the artistic community, connecting emerging artists and potential buyers.
The homes, located on Décarie and Ouimet streets, are in the heart of Saint-Laurent. They were built near the first shopping center in Canada, Galeries Norgate, completed in 1950 at the corner of Décarie and Côte-Vertu boulevards. According to the City of Montreal, the homes were the subject of a vast renovation project at the end of the 1970s. They belonged, until December 2, to the Starlight and KingSett investment funds.
“Given the age of the park, I believe that this is a transaction that will be interesting for [vendeurs et les acheteurs] », Estimated Patrice Ménard, president and founder of PMML, which sells, finances and evaluates commercial buildings. “At the price paid, there is room to improve the quality of housing,” he specified.
The sale was also so important that it even required approval from the Competition Bureau of Canada, Mr. Claude noted.
Affordable housing
If certain concerns were raised regarding the renovations which end up increasing the price of rents, Mr. Claude wanted to be reassuring. He said renovations could be made as needed, with the natural turnover of the rental market.
“At the right price at which we purchased, affordable financing [prêt de 140,8 millions de 10 ans, taux de 3,9 %, amorti sur 45 ans]there is no financial pressure on us in this transaction, so we have no pressure to put [sur les locataires] “, he explained, emphasizing that the sellers had already invested a lot in renovating the units in recent years. “Ultimately, our position is really just to continue this good conversation, nothing more,” he added.
In total, 444 units of the transaction are affordable housing, according to the criteria of the Canada Mortgage and Housing Corporation (CMHC). In exchange for favorable financing terms, borrowers must meet the affordability covenant for the next 19 years.
“I think that the price paid will allow investors to improve the quality of life of tenants,” added Mr. Ménard.
Densification au menu
Mr. Claude mentioned his desire as well as that of his partners to build new housing on the property, making it more dense. “We are looking at solutions with the City because there are several vacant parking lots,” he stressed. For the moment, at least a hundred housing units could be added, according to their estimates.
The land occupied on Rue Décarie by an outdoor swimming pool, damaged and unused for several years, could also give way to around sixty new constructions.
1. Read the article “Young Serial Buyers”
What to expect for multi-residential in 2025?
- In Canada, rents are expected to experience some downward pressure due to the increase in new supply and the expected demographic slowdown.
- New housing is most at risk of falling rents, given higher vacancy rates and numerous deliveries expected in the near term in some markets.
- While immigration restrictions and slight population declines in 2025-2026 may reduce overall demand for rental housing, Canada still faces a housing affordability problem and unmet demand.
Source : CBRE, Canadian Real Estate Market Outlook, December 2024
