Tricon acquires stake in Don Valley development site at 7 Labatt

Tricon Capital Group Inc., an investment manager focused on residential real estate, today announced an expansion of its Toronto multi-family development program to over 3,000 units with the addition of its seventh project in downtown Toronto. The new mixed-use development built in partnership with TAS is located at the corner of Labatt and River streets in Toronto’s downtown east submarket on a 1.3 acre site that is fully zoned for a ~560,000 square foot building.

An early planning rendering of the project at 7 Labatt. Image via submission to the City of Toronto.
An early planning rendering of the project at 7 Labatt. Image via submission to the City of Toronto.

The addition of the project at 7 Labatt brings Tricon’s multi-family development pipeline to over 3,000 units with an estimated total cost of approximately $1.2 billion and targeted development yields of 5-6%; Tricon’s average ownership stake in this portfolio is approximately 30%. The seven projects are expected to be completed over the next three to four years.

“Tricon has committed to building a market leading purpose-built rental platform in Toronto and continues to execute on this plan with the addition of its latest project in the thriving Corktown neighbourhood. Even in the context of a competitive land market, we have been able to secure compelling sites at an attractive land basis by partnering with strategic developers and institutional investors seeking long-term cash flow,” said Tricon’s President and CEO Gary Berman.

“Toronto continues to support extremely compelling rental economics with immigration in excess of 100,000 each year, a diverse economy, high quality of life, and growing status as a global city. During 2018, year-over-year rental growth topped 10% and vacancy remained very constrained at less than 1%, according to UrbanRental. Tricon is at the forefront of providing class-A multi-family rental apartments within the most sought-after locations across the city, and is leveraging 30 years of development experience to pursue strong investment returns for our investment partners and shareholders.”

An aerial view of the site. Image via Google Maps.
An aerial view of the site. Image via Google Maps.

The project at 7 Labatt is immediately south of the Regent Park re-vitalization, a 69 acre master plan that has been transformed to a vibrant, family-oriented urban community. The site is in close proximity to cultural, community and state of the art athletic amenities, and offers convenient access to three downtown streetcar lines as well as the Don Valley Parkway. The project will include approximately 600 residential units, expected to be split evenly between rental and for-sale condominium units. Tricon’s interest in the project site was acquired from TAS, a community-centric mixed-used developer, and the project will be developed in partnership with TAS with construction expected to commence in mid-2020 and completion anticipated in late 2023. The total equity commitment for the project is approximately $60 million (~C$80million), with 30% from Tricon, 50% from an institutional investor, and 20% from TAS.

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