Buyer snaps up two north London towers in $130M deal

Buyer snaps up two north London towers in 130M deal

York Developments has sold two of its newest London towers in a $130-million deal.

York Developments has sold two of its newest London towers in a $130-million deal.

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The 16- and 17-storey Alto Towers apartments on Fanshawe Park Road West at Wonderland Road have been flipped to CAPREIT, a Toronto real estate investor specializing in rental units.

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York wasn’t looking to sell but made “a significant profit” off the deal, York chief executive Ali Soufan said. “It was an unsolicited offer that was great for us and our investors.”

The apartments were built in 2019 and 2021 and have 291 apartment units. In a statement, CAPREIT cited the chance to buy in a “sought-after community” such as London.

Alto Towers on Fanshawe Park Road near Wonderland Road are shown on September 5, 2021. (Derek Ruttan/The London Free Press)

The investor is looking to sell some of its older rental properties and buy new ones and this is part of that strategy, CAPREIT officials said in a statement.

“We’re very pleased with the progress we’ve made on the execution of our strategy in the first quarter of 2024,” Mark Kenney, CAPREIT chief executive, said. “These transactions exemplify. . . that strategy in action.”

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The $130 million purchase price is a “significant discount” to what it would cost to build the towers today, CAPREIT officials say. The real estate investment trust (REIT) has also assumed existing below-market mortgages of $80.9 million, with a term to maturity of two years and a 2.3 per cent blended interest rate.

“We were able to purchase these well-located, concrete, new-build properties for only $385 per leasable square foot, representing a steep discount to replacement cost,” Julian Schonfeldt, CAPREIT’s chief investment officer, said.

CAPREIT is Canada’s largest publicly traded provider of rental housing. It owns about 64,300 residential apartment suites, townhomes and homes across Canada and the Netherlands worth about $16.5 billion.

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