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TORONTO, March 23, 2021 /CNW/ - Tricon Residential
Inc. ("Tricon" or the "Company") (TSX: TCN), a rental housing
company catering to the middle-market demographic throughout
the United States and Canada, and Canada Pension Plan Investment
Board ("CPP Investments") announced today that they have entered
into a joint venture (the "Joint Venture" or "JV") to invest in
build-to-core multi-family rental projects in the Greater Toronto Area.
The Joint Venture will provide up to C$500 million of equity capital, including up to
C$350 million from CPP Investments
(70%) and up to C$150 million from
Tricon (30%), allowing for the expected development of 2,000-3,000
units at a gross development cost of approximately C$1.4 billion, including leverage. The Joint
Venture will focus on developing high-quality rental apartments,
located close to major transit and employment nodes, intended for a
long-term hold by the JV. Tricon will serve as the developer, asset
manager and property manager of the JV projects.
"We are excited to partner with CPP Investments, one of the
world's largest and most respected institutional investors, to grow
our Toronto multi-family
development platform. The Joint Venture will increase the stock of
private rental housing, a stated goal of the City of Toronto and Provincial Government, and
will play an important role in enhancing the City's vibrancy and
livability," said Gary Berman,
President and CEO of Tricon Residential. "Toronto's compelling long-term rental
fundamentals are firmly in place, including high population growth,
a diverse economy, and increasingly stretched home prices. The
current dislocation we are seeing in the land market presents an
opportunity to source attractive development sites and provide
high-quality rental apartments that respond to the needs of today's
renters, with relatively large livable suites, extensive amenities,
and lifestyle programming (including virtual offerings) that
contribute to a sense of resident community."
The Joint Venture's first project has been placed under contract
and is located in Toronto's
Downtown East neighbourhood. The development is expected to
consist of two towers totalling 870 units on a 1.8 acre site,
and will feature a mix of 1, 2, and 3-bedroom units as well as an
amenity package that includes a commercial quality fitness
facility, rooftop garden, outdoor pool, 24/7 concierge, automated
parcel management system, bike lockers, and a half-acre public
park. The location is a short walk to a future Ontario Line subway
station, and benefits from convenient walking proximity to the
downtown Toronto Central Business District. The total development
cost is expected to be approximately C$600
million, including approximately C$192 million of equity capital contributed from
the JV, of which Tricon's share is approximately C$58 million. Construction is expected to
commence on the site in early 2022 with completion expected in
2025, pending closing of the transaction.
"The Greater Toronto Area
continues to experience significant undersupply of purpose-built
rental properties, and even less stock of modern, institutionally
owned and operated rental properties," said Hilary Spann, Managing Director, Head of Real
Estate Americas, CPP Investments. "We see a long-term opportunity
to build and invest in properties alongside Tricon, a
well-respected owner, developer and operator in the region, to meet
this need with newer multi-family properties in transit-oriented
locations."
Tricon is one the most active developers of rental housing in
downtown Toronto, ranging from
affordable to market rate units. The Joint Venture is expected to
allow Tricon to scale its Toronto-based multi-family portfolio to above
7,000 units in partnership with a likeminded long-term investor and
maintain an active development pipeline as nearly 1,300 units are
constructed and stabilized over the next two years. Tricon expects
to maintain its capital allocation below 10% for development
activities, with over 90% allocated towards stabilized rental
assets.
About Tricon Residential Inc.
Founded in 1988, Tricon is a rental housing company catering to
the middle-market demographic throughout the United States and Canada. Tricon owns and manages approximately
31,000 single-family rental homes and multi-family rental units
through an integrated, technology-enabled operating platform. More
information about Tricon is available at
www.triconresidential.com.
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a
professional investment management organization that manages the
Fund in the best interest of the more than 20 million contributors
and beneficiaries of the Canada Pension Plan. In order to build
diversified portfolios of assets, investments are made around the
world in public equities, private equities, real estate,
infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York
City, San Francisco, São
Paulo and Sydney, CPP Investments
is governed and managed independently of the Canada Pension Plan
and at arm's length from governments. At December 31, 2020, the Fund totalled C$475.7 billion. For more information,
please visit www.cppinvestments.com or follow us
on LinkedIn, Facebook or Twitter.
This press release contains forward-looking statements and
information relating to expected future events and the Company's
financial and operating results and projections that involve risks
and uncertainties, including statements regarding the Company's
intentions, growth and investment opportunities, and performance
goals and expectations. Such forward-looking information is
typically indicated by the use of words such as "will", "may",
"expects" or "intends".
The forward-looking statements and information contained in
this press release include, without limitation, statements
regarding: the formation of the JV, its terms, its investment
strategy and its development potential; the JV's first project and
its anticipated development plan; the future growth of the
Company's Toronto-based
multi-family portfolio; the timelines of existing development
projects; and the Company's future capital allocation plans.
If unknown risks arise, or if any of the assumptions
underlying the forward-looking statements prove incorrect, actual
results may differ materially from management expectations as
projected in such forward-looking statements. Examples of such
risks and uncertainties include, but are not limited to, the
inability of the JV to source and execute on suitable investments;
the inability to acquire the JV's first project, which remains
subject to a number of conditions specified in its relevant
transaction documents; and other risk factors described in the
Company's continuous disclosure materials from time to time,
available on SEDAR at www.sedar.com. Accordingly, although we
believe that our anticipated future results, performance or
achievements expressed or implied by the forward-looking statements
and information are based upon reasonable assumptions and
expectations, the reader should not place undue reliance on
forward-looking statements and information. The Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, unless required by applicable law.
SOURCE Tricon Residential Inc.