BGO has purchased the remaining 50 per cent stake in Toronto’s Pivot apartment building, becoming its sole owner. The company also acquired The James, an apartment building in Victoria, B.C.
According to BGO managing director of portfolio management Adam Hagedorn, “These are very core assets” and the company intends to continue investing in them to maintain their quality.
Investment Strategy
BGO manages over 12,000 multifamily units in Canada, with properties in Ontario and Western Canada. The company looks for assets with good transit connectivity and supply-constrained markets.
Hagedorn believes the current supply overhang in Canadian markets will disappear in the next couple of years, leading to a more balanced market. He prefers markets like Victoria, which may be an exception to the current trend.
The Pivot building, located at 35 Greenfield Ave. in North York, was built in 2020 and has 361 units. It features amenities like a fitness centre, outdoor terraces, and a 24-hour concierge. The occupancy rate at the time of acquisition was in the high 90 per cent range.
BGO has held a 50 per cent stake in Pivot since 2021 and acquired the remaining stake for $95.7 million. TD Securities was the broker for the deal.
Hagedorn said the company will benefit from the asset’s strong location, amenities, and connectivity to the Yonge-Sheppard subway stop. He also expressed conviction in the go-forward rental projection for the asset.
The sale of Pivot aligns with RioCan’s strategy to focus on its core retail business in Canada’s major markets, according to RioCan chief investment officer Andrew Duncan.
Acquisition of The James
The James, located at 345 Quebec St. in Victoria’s historic James Bay neighbourhood, is a 12-storey property with 219 rental units. It was acquired from an unnamed institutional investor for an undisclosed price.
Hagedorn said The James is the best asset in the James Bay neighbourhood, with a track record of strong occupancy and operating performance. The property underwent an extensive capital improvement program in 2020, including upgrades to major building systems and suite renovations.
BGO Living will continue to be the property manager for The James. The company was impressed by the property’s performance over the last five years, which have been challenging for the multifamily asset class.
The acquisition of The James was brokered by Avison Young after a two-round bid process. Hagedorn said the seller had been looking to monetize the asset for about a 12-month period and that there was other institutional interest in the property.
BGO acquired The BluePrint Residences in Greater Victoria last December, a newly constructed multifamily community with 336 housing units and 356 parking stalls.
The property features amenities like an indoor pool, a fitness centre, and a private courtyard, and is within walking distance of downtown Victoria.
Notably, The James was built in 1973 as an apartment building and later converted to a hotel before being reconverted back to purpose-built rental in 2020. This unique history is a sign of the property’s adaptability and enduring value.
Asset Management and Operational Plans
The Pivot building, a 36-storey property, boasts an average unit size of 714 square feet, with a mix of 195 one-bedroom units, 30 one-bedroom plus den units, 134 two-bedroom units, and two three-bedroom units, offering a range of options for residents. Additionally, the building features 327 below-grade parking stalls and four elevators, ensuring convenient access and ample parking for residents.
Market Context and Strategic Implications
Hagedorn noted that BGO continues to see a path towards improving occupancy at Pivot even further, closer to 100 per cent, given the strong demand for the asset. Moreover, the acquisition of The BluePrint Residences, a 5.2-acre property with four five-storey buildings, highlights BGO’s commitment to expanding its presence in the Victoria region, with the property comprising over 218,000 square feet of living space.
