A Vancouver-based investment firm and its new Toronto-based partner have bought 105 acres of land in King Township north of Toronto, where they plan to develop up to 1.7 million square feet of industrial and employment space.
Nicola Wealth and Blackwood Partners announced the King Township purchase last week, marking the first acquisition made together since Nicola Wealth acquired the Toronto asset management company earlier this month, according to a RENX report.
Nicola Wealth is the in-house real estate division of a Vancouver financial planning and investment firm that manages $9 billion in assets across Canada and the U.S. and employs more than 200 people. The company was founded by John Nicola in 1994 and manages assets for high-net-worth families and individuals, holding bricks-and-mortar real estate through limited partnerships.
Its North American portfolio spans office, retail, industrial, self-storage, seniors housing and multifamily residential properties.
A build-and-hold strategy
Unlike merchant developers who sell projects after completion, Nicola Wealth builds rental properties to hold as long-term investments. Josh Anderson, the firm's director of development, told RENX the company is moving more aggressively into multifamily housing because demand for rentals is expected to remain strong.
In the post-pandemic world, multifamily is where we see safety in asset class. I wouldn't say it's a new thing — but it's definitely something that has been reinforced here in the past year, absolutely.
It's a flight to safety, in some respects. It is, literally, the safest real estate investment you can think of, because people always need a roof over their heads.
Anderson joined the firm a year ago after two decades in the development industry, including work with Westbank Corp. and Boffo Properties. His hiring reflects a corporate decision to bring the development function in-house as the firm's funds have grown.
Expansion on both coasts
Alongside the King Township land deal, the company has filed a rezoning application in the District of Saanich near Victoria to develop 407 purpose-built rental units with 20,000 square feet of ground-floor commercial space on a two-acre site at 1555-1595 McKenzie Ave., purchased by the firm in 2019. The project would offer micro-suites, three-bedroom units and townhouses aimed at the university town's young demographic.
Nicola Wealth already owns roughly 1,100 rental units in the Victoria region, including The James at Harbour Towers with 219 units in the James Bay neighbourhood, and has plans for a 274-unit project in downtown Victoria.
The company describes itself as being on a buying spree in B.C., holding 60 properties in the province as of November 2020 in markets that include the Lower Mainland, Vancouver Island, Squamish and Kelowna.
Anderson said the condo market's shift toward rentals could eventually reverse, but the firm is a long-term investor that is not deterred by smaller market swings. He added the company remains comfortable with the strength of rental demand going forward.
