CHC Realty Capital Corp. turned to the potentially lucrative student housing market to earn conditional approval from the TSX Venture Exchange for the closing of its qualifying transaction.
The Toronto company announced in early January it was acquiring a student housing building in Kingston, Ont., known as Liberty Terrace, for $2.5 million as its qualifying transaction. The company’s stock began trading on Jan. 15, with a ticker of CHC.P.
Assuming all conditions for making the acquisition are satisfied, the company expects to close the qualifying transaction on or about April 1 and anticipates it will have then met all of the minimum listing requirements for a Tier 2 Real Estate Issuer.
Liberty Terrace is a fully occupied 18-bed property close to Queen’s University with 1,108 square feet of ground floor commercial space. One of the two commercial tenants is expected to vacate the premises at the end of 2014.
“We are very excited to enter into this transaction as the first step in our growth plan to become the leading provider of student housing across Canada,” Mark Hansen, CHC’s president and CEO said in a statement.
Hansen said the company chose the property as its qualifying transaction because it fit CHC’s criteria of acquiring “high-quality assets in close proximity to a university in a proven market.”
Liberty Terrace offers stable and secure cash flow and has a strong local manager, according to Hansen. “This model represents our template for growth across the country.”
The company said that at an appropriate time it will consider conversion to a REIT, making CHC would be the first Canadian REIT catering to the demand for student housing.
Three other student housing properties
CHC owns three other student housing properties. The Luxe in Waterloo, Ont., located close to both Wilfrid Laurier University and the University of Waterloo, consists of two buildings holding 536 and 418 beds, respectively. The building’s amenities include a movie theatre, fitness studio, yoga studio, games room and all the suites are furnished. CHC acquired The Luxe in the middle of 2013.
The West Village Suites in Hamilton, (shown in the photo) is a LEED Platinum-certified, purpose-built student housing property with 449 beds and an on-site restaurant. It is within walking distance of McMaster University.
The third student housing project in the CHC portfolio is Village Suites in Oshawa. It is a LEED Gold-certified student housing property within walking distance of Durham College and the University of Ontario Institute of Technology. It has 588 beds and features a fitness centre, games room, TV rooms and on-site laundry facilities.
A background in rental housing
Hansen is a real estate industry veteran with almost 20 years of experience, including more than 10 years in multi-residential real estate.
Hansen was formerly the vice-president of operations for Canadian Apartment Properties Real Estate Trust. At CAP REIT, Hansen oversaw all residential and commercial properties from Toronto to Victoria. He was responsible for managing properties that generated $250 million in annual revenues as well as $30 million in capital projects and 200 employees.
Craig Smith, chairman of the investment committee for CHC Realty, is the founder, president and broker of record of Ashlar Urban Realty Inc., a full-service Toronto-based commercial real estate firm.