A joint venture led by Canada’s largest pension fund is launching a $400 million joint venture to develop multifamily rentals around Toronto.
Canada Pension Plan Investment Board is contributing 70 percent of the capital while its partner, Developer Tricon Residential, is covering the remaining 30 percent.
The JV plans to develop properties “close to major transit and employment nodes” and has a long-term hold strategy, according to news announcing the venture. Tricon will develop and manage the properties.
The first project is a two-tower development with 870 units in Toronto’s Downtown East area. The JV is putting about $150 million in equity capital toward the roughly $475 million project. The venture is under contract for the property, and plans to break ground early next year, with completion projected for 2025.
Toronto is one of the least affordable cities in the world and city, and Ontario provincial authorities have been pushing for more residential development there to help alleviate the shortage of housing, and drive down prices.
CPP Investments is among the largest pension funds in the world, and is active around the globe. In 2019, it launched a partnership with Brazilian developer Cyrela to build multifamily projects in Brazil. Developer Greystar joined that JV in September.
CPP is also active in the United States. It owns One Park Avenue in Manhattan together with Vornado Realty Trust, and is in the process of refinancing that property.
The pension giant recently came under fire when then-CEO Mark Machin traveled to the United Arab Emirates to receive a Covid-19 vaccination while supplies were low in Canada. Machin resigned in late February and was replaced by John Graham.
Tricon is also active in the U.S. Subsidiary Tricon American Homes was one of many investors that bought up distressed homes during the last financial crisis and turned them into rentals. By 2019, the firm was looking to build its own single-family rentals.