Killam buys eight apartment buildings

Stewart, Dave. Killam buys eight apartment buildings. The Guardian 04 June 2013

One of Atlantic Canada’s largest developers has just scooped up eight apartment buildings in the greater Charlottetown area.

Killam Properties Inc. spent $18.5 million last week to buy the buildings from TS Magnum.

Most of the apartment buildings are located in Stratford, such as the Stratford Commons, Stratford Gateway and Stratford Heights. In total, the purchase increases Killam’s portfolio by 172 rental units.

That’s on top of another recent project, the 49-unit Brighton House on North River Road, for $5.5 million.

“We have quite a few properties on P.E.I. already,’’ said Tim Banks, director with Killam. “We like the marketplace and the whole industry is having a bit of a flight to better quality in terms of buildings and that’s where our portfolio is.’’

Killam now owns 22 apartment buildings (907 units), many of them catering to university students, on P.E.I.

“We believe we’ve got a strong commitment to quality properties and the reason why we’re in a lot of communities buying new product. We just went out and (purchased) 172 more units and we’re very high on the Charlottetown-area marketplace.’’

Banks echoes a point many developers are making these days — that the demand for high-quality apartments is skyrocketing. People are choosing to downsize from a home, and all the responsibilities that go with that, to a nice apartment.

“A lot of senior people are selling their homes and they’re moving into a building where there’s less maintenance and more efficiency in their heating. Not so much for them to manage.’’

Some developers have tried to get condominiums off the ground. The appetite for condos doesn’t appear to be quite as strong — Paoli’s Wharf on one side and the abandoned project at the corner of Prince and Grafton streets on the other.

“Condominiums are not out of reach for Islanders but they’re not on the minds of Islanders, particularly when you can go into a fresh, brand new apartment building that has everything done for you and you’ve got fixed cost there.’’

Banks said Brighton House is 98 per cent occupied.

“It didn’t take very long to get it filled.’’

As for the other apartment buildings, there’s very little vacancy. Part of the reason is a high transient rate in the capital.

“We range from seven or eight per cent vacancy down to zero at times. A lot of that has to do with the fact Charlottetown is a university town and you get turnover there related to that.’’