- What Vitus Diversified REIT purchased an apartment building in Sudbury, Ont.
- Why It’s part of the firm’s ongoing growth efforts
- What next Plans to add additional units are in the works
Virtus Diversified REIT’s purchase of an apartment building in Sudbury, Ont., for $24.4m will generate a capitalization rate of 6.2%, Green Street News can reveal.
Nickel District Apartments, at 323 Second Avenue North, comprises 114 units on three storeys. The acquisition, which closed on June 3 and was brokered by Commercial Focus Realty, values the property at just $214,000/unit. The seller was Strategic Growth Realty Group.
Virtus announced the sale this week, but the cap rate has not been publicly reported. It is the REIT’s largest acquisition to date and is part of its growth plan, which aims to “acquire strong properties from weak hands,” Virtus president Josh Will said in a release. More acquisitions are expected in the coming months.
Virtus is financing the Nickel District purchase through CMHC-insured mortgages. The vendor also accepted REIT units as part of the equity down payment.
Nickel District is a former high school building that was converted into apartments in the early 2000s. The walk-up-style building has one studio, 22 one-bedroom, 87 two-bedroom and four three-bedroom units. Rents are below market value, providing upside potential.
In addition, Virtus plans to convert an area in the building — that formerly was used for automotive and technology purposes — into an additional six to eight units that would boost revenue further.
The property is 900m south of Kingsway, a main throughway in Sudbury, and is close to RioCan Centre Sudbury, a 34-store plaza with tenants such as Best Buy, Costco, Home Depot, SilverCity and Winners.
Virtus, based in Woodbridge, Ont., invests in income-producing properties in Canada and the U.S. It is active across property types, including multifamily, retail and industrial. .
