Starlight Investments plans to merge two of its Western Canada funds into a platform comprised of 15 properties in British Columbia with 1,413 multifamily units, valued at approximately $639.4 million.

Announced Thursday morning by the Toronto-based real estate investment firm, the transaction involves the Starlight Western Canada Multi-Family Limited Partnership (Fund 1) and the Starlight Western Canada Multi-Family (No. 2) Fund. Starlight proposes to combine the assets of both funds on a net-asset-value for net-asset-value basis.

If approved, holders of the No. 2 fund will retain their existing units upon completion of the transaction. Unitholders of Fund 1 will continue to hold limited partnership interests in Fund 1 subject to a value equalization process.

Fund 2 will remain a reporting issuer, holding a majority equity interest in and having control of Fund 1, while Fund 1 will remain a private limited partnership.

Starlight said the business combination will create a superior investment product because of the larger platform, enhanced access to capital and potential to reduce costs of borrowing, synergies and other costs.

"Under Starlight's management, the value of the assets in each fund has increased since inception of each respective fund," Daniel Drimmer, the CEO of Starlight Group and both funds, said in the announcement.

"The consolidation of the assets into a single platform is an opportunity to work towards increasing value in a larger, more diversified vehicle with a larger asset pool and with increased potential for a successful exit as a result of the enhanced scale of the platform."

About Starlight’s funds

The limited partnership was founded by Starlight to acquire, own and operate a portfolio of 469 multifamily units in Kelowna and Vancouver Island.

The No. 2 fund was founded in November 2021 for a similar purpose involving a portfolio of “newer vintage residences” and multifamily residences on Vancouver Island and in mainland British Columbia. The No. 2 fund states it consists of 944 suites in nine residences located across four cities.

Some of the properties in the No. 2 fund include

• 6035 Linley Valley Dr. and 4800 Uplands Dr. in Nanaimo, a property with 251 suites;
• 2699 Peatt Rd. in Langford, a building with 81 suites; and
• 3400 Centennial Dr. in Vernon, a property with 60 suites.

In the Q2 financial results of the No. 2 fund, the latest to date, Starlight reported revenue of approximately $5.5 million and $3.8 million in net operating income, an increase of over one per cent for both compared to the same quarter in 2024.

Starlight attributed the gains to an average monthly rent growth of approximately 3.7 per cent between Q2 2024 and Q2 2025. The No. 2 fund had an occupancy rate of 98.4 per cent as of June 30.

The closing of the transaction is subject to several closing conditions, including the approval of the fund unitholders.

A special meeting of the unitholders of the No. 2 fund will take place to seek approval for the merger, and to discuss amendments to its declaration of trust.

Starlight’s recent actions

The proposed merger adds to several major moves made by Starlight through 2025.

In August, the company broke ground on Phase 1 of its Harris Green Village project in Victoria, B.C. The city's largest multifamily housing development, Phase 1 is designed to add 526 rental suites to Victoria. Harris Green Village is expected to consist of 1,500 units when finished.

In June, Starlight announced its intention to acquire $750 million of purpose-built rental apartments through a vehicle it named the Starlight Canadian Core Multi-Family Fund.

In February, it acquired a portfolio of 11 apartment buildings with 391 suites in Cambridge, Ont., just west of Toronto.