Laval-based Groupe Dumont has made its first venture into the Toronto market with the purchase of the 1,212-unit, four-tower The Oaks on the Green apartment complex in North York.

Groupe Dumont acquired the 1972-built development at 160-200 Chalkfarm Dr. from Greenwin for an undisclosed price. Greenwin will continue to manage the properties near Jane Street and Wilson Avenue for the next five years.

“For us it was a good opportunity to move into the Toronto area,” says Groupe Dumont president and CEO Carl Dumont.

“We already had industrial buildings in Guelph and Belleville but nothing yet in the Toronto area and I was looking for at least 1,000 units or a large building.”

The company describes the deal for the 23- to 28-storey towers as one of the largest multifamily transactions in Canada this year.

Dumont says the acquisition represents three things: “Real scale in a single transaction, an asset well below replacement cost and a piece of land in Toronto you simply cannot reassemble today.”

Upgrades planned for the existing buildings

Rents at The Oaks on the Green range from about $1,600 to $2,700. The complex has a vacancy rate under two per cent and turnover is low at five to seven per cent, “so that helps because people stay for awhile.”

He says the rental situation was not the first thing Groupe Dumont looked at. Rather “it it was what residents were saying about the buildings, and what it would cost to fix it.”

Dumont plans to invest several million dollars at The Oaks on the Green, with investments in elevators, common areas, lighting, heating, laundry, corridors and the grounds over the next 12 to 24 months. “

Capital improvement is the core of the plan, Dumont says.

There are no plans to densify the site with an additional rental building. However, the company plans to expand outdoor activities on the site, with additions such as a lounge and barbecue area.

“If you want people to stay, you fix what they touch,” he says, noting “we’re not writing a cheque and walking away. We’re trying to build something that outlasts us.”

The plan “is straightforward: Put capital into the buildings, run them better in terms of expenses, hold them for a long time," Dumont says. "And we don’t look at this as 1,200 units — it’s 1,200 households and an existing community. How we treat that will determine whether this investment works.”

Groupe Dumont is wholly owned by Dumont and has about $1.3 billion in assets, with approximately 3,000 apartments, three-million square feet of commercial space and about 5,000 units in development. “I started from scratch in 2015 and acquired smaller assets and grew from there.”

Looking to expand in Toronto, for opportunities in the West

The company is open to increasing its presence in Toronto and “has quite a bit of liquidity to expand,” Dumont says.

Higher vacancy rates in Toronto “trigger some good opportunities to get in for private companies like Groupe Dumont” particularly for older assets.

The fact the company has a small team, no investment committee and no outside equity “lets us underwrite a complicated file and close it quickly, which is usually why a vendor comes to us in the first place,” Dumont says.

Groupe Dumont is looking for scale and irreplaceable land and can move quickly “because we’re private, small, well-capitalized, so it’s easy, ultimately, to make quick transactions.”

Although it’s small and private, Dumont uses “institutional standards on how we underwrite, document and operate.”

The company aims to continue to acquire large-format assets and build its operating side to match. “The constraint on a group like ours has never been capital, it’s how many buildings you can run properly at once,” he says.

Although its residential, industrial and office assets are mainly in Quebec and Ontario, Groupe Dumont also has assets in New Brunswick and is looking at industrial and office opportunities in Western Canada and in some U.S. locations.

The company has a development project at 400 Coventry Road in Ottawa that calls for more than 1,800 units in seven highrise buildings of 18 to 30 storeys.

It also has almost 2.3 million square feet of land in downtown Gatineau, Que. in pre-development.

“The pre-development came out of opportunities where we could buy land and present some projects, but that’s not our core business."

Groupe Dumont self-manages its other properties. “The partnership with Greenwin is a first for us. It will be interesting to learn from each other and see that kind of model,” Dumont says.

In five years, Dumont sees Groupe Dumont as being “meaningfully larger but growing by concentration rather than count. I’d rather own 10 more assets like this one (The Oaks on the Green) than a hundred small ones.”