Alternative Capital Group has put two recently built upscale multifamily buildings near Montreal with a combined 154 units on the market and its brokerage expects strong investor interest in the properties.

The 72-unit Meridiem Laval at 199 du Canada St. in Laval and the 82-unit Meridiem St-Jérôme at 219 Calixa-Lavallée St. in St-Jérôme were both completed in 2021.

Apartments in the four-storey buildings have luxury features found in more premium developments “that really set them apart” from much of the rest of the rental market, says Jacob Hayon, executive vice-president at JLL in Montreal, the brokerage handling the sale of the properties.

Both properties have strong occupancy with rents slightly below market rates, Hayon says. Average monthly rents are $2,044 in the Laval building and $1,970 in the St-Jérôme building. JLL reports the two properties have six per cent rental growth potential.

The apartments have attracted a diverse and stable tenant base that includes empty nesters and young professionals.

Both properties are stabilized, which had an impact on Alternative Capital’s decision to sell, Hayon says. The company is a private equity firm in addition to operating as a developer. “They go in and go out,” of properties and timing will always dictate the company’s selling decisions.

Alternative Capital previously sold its other Meridiem development, the Meridiem Beloeil on the South Shore of Montreal. 

Alternative Capital's background

Founded by Claude Delage and Nicolas Beauchamp, Alternative Capital also owns the Chelsea House student housing development at 1839 Lincoln Ave. in downtown Montreal. It features fully equipped turnkey apartments with leases of four, eight or 12 months.

Chelsea House offers “a very high-end student housing experience,” says Ryan Gertler, an associate at JLL in Montreal.

Last year, Alternative Capital purchased the Willis Building, an office building at 1220-1224 Ste. Catherine St. on the corner of Drummond St. in downtown Montreal that once housed the Willis & Co. piano maker.

 The company is now expanding its Chelsea House concept by converting the property into student housing and renaming it the Chelsea House Sainte-Catherine, with occupancy slated for 2026.

Hayon says Alternative Capital provides higher-end offerings at both its Meridiem and student housing projects.

“It’s not typical to see all the amenities they have invested in,” he says, describing amenities that include quartz countertops and glass showers. “It’s really high end in terms of finishes and infrastructure.”

The Le Meridiem properties

Located in the Saint-François neighbourhood of Laval, Meridiem Laval is a riverfront property along the Rivière des Prairies. 

It has 24 one-bedroom apartments (33 per cent), 37 two-bedroom apartments (52 per cent), and 11 three-bedroom apartments (15 per cent).

Amenities include a fitness center, heated pool, outdoor terrace with BBQs, community lounge, and 109 indoor parking spaces. 

Located on the north shore of Montreal, about 30 minutes from the city, Meridiem St-Jérôme is in a transit-oriented development area and a short walk to a major mall. It has a mix of 28 (34 per cent) one-bedroom, 39 (48 per cent) two-bedrooms, and 15 (18 per cent) three-bedrooms.

There is an outdoor pool, fitness facility, terrace, grilling stations and community lounge, along with 80 interior and 36 exterior parking spots.

Tenants in both buildings pay for electricity, heating and hot water. 

Both properties are financed at below market interest rates:  Laval at 2.23 per cent, expiring on Dec. 1, 2026, and St-Jérôme at of 2.65 per cent until May 1, 2027.

Apartments average over 900 square feet

“The sizes of the units are very different from what we’re used to,” says Hayom, noting units average 980 square feet in St-Jérôme and 961 square feet in Laval, compared to an average of 650 to 750 square feet for the Montreal area. 

While the Laval property is 96 per cent leased, St-Jérôme is only 88 per cent rented. However, Gertler says several tenants recently moved and St-Jérôme will be fully leased this month.

Hayom says multifamily is in high demand among private and institutional investors and he expects strong interest in the Meridiem properties, which can be bought separately or together.

He notes a few potential buyers will be flying in to look at the properties. JLL plans to ovver organized tours of the properties, and was still finalizing the sales process.

Given that the properties are new, “it kind of opens the door for people in Ontario or people backed with U.S. money to come in and acquire something that’s essentially carefree for the short and interim term,” Gertler says. “It makes it much more digestible to them.”

The Montreal real estate community “will be all over it, but it kind of widens the net a bit, which is nice.”

Hayom says the properties represent “bite-sized” deals that will be of interest to investors looking to buy into developments with community feels, where the property manager knows every tenant by name.

Montreal multifamily a preferred asset class

Overall, multifamily remains a preferred asset class in the Montreal area, Hayom says, although recent CMHC changes have made it harder “for investors to get good debt.” 

As construction costs and land values have increased recently, “developers were having a hard time to make the math work, and a lot of products were put on ice until everything stabilizes.”

The fact not enough new multifamily supply is being built will increase the value of existing inventory, he says.