When is a $5M acquisition of a residential apartment building a big deal? When its tenants purchase it.
Robins Appleby acted for the tenants of 272 Caroline Street in Hamilton as they came together, formed a co-operative corporation, and purchased their building. The building had rental rates far below the average monthly rent in Hamilton. This was largely the result of long-term tenancies, with some residents living in the building for decades. Concerned that a sale to the private market would yield unaffordable rents in due course, the former tenants, now members of the Co-operative, took control and bought their building.
The transaction was financed with loans from First Ontario Credit Union, insured by CMHC, an investment from New Market Funds, a loan from the CMHC Innovation Fund, and the City of Hamilton through a contribution agreement and rent supplements. The Robins team was led by John Fox and included Ladislav Kovac, Claudia Pedrero, Amelia Briggs-Morris and Natalie Caprara. Our incredibly tenacious client group was headed by Emily Power and Jacob Hoytema.
The importance of this kind of transaction ought not to be missed. Where the press and governments have tended to focus on the creation of new affordable units, Ontario loses more existing affordable units than it can hope to build. This transaction ensures that these 21 units at 272 Caroline will remain affordable for a long time. The multiple levels of financing also underscore the challenges for non-profit actors seeking to buy at market rates—loans from different levels of government and partnerships with socially-minded lenders are essential for success. We offer our congratulations to Emily, Jacob, and all the members on completing this transaction.