Toronto firm buys 22 city buildings
Developer Tony Graat sells off apartment properties in one of London's biggest real estate deals
London Free Press, July 7, 2002
One of the largest real estate deals in London history closed yesterday when a Toronto company bought 22 apartment buildings from a London property giant.
TransGlobe Management Services and Tony Graat inked the multimillion-dollar deal late yesterday afternoon when TransGlobe acquired 2,270 units in 22 apartment buildings from Graat.
TransGlobe takes over buildings on Wonderland Road South, Proudfoot Lane, Kipps Lane, Richmond Street, Queens Avenue and Talbot Street.
Graat maintains control of some townhouses, condos and malls.
And he retains Reservoir Hill, a property he bought in 1967, where his plans to put up apartment buildings sparked a battle with the city. The city contends the area is historic and is appealing an Ontario Municipal Board decision that authorized the development.
Graat did not respond to interview requests from The Free Press.
Yesterday's deal catapults TransGlobe, an eight-year-old family-run business, into the London rental market.
"I think London is a great city," said TransGlobe's president, Daniel Drimmer. "It's in a growth mode. It's a good rental market."
Drimmer wouldn't say how much he paid for the buildings, but industry experts say it had to be in the hundreds of millions.
"Given (Graat's) most recent sales ... outside of London and the products being as good or better than he's had in other communities, I would think that he averaged around $75,000 per unit, which would be north of $160 million," said George Georgopoulos, a senior sales associate with Sutton Group-Select Realty. "That's one of the biggest deals London has seen. It's going to be one that's going to get a lot of attention for London."
Georgopoulos said the market for apartment buildings is hot, with everyone wanting a piece of the action.
"The rental market in London is tight," Georgopoulos said. "Typically, large blocks of apartment buildings are hard to obtain."
The buildings are invaluable to new buyers, who could hold the rental units for a short time, then convert them to condos and sell them individually for a profit.
That means people interested in buying the buildings would pay a premium, he said.
"For people that want to park money in a place other than the stock market, it's an apartment building because everybody needs a place to live," he said. "To buy an apartment building is a very prudent investment."
The sale has some tenants worried.
"We're just waiting to see what will happen," said one, asking his name not be used. "Are they continuing as is? Are they knocking it down or turning it into a condo?"
But Drimmer said that shouldn't be a concern for tenants, who will get "professional property management."
TransGlobe has no plans to change the buildings, he added. "They're in pretty good shape."
A list of apartment buildings TransGlobe Management Services acquired from Tony Graat yesterday: