Rental housing company Tricon Residential Inc. and the Canada Pension Plan Investment Board (CPPIB) have teamed up to build rental housing throughout the Greater Toronto Area (GTA).

Through the joint venture, the companies will develop high-quality rental apartments located close to major transit and employment centres, with Tricon serving as the developer, asset manager, and property manager of the projects.

Under the agreement, CPP Investments will contribute up to $350 million, while Tricon will provide up to $150 million.

This will allow for the expected development of 2,000-3,000 units at a gross development cost of approximately C$1.4 billion, including leverage.

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The joint venture’s first project will be located in Toronto’s downtown east neighbourhood, and it's expected to consist of two towers housing a total of 870 units on a 1.8-acre site.

The unit mix would include 1, 2, and 3-bedroom units as well as amenities that include a fitness facility, rooftop garden, outdoor pool, 24/7 concierge, automated parcel management system, bike lockers, and a half-acre public park.

The location is a short walk to a future Ontario Line subway station and will be in close walking proximity to the downtown Toronto central business district.

The total development cost is expected to be approximately $600 million, including approximately $192 million of equity capital contributed from the joint venture, of which, Tricon’s share is approximately $58 million.

“Toronto’s compelling long-term rental fundamentals are firmly in place, including high population growth, a diverse economy, and increasingly stretched home prices," said Gary Berman, President and CEO of Tricon Residential in a statement.

"The current dislocation we are seeing in the land market presents an opportunity to source attractive development sites and provide high-quality rental apartments that respond to the needs of today’s renters, with relatively large livable suites, extensive amenities, and lifestyle programming (including virtual offerings) that contribute to a sense of resident community.”

While the actual site of the first project has yet to be disclosed, construction is expected to commence on the site in early 2022 with completion expected in 2025, pending the closing of the transaction.