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Starlight Investments, one of the largest privately held apartment landlords in Canada, is creating a US$1.3 billion partnership with two of the largest pension funds in the country to look for multi-family assets in the U.S. south, a region largely free of rent control.

Raj Mehta, global head of private capital and partnerships with Starlight, says the expanded rent control regime in Ontario isn’t the reason the company is looking south of the border for property in its partnership with the Public Sector Pension Investment Board and the Alberta Investment Management Corp. But the reality is, the province is not a place he expects to see more opportunity in the future.

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“It’s an interesting conclusion. You are looking at two large pension funds in Canada. Part of their strategy is they want to diversify anyway and that’s a big part of it. But the second part of it is if you really like multi-family, and many institutional investors do because it’s very stable, safe and has low volatility — and there is no product to buy in Canada, then you are forced to look elsewhere,” said Mehta. “The United States is natural.”