Yellowknife renters unlikely to see changes from sale of city's biggest landlord

CBC February 21, 2020

A pair of southern investment firms could soon control a major portion of Yellowknife's real estate, including two dozen apartment buildings with hundreds of units and much of the big commercial buildings downtown.

Northview REIT, which has long owned a majority of rental properties in Yellowknife and others in the Northwest Territories and Nunavut, could be sold for $4.8 billion to Starlight Investment and Kingsett Capital.

The pair of southern investment firms announced their offer to purchase Northview on Thursday. The deal still needs to be approved, but it involves thousands of properties across Canada and in the North.

In Yellowknife alone, Northview's 27 apartment buildings and 14 commercial buildings would be owned by Kingsett, a private equity firm based in Toronto that owns a number commercial spaces downtown, including the Bellanca Building.

The structure's not changing, the way they operate's not changing. - Rob Warburton, Cloudworks

If the deal does go through, two of the city's largest property owners would essentially become one, explained Rob Warburton, the owner and founder of Cloudworks, a local real estate investment company.

But tenants may not see any major changes on the ground as they're simply swapping one large corporate landlord for another.

View photos Alex Brockman/CBC

"This is share purchases, and corporate ownership structure changes, but the same buildings are doing the same things," Warburton said. "I'm not sure what kind of impact that would have — in the short term? Nothing.

"In the long term, the structure's not changing, the way they operate is not changing," he said. "These [commercial] properties have changed hands multiple times in the past decade with no noticeable change day-to-day."

Concentration of ownership downtown

Much of Yellowknife's downtown commercial buildings are owned by southern investors who've often come under fire for allowing buildings to sit empty.

Yellowknife North MLA Rylund Johnson expects that to only continue under the new ownership structure.

They're multi-billion dollar portfolios and Yellowknife is almost a rounding error for them. -Rylund Johnson, Yellowknife North MLA

"The more they own, the less relevant Yellowknife becomes to their portfolios," he said. "They're multi-billion dollar portfolios and Yellowknife is almost a rounding error for them.

"I can't think of a single benefit to this," he said. "Sometimes with mergers you can argue there's efficiencies, but that doesn't apply when [Kingsett has] consistently ignored their assets in Yellowknife and haven't invested capital."

View photos Alex Brockman/CBC

Johnson has previously complained to Canada's Competition Bureau about the amount of property Northview owned in Yellowknife, arguing they essentially hold a monopoly on rental properties.

"The market in Yellowknife is in desperate need of competition," he said.

Johnson expects the Competition Bureau to review this deal since it's so large and hopes some of the Yellowknife properties could be sold off as the deal works its way through being finalized.

"The Yellowknife assets aren't what this deal's about," he said.

Northview's board of trustees recommends shareholders approve the deal, which the companies say should be completed later this year. Northview also has until March 20 to find a better deal, according to a media release issued Thursday.

Through a spokesman, officials with Starlight Investment and Kingsett Capital declined an interview request from CBC News.