Fitzrovia is looking to densify older multi-family rental properties after launching an apartment building owner-operator.

Montreal-based Fitzrovia ranks among Canada’s largest developers of purpose-built rental housing. The new subsidiary, dubbed Maddox, specializes in enhancing purpose-built rental properties.

Maddox assets include the 596-unit Sherbourne complex comprising two towers at Sherbourne and Shuter streets in Toronto’s east end.

Adrian Rocca, Fitzrovia’s president and CEO, told BNN Bloomberg that the company could build new multi-family rental buildings around the Sherbourne and Shuter property. Rocca said Fitzrovia is in the process of acquiring two infill development land parcels near the property.

“We are in the process of getting [them] titled, and we will look to densify to create new supply as and when it makes sense,” he told his interviewer. “It’s, really, excess land.”

Rocca said many older purpose-built rental properties are “underdensified.” He stressed that Maddox will not evict existing tenants for the purpose of renovations. Although the Maddox business focuses on upgrading buildings, renovations will only occur after units become vacant.

“We will absolutely not renovict,” he told BNN Bloomberg. “If a resident wants to stay in our building forever, we’d love for them to do that.”

Rocca said Fitzrovia’s institutional investors allow the Montreal-based company to take a patient approach to development as they focus on earning long-term income. Although the returns are smaller, they can be “very attractive” when buildings are stabilized. The strategy also provides a hedge against inflation.

“We believe it’s a very defensive strategy,” Rocca told his interviewer.