Harbour Equity Capital raised $55M for its third JV development fund and is now deploying the capital, mostly into multifamily, including an array of GTA projects. President Ari Silverberg told us he's hunting for more deals in 2017.

Harbour Equity was founded in 2011 by Silverberg — a “reformed lawyer” and former exec with General Growth Properties, the second-largest regional mall operator in the U.S. — along with partners Paul Schachter and Alan Winer, who launched Harbour Mortgage in 2001. To date, Harbour, via three funds, has deployed more than $100M in JV developments nationwide, including residential, retail, office and industrial projects. “We focus on mid-market investments ($2M to $10M), and not a lot of companies are doing just that,” Silverberg said. “We saw an opportunity.” Plus Canada’s been a pretty development-friendly environment the past five years, he said.

The firm's investors are high-net-worth individuals and family offices. “We haven’t raised money through institutional sources,” Silverberg said. Harbour Equity started with one-off deals and moved to a fund model in 2013, raising $33M in its first fund; the second, launched in 2015, raised $36M. Harbour saw “tremendous deal flow” from 2015 through 2016, including a JV with Icon Partners on Royal York Urban Towns (below), a 104-unit stacked townhouse project on Royal York Road. Harbour's got another project with Icon, in Pickering, under Fund 3. “Key to our investment strategy is finding the right development partners.”

Harbour Equity prefers to get in early on projects and stay the course, enabling its partners to better scale operations, “stretch their equity,” and execute multiple projects concurrently. Silverberg's group may offer insights, but it allows builder partners to “do their thing.” To date 15% of Harbour’s third fund has been allocated; another 25% is earmarked for projects in approvals stage, including two condos in Halifax with Urban Capital Property Group. The two firms are also JVing on a 170-unit condo on the Queensway. “It’s nice to know who we’re working with. But we’re always open to new partners and opportunities.”

TO-born Silverberg got his business degree at Wharton, where he met General Growth Properties CEO John Bucksbaum, who lured him to Chicago to work for his development group. Silverberg returned home in 2006 and briefly worked for RioCan REIT before co-launching Charter REIT. By 2010, “I'd had my fill of public markets.” So when he was approached by Schachter and Winer, he was happy to join forces. Silverberg pegs purpose-built rental as a growth avenue for Harbour Equity, with projects in Edmonton, Calgary, Oshawa and Waterloo, and more coming in the GTA. "It's going to be a big focus for us.”