- What A 136-unit preconstruction development in Toronto is looking to switch from condominium to rental
- Why The condo market continues to struggle amid high interest rates
- What next The updated plans are awaiting approval from Toronto City Council
An approved condominium development in Toronto’s North York region is pivoting to rental, a move made by several other projects in the region this year.
Dawson Wales Investment filed plans in February for a nine-storey, 136-unit condo building at 12-20 Bentworth Avenue, just west of the Yorkdale Shopping Centre. The plans were approved by Toronto City Council in June.
The developer now has submitted updated plans to build instead all 136 units as rental apartments. The decision to switch to rental was made due in part to the company’s “commitment to building lasting value for all of our stakeholders,” Dawson Wales told Green Street News. The application is awaiting the city council’s approval.
Design plans remain relatively unchanged. Units range from a 357 sq ft studio to a 1,078 sq ft three bedroom. Over 7,000 sq ft of amenity space is planned, including terraces, a green roof, a dog run and a dog-washing station. An underground garage will provide 97 spaces, 10 of which will be for visitors.
Dawson Wales purchased the development site in January 2013 for $12m. The developer obtained an $8.4m loan from Vector Financial Services and Olympia Trust, as well as a $2m vendor take-back loan from the seller.
The rental pivot trend
The Bentworth project joins a growing list of developments making the switch from condo to rental amid struggling preconstruction condo sales.
A new report from real estate data firm Urbanation found that in the third quarter of the year, 1,111 condo units across three developments in the Greater Toronto and Hamilton Area were converted to purpose-built rentals. Similarly, an additional eight developments totaling 2,231 units were either put on hold, cancelled or placed under receivership during Q3.
“The new condo market is facing its toughest challenge in decades,” said Shaun Hildebrand, president of Urbanation. “Investors are inactive, and end-user buyers currently have plenty of lower-priced options to choose from in the resale market.”
This trend has been building for quite some time under high interest rates and increasing unaffordability. Over the past two years, 33 condo projects totaling 6,796 units were converted to rental, put on hold, cancelled or went into receivership, Urbanation said.
