Ontario Fund Converts Toronto Condo Block to Rentals
High Art Capital, backed by Ontario's Building Ontario Fund, acquired 43 unsold condos at Line 5 in Toronto for $22.3 million, roughly $518,000 per unit, well below current market prices. The units will be operated as long-term rentals as part of a $1.3 billion initiative to purchase about 2,200 condos. The deal comes as GTA condo sales remain weak, with only 215 new units sold in August.
The transaction at Line 5, a 1,005-unit project near Yonge and Eglinton, was completed at roughly $518,000 per unit, a steep discount to the $760,000 starting price for one-bedrooms currently advertised. The development, built by Reserve Properties and Westdale Properties, was launched before the pandemic when investor appetite for pre-construction condos was strong.
High Art's broader plan involves converting unsold inventory into rental portfolios, with property management support from Del and Menkes. The $1.3 billion initiative, partially funded by Ontario's Building Ontario Fund, targets about 2,200 units, including 550 affordable rentals. This move comes as August new condo sales in the GTA hit just 215 units, a 78% drop from the 10-year average.
This initiative could inject much-needed rental supply into Toronto's tight market, potentially easing rent pressures for tenants. By converting unsold condos, it may also provide developers a financial lifeline amid weak sales, reducing the risk of stalled projects. However, it could reduce the pool of units available for individual buyers, possibly affecting first-time purchasers. The inclusion of 550 affordable units may help some lower-income households, though the overall impact on housing affordability remains modest relative to the city's needs.