Toronto Developer Converts Downtown Office Tower to Rental Housing
KingSett Capital has filed a site plan application to convert 700 Bay Street, a 24-storey office building in Toronto, into 249 purpose-built rental units. The conversion represents the latest phase of KingSett's residential development strategy in the Bay and Gerrard area, following its earlier completion of a 275-unit rental tower and residential expansion at adjacent properties. The property's proximity to multiple universities and a hospital district positions it within a high-demand residential corridor.
KingSett Capital has strategically concentrated its residential development efforts in the Bay and Gerrard corridor over the past 14 years. The developer initially acquired 700 Bay in 2012 and subsequently completed neighboring residential projects by 2020, leaving the office tower as the final piece of its area transformation. The 24-storey building, which spans nearly 185,000 square feet of office and retail space, had approximately 84,000 square feet available for lease as of September 2026, indicating softening demand for commercial office tenancy in this downtown location.
The conversion capitalizes on the area's institutional anchors and demographic patterns. The site's walking-distance proximity to Toronto Metropolitan University, the University of Toronto, and the downtown hospital district suggests strong rental demand from students and healthcare workers. This positioning follows a market trend where purpose-built rental housing has become increasingly viable in mixed-use downtown cores with transit access and institutional employment density.
This conversion may address Toronto's rental housing shortage while responding to documented shifts in office space utilization. The transformation could affect commercial real estate values in the downtown core and potentially influence hiring patterns for office-dependent businesses seeking downtown locations. However, the loss of office inventory might pressure remaining downtown commercial tenants, though weak leasing activity at 700 Bay itself suggests limited competitive impact. The project could model adaptive reuse strategies for underperforming office assets across Canadian cities facing similar market conditions.