Graywood Developments LP and Phantom Developments have acquired a development property at 3201 Highway 7, at the Vaughan Metropolitan Centre. (Courtesy Graywood)

Graywood Developments LP and Phantom Developments have partnered to acquire 3201 Highway 7, a property slated for a major three-tower-plus-podium, mixed-use development at the Vaughan Metropolitan Centre (VMC).

For Graywood, the acquisition, which is at the intersection of Interchange Way, is the largest in company history. It also completes the final closing of its ninth real estate private equity fund.

The partners’ planned development would comprise two 55- and one 26-storey tower with approximately 1,730 residential units in total.

The purchase price for the property, located just steps away from the VMC stop on the TTC subway line, was not disclosed.

Graywood currently has 14 active projects with 6,000 residential units under development, representing $4.3 billion in development value.

The Vaughan Metropolitan Centre site

Alex Marshall, Graywood’s director of development, said the firm is focused on investing in what it calls AAA locations with direct connections to transit.

“We think Vaughan is that next spot,” Marshall told RENX. “If you’ve walked the VMC recently, you can see it already coming into force.

“You walk from the transit centre to our site, it’s less than a four-minute walk and we are creating a complete community where our residents are going to be able to live, work and play with office space, amenity space, retail and obviously it’s going to be home to over 1,700 units.”

Another reason Graywood purchased the site, he said, is because it has planning approvals in place for a pair of 55-storey towers, fronting onto Highway 7. A third tower of 26 storeys is planned on the south side. 

Marshall said ground-floor retail will be located in the two towers along Highway 7, comprising about 10,000 square feet. Rounding out the site is a proposal for a stand-alone, three-storey office building of about 40,000 square feet.

“The two 55-storey towers are going to share a five-storey podium and at the first floor of that podium connecting the two towers, that’s where the retail will be,” he said.

A five-storey hotel currently sits on the site. That property is part of the redevelopment and will be demolished when construction begins.

Marshall said the goal is to launch sales for the residences in Q1 2023. The hope is to start construction soon after.

“With 55-storey towers, the construction timeline is a little longer than most smaller projects. So we’re looking to be fully complete before the end of 2027,” he added.

Graywood and Fund IX

Graywood, based in Toronto and established more than 35 years ago, is a private investment management company specializing in real estate development in the Greater Toronto Area and other Canadian markets. Graywood has managed 53 projects, representing $8.3 billion in development value and 31,100 units.

It has about 60 employees. 

Graywood raised $148 million from Canadian financial institutions, pension plans, family offices and high-net-worth individuals in its ninth fund, bringing Graywood’s equity under management to over $525 million, funding the current active projects.

The company is looking to grow in the next few years with additional funds. 

The acquisition of 3201 Highway 7 follows the acquisition of two previous investments for Fund IX.

Graywood acquired 241 Church St., at the northeast corner of Church and Dundas Streets in downtown Toronto, in October 2020 as its first seed investment. 241 Church St. will be developed into a 52-storey building with approximately 600 units.

Graywood acquired 2365 and 2377 Lakeshore Rd. W. in Oakville’s Bronte Village neighbourhood in September as its second acquisition. The Lakeshore Road project is expected to have 138 units in mid-rise built form along the shores of Lake Ontario. 

Marshall said those locations and proximity to transit drives Graywood’s passion for development – wanting to be in up-and-coming locations with the ability to create complete communities.

The Vaughan Metropolitan Centre district

Alex Marshall is Graywood Developments’ director of development. (Courtesy Graywood)

The 3201 Highway 7 site is in an area that has been undergoing an enormous amount of development recently, including the additions of infrastructure and community amenities. In addition to several other major multiresidential projects, there is a new flagship YMCA and central library nearby, new office and retail space, a transit hub and a nine-acre park.

Graywood isn’t the only company which sees the future potential in this rapidly growing Greater Toronto Area node.

“(Growth in the area) is driven by the transit station coming first. The transit arrived on the site and with that came the development of two office towers with big tenants. You can see the signs from the highway. You’ve got KPMG and you have PwC that have really bought in, moved their offices to that location which has then spurred some development in the residential space, along with the bus terminal,” said Marshall. 

He said supply and demand has led to a boom in residential construction in the Toronto area. 

“There’s such high demand for people that want to live in these great locations, accessible to transit,” Marshall said.

“People want to live in Toronto and that is what’s driving the demand . . . . We really need to make sure that the development industry can create enough supply to keep that going so people can move here and experience the city that we all have.”

He said that demand will be driven even higher by the oncoming influx of new immigration.

The ongoing pandemic has slowed the pace of newcomers during the past 18 months, but with the situation slowly improving hundreds of thousands of new residents will be coming to Canada over the next few years.

“Toronto is a great mix of innovation and capital. So you look at the technology companies that are coming, they’re setting up shop in Toronto . . . Shopify and others.

“It’s the next frontier in the economy and that is why the next generation want to move to Toronto, live in Toronto, work and play in Toronto.”