It’s no secret investing in new condo development today can be daunting for both builders and capital investors.

But that isn't stopping some deals from getting done, including Fengate Asset Management's new partnership with The Molinaro Group to complete a $240-million, 18-storey, 380,000-square-foot condominium tower in Burlington, a city just west of Toronto.

For Fengate — which is the capital partner along with investor LiUNA Pension Fund of Central and Eastern Canada — the development offers great potential.

“We like the demographics of Burlington. It’s a highly desirable location, and it has good population growth and good GDP growth; great labour population, great access to the 400-series highways and obviously, light-rail transit,” said Colin Catherwood, managing director investments with Fengate, in an interview with RENX. “We invest on behalf of pension funds and high-net-worth individuals, and LiUNA is our strategic partner and so LiUNA is the beneficiary.”

Financial details of the partnership, which closed in October, have not been made public.

Paradigm Grand condominiums

Known as Paradigm Grand, the project is being developed by Molinaro, which is completing the second of two phases. The first tranche was completed in 2019 by Molinaro.

The new tower will deliver 388 housing units to the city, as well as 18,000 square feet of retail and 12,000 square feet of office space. The project will also include 549 parking stalls. Amenities include a pool, spa, fitness centre, yoga studio, lounges and party areas.

The project is operating on an ambitious timeline, according to Catherwood.

“It’s fast. They’ve sold 70 per cent of the units, so they need to sell the remainder, and that will happen over time but we expect occupancy to be late Q4 for 2026 and first quarter 2027.”

The units range from 500 square feet to 1,400 square feet and pricing is from $800 to $900 per square foot. Ideal buyers will be young professionals, he said.

While this is the first official partnership between Molinaro and Fengate, the two are well acquainted.

“We’ve known of them and had relationships at various levels with the Molinaro Group for decades. Fengate and their first generation knew (Molinaro’s) first generation, and the second generation also get along so there’s deep connections,” he said.

So, when approached by Paradigm to become a partner, Fengate was a willing participant.

“They approached us in terms of working together and providing a capital solution for them in arguably a tough market, and so we found a structure that worked for all parties.”

Molinaro will handle the “day-to-day, development, management, construction management,” Catherwood said. “We’ve been able to give them guidance in terms of leasing and construction and the like, so it has been a sharing of resources.”

"Structural change" in condo sales market

While condo sales and prices across the Greater Toronto Area have dipped significantly over the past couple of years, the market is shifting for the better according to Catherwood.

“It’s been a tough couple of years. We continue to see starts decline. We continue to see cancellations happening, but I do think that we are seeing a bit of a structural change in the condo market overall."

Unlike the factors which propelled the earlier building boom, a different type of buyer is moving in.

“I believe the speculation in the condo market is going to be removed, and it’s going to be more of an owner-occupied market going forward," which Catherwood said makes investing in a “high-growth” area such as Burlington, or neighbouring Oakville, a smart play.

“I think fundamentally, what you’re seeing is that density doesn’t have the same value that it did maybe a couple years ago with the investor market. Projects that are significant in scale - 600, 700, 800 units will have difficulty being delivered because you need to be able to cater more to the owner-occupied market,” he said.

While the usual challenges remain, including financing, interest rates and construction costs, “I think in general, there is a real opportunity to pivot some of these for-sale housing condominium units to purpose-built rental and deliver an attainable rental in the Canadian context,” Catherwood said.

Fengate investing in multifamily, seniors housing

Fengate is also investing in four purpose-built rental developments (three in Toronto, one in Ottawa). Fengate, LIUNA and The Hi-Rise Group broke ground earlier this month at Church & Main in Brampton, just north of Toronto.

The 35-storey, 400-unit transit-oriented development will offer studio, one-, two- and three-bedroom units focused toward new Canadians, students, young professionals and families. It is located across from the Brampton Innovation District GO station.

The tower is the second development in Brampton for LiUNA and Fengate after the Manett Urban - Rentals on the Park which took occupancy earlier this year and is 90 per cent leased.

“While many others have gone pens and shovels down, we are here, and we are building,” said Jaime McKenna, Fengate's president, in a release about that project.

Amenities at Church & Main will include co-working and social lounge spaces, fitness and wellness facilities, indoor and outdoor community gathering areas, a pet wash area, game rooms, and multi-purpose activity spaces. It targets LEED Gold certification, and is anticipated to welcome its first residents in 2029.

Ground breaks at seniors residence

The company also recently broke ground for a seniors’ residence at 1105 McCraney St. E. in Oakville. The six-storey, 221-unit residence will offer independent supportive living and memory care suites.

McCraney is also a LiUNA and Fengate project, with Seasons Retirement Communities and The Hi-Rise Group. It is the first GTA-based development for Seasons, which has 15 retirement residences in Ontario, eight in Alberta, and two in British Columbia.

The federal government’s recent budget and other previously announced pro-housing measures may already be having a positive impact on potential buyers, Catherwood believes.

“They have delivered on a lot of their promises, which is positive: HST being removed, and changes to the HST in general have been positive.”

Municipalities are also stepping up.

“They’ve also provided realty tax benefits for affordable housing, and within the City of Toronto in particular, they’ve also provided rental incentive programs that eliminate DCs (development charges) and give a rebate to the tune of about 15 per cent for affordable housing,” Catherwood observed. “It’s been an interesting three years but we are seeing green shoots. I am optimistic in terms of the future. I do believe that we are at an inflection point.”