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Graywood expands emphasis on purpose-built rental development

Shovels are in the ground and the crane is in place at Graywood's 241 Church St., multiresidential tower site. (Courtesy Graywood)
Shovels are in the ground and the crane is in place at Graywood's 241 Church St., multiresidential tower site. (Courtesy Graywood)

Toronto-based Graywood Developments is putting a stronger and expanded focus on the build-to-rent residential sector as a response to current market demands.

“Rental has always been part of Graywood’s strategic plan,” chief operating officer Greg Sweeney told RENX. 

“Going back a number of years, we were doing our due diligence on the market and the potential of each site to have them accommodate rental on them in addition to condo. We had done that analysis on all of our sites to ensure we had flexibility from both angles.”

As part of the move, Graywood has earmarked five residential communities — totalling approximately 3,000 units — under development as rental projects.

As a fully integrated organization, Graywood intends to develop, construct, lease, operate and manage its rental properties in-house.

“Our team is well-positioned to thrive in managing all these projects and delivering an outstanding living experience for everyone who rents from us,” Sweeney said.

Soft condominium sales are continuing

While the Greater Toronto Area (GTA) has experienced a softening of condominium sales since 2022, there remains a demand for quality rental housing to help ease the current housing shortage.

“Our focus is to provide quality housing solutions to the market, be that lowrise, midrise or highrise,” Sweeney said. “There's a long-term housing shortage right now, and there's clearly growing demand, so across our portfolio there were sites that made sense for us to move forward in the build-to-rent sector.”

One of the primary differences between condo and purpose-built rental apartment development is their funding structure. Rentals require significantly more up-front equity to fund construction, whereas condo financing relies on unit pre-sales that enable the developer to leverage purchase deposits to help fund it.

“Graywood is uniquely positioned in that there are many pathways to secure that equity, so we’re well-positioned to move forward with our pipeline,” Sweeney noted. 

Graywood’s first two purpose-built rental projects to be named are: 241 Church Street in downtown Toronto; and 3201 Highway 7, located north of Ontario’s capital in Vaughan, which is a partnership with Phantom Developments.

“We're prioritizing AAA locations with access to transit and other urban amenities, and we're designing them in a contextually responsive way to respond to the communities they're in,” Sweeney said.

241 Church Street and 3201 Highway 7

Construction for the 52-storey, 591-unit 241 Church Street began last year and should be up to ground level in the coming weeks. It will feature a mix of studio, one-bedroom, two-bedroom and three-bedroom units and amenities including co-working space, a gym, a party room, a work studio, an outdoor terrace and a dog run.

Completion is targeted for Q3 2028.

“One of the things we've looked at involves adjusting the amenity packages and how we program rental versus condo,” Sweeney said.

At 241 Church Street, for example, amenities are being moved to the top floor to offer a package for all of the building’s residents to enjoy. That location likely would be where a developer would receive the highest price per square foot for a penthouse suite in a condo so an amenity floor would be placed lower down.

Demolition of an existing structure at the 3201 Highway 7 site is taking place and Sweeney expects ground to be broken for the new 55-storey building in the coming weeks. It will have approximately 600 units comprised of studios, one-bedroom, two-bedroom and three-bedroom suites.

Amenities are expected to include co-working space, a gym, a party room, a work studio, a swimming pool, an outdoor terrace and a dog run.

Completion in the fourth quarter of 2029 is targeted for that project. 

Claystone

The real estate investment management company remains active in the condo market and launched Claystone at 2375 Lakeshore Rd. W. in Oakville, Ont. in April. The seven-storey, 141-unit building is being developed in partnership with Hankyu Hanshin Properties, a real estate company from Osaka, Japan. 

“We've been thrilled with the community's response to that project,” Sweeney said. “We've really enjoyed working with our partners, HHP, throughout that process.

“We’ve seen sales steadily continue through the summer. The market isn't what it was a few years ago but we're very proud of our team and don't foresee any delays in getting that project underway.”

Sweeney would like to be in the ground with Claystone in the back half of 2026.

Other Graywood developments

Claystone joins other active Graywood projects for sale across the GTA, including: the 32-storey, 557-unit The Goode at 33 Parliament St. in Toronto's The Distillery Historic District; and Park and Lake, a community of 165 single-family homes at 1440 Tradewinds St. in Oshawa developed in partnership with Falconcrest Homes.

Sweeney declined to reveal specific details, but said there are still unsold units in some of Graywood’s more recently completed condos. The company’s Toronto completions over the past two years include:

  • the 159-unit 250 Lawrence, at 250 Lawrence Ave. W., in the spring of 2023;
  • the 269-unit Scout, at 1787 St. Clair Ave. W., in the spring of 2023;
  • the 285-unit Wonder, a partnership with Alterra at 462 Eastern Ave., in the summer of 2023;
  • and the 489-unit JAC Condos, a partnership with Phantom at 308 Jarvis St., last November.

“From time to time there are units that are sold, but clearly the market is not as robust as it was a number of years ago,” Sweeney said.

Acquisitions are coming

Graywood currently asset manages a portfolio of income properties valued at $1.6 billion throughout Canada and the United States. It has 12 active projects with 5,900 residential units, representing $4.7 billion in value, under development. 

“A couple of the properties that are in our pipeline are sites that we’re firm to close on,” Sweeney said. “We’re actively underwriting and looking at opportunities in the market and always evaluating those sites as either condo or rental. 

“But the sites that we're looking to close on for the year-end at this point would be targeted for rental.”


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