After passing on several potential joint multifamily development sites together over the years, Capital Developments and Kilmer Group have found one to their liking. They are moving forward with a 34-storey purpose-built rental building in Toronto’s Willowdale community.

“We learned that we approach business very similarly and that our teams get along very well, which is very important in the real estate industry where your projects are five to seven years long,” Capital Developments president Carlo Timpano told RENX.

“This one stuck and that was the genesis of this relationship on this site.”

Timpano wouldn’t reveal the financial split of the partnership but said Capital Developments and Kilmer will share development management, sales and marketing obligations. 

“Each of us brings our respective strengths to the table. Kilmer in particular is exceptionally good at all things civil engineering, all things below grade and all things that, frankly, drive up the cost and represent the risk of the building. We're very fortunate to have it on our team in this node, where there are issues with soils and civil.”

Five-month rezoning approval process

The Hendon Avenue development site near Yonge Street and Finch Avenue is an assembly of four properties, three of which contained empty houses and one with a house that was occupied. The total assembly cost $15 million.

A rezoning application was submitted just before the final acquisition closed in June and was approved in just five months, which is quick for Toronto. This will be Capital Developments’ third project in the node, following Azura Condominiums and Olive Residences.

The two Toronto-based developers closely collaborated with members of the local community, City of Toronto planning staff and councillor Lily Cheng’s office to push the process through. 

Other factors involved in obtaining speedy approvals included the site’s location 150 metres from the Finch subway station entrance and not asking to build a 50-, 60- or 70-storey building.

“We didn't need to push the envelope to have an economically viable tower,” Timpano said. “We didn’t need that density.”  

The development will not only provide badly needed housing but will also enhance nearby Hendon Park and the public realm of Hendon Avenue.

What will be built

The existing houses are to be demolished in the first quarter of this year and ground should be broken for the Arcadis-designed apartment building by the end of the second quarter. Timpano expects construction to take about 30 months.

The building will have approximately 350 residential units. Fifty to 55 per cent will have two or three bedrooms, with the remainder having one bedroom. Unit sizes will be in the 450- to 1,000-square foot range; there won’t be any studio apartments.

“The twos and threes will be split into larger twos and threes for families, and smaller twos and threes for students,” Timpano said. “The ones will be split into larger ones for couples and smaller ones for students.” 

Amenities at 41 Hendon will include an outdoor swimming pool, a fitness centre and co-working spaces.

Other Capital Developments projects

Capital Developments has several other projects at various stages of development in Toronto.

The residential portion of the 65-storey, 700-unit, Sweeny&Co Architects-designed 11 YV condominium — in partnership with Metropia and RioCan Living in the high-end Yorkville area — has been completed. Its 25,000 square feet of street-level retail space will open next year.

Olive Residences — a 31-storey, 379-unit, Arcadis-designed condo at 36 Olive Ave., not far from the Hendon site — has been registered and will begin occupancy in January.

The 28-storey, 303-unit, Diamond Schmitt-designed, flatiron-shaped Park Road condo at 28 Park Rd. in Yorkville will be topped off in January. Occupancy is expected in early 2027.

Construction is past the 30th storey for the Arcadis-designed 8 Elm on Yonge, a partnership with Reserve Properties at Yonge and Elm streets, that will be a 69-storey, 821-unit mixed-use condo upon completion.

Construction of a 50-storey, 600-unit, Sweeny & Co-designed purpose-built rental apartment at 170 Roehampton Ave., northeast of Yonge Street and Eglinton Avenue East, is above grade and slated for completion in 2028. The net-zero carbon building is being developed in partnership with Metropia and Woodbourne.

Demolition is underway on the former 14-storey rental apartment on the site of what will become 88 Isabella, on Isabella Avenue between Church and Jarvis streets. The 62-storey Diamond Schmitt-designed rental tower, which was originally conceived as a condo, should be completed in 2029.

Still a market for condos

Capital Developments has three mid-rise sites in the early stages of development that should be announced in February. Two will be purpose-built rental apartments and the third could be either a rental or a condo.

“We still believe there’s a condo market in a different form than it was 24 months ago,” Timpano said. “There’s still a demand for condos if you can sell them at close to resale prices and with a new building typology.”

These mid-market condo units would be larger and target end-users who will live in them, as opposed to investors looking to buy and then rent them on the shadow market. 

Capital Developments is, however, being more conservative in site acquisitions due to the major slump in new condo sales and other unfavourable market conditions. 

Other developers seem to be taking the same approach. The company is trying to sell a site at 399 Yonge St., where it had originally proposed to develop a 75-storey, 828-unit Teeple Architects-designed condo at the corner of Gerrard Street, but hasn’t had any success.

“The process of selling that site has taken longer than it would have in a more buoyant market,” Timpano said.