Graywood Developments and Phantom Developments have broken ground on a 55-storey, 617-unit purpose-built rental apartment at 3201 Highway 7 in Vaughan Metropolitan Centre (VMC), just north of Toronto.

The project is the second partnership between Graywood and Phantom, which jointly developed the recently completed JAC Condos in downtown Toronto.

“We had a very good relationship and everything was in sync with the partnership,” Phantom principal Henry Strasser told RENX when asked about expanding their relationship. “We were aligned with full transparency.”

Graywood approached Phantom about becoming involved with the VMC project, which involved the acquisition of the site from The Gupta Group for approximately $131 million. 

Graywood has a 65 per cent ownership stake and is managing construction. Phantom owns the other 35 per cent, is collaborating with its partner on marketing and is involved with all major decisions.

A 155-room Hilton Garden Inn owned by The Gupta Group on the site remained open until it was decided to move forward with the new development. The hotel was demolished over the summer.

What 3201 Highway 7 will offer

The VMC apartment building will offer studios as well as one-, two-and three-bedroom units. Amenities will include a gym, a party room, a swimming pool, co-working space, an outdoor terrace and a dog run. 

The site’s location is a five-minute walk to the VMC subway station. It also provides quick access to highways 400 and 407 and has an abundance of amenities within walking distance.  

While there’s been heavy condominium development in VMC by a number of companies, SmartLiving’s 36-storey, 366-unit The Millway has been the most notable purpose-built rental to go up in the area since it was completed three years ago.

“We haven't seen any other projects that were transferred from condominiums to rental as of yet in the area, but we suspect there will be some,” Strasser said. Many planned condo developments across the Greater Toronto Area (GTA) have pivoted to rental apartments.

“We're ahead of the game. We’ve already started construction and the financing is in place.”

The building is expected to take just over five years to complete and will be the first in a three-tower master plan, with all buildings designed by Arcadis. Once completed, the community will add 1,700 residential units to VMC.   

“The next two towers are ready to go and are designed,” Strasser said, adding they’ll be launched when the market seems right for either rental apartments or condos.

The vision for VMC is to create a transit-oriented downtown with residential, office and mixed-use districts linked by a network of parks, squares, open spaces and streets. The City of Vaughan has targets of 12,000 residential units, 1.5 million square feet of office space and 750,000 square feet of new retail space for VMC by 2031.

Other Phantom developments

Phantom is also active at other sites. It has just started construction on a 370,000-square-foot industrial building with a 40-foot clear height in the East Beaver Creek commercial area of Richmond Hill, north of Toronto. 

“We're doing it on spec, but three or four major tenants have reached out to us through their representatives to lease half the space or the full space once they saw that we commenced construction,” Strasser said. 

Phantom is also ready to move forward with a 76-townhome development near the intersection of Sebastian Street and Taunton Road East in Whitby, a town in Durham Region that’s less than 60 kilometres from downtown Toronto. 

“I can turn the key and we can start selling or marketing as we wish,” Strasser said. “We have layouts and have everything all ready to go.”

Future Phantom acquisitions

Phantom wants to acquire more development properties but is willing to wait for pricing to moderate.

“We're looking for good deals but, right now, the deals still aren't there,” Strasser said. “I think the pricing is still high for where today's market is. 

“But we've told Graywood, we've told all of our partners, and we’ve told our lenders that, if a really, really good deal comes up, Phantom would be interested in looking at it or doing a joint venture.”

Graywood and Phantom

Toronto-based Graywood is a private investment management firm focused on the development of build-to-sell and build-to-rent communities as well as commercial properties. It has managed 56 projects, representing $9.2 billion in development value and 31,900 units across North America, during its 40-year history. 

The firm has 10 active projects, which include 4,266 residential units (2,600 of which are rentals) representing $3.7 billion in development, and an asset management portfolio valued at $1.6 billion.

Toronto-based Phantom has been involved with the development of several major condo projects in the GTA, including JAC Condos, Jade, Jade Waterfront, 8 Cumberland and Tea Garden.

Subsidiary company S&A Developments has built and managed more than two million square feet of industrial and commercial space throughout the GTA.