Construction is underway for a new purpose-built rental apartment at 88 Isabella St. in downtown Toronto that was originally planned to be a condominium.

There have been a few changes to the project, however. Woodbourne has replaced an unnamed family office to become the partner for Address, Capital Developments’ purpose-built rental apartment development platform that was launched earlier this year, and the size of the building has been reduced.

“When we converted from condo to rental, because of the nature of rental we needed additional equity to finance the project, and Woodbourne came in for the step-up equity,” Carlo Timpano, president of both Capital and Address, told RENX.

The two companies have worked together before, as they’ve teamed up for 170 Roehampton, a 50-storey, 600-unit, Sweeny&Co Architects-designed building at 170 Roehampton Ave. in Toronto that’s slated for completion in 2028.

Capital and Woodbourne also previously bid together for phase four of a development in Toronto’s Regent Park and Woodbourne’s affiliated Rhapsody Property Management Services has provided operational input on other rental projects.

Timpano couldn’t reveal the two companies’ ownership stakes in 88 Isabella due to a non-disclosure agreement, but said: “They will be assisting on the development management side by providing input on suite design and mix. Rhapsody, their wholly owned subsidiary, will be the operator of the asset.”

Building size has been reduced

The Diamond Schmitt-designed building was originally supposed to be 62 storeys and have more than 800 units, but has now been reduced to 50 storeys and 508 units — including 82 rental replacement units.

“We’re right-sizing it for the needs of the market, in terms of how many units we're delivering but also the size of the suites,” Capital director of development Caitlin Elliott said in the same interview.

Floor plates were redesigned and the average unit size has increased to 690 square feet. One-bedroom and one-bedroom plus den units will comprise 60 per cent of the total count, with two-bedroom units accounting for 30 per cent and three-bedroom units for the rest.

“Based on where rents are today, it's probably more likely to be roommates in the three-bedroom units than it is to be families,” said Timpano.

Interiors, amenities and location

Cecconi Simone is the interior designer. Kitchens have been expanded to include islands and full-size appliances, while each unit will also have a storage closet as part of the redesign.

Amenities will include: an outdoor terrace which rings the base of the tower; an outdoor swimming pool; a fitness studio and spa; a children's room; a games room; group and individual co-working spaces; three levels of underground parking for 105 vehicles; and a bicycle storage stall for each unit. 

Units will offer views of the downtown skyline to the south and the Rosedale Valley Ravine to the north. A ground-floor setback will allow the project to dedicate a publicly accessible space at the base of the building, enhancing the public realm for the surrounding community.

The Toronto Transit Commission’s Bloor-Yonge subway station is a less than 10-minute walk from the building’s location between Church and Jarvis streets.

The building, which is committed to a LEED Gold certification, has a targeted completion date in 2030.

Other Address developments

Fengate Asset Management, on behalf of LiUNA Pension Fund of Central and Eastern Canada, and Capital/Address just acquired a site at 880 Eastern Ave. and 80 Knox Ave. in Toronto's Leslieville neighbourhood from TAS Impact that’s approved for a 12-storey purpose-built rental building. It’s expected to have about 250 units, including affordable units, along with commercial/retail space at grade.

The project will target LEED certification and construction is expected to begin in late 2027.

“There’s a total lack of supply of contemporary rental product in this neighbourhood because it's been so hard to get approvals,” said Timpano. “These will have larger suites targeted towards people who already live in the area, and likely a higher mix of three bedrooms versus what we've done elsewhere in the market.”

Construction is in the very early stages for the Arcadis-designed 34-storey, 360-unit 41 Hendon near Yonge Street and Finch Avenue in North York that’s being developed in partnership with Kilmer Group. It’s expected to be completed by early 2029.

There are two other development sites under contract where Address and institutional partners plan to build a total of approximately 500 units.

“One of them is what I would call a yellow belt-oriented development in the heart of a neighbourhood, a short midrise project,” said Timpano. “The other is in one of the nodes that we've built in now, and it would be a 20- to 25-storey tower.”

The Toronto multifamily market

Timpano believes the Toronto condo market will continue to go through short-term chaos until some macroeconomic stability is achieved. Although available new condo unit inventory is slowly being cleared, the lack of new development will create a supply cliff late in this decade and early in the next one.

“There’s no contemporary product putting shovels in the ground right now except for product that’s in the $2,000-plus per square foot range,” said Timpano. 

“I don’t believe that rental product is a full substitute for ownership product and, if your objective is to buy a new-build product in 2029 or 2030 that isn't a true luxury product, that product simply won’t exist because no one is building it. 

“Someone is going to spec a mid-tier condo right now and, when they deliver it in 2029 or 2030, they’re going to make a decent amount of money.”

While several purpose-built rental apartment developments have been announced, many have yet to begin construction. 

Capital and Address are looking for development projects that pencil in for purpose-built rental but could potentially be converted to condo if market conditions improve.