Ontario-backed High Art Capital pays $22.3-million for 43 unsold Toronto condo units

Ontario government-backed investment firm High Art Capital has paid $22.3-million for 43 unsold condo units at new towers in midtown Toronto, an amount well below the market rate.

The bulk purchase is the $1.3-billion fund’s first transaction. The firm bought the units in a condo complex called Line 5, which was named after the city’s new light-rail transit on Eglinton Avenue.

The purchase is one of the few of its kind to be revealed publicly. Large investors, such as real estate companies, have been bulk-buying unsold condo units at a discount to take advantage of the recent downturn.

But the deals are not typically public, nor are the precise locations or pricing per unit. The $22.3-million price tag works out to an average of $518,000 a unit, according to data from CoStar Group, a U.S.-based commercial real estate information provider that reviewed land transfer records for the transaction.

High Art, a privately owned fund, launched this year to buy up unsold inventory in the Toronto region and turn them into rentals. It is backed by $300-million in financing from the Ontario government through its Building Ontario Fund, which was formed in 2024 to invest with private investors in infrastructure deemed critical for the province.

Its Line 5 deal was initially announced in mid-August in a news release without information on the location, pricing or number of units. At the time, a High Art spokesperson said it would not disclose transaction details.

This week, spokesperson Laryssa Waler reiterated that the fund does not comment on details of confidential commercial transactions.

Developers lobby Ottawa for mortgage-interest tax changes on new homes

The Line 5 project was developed by Westdale Properties and Reserve Properties, which launched sales prior to the pandemic when there was strong demand for pre-construction condos. Now, there’s very little demand.

Westdale chief operating officer Mitchell Cohen said a lot of developers are sitting on inventory and the transaction with High Art helps get the units out on the market so people can live in them. “It was a perfect opportunity,” said Mr. Cohen.

High Art paid less than the average price of a pre-construction condo in Toronto and those on the resale market.

“Bulk buyers are acquiring at a notable discount to an individual buyer,” said Shaun Hildebrand, president with condo research firm Urbanation Inc.

High Art’s plan is to buy about 2,200 unsold condos and then sell most of them after a minimum of five years. Of that amount, 550 units are expected to be rented at below-market rates and remain affordable rentals in perpetuity.

Building Ontario Fund spokesperson Julia Sakas said High Art’s plan creates both market and affordable rental housing.

As part of its first deal, High Art has said it has an agreement with the Service Employees International Union to provide its members in health care, such as personal support workers, with rental units below market rates.

The union said the response has been overwhelming, with more than 500 members expressing interest.

“Some of our members have enormous commutes,” said John Klein, the union’s secretary treasurer, adding that the fund wanted to prioritize health care workers and first responders.

In depth: In downtown Toronto, the office is back

Rent would be 25 per cent below the going rate. For example, the Line 5 condos are near the heavily trafficked intersection of Yonge Street and Eglinton Avenue. There, the typical rent for a one-bedroom is about $2,400 per month, according to Mr. Klein. That means union members could rent a unit at around $1,800 per month, he said.

The real estate downturn has prompted the federal and Ontario governments to introduce a temporary tax break to help revive the condo market and spur homebuilding.

From April, 2026, through March, 2027, buyers are eligible for an HST rebate on the purchase of new homes, up to a maximum of $130,000 on homes priced up to $1.5-million.

So far, the tax break is mostly boosting purchases of new houses. But Westdale’s Mr. Cohen said the rebate has also helped condo sales.

In August, there were 215 purchases of new condos in the Toronto region, including condo apartments and stacked condo townhouses, according to a report from new-home research group Altus and trade group Building Industry and Land Development Association.

That’s 78 per cent below the 10-year average for that month, according to the report.