What was set to become the site of a high-rise tower from one of Toronto's well-known rental developers may soon have a different future in store as the property was listed for sale last week.
Hazelview Investments in partnership with Trinity Development Group had planned to construct a 27-storey, 354-unit rental tower at 1540 Bloor Street West, on the northwest corner of the Dundas Street intersection. Located just a stone's throw from the Dundas West subway station and less-than-five-minute walk from the Bloor GO station, the project would have added much-needed rental housing in an extremely convenient location.
Significant work had been put into the site, having already obtained zoning amendments for their height and density — no small feat in the City of Toronto where approvals can take years, costing developers quite a bit of money. The established entitlements will be maintained with the sale, which is being brokered by JLL Capital Markets.
Michael Tsourounis, Head of Real Estate at Hazelview Investments, tells STOREYS that the decision to walk away from the project was made in order to refocus their efforts on other ongoing work.
"We have a big rental project that's currently underway in the immediate vicinity at Bloor and Dufferin so we're currently under construction on that right now and that's why we made the decision to sell this site here just from how much we have going on in that immediate sub market from a capacity standpoint," he said.
The Bloor West site, known for the two-storey, giraffe-printed building that currently occupies it, was originally purchased by Trinity and Hazelview (named Timbercreek Communities, at the time) in 2018, paying $35M for the property along with the three adjacent plots to the west. The developers submitted plans for the site in 2018 calling for 29 storeys, which was revised in 2019 to 25 storeys. By 2021, plans were revised again to their current 27 storeys.
Along with the nearly 400 units, the developers had planned for over 8,000 sq. ft of retail space, a parking garage with 100 spots, and over 14,000 sq. ft of amenities.
Developers Struggling With Projects
Developers, whether it be of condos or rentals, have struggled to make projects financially viable in 2023 as borrowing costs remain high, the pool of buyers continues to shrink, and the costs associated with length approval timelines become prohibitive. Not only have many developers paused, cancelled, or sold off planned developments, but several high-profile projects have been placed into receivership amid cashflow struggles.
"On the rental side of things, there's no doubt that we have a severe shortage of housing in Canada, particularly in Toronto, so we need to be developing as much as we can, but I think the current economic environment where we've had elevations in interest rates and pretty substantial increases in construction costs, that has challenged the economic viability of some projects for sure," Tsourounis said.
Although he notes that changes like the dropping of GST and PST on new rental builds have been great steps forward and were extremely welcomed by the industry, it's just one of many things that needs to happen to help more homes get built.
"There really is no silver bullet in this," Tsourounis said. "It's got to be multiple efforts across all levels of government."
There are other changes he'd like to see, like a review of development charges — the fees paid by the developer at the time a building permit is issued — which were hiked in Toronto last year to add more than $40,000 in fees per unit to some development application processes. As well, immigration needs to be balanced with Canada's aging workforce in a way that will help with housing construction, he says.
Hazelview has a large pipeline of projects that they'd like to get in the ground, but in today's environment, they need to be prudent and are monitoring each one.
"We need to ensure that there is the right economic viability in order for us to start any of those projects," Tsourounis said. "And right now, the current landscape is certainly a little more challenging."
