Investor sees a rare opening in Toronto as condo prices and rents reset from recent highs and says it’s just getting started
The condo market in the Toronto area has been struggling recently, but one large investor believes that now is the right time to jump into the market – with both feet!
Jesta Group is making a contrarian bet on the market, acquiring 62 newly built units in a bulk transaction valued at about $30 million as it launches a broader plan to assemble a $500 million rental housing portfolio in the city.
The Montreal-based family office said the purchase marks its first major move into Toronto’s residential sector and over the next 12 months it expects to acquire roughly 1,000 condo units that it will operate as long-term rentals.
The initial acquisition includes suites in The Saint by Minto Group and 8 Wellesley by CentreCourt, two recently completed towers in downtown Toronto. Jesta said the units are being purchased at discounts to original pricing, reflecting softer conditions in the condo market.
“The current market dislocation in Toronto's condominium sector has created an exceptional entry point for disciplined investors with a long-term perspective,” said Michael Elmann, chief executive officer of Jesta Group. “We are acquiring high-quality assets at below replacement cost in one of North America's most supply-constrained housing markets. Toronto's structural fundamentals remain compelling, and current conditions offer a rare opportunity to build a substantial rental portfolio with significant upside potential.”
Market correction
Toronto’s condominium sector has come under pressure as higher borrowing costs, weaker investor demand and a growing supply of unsold units weigh on prices. Analysts at TD Economics have said the Greater Toronto Area condo market is undergoing a correction after years of rapid appreciation, creating a more favorable environment for buyers with available capital.
The rental market has also softened. According to the latest National Rent Report from Rentals.ca and Urbanation, average asking rents for condominium apartments in Canada fell 5.6% from a year earlier in April to $2,087. In Ontario, apartment rents were down 5.2% year over year.
“Rents in Canada are basically back to their level from three years ago,” said Urbantion president Shaun Hildebrand. “This improvement in affordability should help bring renters into the market who were priced out in recent years.”
Long-term value creation
Jesta believes the near-term softness in rents and prices will be outweighed by Toronto’s long-term housing shortage and population growth.
“Our strategy is rooted in a fundamental belief that Toronto's housing shortage and population growth will drive long-term value creation,” Elmann said. “By acquiring newly completed units in bulk, we can scale efficiently while avoiding development risk and lengthy construction timelines. This approach positions us to generate attractive risk-adjusted returns as market conditions normalize.”
The company said it plans to focus on downtown Toronto and transit-connected neighbourhoods, targeting recently completed or near-completed buildings where developers and investors may be willing to sell multiple units at once.
Jesta’s move highlights how institutional and family-office capital is beginning to re-enter markets that have been sidelined by higher rates.
With valuations reset and financing conditions gradually stabilizing, some investors are viewing Toronto condos less as a speculative trade and more as an income-producing asset class with long-term appreciation potential.
