Capital Developments founders Todd Cowan and Jordan Dermer have launched Address, a new platform dedicated entirely to purpose-built rental apartment development.

Carlo Timpano, president of both Capital and Address, spoke with RENX about the reasoning behind the formation of the new platform, its strategies and its projects.

“We're not taking the condo playbook and applying it to rental,” said Timpano. “We formed Address because we believe purpose-built rental requires a dedicated focus.

“It has a different economic lens, a different financing lens, and a different design lens, despite similarities.”

Address’ operating model

While Toronto-based Address is looking for operating directors and executives, it already has an established operating model. 

“A lot of rental developers are fully integrated and we've made a conscious decision not to be,” explained Timpano. “We’re a soup-to-nuts developer, which means we acquire, entitle, brand, market, build, hand over and asset manage, but we don't self-perform construction.

“That means we're not in a position to need to build to keep the platform busy or to support overhead, which keeps our governance clean, which our investors like. While we’re asset managers, we're partnering with exceptional partners like Rhapsody to operate our buildings, which means that the success or flexibility of the building isn’t uniquely tied to us, which creates a more scalable and institutional-friendly model. 

“We will be financing projects on a project-by-project basis and, in this market, we think that's important because it gives our partners control and alignment.”

With the backing of both existing and new investors, largely comprised of family offices and private equity funds, Address is actively seeking new land to develop apartment buildings. 

“Some of the sites we're looking at in the core will have lots of studios, one-bedrooms and three-bedrooms targeted at housemates, so we're really not a one-size-fits-all platform,” said Timpano.

Address’ initial projects

Address’ first Toronto projects under construction are:

• 41 Hendon, an Arcadis-designed 34-storey, 360-unit building near Yonge Street and Finch Avenue being developed in partnership with Kilmer Group that’s expected to be completed in late 2028 or early 2029;
• 88 Isabella, a 62-storey Diamond Schmitt-designed tower with more than 800 units at 88 Isabella Ave. between Church and Jarvis streets, which is scheduled for completion in 2029;
• and 170 Roehampton, a 50-storey, 600-unit, Sweeny&Co Architects-designed building at 170 Roehampton Ave., northeast of Yonge Street and Eglinton Avenue East, which is being developed in partnership with Metropia, Westdale and Woodbourne and is slated for completion in 2028.

While details haven’t been released, there are plans for a midrise apartment building in Toronto’s Beaches neighbourhood that will target down-sizers and have a high percentage of three-bedroom units. 

There are also plans for midrise apartment buildings in the York Mills, Annex and High Park areas of Toronto and for a mixed-use project in Richmond Hill, north of Toronto.

“Our approach is neighbourhood-first,” said Timpano. “Developers can sometimes become so focused on the building itself that they actually forget why people choose neighbourhoods.

“For us, we think the neighbourhood is the amenity. The building itself has to be excellent, but the daily life around it is what makes rental housing successful.”

Capital Developments projects

Two Capital condo projects have recently been completed and two others are under construction.

The residential portion of the 65-storey, 700-unit, Sweeny&Co-designed 11 YV — developed in partnership with Metropia and RioCan Living in the high-end Yorkville area — has been completed. Its 25,000 square feet of street-level retail space will open next year.

Olive Residences — a 31-storey, 379-unit, Arcadis-designed condo at 36 Olive Ave., not far from the Hendon site — has begun occupancy.

“The rents at Yonge and Finch and the retail prices at Yonge and Finch are currently higher than they are downtown,” said Timpano. “That justifies our decision to build more in that node.”

Construction is up to the 50th floor for the Arcadis-designed 8 Elm on Yonge, a partnership with Reserve Properties at Yonge and Elm streets, that will be a 69-storey, 821-unit mixed-use condo upon completion towards the end of next year.

The 28-storey, 303-unit, Diamond Schmitt-designed, flatiron-shaped Park Road condo at 28 Park Rd. in Yorkville has been topped off. Occupancy is expected in January.

Prospects for the Toronto multifamily market

Capital continues to seek new condo development sites despite the ongoing slump in the market.

“There's still a market out there for the right high-quality product that's well-located in good neighbourhoods,” said Timpano.

Capital has been unsuccessful in its attempts to sell a development site at 399 Yonge St., where it had originally proposed to develop a 75-storey, 828-unit Teeple Architects-designed condo at the corner of Gerrard Street, and is contemplating developing a building that would incorporate both purpose-built rental and condo units.

“I’m of the view that it will be difficult to fully clarify short-term movements until we have stability on a macro-economic stage, which means stabilized trade and a stabilized trade environment,” said Timpano.

“In the medium to longer term, I believe there will be strength in the market because I still believe the rental market is fundamentally under-supplied. I believe Toronto still has the same tailwinds it did 10 years ago, although slightly muted today, which means a great financial sector, great commodities, great educational institutions and a very diverse city.”