A major charity has sold 10 downtown Toronto properties to four developers for a total of $36m (£29m), during the rush of an expected boom in condominium development in Canada’s largest city.
The sale of the properties, including a downtown restaurant-lined boulevard, is being blamed on the higher demand for high-end real estate in Toronto, amid concerns that the prices were being fuelled by residents moving into the city in search of better lives and the declining labour market.
James Meena, chief executive of the WE Charity, had previously said the charity could face a fiscal crisis as it struggled to raise money to spend on its clients. Meena had predicted construction of thousands of new condos would cause the charity to struggle to meet a $40m shortfall over the next three years.
Now, however, Meena says the developers, who include Silvercrest Properties, welcomed the chance to contribute to the city’s revitalisation, and ensure the long-term sustainability of many of Toronto’s established assets.
“Over the last two decades, Toronto has witnessed a serious shift in its dynamics,” said Charles-Antoine Leblanc, president of Silvercrest Properties, adding that he was “delighted” to help We Charity manage its investment in the city.
We Charity purchased the remaining properties for $27.75m in 2015, but said it received “significant offers” for them last week. Five properties have already sold for less than the $27.75m the charity paid, with one going for just $18.23m, and two properties listed for $8.75m.
As a result, Meena said, We Charity would have to invest $12m of its operating funds on buying back the properties if they are needed in the future.
“We will use our operating funds to recoup as much of our investment as possible and have no interest in expanding our investment in the future,” he said.
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The charity said it was not in breach of its loan terms, and that the limited impact on its current operations meant it would “not have to miss any monthly payments”.
We Charity leases the buildings it owns at the Marmora Collection building, on Avenue Road, and at the Queen West building, which had previously been owned by the federal government.
It is unclear who will buy the remaining three properties, which include, the wine bar Yannick Sagot, an event space called the Cinema Club that would be renamed Yannick’s, and a second building known as Orchard Loft.