By Matt Gonsalves
Vice President, Mortgage Lending, Foremost Financial
Toronto’s housing market is changing, and one of the most interesting areas of change is the rise of multiplex condominium projects.
I recently sat down with Ben Singer, a partner at SR Law, on the Foremost Opportunities in Real Estate podcast to discuss this emerging asset class and the legal, practical, and financial considerations developers should understand before building multiplex condos. Ben has been a strong advocate for multiplex condominium projects in Toronto and has worked with developers, investors, lenders, and builders on small infill projects across the city.
At Foremost Financial, we have seen increasing interest in this space. We have worked on multiplex condominium projects in neighbourhoods such as East York, Trinity Bellwood’s, Bloor & Ossington, Yonge and Finch, The Junction, and Forest Hill. These projects are still relatively new to the broader market, but they have the potential to become an important part of Toronto’s missing middle housing stock.
Why Multiplex Condos Matter
For many Canadians, home ownership remains an important goal. The challenge is that detached homes in established Toronto neighbourhoods are increasingly out of reach.
In many desirable areas, the land itself is the largest cost. There is no more land being created in neighbourhoods like Forest Hill, Rosedale, The Junction, or along established transit corridors. If we want more people to live in these communities, the practical solution is to create more homes on existing lots.
That is where multiplex condos become compelling.
Instead of one family buying an expensive detached home on a single lot, a builder can create three, four, five, or six homes on that same property. If those homes are registered as condominium units, each buyer can own their individual unit.
Ben made an excellent point during our conversation: this model can help people gain access to neighbourhoods they might otherwise be priced out of. A buyer may not be able to afford an entire lot in a prime Toronto neighbourhood, but they may be able to afford one well-designed home within a multiplex condominium, splitting both the upfront land cost & ongoing maintenance costs with a few other families.
That is a powerful idea.
Multiplex condominium projects can also be attractive for builders because they create a clearer path to redeploying capital into higher-return projects. Instead of completing a project and becoming a long-term landlord, a builder can sell the individual units, recover their equity, and move that capital into the next development. For experienced builders, this creates the opportunity to compound from one project to the next while continuing to add much-needed housing supply.
For buyers, the model is equally important. Multiplex condos can give families the opportunity to experience the pride, stability, and long-term benefits of home ownership in established neighbourhoods where detached homes may be financially out of reach. Instead of renting indefinitely, buyers can own a well-designed home in a community they want to be part of.
Multiplex Condos Are Different From Purpose-Built Rentals
One of the most important themes from our discussion was that developers need to decide early whether they are building for rental or building for ownership.
A purpose-built rental multiplex and a multiplex condominium may look similar from the outside, but they are very different projects.
A rental project is usually designed around rental income, operating expenses, cap rates, and refinancing. In today’s market, many rental projects are also designed with CMHC financing in mind.
A condominium project is different. It is designed for end users.
That means the developer has to think carefully about what a buyer will actually want to live in. The unit sizes, layouts, parking, storage, common areas, outdoor space, finishes, and monthly common expenses all matter.
As Ben explained, building for condo means building for the market. There is no government program artificially shaping the product. Either buyers like the homes, or they do not.
That market discipline can be healthy. It forces developers to think carefully about the people who will eventually live in the project.
Legal Considerations Come Early
Multiplex condominium projects also come with legal considerations that should be addressed early.
One of the first questions Ben raised was whether the developer will be considered a vendor for the purposes of the Home Construction Regulatory Authority, commonly known as the HCRA.
The HCRA regulates the sale of new homes in Ontario. Even if a developer hires an HCRA-licensed builder, the person or company selling the new homes will still need to understand their obligations.
Developers also need to consider Tarion warranty coverage.
This can be especially important in projects where a builder is renovating or adding to an existing structure. In some cases, a project may retain part of the original foundation or exterior walls, but the individual units may still feel like new homes to the eventual buyers.
Ben discussed a project where the builder retained a significant portion of the existing structure, but the team still had discussions with Tarion and ultimately obtained warranty coverage for the units.
That can be a major advantage for buyers. A Tarion warranty gives purchasers greater comfort that the home is backed by a recognized warranty program. For newer builders, this can help reduce the perceived risk of buying from someone without a long track record.
From a financing perspective, that matters. The more confidence buyers have in the finished product, the stronger the exit strategy becomes.
The Realtor Should Be Involved Before Construction
Another important takeaway from the interview was the role of the realtor.
In a conventional project, some developers may think of the realtor as someone who gets involved near the end, once the homes are ready to sell.
For multiplex condos, that is a mistake.
A strong realtor should be involved much earlier. They understand the end buyer. They know what people in a specific neighbourhood are looking for. They can tell a developer whether the proposed units are likely to sell, what features matter, and what design decisions may hurt marketability.
Parking is a perfect example.
A developer may be able to build a multiplex without parking, but that does not mean the market will accept it.
In some Toronto neighbourhoods, limited parking may be manageable because buyers can rely on rapid transit, walking, cycling, or car sharing. In other areas, a lack of parking can be a major problem.
As I mentioned during the interview, we have seen situations where builders were planning condominium units in areas where the market likely expected parking. If those developers had consulted a strong realtor earlier, they may have realized that the project needed to be adjusted before committing significant capital.
The same logic applies to suite sizes, entrances, storage, outdoor areas, pet rules, and common expenses.
The question should not simply be: “Can we build this?”
The better question is: “Will people want to buy this?”
Parking and Transit Are Critical
Parking was one of the most interesting parts of our discussion.
For multiplex condo projects, parking can significantly affect value and marketability.
Ben’s view was that projects without parking are generally more viable as rentals than as condos, unless they are located in areas where buyers can comfortably live without a car.
That means proximity to rapid transit is extremely important.
If a project is close to a subway, LRT, GO station, strong bus route, parks, shops, schools, and employment, buyers may be more comfortable purchasing without dedicated parking.
But if the property is in a neighbourhood where families need a car for commuting, daycare, school, groceries, and daily life, parking becomes much more important.
We also discussed reverse slope driveways and the City of Toronto’s evolving multiplex rules. As the policy environment changes, developers will need to work closely with planners, architects, lawyers, and lenders to understand what is permitted and what is practical.
The rules will continue to evolve, but the market reality remains the same: a home has to work for the person buying it.
The Cost of Condominium Registration Can Be Worth It
Some developers worry about the cost of registering a multiplex as a condominium.
There are additional costs. These can include legal fees, survey costs, planning work, disclosure documents, purchase agreement preparation, condominium registration, and consulting from a condominium property manager.
However, those costs need to be viewed in context.
If a project has 7,000, 8,000, 9,000, or 10,000 square feet of saleable area, the additional cost per square foot may be reasonable compared to the potential increase in value.
A rental building is generally valued based on income and a capitalization rate. A condominium project is valued based on individual unit sales.
Those two valuation methods can produce very different outcomes.
In the right location, with the right design, a multiplex condominium may create more value than a purpose-built rental. But developers need to run the numbers carefully before deciding which strategy makes sense.
Be Careful With “Rent Now, Condo Later”
We also discussed a strategy some developers are considering: build the multiplex, rent it out for a few years, and then convert it into condominiums later.
This sounds simple, but it can create complications.
Ben explained that in Toronto, buildings with six or more rental units can be subject to conversion rules. If a developer waits too long and creates a rental building first, they may later need municipal approval to convert it to condominium ownership.
There are also tenant rights to consider.
If tenants are living in the building when it is converted, they may have rights that affect the eventual sale of the units. These can include rights of first refusal and rights of continued occupancy.
That can make the units harder to sell to end users who want vacant possession.
This is why the initial business plan matters so much. If the goal is to sell individual condominium units, it is often better to design and structure the project that way from the beginning.
Co-Ownership Versus Condominium Ownership
Another interesting part of our conversation focused on families or groups of friends who may want to build together.
For example, two or three families may want to buy land, hire a builder, and create separate homes for themselves or their children within one multiplex.
Ben explained that the right structure depends on the time horizon and the financial needs of the group.
If everyone is comfortable co-owning the property for a period of time, they may be able to delay the condominium registration process. This can spread out some of the costs.
However, co-ownership has limitations. There are no separate units to mortgage or sell individually until the condominium is registered.
Condominium ownership creates a clearer legal structure. Each owner has their own unit. Each unit can potentially have its own mortgage. The condominium rules also provide a framework for managing shared expenses and disputes.
That can be helpful, especially when multiple families or unrelated parties are involved.
Multiplex Condos Are Still Early, But the Opportunity Is Real
Toronto is still in the early stages of multiplex condominium development.
There have been builders working in this space for years, but it has not yet become a mainstream part of the housing market. That is beginning to change.
As more projects are completed and sold, buyers will become more familiar with the product. Appraisers will have more comparable sales. Realtors will better understand how to market the units. Lenders will become more comfortable underwriting them. Developers will learn what works and what does not.
That is how a new asset class develops.
We are already seeing strong builders, lawyers, planners, and realtors begin to specialize in this space.
At Foremost Financial, we believe multiplex condos can play an important role in Toronto’s housing future. They are not the only solution, but they are one practical way to create more ownership opportunities in established neighbourhoods.
Financing Is a Critical Part of the Equation
As Ben said near the end of our conversation, advocacy matters — but money gets housing built.
That point is important.
A developer can have a great site, a great architect, a strong legal team, and a thoughtful business plan. But without the right financing, the project cannot move forward.
At Foremost Financial, we finance small infill construction projects and missing middle housing. We understand that multiplex condo projects require a different level of analysis than a conventional mortgage.
When reviewing these projects, we look at the borrower, the site, the budget, the design, the team, the exit strategy, and the marketability of the finished homes.
We want to understand whether the project makes sense not just on paper, but in the real world.
- Can it be built?
- Can it be sold?
- Will buyers want it?
- Is the team capable of executing?
- Is the exit strategy realistic?
- Those are the questions that matter.
Final Thoughts
My conversation with Ben Singer reinforced how much opportunity exists in the multiplex condominium space, but also how important it is to approach these projects carefully.
Multiplex condos are not simply small apartment buildings. They are not just detached homes with more units. They are a distinct product type that requires thoughtful planning, strong legal advice, smart design, realistic sales assumptions, and experienced financing.
The developers who succeed in this space will be the ones who understand the buyer, build the right team, and make key decisions early.
Toronto needs more housing options. Multiplex condos can help create them.
At Foremost Financial, we are proud to support experienced builders and developers who are helping bring this next generation of missing middle housing to life.
About Ben Singer
Ben Singer is a partner at SR Law, where he advises real estate developers, investors, and lenders on development projects, condominium matters, and small infill housing. Ben has been an active voice in Toronto’s multiplex condominium space and has worked with builders and developers bringing this emerging housing model to market.
About Matt Gonsalves
Matt Gonsalves is Vice President, Mortgage Lending at Foremost Financial. Matt works with builders, developers and real estate entrepreneurs across Southern Ontario, providing bridge loans on commercial properties and construction financing for small infill, missing middle, and multiplex housing projects.
About Foremost Financial
Foremost Financial provides bridge loans and construction financing for experienced builders and developers across Southern Ontario. The firm specializes in small infill construction projects, missing middle housing, private mortgage lending, and practical financing solutions for real estate developers.