Market Sentiment & Buyers That Need To Place Capital

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A quick pulse check on the multifamily market and information on a new source of capital for non-profits.

March 21, 2025

Read Time: 3 minutes

Last week, I signed the biggest deal of my career.

I got married! (Cheesy, I know)

But today, we're back to our regularly scheduled programming - and there's a lot to discuss.

Ottawa announced it's taking applications for the Rental Protection Fund, and market sentiment is torn between a weak economic outlook and the benefits of the low interest rates that come as a result.

What does all of this mean for owners?

Let's dive in.

(did someone forward you this newsletter? Sign up [here](https://onmultifamily.com/)).

But First - 4 Property Types our Client's Can Put Strong Offers on Right Now

Four of our (extremely qualified) buyers need to place capital within the next 90 days, and they need to have something under contract within the next two weeks (aka they'll submit an offer within 24 hours).

Here are the opportunities they badly want:

Toronto Core Value-Add: 50 - 60 units. This buyer works primarily on price per unit, so they are not scared off by lower cap rates. Ideal property is 260K - 270K/unit in a decent part of Toronto.

Toronto Core - Large: Targeting acquisitions in the $100M - $500M range in A+ to B+ neighbourhoods. This buyer prefers opportunities that are further along the value chain (i.e. not falling apart) but still with room to grow rents.

East of GTA: This buyer is looking for opportunities from $10M - $20M in Whitby, Peterborough, Port Hope, Coburg, and Lindsay Ontario. They have cap rate expectations of 5.25% - 5.75%.

Toronto Outskirts Value-Add: This purchaser needs 80 - 90 units, but buys primarily on price per unit (can stomach low cap rates). An example of an ideal opportunity is $225K/unit at a 3.5% cap in Scarborough.

If you'd like an offer on a property that fits any of these descriptions - contact me. Each of the above groups have sizeable portfolios, and execute flawlessly with no false starts.

Rental Protection Fund (Taking Applications)

On March 7th, Ottawa announced it will be taking applications for its Rental Protection Fund (from now until May 21, 2025). This is a $1.47 billion initiative (with $470 million in non-repayable contributions / free equity) to support community housing providers in acquiring existing, privately-owned, multifamily.

Nathaniel Erskine-Smith, Canada's Minister of Housing, Infrastructure and Communities.

Most people aren't aware of this, but non-profits have become a significant percentage of the buyer pool. In Toronto Proper, for instance, non-profits have represented 11.23% of multifamily acquisitions since January 1, 2024 ($140M). Their money is real, and they actually do deals (albeit on a longer timeline than private investors).

The fund is to be dispersed over 5 years, so here's how I see it impacting our Ontario market:

Toronto and Vancouver are the least affordable cities in Canada, and the most populous. I would estimate the GTA collects 25% of this grant money.

25% x $470M / 5 years = $23,500,000 in multifamily grants/year

A typical loan-to-value hovers around 70%, so they should have capacity to buy an additional $78.3M across the GTA every year, representing an extra 3.6% of the total deal volume for the GTA last year.

This is a long winded way of saying non-profit share of acquisition could grow to roughly 14% of the market (all things being equal). Sellers would be wise to take these organizations seriously.

Multifamily Market Sentiment

The environment for investors is shifting every day.

Mark Carney is calling an election this Sunday (insiders tell me), we're in the middle of a tariff war, and rents fell nationally for the fifth straight month. It's an environment with a lot of uncertainty.

On the flip side, bond yields are down significantly, meaning a buyer's equity can still stretch enough to meet an owner's expectations.

Deals are happening. To get deals done, your buyer needs to have healthy access to equity and strong conviction. There are still TONS of these buyers out there (we speak with them every day).

Who fits this description today? Private buyers - and they're hungry.

I give this market a "B". Liquidity exists for realistic owners, but not sellers seeking that diamond in the rough buyer from 2021. This is my near and medium term outlook, and it's healthy for the market.

👋 P.S. I've helped my clients sell $1.1Bn in multifamily since 2018

([see recent deals](https://www.collierscanada.com/en-ca/experts/dayma-itamunoala)).

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