Montreal real estate firm bets $500M on Toronto’s condo glut

by Courtney Zwicker

A Montreal-based real estate firm is making a major bet on Toronto’s troubled condo market, acquiring a bulk portfolio of units at steep discounts and pledging to spend up to $500 million over the next year.

Jesta Group, a family-owned company with four decades of investment experience spanning Montreal, New York, London, Paris, Miami and the Mediterranean, has completed its first residential transaction in Toronto, a bulk condominium acquisition valued at $30 million.

The deal is one of the first of its kind in the city and launches a program targeting more than 1,000 condo units over the next 12 months.

The market the firm is buying into is under severe stress. An analysis by Urbanation last month found that sales declined to a 35-year low in the first quarter of 2026, while for the first time in decades, zero new condo projects launched in the Greater Toronto and Hamilton Area.

A record 4,295 new condos were completed and unsold as of Q1, more than double the unsold inventory from a year earlier and five times higher than in 2024.

Jesta’s bet is that the oversupply is temporary and that the same forces pushing the market down today will eventually drive prices higher.

“There’s obviously an oversupply in Toronto,” said Anthony O’Brien, senior managing director at Jesta Group. “Our theory is that oversupply is going to be absorbed over the next few years, and because construction costs are so high and because there’s so much condo inventory sitting vacant, there are no new planned condo projects in the foreseeable future.”

O’Brien said a shortage of new supply is coming, and perhaps sooner than people may realize.

“What’s likely going to happen is as this inventory gets absorbed, there won’t be new inventory hitting for another few years after. It looks like 2028 to 2030, there’s almost no new projects being delivered.”

Buying at a discount, renting until prices return

Jesta’s initial acquisition consists of studio to three-bedroom units in a single downtown Toronto building delivered in 2025 as unsold developer inventory. The firm declined to disclose the address or unit count, citing confidentiality agreements. The building sits steps from Toronto Metropolitan University, within walking distance of transit, shopping and recreation, says Jesta.

O’Brien said Jesta is in a position to fetch units at a significant discount to market pricing to bring relief to developers. Jesta is targeting high-quality buildings by established developers, with no shoebox condos and at least 30 units available per transaction.

The plan is to rent the units out, use the income to service the debt, then sell when the market recovers.

“We’re buying today at a discount because of the oversupply in the marketplace,” O’Brien said. “As the market improves with less supply, pricing should increase, and that’s when we’ll sell and exit.”

He expects to begin selling within three to five years, with a full exit by year five.

O’Brien said rents make the numbers work even now.

“Even though pricing has dropped somewhat in the past three years, it’s still very, very strong compared to other areas of the country. The rent will cover the debt, until we turn around and sell them.”

An added catalyst

O’Brien also cited the temporary HST rebate on new residential construction as a key trigger for the timing of the program. The rebate, which has a 12-month window beginning April 1, gives Jesta a 13-per-cent saving on purchases and creates urgency to complete transactions within the year.

To execute the program, Jesta is partnering with family offices and institutional investors. The firm is pursuing additional bulk acquisitions across downtown Toronto, with Cushman & Wakefield sourcing opportunities.

O’Brien said they have been scoping opportunities for the last six months, and several projects are under review.