On Monday (Nov 17), the Ontario Superior Court ruled that nearly all purchase agreements for Toronto’s luxury condo One Bloor West (formerly The One) would be canceled. Alvarez & Marsal, overseeing the bankruptcy, was approved to void 314 of 329 contracts, leaving only 15 “economically viable” agreements intact.
This ruling not only broke the hearts of buyers but also exposed some risks in Toronto’s high-end real estate market:
Luxury Condo Bubble Risks: Originally targeting investors and small units, the project struggled to deliver on promises due to funding issues and construction delays.
High Buyer Risk: Even in prime locations or landmark projects, buyers’ rights can be severely compromised if developers go bankrupt.
Market Shift: The plan for resale involves fewer small units, more ultra-luxury units, and the introduction of a high-end hotel brand—showing that developers are now focusing on ultra-wealthy buyers.
In June this year, One Bloor West topped out at 85 floors, becoming the tallest building in Toronto. Buyers, who had watched the tower slowly rise over the years, had hoped to finally move into their dream condos—only to be hit with the court’s cold reality.
Several buyers attended the hearing to express strong opposition to the contract cancellations. Daljit Singh, whose daughter was an early buyer but passed away a year later, tearfully said:
“I really, really want to keep that condo… it was my daughter’s.”
Judge Peter Osborne acknowledged that canceling the contracts was far from ideal, but the developer’s bankruptcy left little alternative. He reminded buyers that, in such cases, getting a refund of deposits and accrued interest is already a relatively positive outcome.
Investor Movin Mokbel, who purchased three units in 2017, expressed heartbreak as well. He had been proud to watch the building gradually rise into Toronto’s skyline but was devastated when his contracts were canceled. He said he only wanted the original condos and did not want the building converted into a hotel brand.
Alvarez & Marsal plan to resell these units at significantly higher prices, reduce smaller investor-oriented units, increase ultra-luxury units, and introduce a high-end hotel brand, creating a product similar to Four Seasons Private Residences or Ritz-Carlton condos. According to court documents, this strategy is expected to generate over CAD 200 million in revenue.
Ultimately, while buyers are left disappointed, the topping-out marks a new iconic addition to Toronto’s skyline. Refunds of deposits and interest will provide some compensation, and notifications will be sent via Aviva Insurance. For the market, this serves as a warning: even in Toronto’s prime locations, luxury condo investment carries real risks.
Source: The Star
Toronto’s “Iconic Luxury Condo” Tops Out—But Almost All Buyers Lose Their Deals!
