Jesta Is Buying Unsold Condos: Why Jim Says That Is Good News

So an interesting week for the condo market in Toronto. Another big buyer has gone public that they intend to purchase $500 million of unsold brand new condos. They're called Jesta Group and they are getting their funding from institutions and from family offices. Now this is the second group like this.

The other one is called High Art Capital and High Art Capital has some government financial backing and also institutional buyers etc. They're putting $1.3 billion into buying unsold condo inventory from the builders and yet I have heard some negative talk about this in social and I don't really understand it because here's how I view it.

Number one, these unsold new units were in overhang over the Toronto market. You know the fact that there are many many thousands of units that are going to sit probably for years unsold is not good for anybody who owns a condo. I've heard people say oh well now all those units are going to be rentals, those poor people who bought in those buildings.

Guess what folks? Those units were going to be rentals no matter what. It didn't matter who bought them. Like rentals is what 500 square foot units are 450 square foot units are turned into and so this does not change how they will be utilized and in fact they will be professionally managed by Tridel and Menkes at least in the case of those acquired by Jesta.

And most importantly don't you think that institutional money and family offices are doing the math and is it possible that they understand the data better than you and I do?