At a time when most bank executives won’t pick up the phone when a developer calls, KC Daya says he is being courted by multiple Big Five banks eager to open their vaults.
That’s because last year he secured a $100 million operating line of credit with Bank of Montreal (BMO) for his company’s income fund, and now several rival banks are interested in making similar deals.
“BMO went through our books with a fine-toothed comb before agreeing to underwrite our portfolio,” says Daya, CEO of Toronto’s Clifton Blake Group, a leading developer of Grade A rental properties and private REIT (Real Estate Investment Trust) with about $1.6 billion in assets under management or in the pipeline.
“That level of scrutiny was intense, but it demonstrates the quality of our asset portfolio, particularly in a tight credit environment.”
It’s taken Daya 20 years of hard work and hard knocks in real-estate investment and development to gain entry into Bay Street’s inner sanctum.
His business-minded parents, who immigrated from Kenya in the 1970s, wanted their son to be a doctor. Daya had other ideas.
After finishing his B.Sc. in computing at McGill University in Montreal he jumped into real estate. An MBA from the Schulich School of Business followed and his first institutional jobs in asset management, including a stint at industry giant Brookfield Properties.
But the self-starter needed a bigger challenge, so when a niche equity investor asked him to help launch a private mortgage fund, Daya jumped at the opportunity.
The fund, unfortunately, never took off and Daya found himself unemployed.
“That was the low point,” he recalls. “But quitting Brookfield was best decision I ever made because it provided the catalyst for what was to become Clifton Blake.”
He met his partner, Wes Myles, also a Schulich alumnus, in 2011. The pair have formed a kind of Lennon-McCartney partnership, with each bringing a different skill set to the table.
Daya’s focus is on capital markets and business development, while Myles oversees asset management along with mixed-use rental development and construction.
“It’s very complementary,” says Daya of the partnership.
In the last couple of years the GTA’s rental market has experienced record growth, and Clifton Blake plans to deliver an additional 1,500 purpose-built rental (PBR) apartments across several projects by 2028. It will be competing with an influx of developers rushing to transition to rental following last year’s collapse of the presale condo market.
At least 27,320 apartments in 61 projects that previously submitted a condo development application in the Great Toronto and Hamilton Area (GTHA) switched to purpose-built rental in 2025, according to analytics firm Urbanation. That’s in addition to nine cancelled condo projects already in development that swung over to rental.
The Toronto Star recently sat down with Daya to discuss how REITs and institutional money have become increasingly important in delivering new rental housing in the GTA, the risks and rewards of undertaking a condo-to-PRB conversion and what it takes to succeed in a rental market that’s in transition.
A decades-old, investor-driven condo boom stalled last year. Can you talk a little about how REITs and institutional money have picked up the slack from a broken housing model?
For a long time the presale condo market functioned as a shadow engine for financing housing construction.
When rates moved up and the investor math flipped, condo sales fell hard. What’s stepped in is pension funds, REITs, private credit and private equity.
But the idea that we’re picking up the slack is only partially true. Institutional capital can fund rental at scale, but it still needs a viable spread between construction costs and stabilized yields — and that spread has been under great pressure.
With so many condo developers jumping on the purpose-built rental (PBR) bandwagon these days, what differentiates Clifton Blake from these newcomers?
Rental is not a one-time transaction, it’s a long-term operating commitment.
The groups that will struggle are the ones underwriting rental with a condo mindset thinking they can figure out operations later. Clifton Blake’s competitive edge is that we’re a developer, builder, lender and asset manager with all the parts working together to create synergies that contribute to improved spreads.
Also, we focus on mixed-use, transit-oriented, urban projects designed for livability.
That specialization drives repeatable execution and a consistent product standard. There is no other investable portfolio like this in Canada.
In the last couple of years Clifton Blake has added a construction company and a commercial real estate brokerage to its operations. Why is vertical integration important for you?
In this business certainty is the scarcest commodity.
On construction, bringing CB Wilkinson into the platform is about tighter control over scheduling, procurement and accountability — especially in midrise and multi-family construction where small sequencing errors can turn into big cost overruns.
On the brokerage side, CB Metcom strengthens our market intelligence, allowing us to see opportunities earlier, read changes in leasing and pricing in real time and move faster when markets shift.
A large number of condo-to-PBR conversions are underway right now in the GTA. Clifton Blake is converting one cancelled condo project at 1613 St Clair Ave. W. and it’s considering others. What are the risks and rewards of a conversion?
We get approached by condo developers asking whether we would like to take over a project nearly every other week.
The main reward is embedded approvals that allow for faster development, so you’re often buying time as much as you’re buying land. In the case of 1613 St. Clair Ave. West, we acquired the project after the developer couldn’t meet required presale thresholds.
The risk is that condo plans can lock in bad rental economics. Anything from inefficient mechanical choices for heating and cooling to oversized balconies and the wrong mix of suites.
We like conversions only when we can rework the building into a true rental product, not a compromise that creates an operating pain for decades.
Some condo developers are attempting to convert tall towers over 40 storeys into rental properties. What are the challenges and can we expect an industry shakeout?
Above a certain height operating complexity ramps up faster than revenue.
Also, finding tenants for 400 rental suites can stretch beyond a year, which means you start seeing turnover before the building is fully leased up.
An industry shakeout wouldn’t surprise me. Not because rental demand is weak, but because not every condo tower design becomes a good rental property and not every developer is capitalized to build and hold through lease-up and stabilization.
A number of REITs have recently experienced a run on redemptions by retail investors. Has this impacted Clifton Blake?
Simply put, no. At the root of that is consistent communication and clear expectations around time horizons.
Our core investors know we’ve done our due diligence so they will ride through a down cycle and double down at the right moment.
The GTHA’s real estate market shows healthy fundamentals, yet we’re not building a sufficient volume of new housing. Can you explain this paradox?
Even if rents are firm and demand is strong, the combined weight of construction costs, financing costs and municipal development charges can push the return on investment below levels that some private lenders and institutional equity demand.
As a result, a shortfall of about 121,000 purpose-built and condominium rentals is expected in the GTA over the next 10 years,
Can we expect the trend of institutional players from outside Canada moving private equity into the GTA to accelerate in 2026?
Despite yields getting squeezed, the GTA is a fairly stable investment environment.
I expect we’ll continue to see a selective acceleration of foreign capital moving into the domestic market this year, including European and Asian investors who are already acquiring rental assets with a long-term view.
PM Mark Carney’s November budget enhanced Canada Mortgage and Housing Corporation (CMHC) funding to stimulate PBR development. Is that a significant change?
Yes, directionally important, but not a silver bullet.
Budget 2025 did put housing at the centre of the agenda with the new Build Canada Homes program, created to finance affordable housing.
On CMHC specifically, the Apartment Construction Loan Program (ACLP) is attractive because it can provide low-cost financing through the riskiest part of development, potentially up to 100 per cent of the rental component in eligible cases.
However this does little to solve housing issues in cities like Toronto or Vancouver.
That’s because imposing substantially discounted rents in urban centres digs into a project’s value and tenants paying market rates end up subsidizing the difference.
If governments want private capital to build rental housing at scale in large cities, the most powerful lever is reducing timeline risk and rule volatility so projects can be financed and delivered predictably.
Have we seen an end to the investor-driven condo boom and what is your outlook for the GTA’s purpose-built rental market over the next 18 months? Who will be the winners and losers?
The old condo-boom model has clearly broken down.
I expect many former condo investors won’t return to the asset class after this episode, which signals a more permanent shift in behaviour.
Some smaller or less functional condo stock may linger, but it doesn’t truly compete long-term with well-designed, purpose-built rental — especially for couples and families seeking stable housing.
Winners will be well-capitalized groups with operational depth and realistic underwriting.
Losers will be thinly capitalized projects, designs that don’t operate efficiently and investor-owned condos competing piecemeal.
At Clifton Blake we have plans to expand our footprint strategically beyond Toronto while maintaining the same niche strategy of newly built PBR’s in core urban neighbourhoods.
