This isn't a surprise. Bob Fugger confirmed back in March that they were going rental. Presumably it is investment driven, i.e. a better return from rentals, and enables a creative financing arrangement, including tapping into the CMHC program.
Pretty attractive loan arrangements (from CMHC website):
The loan offers:
- a 10-year term (closed to pre-payment) and a fixed interest rate locked in at first advance for certainty during the most risky periods of development
- up to a 50-year amortization period
- CMHC mortgage loan insurance that is effective from first draw and for the duration of the amortization period to simplify loan renewal. The borrower does not pay the premium, only the PST if applicable
- up to 100% loan to cost for residential space and up to 75% loan to cost for non-residential space (depending on the strength of the application)
- interest only payments financed by the loan during construction through to occupancy permit
- principal and interest payments are due after 12 months of stabilized effective gross income
https://www.cmhc-sch...cing-initiative