When Olympic & York Developments, Ltd., of Toronto laid out $350 million a few weeks ago to buy nine skyscrapers in New York City, it became overnight the largest Canadian investor in American real esate.

The deal - which included $50 million in cash - makes Olympia & York one of the largest foreign landlords in te United States, with giants like International Telephone & Telegraph, American Brands, and Harper & Row under its roof.

Olympia & York is the newest entrant in the great realty invasion from the north. In 1973, 7 of the largest Canadian developers had operations south of the border; today at least 16 are in the U.S.A., with more headed that way. Five years ago, Canadian investments in U.S. property amounted to roughly $300 million . In 1977, a conservative estimate is $1.5 billion; others put the figure as high as $2.5 billion. And that doesn't include the assets of a growing number of institutional investors, syndicates and individuals.

Trizec Corp. of Montreal last year disposed of $100 million in Canadian holdings to get cash to invest in the U.S. It now has 26 per cent, or $192 million, of its $840 million total assets in U.S. real estate.

Daon Development Corp. of Vancouver, which had not entered the U.S. market until last year, already had one-sixth of its $300 million in assets in U.S. holdings.

Canadians have been involved in more than one-half of the apartment sales in the Seattle area in the past three years. They now own approximately 30 per cent of the major apartment complexes in King and Snohomish countries.

Canadian firms have bought buildings or have been hired in recent years to develop major complexes in 17 major U.S. cities, including Boston, Chicago, Denver, Minneapolis, Los Angeles and San Francisco.

The reasons for this sudden rush southward can be found in the coincidence of relatively poor political and economic times in Canada and improving conditions in the United States.

A. Michael Gilbert of Gordon Securities, Ltd., in Toronto points to unfavorable internal situations driving developers out: overexpansion of major building during the early 1970s that has led to go slow policies and restrictive commercial zoning on the part of provincial government, and concurrently high residential construction cost - the average house has doubled to $60,000 in five years - coupled with rent contol that makes housing development unattractive.

Then there are federal wage and price controls and provincial restrictions on foreign capital.Until this week, any foreign-controlled company buying land or property for its own portfolio in Ontario had to pay 20 per cent above the purchase price in taxes. (It now applies only to resort and farm lands.) The Foreign Investment Review requires that transactions involving foreigners be scrutinized to determine whether they are of significant benefit to the nation. As a result, the flow of European and Middle Eastern capital into Canada has been affected severely or deflected towards the U.S.

Moreover, no-recourse loans, where the mortgage is secured by the property alone, are rare in Canada. And developers no longer can deduct interest on the carrying cost of land they buy for future construction or speculation.

The United States, by contrast, offers excellent growth possibilities compared with the Canadian real estate market.

There are lower construction and financing costs, and better relations with craft unions. During the past two years, Canadians have been bailing out troubled U.S. real estate investment trusts, sometimes acquiring property at fire-sale prices. Olympia & New York, for instance, bought outright or an interest in its New York skyscrapers for $25 million less than the previous owner, National Kinney Corp., paid for them four years earlier.

Canadians, in common with other foreign investors, appreciate America's political stability (all the more so in the perspective of the wrenching Quebec problem), minimal expropriation risk, low-cost land, free currency exchange that allows profits to be re-patriated easily, and the steady appreciation of property since the Great Depression.

Finally, financial and technical real estate procedures and customes and language are similiar on both sides of the border. Unlike anti-Japanese sentiment that followed massive acquisitions in Hawaii and the fears a few years ago over the prospect of an Arab takeover, the Canadian invasion has aroused no xenophobia. Quite the contrary, both Canadians and Americans affirm the welcome mat is always out

Traditionally Canadian developers have been interested in commercial property like office buildings and shopping centers in growing areas like the Sun Belt and California. These are considered safer and better investments than the residential market or re-development of blighted inner cities.But recently several companies, notably Mondev of Montreal and Oxford Development of Edmonton have begun to go into unpopular metropolitan areas. An increasing number also are venturing into residential. (A list of projects by Canadian developers accompanying this article indicates the diversity of those investments.)

Thus far the federal and provincial governments of Canada have not shown alarm over this move southward, for the capital drain has been relatively modest. Canadian analysts estimate only 20 per cent of the equity capital comes across the border, as most developments are joint ventures, with Americans as the minor partners. Moreover, financing is largely provided by American banks and Canadian banks with U.S. deposits.

Olympia & York is an exception to the general practice. The $50 million cash it put up to buy the New York properties owned outright or in part by Kinney was generated internally, according to sources close to the venture. Undoubtedly the reason O&Y had so much spare cash is that its Canadian properties built several years ago have started to generate income, money that cannot be reinvested in Canadian expansion. In 1978-79, O&Y expects to do only one-quarter of the business in Canada it did in 1975-76. The only other real estate it owns in the U.S. is 5,500 acres in New Jersey, bought two or three years ago.

With more than a billion dollars in assets, Olympia & York is the largest privately owned development company in Canada. Its executive offices are located on the 32d floor of the tallest building in Canada, the 72-story First Canadian Place Tower in downtown Toronto, developed by O&Y along with the Bank of Montreal, its principal tenant.

Men in dark, vested pinstripe suits silently usher the visitor into the boardroom. O&Y is wholly (or almost entirely, depending on one's source) owned by the Reichmann family who might be called the Rothschilds ofCanadian realty. Samuel Reichmann left Vienna on the eve of World War II to flee to Tangier, then a French protectorate. After Moroccan independence, the family emigrated to Canada where in 1955 Samuel set himself up in business manufacturing ceremic tiles and importing steel. Today Samuel's widow Rene is chairman of the board of the billion-dollar real estate firm - which still has its tile operations, incidentally - while her son Albert is president; Paul, executive vice president; and Ralph, vice president and treasurer.

In an interview, "Mr. Paul," as he is known to the employees, was asked why O&Y chose New York, given the city's precarious financial health and the exodus of corporations to the suburbs. He said the only criterion for such a large purchase was that a large enough package of properties could be assembled to warrant setting up a branch office in the city. O&Y's Manhattan office is scheduled to open this summer, paving the way for further expansion south of the border. O&Y plans to associate with American firms to develop residential properties.

Reichmann shrugged off the bankruptcy threat, saying, "New York is still the world's major financial center. We (Canadians) have more confidence in the United States then the average American."

His optimism stems from his projections of real estate patterns in the city. Noting that there are 450 million square feet of office space in New York - about 10 times that of Toronto - Reichmann observed that less than half of it was "quality" space, that some was slums. As the slums become vacant and demolished, the newer buildings like O&Y's skyscrappers will fill up despite current emigration, he reasoned.

As Reichmann is formal, so A. Ephraim ("Eph") Diamond of Cadillac Fairview Corp., Ltd., is the picture of informality. Slouched on an office couch, the chairman of the board and chief executive officer of the largest Canadian real estate development company, with assets of $7.85 billion, declared, "We'd go wherever a good deal comes up. When they (Americans) rap on the door, our door will open. Our objective is to accelerate expansion to the highest possible extent."

Diamond and Cadillac, which is 37 per cent owned by the Bronfman family of Seagram's fame, thought they had fulfilled their goal last year when they believed the Irvine Co., controlling a mammoth development outside Los Angeles, was within their grasp. But Cadillac's bid of $283 million was topped by Mobil Corp. and more recently by a syndicate headed by Henry Ford II. Cadillac is now out of the bidding. "If we had been successful at Irvine, our U.S. assets would have tripled overnight," Diamond sighed.

As it is, Cadillac has approximately $100 million in U.S. assets, divided among office buildings it bought for investment, shopping centers it is developing, and commercial and residential properties.

Its one property in the Washgton area, a 200-acre industrial park in Lanham, is partially constructed. However, Diamond conceded it was the least successful of its four parks, purchased last year for $80 million from the Boston firm of Cabot, Cabot and Forbes.

From Lanham to Oxon Hill is not a big jump, but it is a big jump from A.E. Diamond of Cadillac to Fred Kriz of Park Avenue Developments in Vancouver. Kriz recently paid $4.3 million for the Private Hill Apartments, a 246-unit high rise in Oxon Hill. He reportedly is seeking property in six or eight other states, in addition to three apartment buildings he owns in Los Angeles, and two more in Seattle. (The sale was arranged through the national real estate firm of Coldwell Banker which does a considerable part of its business with Canadians. Coldwell recently established an office in Washington and already is negotiating a sale to Canadians of Alexandria property.)

Kriz, who heads a family-owned company, refused to be photographed, interviewed or to return phone calls. Still, it was learned that he brought properties 12 years ago in Canada, properties that subsequently quadrupled in value. He is said now to be trying to liquidate his Canadian assets in order to invest in U.S. property.

Both his secrecy and his plans appear typical of the many hundreds or thousands of small Canadian investors invading the United States, according to brokers and investment councelors. Apart from the reported activities of public real estate companies and a few large private deals like Olympia & York's, no comprehensive information is available from government or industry sources.

A Dallas broker, Vance Miller, estimates that a quarter of a billion Canadian dollars are currently invested in Texas alone. Last year, for instance, the Canadian Imperial Bank paid $25 million for an apartment complex in Houston. Canadian life insurance companies have acquired a half billion dollars worth of U.S. property in the last five years in Atlanta, Chicago, Denver, Los Angeles and Philadelphia.

Such local or regional accounts may exaggerate the true picture of Canadian investment in American real estate. But one thing seems certain: It's big and getting bigger.