First off, welcome to SkyscraperPage maddindian! I hope you enjoy your time here.
That said, I have to disagree with your post. Don't take anything personally, and feel free to discuss or disagree with my points.
Although it's not a terrible location (ie. somewhere like Erb Street & Ira Needles Blvd), IMO it's definitely not at the ideal location which is somewhere closer to King Street in Uptown->Downtown near a proposed LRT station.
Depends on what style you're looking for. To me personally, the Westmount Grand has more of an "empty-nester" or "45 year old+" finish.
a) Kaufman's has more of a youthful "early 20's-35 year old" feel. Some Facebook photos:
Plus you were able to customize/upgrade your loft to the finishes you wanted: ie. in my unit we've put in a glass bedroom door, hard wood floors, a heat lamp for the bathroom, etc..
b) I've seen 400sq ft units in Toronto. 600 sq feet isn't that small for a first time buyer who doesn't have kids or 3 sets of furniture. Plus with 12 foot ceilings, it means you just build up rather than out (ie. you buy a tall rather than a wide bookcase). You also want to buy furniture that does double duty: ie. a bed with storage space underneath. Also it's a good idea to watch home shows where sometimes they do specials on "living in smaller spaces".
In terms of price: $170K for 600sq ft works out to $283/sq ft. You could probably negotiate a bit off the list price and buy the unit in the $270's range, which isn't really that expensive for a loft. Remember you have high ceilings, huge windows, are across from a proposed LRT station, you're surrounded by festivals in the summer, you can walk to many places. Overall it's a "fun" location to live in, and it's worth the extra price compared to a more suburban setting.
Also, $283/sq ft isn't even the most expensive price in the KW market. I have a Bauer Loft price list from July 7, 2007 which has a 691 sq ft unit priced at $199,900 or $289/sq ft. You'd probably need to add another 2-3% now that it's 5 months later.
c) Lack of underground parking is a huge turnoff. Although Kaufman's isn't loaded with amenities, there are some such as a roof-top terrace with BBQ's, party room, and a craft/art area in the basement. Also, entry into the building is done with swipe cards, a cool feature for young people.
Depends on what you're looking for. If you're happy living in a building that's dated on the outside, that will have more of an adult/senior feel and that's not located in "the action", then go with the Westmount Grand. Personally I was looking for the exact opposite though.