As we’re seeing more and more across Ontario — and across Canada, for that matter — development land is highly prone to falling into distress. In many cases, developers are finding themselves indebted in the high millions, rendering their projects stalled with uncertain futures.
Maplequest Ventures Inc. — a privately held real estate development company based in Richmond Hill — is a quintessential example. Maplequest is the registered owner of two residential development sites in Brampton that were placed under receivership on June 26, 2024, amid allegations that the company is in default of close to $90M in loans.
Those lands include a 50-acre site at 10475 Heritage Road, which is in the process of being developed into 147 townhouse units, 288 mid-rise apartment units, and 1,599 high-rise apartment units, as well as a 19-acre site at at 11229 and 11258 Torbram Road, which is being developed into 144 low-density single-family dwellings and 27 freehold medium density townhome dwellings.
The June 14 application for receivership — it identifies the senior secured lenders of Maplequest to be KingSett Mortgage Corporation and First Source Financial Management Inc. — gets into specifics of the indebtedness, revealing that the aggregate principal amounts outstanding are $47,954,224.90 (to KingSett) and $41,250,000 (to First Source) per commitment letters dated July 28, 2017, and August 31, 2020, respectively. Both letters have been amended on numerous occasions to extend the terms of the respective agreements.
The court filings further state that Maplequest has failed to pay two months of interest payments, pursuant to which the underlying loans matured on March 1, 2024, in favour of KingSett, and May 8, 2024, in favour of First Source.
In this particular case, there has been collateral damage. Two development sites in Caledon owned by Digram Developments Caledon Inc. — another privately held real estate development company, also based in Richmond Hill — are included in the June 26 receivership order, as Digram is one of the guarantors on the loan extended to Maplequest by KingSett specifically.
The Digram-owned sites include lands at 4 Breckonwood Street, 18 Portman Street, and 54 Phyllis Drive, as well as a third address on Dotchson Avenue.
The June 26 order appoints KSV Advisory as receiver and manager of the development properties in Brampton and Caledon, and, in essence, empowers the restructuring firm to move forward with the properties as they see fit. More often than not, this involves the sale of the property. According to the court filings, the hope on KingSett and First Source’s part is the receivership proceedings will “provide the stability, structure, and supervision required to preserve the value of the property” in the interest of all stakeholders.
