It seems like you can’t turn a corner in the Greater Toronto Area these days without running into a development site in limbo — and for some of those sites, a receivership order is pending or already in effect. It’s pretty grim.
That’s the story in a nutshell for a development site at 253 Queen Street East in Brampton, which is poised to accommodate three high-rises and over a thousand new residential units.
But with an over $10M debt linked to the property by late 2023, the site owner, 253 Queen Street Inc., was hit with a receivership order on February 8, 2024, which put Rosen Goldberg Inc. in charge of the fate of the property and impending development plans.
It’s now been over four months since the receivership order was issued, and just last week, Rosen Goldberg filed a motion record that, in part, is seeking approval from the Ontario courts to begin the marking and sales process with respect to the Brampton property.
READ: 3-Tower Project In Brampton In Receivership Over $10M Vendor Take-Back Mortgage
That June 14 motion explains that “the nature and value of the property” led Rosen Goldberg to determine that “engaging a qualified listing broker would be the most effective means of broadly canvassing the market and achieving a maximum realization.”
As such, Rosen Goldberg “obtained proposals from CBRE and Colliers International,” and in addition, “reviewed proposals that the debtor had obtained from JLL and Institutional Property Advisors shortly prior to the receiver’s appointment and spoke with representatives of JLL and Institutional Property Advisors following its appointment.”
Based on those proposals and discussions, it was determined that CBRE would be the best choice for a listing broker, according to the motion — which will be presented to a judge on June 27.
“The listing will be unpriced. CBRE’s commission will be 1.25% of the sale price of the property,” the motion adds. “The marketing and sale process developed by CBRE contemplates a robust canvassing of the market, involving an eight- to nine-week process to secure an agreement of purchase and sale, followed by a 60- to 90-day due diligence period and a closing 30 days following waiver of conditions.”
The Development; The Receivership
The development slated for 253 Queen Street East has been in the works since 2019, and was expected to roll out in two phases. According to the developer behind the project, U Developments, the site was anticipated to evolve from a low-rise commercial plaza and surface parking lot into a high-density, mixed-use community consisting of three high-rise towers over 1.57 hectares. Those towers were approved this past fall at 32, 33, and 38 storeys in height.
Between those trio of towers, a total of 1,026 residential units were planned, as well as 8,154 sq. m of office space and 1,860 sq. m of retail space.
The project drew in the likes of BDP Quadrangle, as well as award-winning landscape designers DTAH.
The receivership proceedings were initiated by Homedale-Eagle Corporation on January 26, 2024, and the court filings state that the initial mortgage taken on by U Developments on May 2, 2018, involved a term of five years with interest at 3% per annum under a first-ranking vendor take-back mortgage. That loan was then amended on two occasions to extend the maturity date and increase the interest rate to 8% per annum, payable in quarterly instalments of $200,000 on August 2, 2023, November 2, 2023, February 2, 2024, and May 2, 2024.
After receiving notice from its banker on November 7, 2023, that stop payments had been placed on the first two of those instalment cheques, and issuing a “formal demand for payment” in the amount of $10,447,829 on November 22, Homedale opted to pursue receivership.
In addition, the court filings say that the property in question is subject to a subordinate mortgage in the principal amount of $2M registered in favour of Sky Mortgage Corporation. Sky Mortgage is also in financial default.
