Metro Vancouver has seen numerous insolvencies the past few years, but most of them have been residential projects and many of them have yet to reach the construction phase. This makes the Nexus project by Keltic Development an anomaly.
Nexus is a 10-storey medical office project planned for 220 Prior Street in Vancouver, near the new St. Paul's Hospital campus currently being constructed. The building is designed by MCMP Architects and is set to include 102,000 sq. ft of medical office space, industrial space, and retail space.
In 2022, California-based medical technology company Masimo agreed to buy the entire building for $123 million, paying a deposit of $21 million. Construction commenced that same year, but Keltic announced earlier this year that Masimo had backed out of the purchase agreement. In response, Keltic pivoted to marketing the project as a strata office development named Nexus. Construction was set to complete soon, with occupancy expected in Q3 2025, according to the project website.
The lender on the project is SHAPE Capital Corp, which is the real estate lending arm of SHAPE Properties, the developer behind The Amazing Brentwood and The City of Lougheed master-planned communities in Burnaby. On August 25, SHAPE filed a receivership application in the Supreme Court of British Columbia looking to appoint a Receiver over the Nexus project, claiming they were owed approximately $62 million, as first reported by STOREYS on September 2.
READ: Keltic Facing Receivership On Nexus Project Near New St. Paul's Hospital
STOREYS reached out to Keltic Development and a third-party representative of the company prior to publishing the September 2 article, but did not receive a response until September 4. Below is new information and comments provided by Keltic Development CEO Rachel Lei, addressing several aspects of the receivership application.
Masimo, SHAPE, And The Loan
The groundbreaking ceremony for 220 Prior Street in 2022 was attended by members of Keltic and Masimo, as well as Minister Ravi Kahlon and then-Mayor of Vancouver Kennedy Stewart. / Masimo
The decision by Masimo to back out of buying Nexus did not directly result in the project being placed under receivership, but it was a significant contributing factor. Although it was not announced until late-January, Lei tells STOREYS that Masimo backed out of the agreement on December 31, 2024. However, Masimo and SHAPE reached an agreement that would see Masimo provide $3.6 million in compensation as a settlement, on top of the $21 million deposit paid in 2022 that they were forfeiting.
Lei says that the $3.6 million went to SHAPE, which originally committed to lending $85 million towards Nexus, but immediately slashed the commitment down to $65 million after the settlement with Masimo. At that point in time, December 2024, the project had already received approximately $51 million of the loan.
Furthermore, along with reducing the loan to $65 million, Lei says SHAPE also introduced two new conditions. The first was that Keltic had to return $10 million to SHAPE and the second was that Keltic had to inject $10 million of additional equity into the project — shifting a bit more risk from SHAPE to Keltic.
These conditions were not outlined in SHAPE's receivership application, but were alluded to in references as a "supplement to the mortgage commitment."
"Under these two stringent conditions, Shape would only agree to fund the project again but only to a maximum amount of $65mil," said Lei. "This would leave the project [in]complete if Shape commits to fund only up to $65mil as at that time both parties know that Keltic would need another $30mil in order to complete the building."
The Holdback Account
A rendering of the 10-storey Nexus office project planned for 220 Prior Street in Vancouver. / MCMP Architects, Keltic Development
A secondary aspect of the receivership application was pertaining to the holdback account, which are usually established on construction projects as a fund to cover potential builder liens. In their receivership application, SHAPE said that they discovered in February that Keltic had "misappropriated $3.2 million from the holdback account established for the benefit of the contractors on the Project."
Lei says Keltic had no choice but to borrow from the holdback account in order to keep construction on the project going. The aforementioned changes in loan conditions left Keltic with little time to raise the money they needed immediately, approximately $20 million, after exhausting their own available funds to return $10 million to SHAPE and pay bills. Lei says the money borrowed from the holdback account was used only on Nexus and that Keltic had repaid $1.9 million to the holdback account in June 2025 and that they were working on returning the remaining $1.5 million before the end of October 2025. Lei also said that they would not have needed to borrow from the holdback account had SHAPE not made the amendments to the loan that they did.
In their receivership application, SHAPE also said that it learned in July that Keltic made another unauthorized withdrawal. In August, the general contractor of the Nexus project, Syncra Construction, then issued its own notice of default, citing the unauthorized withdrawals and failure to make payments.
Regarding this, Lei says that a subtrade of Syncra ran into financial trouble in July 2024 and Keltic advanced $200,000 to the subtrade through Syncra. The amount was supposed to be paid back by March 2025, but Keltic was still owed $120,000 as of July 2025. After the subtrade submitted a claim asking for a release from the holdback account in July 2025, Lei says Keltic instead decided to net off the amounts owed from that subtrade's holdback amount so that there would be no outstanding amounts either way.
"This net off action could have been communicated more clearly to avoid misunderstanding, or better still to be netted off at the same moment when the holdback is released to the subtrade," said Lei. "Unfortunately it was dealt at different timing therefore causing the misperception or misunderstanding."
SHAPE's receivership application against Nexus was granted by the Supreme Court on September 5. Where the proceedings will go is currently unknown, but when receivers are appointed over projects that are nearing completion, the most common outcome is that the Receiver finds a solution to guide the project to completion.
However, as Masimo had the building tied up until December/January, Keltic has not had much time to secure presales and the market for strata office units is not what it once was. As a result, just how project stakeholders will be made whole after construction is completed may be less straightforward than it has been in past markets.
