After completing and opening in 2019 as one the largest Asian shopping malls in North America, the King Square Shopping Centre in Markham, Ontario has been placed under receivership over a substantial amount of debt that continues to accumulate.

The King Square Shopping Centre sits at 9390 Woodbine Avenue, just east of the border (Highway 404) shared with Richmond Hill, and is home to 340,000 sq. ft of retail space. The mall sits on a 5.7-acre parcel of land adjacent to a separate 5.9-acre parcel of land — currently used as surface parking — where a hotel and residential development were planned.


The shopping centre is legally owned by King Square Ltd. while the development land is legally owned by Markland Residential Corporation, both of which are the subject of the receivership.

The Receivership

The application to appoint to a receiver over the mall and development land was initiated by MarshallZehr Group in early-December and granted on December 13.

In April 2014, King Square Ltd. and Markland Residential Corporation entered into a loan agreement with Firm Capital Mortgage Fund Inc. for the principal amount of $50M. The principal amount was later increased to $82.2M, with the additional amount funded by MarshallZehr Group. The charge is first-ranking against the mall and second-ranking against the development land.

According to court documents, Firm Capital and MarshallZehr agreed to act as co-lenders, agreeing that the loan would be held under the name of Firm Capital and that MarshallZehr would postpone its security interest in favour of Firm Capital.

In February 2020, King Square Ltd. and Markland Residential Corporation defaulted on the loan agreement. The next month, Firm Capital commenced power of sale proceedings and was able to fully recover the initial $50M by November 2023 through selling units within the mall.

However, the debtors still owe approximately $52M, plus interest, with Firm Capital and MarshallZehr reaching an agreement that would see Firm Capital assign its security to MarshallZehr.

Additional mortgages against the mall include, in ranking priority, a $50M charge by Aviva Insurance Company of Canada, a $8,562,687 charge by Building & Development Mortgages Canada Inc., a $5M charge by OYSX Inc., and more.

The first-ranking mortgage on the development lands is for $20M and held by Am-Stat Corporation. The third-ranking charge is $5M by Aviva and subsequent charge holders also include OYSX for $6M and Stateview Homes for $4.5M — the latter of which was involved in the project planned for the development lands. (Last summer, Stateview itself became the subject of several receivership proceedings.)

What Happens Next

The case is now headed towards a sales process, but not for the entire mall.

Instead, the receiver and the selected brokerage will sell the vacant retail units and parking spaces within the King Square Shopping Centre. According to a report prepared by the receiver this month, the mall consists of a total of 560 commercial units, with approximately 150 — for a total of around 87,000 sq. ft — still owned by King Square Ltd., of which 46 are currently being leased to third parties. King Square Ltd. also still owns 550 of the 897 parking spaces, along with various storage units, kiosks, and sign spaces.

After soliciting proposals, the receiver has selected a joint proposal made by Markham-based Homelife Landmark Realty Inc. Brokerage and Toronto-based AimHome Realty Inc. Brokerage. The brokerage team will receive a 6% commission of the gross sale price for units sold without a cooperating brokerage and a 3% commission if a cooperating brokerage is involved.

The receiver says that an analysis it conducted of recent retail unit sales found that approximately 150 units were sold for between $100K and $500K, 13 units were sold for between $500K and $1M, and five units were sold for over $1M.

The King Square Shopping Centre at 9390 Woodbine Avenue in Markham, Ontario.The King Square Shopping Centre at 9390 Woodbine Avenue in Markham, Ontario.(JHVEPhoto, Shutterstock)

The development land owned by Markland Residential Corporation, however, will be sold in its entirety.

A townhouse development, a residential tower, and a 25-storey hotel were intended for the lands. As part of that development process, the developers were planning to submit an application to the City of Markham to sever the land into two parcels — one for each planned phase — but no application was filed before the receivership order came into effect. The receiver has now retained Bousfields to complete the application, which would allow the parcels to be sold individually if needed.

The receiver has retained Ernst & Young Real Estate Services Inc. to list and sell the development land. Ernst & Young will receive a 1% commission + HST of the gross sale price.

It's unclear what the timeline of the sales process will look like, but the listing term for the King Square units and development land run, respectively, until June 23 and December 31, 2024.

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