Quarry Rock's The Willoughby In Langley Sold For $35M Through Receivership

A townhouse project planned for Langley has now officially changed hands after the project was placed under receivership and went through a court-ordered sales process.

The project is an 87-unit townhouse project called The Willoughby and was set for 20335 70A Avenue in Langley, near RC Garnett Park.

The Willoughby was set to be constructed in three phases across 18 buildings on a lot that's just over four acres. The first phase was set to include 34 units, followed by 23 units in the second phase, and a further 30 units in the third phase. At the time the project was placed under receivership, only the first phase had commenced construction.

According to the court-appointed Receiver, 11 of the 87 units had been presold, but the presale deposits were all returned, at the request of the purchasers.

The Receivership

The Willoughby was being developed by Quarry Rock Developments, who beneficially owned 20335 70A Avenue through QRD (Willoughby) Holdings Inc.

The application to appoint a Receiver over the project was filed by MCAP Financial Corporation and granted by the Supreme Court of British Columbia on November 8.

In its application, MCAP Financial claimed that it was owed $29.6M pertaining to a first-ranking mortgage. The second-ranking charge holder was Atrium Mortgage Investment Corporation, through Canadian Mortgage Servicing Corporation (CMSC), which was owed $7.55M by QRD (Willoughby) Holdings Inc. Furthermore, Overland Capital Corporation and Wubs Investments Ltd. were also registered mortgagees on the project for $10.5M and $4.5M, respectively, according to the court-appointed Receiver, bringing the total amount of debt to just over $52M.

The 20335 70A Avenue site in Langley.(Colliers)

Additionally, the general contractor on the project, Steelcrest Construction Inc., registered a builder's lien against the property with a claim of $2.82M.

As previously reported by STOREYS, Quarry Rock Developments became unable to advance the project due to delays with development approval, increased estimated costs of construction, increased interest rates, the inability to obtain additional financing to fund those increasing costs, and the inability to pay Steelcrest, their contractor, for work that had been done.

In April, the Supreme Court granted approval for the project to be sold and the Receiver retained commercial real estate brokerage Colliers to list and sell the property. The listing team consisted of Casey Weeks, Morgan Iannone, and Bill Randall, and the property was listed without an asking price.

The Sale

After Colliers listed the property, a total of 30 interested parties reached the stage of signing a non-disclosure agreement. However, only eight of those parties toured the site and only one ultimately submitted an offer.

That offer was made by Abbotsford-based Redekop Ferrario Properties, which describes itself on its website as "a new and progressive development company that combines the youth and enthusiasm of a young, proven entrepreneur with the experience of a renowned real estate/construction-based businessman." The company leadership team includes James Redekop and Stefan Ferrario.

According to the Receiver, the offer Redekop Ferrario Properties made for The Willoughby was $34M, in an offer dated May 30. After the Receiver countered with $38M, Redekop Ferrario raised their offer to $35M and the offer was accepted.

A summary of The Willoughby project planned for 20335 70A Avenue.(Colliers)

Following the acceptance of Redekop Ferrario's offer, Colliers then targeted other potential buyers. Those targeted included Intergulf Development Group, Vesta Properties, Zenterra Developments, Kennedy Development, Mosaic, Infinity Properties, Kingdom Properties, and West Fraser Development, according to a letter from Colliers to the Receiver dated June 19.

Prior to that, other parties that showed expressions of interest by signing the NDA included Streetside, Boffo Developments, and Strand.

No other offer was made, however, and the Supreme Court approved the sale to Redekop Ferrario Properties on July 9. STOREYS reached out to Redekop Ferrario on July 17 to inquire about an estimated completion timeline for the project, but has not received a response.

Based on this price, the Receiver says that the amount owed to MCAP Financial — which had reached $32.4 million by late-June — would be paid off in full, with $1.68 million left over. The Receiver estimates that the debt owed to CMSC is approximately $8.3 million, resulting in a shortfall of $6.65 million. Overland Capital, Wub Investments, and Steelcrest receive no recovery.

As first reported by STOREYS in late-April, numerous other projects that were planned by Quarry Rock Developments have also become the subject of receiverships or foreclosures, with many currently on the market looking for a buyer.

[Editor's Note: On August 30, at the request of the Receiver, the Supreme Court converted the transaction to use a reverse vesting order rather than the previously-proposed asset vesting order.]