The City of Burnaby has agreed to acquire the Metrotown Place office towers in Burnaby, according to court filings in the Supreme Court of British Columbia, bringing a receivership proceeding that began just four months ago to a quick and tidy conclusion.
The Metrotown Place property consists of the 19-storey Tower I at 4330 Kingsway and the 10-storey Tower III at 5945 Kathleen Avenue, located along Kingsway between Kathleen Avenue and Wilson Avenue, in the Metrotown neighbourhood of Burnaby.
The property was previously owned by Toronto-based Slate Asset Management — founded by UBC alum Blair Welch and his brother Brady Welch in 2005 — under SCREO I Metrotown Inc.
The two office buildings, which are adjacent to a two-storey commercial building at the intersection of Kingsway and Kathleen Avenue that was not included in the receivership proceeding, were originally constructed in 1983 and were unofficially known as the "Golden Towers" due to the building's unique golden sheen.
For the site, Slate Asset Management was planning on converting the property into a new strata office complex called Capital Point Metrotown, before the project was cancelled, as first reported by STOREYS in May 2023. The property has been vacant since Slate commenced with the project and marketing material for the Capital Point project was still present on the site as recently as this July despite the cancellation.
The Receivership
The application to appoint a Receiver over the property was initiated in June by the United States Life Insurance Company in the City of New York — known as American General Life Assurance outside of New York — and the American Home Assurance Company, both of which are wholly-owned subsidiaries of Corebridge Financial.
The receivership proceeding was pertaining to a loan agreement the two sides entered into in March 2019 for the principal amount of $88,308,000 and the purpose of acquiring the Metrotown Place property and the Capital Point Metrotown redevelopment project.
A rendering of the planned Capital Point Metrotown project. / DIALOG Design
The loan had a maturity date of April 1, 2022, but just prior to that date, Slate informed the lenders that it would be unable to repay the loan and the two sides agreed to an extension to September 1, 2023. As part of the extension agreement, Slate had to devise a sale or realization process that was satisfactory to the lenders by February 1, 2023. Slate was unable to do so until July 2023, then failed to make an interest payment on August 1, 2023, defaulting on the loan agreement.
Around this time, Slate Asset Management made an attempt to sell the property, a buyer was found, and the lenders entered into a forbearance agreeement that allowed Slate to pursue the proposed transaction. However, the transaction ultimately fell through, prompting the lenders to seek out a receivership order, which was granted by the Supreme Court on July 8. The outstanding amount owed to the applying lenders was $48,962,830.73 as of June 20. The Receiver has also noted that $9 million is owed to Metro Vancouver Water Services, although the debt is unsecured.
The Sale And Purchase
As first reported by STOREYS, the Metrotown Place property was then listed for sale, without an asking price, in August by Carter Kerzner, Tony Quattrin, Vincent Minichiello, Jim Szabo, and Luke Gibson of CBRE Vancouver's National Investment Team.
According to the Receiver, CBRE's marketing process saw the brokers contact 1,643 potential purchasers. After 25 parties showed some level of interest, the only, highest, and best offer ultimately came from the City of Burnaby, who proposed to buy the Metrotown Place property for $65,000,000.
According to the asset purchase agreement terms, the City of Burnaby was represented by WPJ McCarthy and Company, who received a brokers' fee of $650,000 plus GST. WPJ McCarthy is the owner of the 5000 Kingsway Plaza that's located a few blocks east of Metrotown Place and set for redevelopment. Acting as the Receiver's broker, CBRE received a fee of $422,500 plus GST.
The Metrotown Place office towers at 4330 Kingsway and 5945 Kathleen Avenue in Burnaby. / CBRE
The purchase agreement was dated October 22, was approved by the Supreme Court on November 7, and is expected to close 10 days after the court approval date or on November 28 at the latest.
Reached for comment, the City of Burnaby confirmed the acquisition, confirmed that Council approved the purchase, and noted that the $65 million purchase price was well below the BC Assessment valuation of $87,760,000.
"The City regularly uses its Corporate & Tax Sale Land Reserve Fund to make acquisitions that meet various short and long-term community objectives," said Manager of Public Affairs Chris Bryan. "City staff will prepare a report for City Council outlining potential uses for the new property."
Time will tell what the City plans to do with the property, but Metrotown Place has a history with governments, as it was formerly home to the Metro Vancouver Regional District before it relocated to the nearby Metrotower III, after it concluded that the Metrotown Place property was nearing the end of its life and would be too costly to renovate. The City of Burnaby is currently in the process of launching its municipal housing corporation, the Burnaby Housing Authority, and has said that it will be leasing office space outside of City Hall, although, at 350,000 sq. ft, the Metrotown Place complex is significantly larger than the 3,000 sq. ft the City says it needs.
