Burnaby-based real estate developer Thind Properties has sold the hotel component of their Highline Metrotown tower in Burnaby, providing a small amount of relief in the face of a substantial amount of debt.
Highline Metrotown sits at 6511 Sussex Avenue in Burnaby, directly adjacent to Metrotown Station and across the street from the Metropolis at Metrotown shopping centre. The 48-storey mixed-use tower completed construction in late-2023 and has received occupancy.
The 10-storey building podium, however, has remained vacant. Originally planned as office space, Thind Properties submitted an application to the City of Burnaby earlier this year to convert the office space into a hotel. The City granted final approval to that application earlier this month.
The sale of the hotel component was disclosed by Thind Properties as part of an ongoing civil suit between it — as 6511 Sussex Heights Development Ltd. — and a realtor named Gurmail Singh.
The Commission Lawsuit
As first reported by STOREYS last week, Singh filed a civil claim on November 14 for $800,000 in unpaid commission, saying that he and Thind had entered into a consultation agreement on September 10 that would see him earn a 2% commission if he sold the 40+ strata office units and three strata retail units.
Since the filing, however, Thind Properties has disputed that such an agreement existed. In an application dated November 21 to cancel the certificate of pending litigation (CPL) that Singh registered on the property, Thind said that it "denies the existence of the Alleged Consulting Agreement" and that they did not learn of it until they received notice that the CPL had been registered.
"The applicant further denies that that [sic] the plaintiff provided any services with respect to the Properties, that the plaintiff provided any advice to the applicant regarding the properties or that the plaintiff referred the buyer of the Properties to the applicant," Thind added.
The 48-storey Highline Metrotown tower next to Metrotown Station in Burnaby. / Thind Properties
In a response filed on November 25, Singh said a colleague of his named Sukhmander (Sam) Rakhra witnessed Thind Properties Founder and CEO Daljit Thind sign the agreement on behalf of 6511 Sussex Heights Development Ltd. and that the agreement bears Thind's signature. He says that he found an interested buyer in Mundi Hotel Enterprises Inc. and provided drawings and information about the hotel component to their Principal, Ron Mundi.
They set up an inspection of the space and then had a meeting to discuss the framework of a potential deal, but Mundi then said they weren't interested in going through with the purchase, according to Singh, who then moved on to other potential buyers.
"However, on October 31, 2024, the plaintiff learned that Mundi Hotel had indeed entered into two agreements with Sussex Heights to purchase the Hotel Properties," said Singh. "While Mr. Thind denied knowledge of those agreements to Mr. Rakhra at the time, it appears that Sussex Heights and Mundi Hotel entered into those agreements on October 2 and 4, 2024 respectively — just over a week after the inspection had taken place."
The Sale
After claiming $800,000 in his initial civil claim, Singh then revised his claim to $944,000 after learning that the total sale price of the hotel component was $47,200,000. He says he has a valid claim to register the CPL because he was granted an interest in the property as security for his services, but that he would consent to canceling the CPL if Thind posts security in the amount of $944,000.
In real estate, encumbrances that are registered on a property — such as a certificate of pending litigation or a lien — can potentially restrict the owners from actions such as selling the property or securing financing, so property owners are often quick to have them removed by posting a bond.
According to Thind Properties, Mundi Hotel Enterprises Inc. has waived its condition precedents and the transaction is now firm and set to close on November 29. It's unclear whether Thind has posted the security to cancel the CPL, as there are currently no new court documents available since Singh's response on November 25, but the transaction has already closed. The closing was confirmed to STOREYS on November 28 by CFO Capital, who represented the buyer in arranging financing.
The hotel will be known as Hyatt Place Metrotown, span 70,000 sq. ft with 159 rooms, and is expected to open in 2025. According to the company's website, this represents the first hotel in Metro Vancouver for Mundi, whose other hotels are all located in the Okanagan Valley or Alberta.
Had the sale been delayed, Thind would have owed KingSett Capital — already owed $146,020,840.41 as of November 1 pursuant to an inventory financing loan — an additional $13,600 in interest and $1,941.80 in holding costs per day, according to Thind, who also said that all of the sales proceeds will be used to pay off the mortgage. The sale brings the outstanding debt on Highline down to around $100 million, but Thind also owes KingSett approximately $75 million on Minoru Square and $85 million on District Northwest.
