A portfolio of rental buildings in Ontario and New Brunswick owned by privately-managed District REIT have been placed under receivership, according to filings in Ontario Superior Court.
District REIT was founded by Richard Hall and Carmen Campagnaro, who also founded Burlington-based developer Valour Group, which itself had a 1,500-unit project in Ajax placed under receivership earlier this year, as previously reported by STOREYS.
“As a Canadian trust, District REIT strategically acquires income-producing properties across key markets in Canada, with a foundation in Southwestern Ontario,” said District REIT on its corporate website.
“Our expansion into New Brunswick reflects our long-term vision of geographic diversification as we identify high-potential opportunities from coast to coast,” they added. “We strategically select assets that align with our growth objectives and deliver value to Unitholders — from thriving urban centres like Toronto to emerging communities like Ayr and Saint John, and beyond.”
Their corporate website lists 29 properties in their portfolio, which are predominantly multi-family properties — apartment buildings and townhouse communities — and industrial properties.
The properties that are subject to the receivership proceedings are:
1. 3967 Savoy Street, London, Ontario: 47 units
2. 15 Gamble Avenue, Toronto, Ontario: 27 units
3. 33 Gamble Avenue, Toronto, Ontario: 28 units
4. 40 Beaty Avenue, Toronto, Ontario: 27 units
5. 11 West Street, Brantford, Ontario: 26 units
6. 225 Riddell Street, Woodstock, Ontario: 56 units
7. 33 and 45 Jack Street, St. John, New Brunswick: 48 units
8. 133-135 Woodhaven Drive, St. John, New Brunswick: 48 units
The eight properties total to 307 units, 209 of which are leased, for a total occupancy rate of 68%. The properties are together bringing in $306,271.51 in gross rent.
The first seven properties are beneficially owned by District REIT Limited Partnership, while the eighth is beneficially owned by East Park Limited Partnership, all through individual holding companies.
The Insolvency
The receivership proceeding was initiated by CMLS Financial, a non-bank lender that was founded in Vancouver in 1974 and acquired by Montreal-based digital mortgage lender Nesto in 2024.
CMLS Financial provided a first-ranking mortgage for each of the eight properties between February 2022 and December 2024, each for a principal amount between $5,000,000 and $18,000,000.
According to the lender, there have been numerous defaults across the various loan agreements, with District REIT ceasing to make required monthly payments pertaining to all the properties beginning around April 2026. In some of the cases, CMLS says the owners also defaulted by failing to provide an energy efficiency attestation and failing to pay property taxes.
CMLS says it issued a formal demand for payment on June 2, after which the owners proposed a “stabilization plan.” That plan included selling some of the properties while retaining others. The owners also told CMLS that the properties were facing a $4.4 million operating shortfall and were not expected to be cash flow positive until February 2027.
“The Stablization Plan was (and remains) unacceptable to CMLS,” said the lender in an receivership application dated October 2. “Following CMLS’ rejection of the Stabilization Plan, the Debtors through their counsel submitted further without prejudice proposals that were also unacceptable to CMLS. CMLS in turn provided forbearance terms that were not accepted by the Debtors.”
CMLS Financial was owed over $78.8 million as of October 5, with interest continuing to accrue, and the Ontario Superior Court granted the receivership on October 28.
District REIT
Although they were ultimately unsuccessful, District REIT filed a response in court opposing CLMS Financial’s receivership application, with Co-Founder Richard Hall revealing many details about the REIT in an affidavit dated October 13.
According to Hall, the eight properties are beneficially owned by District REIT Limited Partnership, which is in turn 99.9% owned by retail investors.
“The overwhelming majority of the equity in the District REIT is held by local retail investors who invested in support of the Valour Group’s mission to create housing in Ontario’s secondary markets,” said Hall.
Hall said that District REIT currently has approximately 850 unique investors and that it’s portfolio of 28 properties have a total appraised value of $218.36 million as of December 31, 2025.
“The investors in the District REIT contributed approximately $86 million in invested capital,” said Hall. “As a result of the market conditions described below, I estimate that the equity value attributable to those investors today is approximately $50 million on an appraisal basis, and in the range of approximately $25 million to $30 million on the basis of the sale prices currently being achieved in the market.”
Explaining their liquidity constraints, Hall pointed to market conditions, interest rates, and tariffs, among other things. Hall also said they were in the process of selling various properties and was anticipating sale prices that would more than cover CMLS’s expected shortfalls.
“The only real exposure CMLS faces is the projected shortfall on the three Toronto Properties,” said Hall. “A receivership does nothing to cure that shortfall — it increases it, by adding receivership costs and a forced-sale discount to the same properties.”
Those additional costs, Hall said, “would fall first on the District REIT’s investors” and “A 20% discount on receivership sales, together with the costs of the receivership, would in my estimation eliminate that equity entirely.” Furthermore, he added that placing the eight properties under receivership would “put the viability of the District REIT as a whole at serious risk.”
The Owners
According to CMLS, the owners are facing “significant cash flow issues” and the troubles “appear to be part of greater organization-wide issues facing Richard and Carmen’s various businesses,” including two other properties — 27 Bold Street in Hamilton and 2158 Lilnan Court in Burlington — being placed under receivership.
27 Bold Street is a 32-unit rental building called The Oscar On Bold that was developed by Valour Group, which beneficially owns the property through Oscar Bold Inc. The building became the subject of a CBC News story in June 2025 after tenants went weeks without gas and air conditioning. The lender that initiated the receivership in October 2025 was Tandia Financial Credit Union and the property was listed for sale earlier this year by Colliers.
2158 Lilnan Court is a 7-unit rental building that was originally constructed in 1958 and beneficially owned by Valour Group through Lilnan Ltd. The lender that initiated the receivership, also in October 2025, was Royal Bank of Canada, and the property is currently listed for sale by JLL.
According to CMLS Financial, District REIT has “laid off a significant portion of its workforce in an attempt to manage its cash constraints” and Richard Hall and Carmen Campagnaro are also subject to bankruptcy applications commenced against them in their personal capacities.
In the aforementioned court response, Hall did not deny the existence of these other proceedings, but said they have no impact on CMLS Financial and that he and Campagnaro intend to oppose the bankruptcy applications. As for the layoffs at the REIT, Hall acknowledged the workforce reduction, but said that the reduction has not impaired its management of the properties.
Nonetheless, the eight properties are now under receivership and the court-appointed Receiver has published an FAQ for unitholders in District REIT.
