Real estate developer Vandyk Properties is staring down the barrel of a receivership as lenders seek to recover more than $203M owed in relation to a number of development projects.
KingSett Mortgage Corporation and Dorr Capital Corporation filed an application on Monday requesting that a receivership order be granted for five Vandyk developments: UPtowns and Heart Lake in Brampton, The Ravine and Lakeview DXE Club in Mississauga, and Grand Central Mimico in Toronto.
KingSett and Dorr loaned the developer funds for these projects and are owed $169,977,089 and $34,000,000, respectively. Court documents detail alleged cost overruns, misuse of funds, failures to discharge construction liens registered on UPtowns, Grand Central Mimico, and Lakeview, and failures to make monthly interest payments on The Ravine, UPtowns, and Heart Lake.
The lenders issued demand letters to Vandyk in September, but payments were not made. Court documents say the lenders have "lost all confidence" in Vandyk's ability to manage its obligations, obtain refinancing, manage the properties, and complete the developments "in a timely manner or at all."
KingSett declined to comment on the matter. Vandyk Properties did not respond to a request for comment issued Tuesday afternoon.
The five projects, which have yet to finish construction, were expected to bring 1,757 homes to the market — a mix of housing types including detached homes, townhomes, and apartments. Of those, 830 have already been sold.
Reports of stalled construction on these projects have circulated for quite some time — years, in some cases. At UPtowns, a 342-unit townhome community next to the Turnberry Golf Course, pre-construction buyers began purchasing in 2017 with an expected closing date of December 2020, but as recently as last month, much of the construction had not been carried out.
Heart Lake, located on a piece of property adjacent to UPtowns, is the subject of another lawsuit filed in July in which asset manager J. Lang Management Inc. said it was concerned that Vandyk would not be able to pay its $6M fee. Meanwhile, Grand Central Mimico, which stopped construction in the spring, has three liens against it seeking over $800K for unpaid work.
The claim from KingSett and Dorr does not mention two other Vandyk projects that are the subject of separate claims for unpaid work. On The Backyard condos in Etobicoke, there is allegedly over $12M owing to various contractors, and the Buckingham, a project planned next to Grand Central Mimico, has reportedly accrued over $300K in unpaid work.
Rumours of serious financial issues at Vandyk have swelled for weeks, with some pointing to the company's attempts to sell off assets earlier this year (along with the stalled construction) as a primary indicator.
Vandyk also operates in Florida, having developed two buildings in the Sarasota area with a third, dubbed SIX88, listed as under construction on Vandyk's website. Images of the site, located at 688 Golden Gate Point, show that Vandyk had occupied the property as early as February 2019, but no work had begun by late 2022. The developer also owns The Shack, a restaurant in Cortez, Florida that the company reportedly bought in 2014 for $4M. The Shack was put up for sale in April of this year, with Vandyk seeking a minimum of $15M. Offers were due by May 15, but current property records still list Vandyk as the owner.