(Bloomberg) -- Lenders to a half-built, 85-story Toronto condo tower will hire a local developer to finish construction after an attempt to sell the project elicited only one bidder.
A court-appointed receiver selected Toronto-based developer Tridel to complete the project after a process initially drew interest from 10 bidders with only one making it to the end, according to a report filed with the court and posted to the receiver’s website Wednesday. The lone bidder who wanted to purchase the project was deemed unqualified, the report said.
The lenders had been looking for a purchase price that equaled or exceeded C$1.2 billion ($847 million), the report said. Earlier filings showed they were owed C$1.26 billion.
The project’s senior secured lenders, two funds run by South Korea-based IGIS Asset Management Co., applied for the receivership after the project’s former owners defaulted on part of its nearly C$1.7 billion in debt last year.
The supertall tower sits at the corner of Yonge and Bloor Streets, near a stretch of upscale shops known locally as “The Mink Mile.” The building, called The One by its developers, has been among the highest-profile projects in the lengthy condominium boom that has reshaped Toronto’s skyline.
But financing woes, delays and soaring costs plagued the project since construction began in 2017. The C$1.4 billion cost projected in 2019 had climbed to C$2 billion by the time it was put in receivership, court documents show.
The lenders’ contract to finish construction with Tridel will see them provide further financing, according to the report. Another IGIS fund had already agreed to extend at least another C$315 million, according to earlier disclosures. And the receiver said it intends to apply on the lenders’ behalf for relief under Canada’s Companies’ Creditors Arrangement Act to allow the project to restructure its finances further.
The proposed resolution to The One marks the latest example in Canada of a lender to a half-finished condo project effectively taking over as its developer. With real estate receiverships on track for their highest level in at least 10 years amid a broader softening in the condo market, few bidders have emerged for such projects. That’s left some lenders with little choice but to invest more in order to get their original loan back.
©2024 Bloomberg L.P.