In March 2020, three high-rise condo projects near Toronto’s Yorkville neighbourhood simultaneously fell into receivership, with buyers left scrambling over the fate of the thousands of pre-sold condo units and sales contracts.
A little over a year later, these three former Cresford projects are now in various stages of being revised and relaunched under new ownership.
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Cresford Development Corporation was the original developer of The Clover on Yonge, The Residences of 33 Yorkville and Halo Residences on Yonge. Collectively, the high-rise condo buildings accounted for almost 2,000 units in Toronto’s new condo inventory, and were all under construction and sold out at the time of their insolvency. On March 27th, 2020, the towers entered receivership under the care of PricewaterhouseCoopers (PwC), appointed as the receiver and manager of assets for the properties.
The receivership order was “granted pursuant” by an application made by bcIMC Construction Fund Corporation for The Halo and The Clover, with the addition of Otéra Capital Inc. for 33 Yorkville. Between the towers, 1,805 buyers entered into purchase agreements and provided $252 million in deposits, as reported in pre-construction purchaser updates posted online by PwC in mid-April 2020.
According to previous reporting by the Toronto Star and The Globe and Mail, Maria Athanasoulis, a former chief operating officer at Cresford Developments, claimed in a lawsuit filed in January 2020 that the company had made “significant misrepresentations to its lenders” as part of a “cash crisis” that resulted in her wrongful dismissal.
Athanasoulis alleged that several active Cresford condo projects in Toronto faced financial challenges, including the three projects that later fell into receivership and YSL Residences, an 85-storey tower near Yonge and Gerrard streets that is not in receivership.
Athanasoulis claimed that she was constructively terminated after she “pressed” Cresford’s founder, Daniel Casey, to move forward with equity investments that he was contractually obligated to make. Instead, Casey was allegedly taking “secret loans” from high-interest funds from OTB Capital, a third-party lender, according to the lawsuit. Casey and Cresford denied anything unusual was happening with how the company raised equity, and later filed a statement of defence and counterclaim to the Ontario Superior Court.
A couple of months after Athanasoulis filed her lawsuit, Cresford’s three downtown condo projects were taken under management by PwC. Here, we look at what’s happened since the three Cresford developments entered receivership over one year ago.
The Clover on Yonge
Having recently rebranded under a new developer, The Clover on Yonge appears to have so far made the most progress in getting back on track out of the three projects.
The Clover accounted for 522 condo units divided between two towers, reaching 44 and 18 storeys in height at 595 Yonge Street, near Wellesley Street. PwC described The Clover as being in “an advanced stage of construction” when the property entered receivership. At the time, the Notice and Statement to the Receiver said that the higher levels of the tallest tower were under construction with the lower levels in the finishing stages. Of the 522 units, 499 of them were subject to pre-sale agreements for a total of $48.8 million in deposits.
In a PwC update and further reporting by the Toronto Star in June 2020, Vancouver-based developer Concord Pacific confirmed that it had acquired The Clover. Concord told the Star that the company had met the condition set out by the Ontario Superior Court of Justice, which required the payment of the property’s mortgage to bcIMC, who was owed $180 million in a mortgage and subordinate loan.
PwC had intended to offer The Clover as part of a packaged deal with The Halo through a stalking horse bid that would set a floor price on both properties. The Star reported that a Concord executive told the court that the company had an agreement to buy Cresford shares prior to the March receivership, and the court agreed to amend the receivership plan if Concord paid the Cresford debt on The Clover.
Clover condo purchasers said that they expected the condos to be resold at nearly double the price than what they were originally contracted for in 2016, according to the Star.
In February 2021, Concord Adex, a subsidiary of Concord Pacific, announced in a press release that it would be bringing The Clover to market this winter as the newly rebranded Gloucester on Yonge. A dedicated package room, along with a “new cohesive design throughout the building and to the street front,” was added to the tower, which is currently in the sales registration phase, according to BuzzBuzzHome.
Halo Residences on Yonge
Once slated as a 39-storey condo tower near Yonge and College streets, The Halo is expected to move forward as a purpose-built rental project.
Located at 480 Yonge Street, The Halo was in the early stages of construction when it entered receivership. The tower, originally set to house 413 units, had 388 of those units in pre-sale agreements that totaled $42.5 million in deposits, according to PwC.
On September 15th, 2020, a Provincial Court Approval and Vesting Order for the project was approved, with an expected closing date for the sale to the new owner set for October. The order considered the termination of all existing sales agreements with Halo purchasers, which would result in the return of deposits. When the sales transaction officially closed in October, the contracts were terminated and a deposit return procedure was opened in February 2021 via PwC.
494 Yonge Street Inc, which is a real estate holding company managed by QuadReal Property Group LP, is reported to be the new purchaser as per PwC and information posted on Halo’s developer website. In February 2021, it was stated on the developer website that The Halo would be reworked as a purpose-built rental project. All existing purchasers are eligible for a one-time, two percent payment on their deposits, which have reportedly been issued to the majority of pre-sale buyers as of this month.
The Residences of 33 Yorkville
Originally slated to rise 71 storeys just north of Yonge and Bloor streets, 33 Yorkville appears to still be in the sales process between PwC and the new owner, reportedly the Vaughan-based Pemberton Group.
In May 2020, PwC filed a motion to the court to approve the proposed Sale and Investor Solicitation Process, which was granted in June. A few months later, PwC put forward another motion to enter into a definitive agreement of purchase and sale with PEM (Yorkville) Holdings Inc. According to the ‘Motion Record of the Receiver,’ an approval and vesting order document posted by PwC in March 2021, PEM (Yorkville) Holdings Inc, referred to as the “Purchaser,” is an entity related to Pemberton Group.
Jeremiah Shamess, the Vice President of Private Capital Investment Group at Colliers Canada, tweeted last week that 33 Yorkville had reportedly “sold for $300,000,000 or $274 per buildable square foot (1,091,500 GFA) to Pemberton [Group].”
On March 4th, 2021, PwC filed an Approval and Vesting Order to approve the sales transaction with PEM Holdings Inc, which appears to also terminate the existing agreements of purchase and sale for the pre-sale condos. Last week, the court issued a deposit return procedure order for 33 Yorkville pre-sale purchasers.