Carlyle Communities Refinances Mississauga Low-Rise Development Site
Tuesday May 28, 2019
Crestview Commons (marketed as Manors of Mineola), is a luxury boutique low-rise development in Mississauga, developed by Carlyle Communities. Fortress Real Developments’ role in this project is that of a development consultant.
Set on 1.5 acres adjacent to the QEW, this project is planned for 20 traditional three-storey townhouses. Lot frontages range from 17′ to 22′, with an average unit size of over 2,000 sf. The site is ideally located for residents looking to commute into Toronto with the Port Credit GO station and Mississauga transit easily accessible.
The parcel of land for the project was acquired in Q4 of 2013 and achieved all approvals in Q4 of 2017. The developer brought the project to market in the Spring of 2017 and has been contending with the slowdown in market conditions since the launch. The borrower indicated to FAAN in 2018 that they were finding it increasingly difficult to achieve construction financing with low pre-sales and the syndicate charge on the property.
On May 17th, 2019, FAAN Mortgage Administrators submitted a report to court and settlement approval order to court that would exit the lenders in this project with a 83% return of their original principal (this includes previously paid interest).
In the report to court FAAN stated, “The Crestview Borrower has advised that it canvassed the market for such financing and that, other than Atrium, lenders are generally not willing to advance funds at this time given the limited number of pre-sales.” They added, “Atrium Mortgage Investments (“Atrium”), the first priority mortgagee, has agreed to provide construction financing but is unwilling to do so while any portion of the charge in favour of BDMC securing loans made by Crestview Individual Lenders remains on title. The Trustee also received independent confirmation from Atrium of same.”
This settlement provides a return of over 80% of their funds and pays out almost 2 years earlier than intended in the development and construction cycle. The original loan was to have been paid out from completed and constructed homes and this solution provides liquidity at a nominal discount but much earlier than forecast.
Over the past 10 years, Fortress in its capacity as a land owner, development consultant and development partner, has completed 35 real estate projects across Canada. These projects have been funded in part through syndicated mortgages (arranged by mortgage brokerages) to finance early pre-construction or ‘soft’ costs and to date they have repaid over $320M to syndicated mortgage lenders. Fortress has assisted in delivering over 2,900 residential units and 3.5 million sf of combined residential and commercial space. Approximately one million square feet is currently under construction. In multiple projects where Fortress has been permitted to complete its role, stakeholders have substantially benefitted from value created.