Vancouver mixed-use project falls into receivership

31519 Investments Ltd., 31519 East 2nd Limited Partnership and 31519 GP Ltd., the owners of a mixed-use development known as Chroma and located at 1888 Scotia Street in Vancouver, were placed into receivership on March 30, 2026 on application by Institutional Mortgage Capital Canada Inc., acting as general partner of IMC Limited Partnership (“IMC”).

The property is a 10-storey building with 133 residential strata units and 8 commercial units. The project was financed through a construction loan provided by IMC in late 2024 and subsequently refinanced into a term facility in March 2025, with a principal amount of approximately $76.4 million and a five-year maturity.

Despite completion of construction in April 2025, the project failed to stabilize as anticipated. Leasing performance lagged materially, with only 2 of 8 commercial units leased and 69 of 133 residential units occupied, resulting in insufficient rental income to service debt obligations. The lender’s October 2025 appraisal, which valued the property at approximately $84.8 million on a stabilized basis, assumed significantly higher occupancy and income levels than those achieved in practice.

Payment defaults emerged shortly after funding, with the borrowers making a single blended payment in July 2025 before failing to meet their August 1, 2025 obligation and remaining in persistent arrears thereafter. Between August 2025 and February 2026, the borrowers made sporadic deposits totaling approximately $728,563.90, leaving a payment deficiency of approximately $1.4 million over the period and an annualized shortfall exceeding $2.4 million.

Operational and reporting deficiencies compounded the financial distress. The borrowers failed to provide timely financial statements, rent rolls, and leasing updates, limiting the IMC’s visibility into project performance and raising concerns regarding cash flow management and the handling of rental income. The lender also cited inadequate capitalization and a failure by the owners to inject additional equity to address liquidity gaps.

Following continued defaults and deteriorating confidence, IMC issued a demand letter on January 21, 2026 accelerating all amounts owing and requiring repayment by February 2, 2026, together with a notice of intention to enforce security. As at January 19, 2026, the total indebtedness stood at approximately $79.3 million.

KSV is the receiver. Counsel is Lawson Lundell for IMC, Nathanson Schachter & Thompson for Momenta Properties Inc. et al., and Osler for the receiver.