Ontario’s Elevate Condo Towers Change Hands Mid-Completion
Dorr Capital Corporation, Gentai Capital Corporation, and ELM Developments Join Forces to Complete Failing Multi-Tower Project
KITCHENER, Ontario, Oct. 09, 2024 (GLOBE NEWSWIRE) — Canadian mortgage lender Dorr Capital Corporation, ELM Developments, and BC’s Gentai Capital Corporation teamed up to acquire mid-rise condominium project from 1776411 Ontario Ltd. for approximately $75 million with hopes to aid the country’s housing crisis.
Located at 1333 Weber Street East in Kitchener, Ontario, the proposed 4-tower Elevate project stands under construction to complete a 15 Storey Tower A & Tower B and 12 storey Tower C & D with a commercial component attached. The project was slated to bring 622 new homes to market by 2029, before facing a string of cost overruns and failing to service the loan in Canada’s rising interest rate and construction costs environment.
The project has a total land area of 3.60 acres and was originally rezoned in 2016. Building A, which is halfway through construction is a 15-storey building with a total of 177 residential dwelling units. Similarly, Building B is approved for a 15-storey tower with 193 residential units, and Building C & D are both 12-storeys, providing commercial space as well as 159 and 93 residential units, respectively.
“While our plan is to develop all four towers as quickly as possible, our primary focus is to complete the existing tower that stands 65% complete and save the existing sales,” says Brian Dorr, CEO of Dorr Capital Corporation. “We already know we’ll have to reassess the sales strategy for one of the other towers and rental is not off the table.”
Construction and misspending appeared to be the primary culprit in the project’s initial demise. To ensure the success of this project, it would require significant restructuring of financing, a complex sales strategy, and adequate development of the project. Vancouver’s Gentai Capital Corporation will adopt the role of majority stakeholder by providing a loan on the property, while Dorr Capital focuses on facilitating the transaction alongside ELM Forward, a division of ELM Developments that specializes in the construction and development of distressed assets.
“Relationships and context play an integral part of saving a project,” explains Dorr. “We not only understood the project coming in, but we also knew the dynamics, and the players involved. We developed a degree of trust and empathy for the existing stakeholders during the initial default phase, which made it easier to come up with a win-win solution.”
Partner Dorr Capital spent over 10 months and countless hours assessing all downsides of this deal to mitigate and fix it with the original partner before constructing the acquisition. Now, equipped with a new team, they have enlisted an improved management structure and are better positioned with access to funding to complete it. “This complex deal required attention to detail and thorough due diligence. Reaching a favourable outcome is possible when you work with competent groups who are committed to achieving a win-win scenario rather than focusing solely on profits.”
“Successful real estate ventures thrive on collaboration, transparent communication, share vision and steadfast focus on leveraging our strengths—opening the door to limitless possibilities,” says Michael Yeung, Executive Vice President, Lending at Gentai Capital.
“With this new team of construction and development experts, we as partners have a clear vision forward,” says Elliot Steiner, President at ELM Developments, “We’re proud to provide over 600 much-needed housing units to the community of Kitchener and are committed to conducting good business to move this project forward.”
“In these delicate and vulnerable situations, it’s better to work as a team, refrain from being greedy, and focus on turning a normal profit. We see considerable upside in sales revenue and would like to capitalize and revive this project to benefit the partnership group and support in dealing with the housing crisis,” concludes Dorr.
The deal was officially approved by the courts on October 8th, 2024 and is anticipated to close this month.
About Dorr Capital
Dorr Capital is Ontario’s trusted commercial real estate financing company. Facilitating +$3Billion dollars in loan servicing, the firm provides viable borrowing solutions for the purchase of land to fuel much needed new home construction in the region. Since 2011, Dorr Capital and its network of lenders have evolved its operations as a traditional loan brokerage to include mortgage loan servicing, syndicated mortgage investments, and CMHC approved loans to meet the growing needs of the Canadian population and of our valued partners.
About Gentai Capital Corporation
Gentai Capital is a leading Canadian alternative investment manager, offering value-added real estate financing solutions coast to coast. With a national portfolio of residential and commercial real estate mortgage loans, and a diversified pipeline of lending opportunities, our scope and scale distinguish us as an integrated asset manager and one of the fastest-growing companies in Canada.
About ELM Forward
ELM Forward is a division of the ELM Developments Group, specializing in the development and construction for distressed assets. The team brings over 30 years of experience in problem-solving for distressed real estate assets, delivering customized solutions from acquisition to completion. To date, they have developed and managed more than 55 projects across Canada and the U.S., covering multiple asset classes. They have delivered 6,300 residential units and 900,000 square feet of commercial space, exceeding a combined value of $4 billion.
Media Contact:
Britainny Hari
Founder, Dual Agency Inc.
brit@thedualagency.ca
(778) 686-9711
