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A landmark condominium project in one of Toronto’s ritziest neighbourhoods has been put into receivership after construction delays and cost overruns.
Construction of the 85-story tower will be taken over by a court-appointed receiver after its owners, developer Sam Mizrahi and investor Jenny Coco, defaulted on part of the project’s nearly $1.7 billion in debt, according to a Oct. 18 order from the Ontario Superior Court of Justice.
Two funds run by South Korea-based IGIS Asset Management Co. applied for the receivership. Another IGIS fund will extend at least another $315 million to continue work on the project, court documents said.
The super-tall 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 one of the most high-profile projects in the lengthy condominium boom that has reshaped Toronto’s skyline.
Financing woes, delays and soaring costs plagued the project since construction began in 2017. The $1.4-billion cost projected in 2019 had climbed to $2 billion earlier this year, the court documents show.
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Though it was supposed to be finished last year, concrete columns and walls have only been poured up to the 40th floor as of early October. The project’s retail space lost its anchor tenant with a replacement yet to be found, and its projected completion has been pushed back to March 2025, the court documents say.
Now, the project faces a softer Canadian real estate market as interest rates at their highest point in more than 20 years dampen demand.
And the partners aren’t getting along. “Over the past several years, Coco’s and Mizrahi’s relationship has become increasingly acrimonious and dysfunctional,” the lenders alleged in the court filings. “Their disagreements have impeded the ability of the borrower to complete the project and impaired the relationship with the senior secured lenders.”
Ari Altstedter, Bloomberg
Before the opening bell: Stocks retreat, oil and gold climb
Oil and gold prices climbed while stocks retreated as investors responded to the threat of a weekend escalation that could spread the conflict between Israel and Hamas to the wider Middle East region. Treasuries rose as yields at multiyear highs drew buyers.
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United States equity futures posted modest declines, while Europe’s Stoxx 600 Index dropped 0.9 per cent. Treasuries gained, led by 10-year debt, where yields have soared by 30 basis points this week to near five per cent. United States Federal Reserve chairman Powell suggested the U.S. central bank is inclined to hold interest rates steady again at its next meeting, while it watches key growth data. The dollar trimmed its advance.
Oil traded above US$90 a barrel and gold approached US$2,000 an ounce after the Pentagon said it’s seeing an increase in drone attacks in Iraq and Syria, while an American destroyer intercepted cruise missiles fired toward Israel by Houthi rebels in Yemen. Israel’s military said it struck Hamas targets in Gaza overnight and hit Hezbollah assets in response to fire from Lebanon, where the Iran-backed group is based.
“The risk premium in crude has shot up again,” said Vandana Hari, founder of consultancy Vanda Insights. “As long as the Israel-Hamas tensions run high, crude will remain susceptible to further spikes on signs of an escalation.”
In Canada, the S&P/TSX composite index closed down 101.89 points at 19,348.81 on Thursday.
Bloomberg
What to watch today
Statistics Canada will release retail sales numbers for August this morning, along with construction investment.
American Express Co. will report earnings today.
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
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