BURST
It was billed by its developer as a luxury condo building whose design would be “inspired by the world-renowned fashion houses of Paris” and evoke “the smart chic of Parisienne character.”
And from a visual standpoint, the four-storey Chloe building off the Arbutus Greenway near West 47th Avenue in Vancouver’s Kerrisdale neighbourhood ticks some of those boxes: an elegant, soft-palette facade features large, framed apartment windows and long, narrow balconies.
But there is no evidence of any Paris-like bustle.
The project developer is in the midst of court receivership proceedings. And in a tough market where many such proceedings are happening, this one stands out.
This isn’t a case where a project is still in the early stages — a set of drawings and a piece of land that has been excavated — and now needs to be sold because costs have escalated and it was too much to carry.
The building, with 46 strata units and 11 retail units, has been completed for almost a year and is ready to be occupied, except for some deficiencies and maintenance work.
“It’s very unusual because it’s finished,” said Vancouver real estate agent Suraj Rai.
He’s keeping close tabs on what happens next in the receivership proceedings, which started in February and revealed the developer owed more than $90 million in secured debt.
The proceedings are about to go into a next phase. The receiver posted some new court documents in July and a court hearing is scheduled to be held mid-August.
Meanwhile, there is currently one Chloe condo unit for sale on the Multiple Listing Service and it is asking $1.388 million or about $1,500 per square foot.
This asking price is much lower than the average $2,100 per square foot price that 31 presale buyers agreed to pay a few years ago for the condo units, said Rai.
Some of the presale buyers did not complete their contracts and the receiver is asking the court to disclaim their original agreements.
In total, the receiver will be asking the court for permission to market and sell 24 residential units, as well as the 11 retail spaces. The developer was not able to complete sales for these.
If approved, this cluster of court-ordered sales will likely push down the price per square foot for the condo units. It also could get to a level where more new buyers would be interested, said Rai.
When the receivership proceedings started in February, the developer owed more than $93 million to secured creditors, according to the receiver’s first report filed on July 4.
The developer of the project is named in court documents as Lightstone Development, which is co-owned by Vicky Zheng, who also is known as Xiao Song Zheng.
The receiver’s report described claims of unsecured debt by some presale purchasers, who say they paid for their units in full directly to the developer without legal counsel or using a trust to hold funds.
At least one set of these buyers has separately filed a notice of claim against the developer, listing Lightstone, Zheng and others as defendants.
They said they entered into an agreement to buy a unit in 2021 and paid a deposit, which was supposed to be held in trust, and later paid Zheng another amount for a total of $880,000 in return for priority in choosing a better unit.
The receiver, however, notes that any of these claims would be unsecured and subordinated to the registered loans or mortgages. It does not appear that the secured creditors will receive full recovery, it added.
In earlier court documents, Peterson, a local real estate company that lent the project around $18 million and initiated the receivership proceedings, said there were additional charges registered on the project without its permission as a senior, secured lender.
It called them “side deals” with third-party lenders and purchasers, and said they allegedly included selling units that had already been pre-sold to other parties at prices lower than fair market value, as well as allowing purchasers to pay for their units directly to the developer.