Coromandel Properties has declared it is in financial trouble with $700 million in outstanding debts on 16 prime Vancouver properties.
to B.C. Supreme Court seeking creditor protection reveals a pattern of high levels of leverage and repeated borrowing to hold onto properties while failing to develop them quickly enough.
The company spent another $15 million picking up single-family home lots east of that site, as well as marketing a condo development on West Broadway and another one in Fairview Slopes. “I would call them a small developer with unusually large land holdings. They’re a small developer, both in terms of their past track record and overall amount of property under development,” said Jon Stovell, who has been in the Metro Vancouver real estate development industry for more than 25 years and is chair of the UDI and president of Reliance Properties.
Typically, developers want to sequence their projects “to drive a more evenly balanced cash flow position,” Rapp said, with some projects in early stages while others are under construction and others are completed and driving revenue.Article content Coromandel was one of several of these. Some local developers were critical of the way these newer companies seemed to be buying prime lots at top dollar with no pressing plans to develop them. Academics and observers said it wasn’t the first time inflated real estate prices were being blamed on investors and immigrants from Asia, pointing back to the 1980s and 1990s-era exodus of people and money from Hong Kong to Vancouver.
But last week, the cherry blossom festival’s executive director Michael Dove got a call from Coromandel saying it wouldn’t be able to continue with its sponsorship. Dove said it was a “pretty big shock because they’re really the cornerstone” of the festival’s sponsorship and budget, which puts the April 1-23 festival in jeopardy.
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