The 1289 Nicola project by Vancouver-based real estate developer Dimex Group has been listed for sale, after facing both foreclosure and receivership proceedings, according to court filings in the Supreme Court of British Columbia.
The project was, not surprisingly, set for 1289 Nicola Street in the West End of Vancouver, two blocks away from Sunset Beach and English Bay.
For the site, Dimex Group — founded by Sunny Dhillon in 2007 — was developing a six-storey concrete passive house building with 10 strata units and three rental units, according to a development permit application. The project website, which says 1289 Nicola merges “a classic French Mansard aesthetic with a contemporary urban palette of materials,” also states that it is a collection of only six strata units, however.
BC Assessment values 1289 Nicola Street at $4,656,000 and the property is beneficially owned by Dimex Group under By The Bay Home Development Ltd.
The Foreclosure
The foreclosure proceedings were initiated against the owners back in November 2023 by Genesis Mortgage Investment Corporation, also known as Gentai Capital, pertaining to a second-ranking mortgage agreement the two sides entered into in May 2022 for the principal amount of $3,500,000.
Gentai Capital’s Petition to the Court did not detail the events leading up to the default, but the developer stated in a response opposing the foreclosure that they had been working on the project since 2017 and had plans to pivot the six-storey concrete building to a five-storey woodframe building, which they believed would improve the profit margin and value of the project.
Nonetheless, the Supreme Court granted an order nisi of foreclosure on January 11, 2024, by which the outstanding debt had reached $3,798,762.01, with interest accruing at a daily rate of $2,023.51.
The Supreme Court also set the redemption date — the date by which the debtors can redeem the mortgage to halt the foreclosure — at January 12, 2024. Dimex Group was unable to redeem the mortgage and Genesis Mortgage Investment Corporation was granted conduct of sale in order to recover their debt.
The Receivership
No successful transaction was completed and the National Bank of Canada then initiated receivership proceedings on September 4, pertaining to a first-ranking charge that included a $15,500,000 construction loan, a $500,000 overdraft loan, and a $50,000 corporate MasterCard line of credit.
National Bank entered into the loan agreement with Dimex Group in December 2019, with Dimex Properties Inc., Dimex Developments Inc., and Sundhir Singh Dhillon serving as the guarantors of the loan (as they did for the Genesis loan).
A rendering of the 1289 Nicola project. / Cornerstone Architecture, Dimex Group
According to National Bank, various permits for the project has been issued by the City of Vancouver, but no significant construction work has been done, and the borrowers have been in default “since at least September 2023,” when they stopped making interest payments.
National Bank said that they were owed approximately $7.47 million as of August 21, 2024, with interest accruing at a daily rate of $1,478.69, and the receivership application was granted on October 3.
Including the amount owed to Gentai, the total debt on the project exceeds $11.2 million, without including interest.
The Listing
Late last month, 1289 Nicola Street was then listed for sale by Colliers, with an asking price of $5,600,000. In its receivership application, National Bank stated that it had obtained an appraisal for the project and “has concerns that its security is in jeopardy.”
“This highly desirable location offers a unique blend of urban convenience and serene coastal living, making it an ideal spot for redevelopment opportunities,” the brokers said. “The site is surrounded by a mix of mid-rise and low-rise residential buildings, providing a strong precedent for innovative and thoughtful design projects.”
The site is currently a vacant lot and any sale of the property will require approval from the Supreme Court.
Elsewhere in Vancouver, Dimex Group also has a project called Templeton at 2250 E 1st Avenue and a project called Lakewood at 2075 E 1st Avenue. Both projects are similar to 1289 Nicola — low-rise passive house buildings in Vancouver — but do not appear to be facing foreclosure or receivership.