Chroma: leased to 82%, the receiver asks to sell

Chroma stands at the corner of Scotia Street and East 2nd Avenue in Vancouver, where Mount Pleasant, Olympic Village and the False Creek Flats meet: ten storeys of concrete, eight commercial units on the ground and second floors, and above them 133 rental apartments weighted heavily to the small end, with 96 studios, 30 one-bedrooms and seven lofts and two-bedrooms, per the First Report of the Receiver, Aug. 31, 2026, s. 2.0, para. 2; s. 2.1, paras. 1–2. Construction finished in April 2025. Institutional Mortgage Capital Canada Inc., as general partner of IMC Limited Partnership, funded a term loan against the building on May 29, 2025, and the borrowers made their first blended payment of $268,563.90 on July 1. They missed the next one, due August 1, and in the words of IMC's affiant "have remained in persistent arrears since that time," per the Affidavit #1 of Ariel Mossman, Feb. 27, 2026, para. 22.

The receiver put the lease-up ahead of any sale. AlixPartners Restructuring, Inc., appointed on March 30 under its former name, KSV Restructuring Inc., and substituted as receiver effective June 1 with the same professionals on the file, determined after discussions with IMC that value would be maximized by continuing to lease the residential and commercial units before starting a sale process. In the five months since, residential leases have gone from 76 of the 133 units to 109, per the First Report of the Receiver, Aug. 31, 2026, s. 1.0, para. 2 and n. 1; s. 2.1, para. 5; s. 2.3, para. 2. On September 14 it will ask Justice Milman to approve a sale process and its engagement of two brokerages to run it, per the Notice of Application, Aug. 31, 2026, p. 1; Part 1, para. 1.

A first payment, then arrears

The building is the debtors' only business. 31519 Investments Ltd. holds title as nominee and bare trustee for 31519 East 2nd Limited Partnership, the beneficial owner, whose general partner is 31519 GP Ltd.; Wave Developments Limited, an affiliate, developed the building and, before the receivership, managed the commercial units and kept the books, per the First Report of the Receiver, Aug. 31, 2026, s. 2.0, paras. 1, 3–4.

IMC had financed the construction too, under a December 9, 2024 commitment letter, and a March 31, 2025 commitment letter refinanced it into a five-year term loan of $76,385,167.72, maturing June 1, 2030, at a fixed rate of 45 basis points over the Canada Mortgage Bond yield, repayable in equal monthly instalments of principal and interest, per the Affidavit #1 of Ariel Mossman, Feb. 27, 2026, paras. 15–17. The loan is insured by Canada Mortgage and Housing Corporation. It is secured by a mortgage and assignment of rents registered on May 29, 2025, among other security, and guaranteed by seven companies and three individuals under a guarantee of May 27, 2025, per the First Report of the Receiver, Aug. 31, 2026, s. 3.1, paras. 1–3. IMC's affiant describes the guarantors as the beneficial owners of the project, per the Affidavit #1 of Ariel Mossman, Feb. 27, 2026, para. 12.

The affidavit sets out the arrears in a table. Seven blended payments totalling $1,879,947.30 fell due between August 1, 2025 and February 10, 2026. Against them the borrowers made what IMC calls "sporadic deposits" of $728,563.90; after $257,547.00 of property taxes and $23,002.63 of protective disbursements, $448,014.27 was left for the loan, and IMC put the shortfall at approximately $1,432,000, per the Affidavit #1 of Ariel Mossman, Feb. 27, 2026, para. 25. The borrowers' January 2026 operating statement showed net operating income of approximately $66,000 from the apartments and $0 from the commercial units, about $792,000 a year. IMC set that against the $3,581,670 of annual stabilized income assumed in an October 2025 appraisal, which it called "hypothetical" because it presumed a fully tenanted building with vacancy of 2% on the residential side and 3% on the commercial, per the Affidavit #1 of Ariel Mossman, Feb. 27, 2026, paras. 24, 27, 29. When the affidavit was sworn, 69 of the 133 apartments and two of the eight commercial units were leased.

The rest of IMC's case was about information. It deposed that the borrowers had not delivered timely financial reporting, rent rolls, leasing updates or 2024 financial statements, that the owners had delegated day-to-day operations and reporting to Wave Developments, and that no project updates reached IMC between mid-December and January 30, 2026. By a letter of January 21, 2026, enclosing a notice of intention to enforce security under the Bankruptcy and Insolvency Act, IMC accelerated the loan and demanded repayment in full by February 2; the affidavit puts the indebtedness at $79,271,630.22 as of January 19. The petition was filed March 2, and its March 13 hearing was reset by consent to March 30, per the Petition Record, Mar. 2, 2026, Petition, Part 2, para. 29; Affidavit #1 of Ariel Mossman, para. 18; Requisition, Mar. 17, 2026. That day Justice Milman appointed the receiver under s. 243(1) of the BIA and s. 39 of the Law and Equity Act, per the Receivership Order, Mar. 30, 2026, para. 1.

Rents, managers and a lease-up

The receiver toured the building shortly after its appointment and determined that "certain aspects of the leasing and property management strategy should be modified." Before the receivership, it reports, residential leasing "had placed significant emphasis on achieving rental rates that the Receiver determined were not supported by prevailing market conditions." After consulting the residential leasing agent, MLA Canada Realty Inc., and IMC, it revised asking rents and leasing incentives "with a view to achieving an appropriate balance between rental rates, occupancy, and overall value of the Real Property," per the First Report of the Receiver, Aug. 31, 2026, s. 2.1, paras. 3–4.

At the appointment, Vada Property Management Inc. ran the residential side, and no third-party manager handled the commercial units, which Wave dealt with. Citing feedback from tenants and its own assessment, the receiver solicited proposals and, since June 2026, FirstService Residential B.C. Ltd. has managed the whole building, with a part-time manager on site; the former caretaker's contract was disclaimed, per the First Report of the Receiver, Aug. 31, 2026, s. 2.2, paras. 1–2; s. 5.0, para. 1(j).

By August 17, 2026, 109 of the 133 apartments, approximately 82%, were leased: 96 occupied and 13 under signed leases whose tenants had not yet moved in. On the day of the receivership order the count had been 76, approximately 57%. On the commercial floors, three units totalling about 6,570 square feet were leased at the date of the order, all still in tenant improvements; a café has since opened, and a fitness gym was expected to open in early September. Five units of about 5,990 square feet were vacant at that date. Marcus & Millichap Ltd. continues to market the vacant space, the planning firm Pooni Group is assessing rezoning options for some of it, and an architecture firm and an engineering firm have been engaged on a permit application to demise units 103, 104, 203 and 204, per the First Report of the Receiver, Aug. 31, 2026, s. 2.1, para. 5; s. 2.3, para. 2; s. 2.4, paras. 1–2; s. 5.0, para. 1(q).