Keltic Prior Street: the lender's $72 million credit bid, by share sale

On November 5, 2026, FTI Consulting Canada Inc., the court-appointed receiver of the Keltic project at Station Street and Prior Street in Vancouver, delivered to the service list a notice of application asking the Supreme Court of British Columbia to approve a sale of the project to its senior secured lender, Shape Capital Corp., by approval and reverse vesting order. The price is $72,475,000, including a $72,000,000 credit bid and $475,000 in cash. Shape would get a newly developed 10-storey medical office, manufacturing and retail building over four levels of underground parking, approximately 102,000 square feet, which could be stratified into 68 commercial units and stands directly adjacent to the new St. Paul's Hospital. It was approximately 79% complete when the receiver was appointed in September 2025; the receiver had the general contractor carry on, and the project was completed and received its occupancy permit from the City of Vancouver on September 1, 2026, per the Second Report, Nov. 5, 2026, paras. 2–4, 9, 28(a).

The deal is a sale of the nominee's shares rather than its land and building: Shape would buy the shares of 1232616 B.C. Ltd., which holds legal title for the Keltic partnership, with the beneficial interest in the land and building. A new company the receiver would incorporate and direct, Residual Co., would take the nominee's other assets and liabilities. The receiver says the share structure is "primarily to increase recovery to Keltic's stakeholders by eliminating the requirement to pay property transfer tax ('PTT') of approximately $2.2 million that would be payable in an alternate asset transaction structure." Aside from the Province of British Columbia, the receiver says, no stakeholder is worse off than under any other viable alternative, and under the structure the Province "is not a 'stakeholder' as no liability to pay PTT will occur," per the Second Report, paras. 9(a), 30–31, 33(c)–(d), App. A, s. 1.1.41. No hearing date is in the record. The agreement is conditional on the order being granted by 5:00 p.m. Vancouver time on November 30, 2026, a date the receiver may extend by up to 21 days, per the Second Report, App. A, ss. 1.1.4, 8.1.

The Nexus project, and the agreement with Masimo

The earlier history is in Shape's affidavit, sworn on August 25, 2025 by its managing partner. Keltic (Prior) Development Limited Partnership and its general partner, 1319191 B.C. Ltd., were developing 220 Prior Street as the "Nexus" project, per the Shape affidavit, Aug. 25, 2025, paras. 1, 3–5. Shape's commitment of November 24, 2022 offered up to $85,000,000, an $82,000,000 construction loan and a $3,000,000 letter of credit facility, for a building on a 20,430-square-foot site "adjacent to the new St. Paul's Hospital site in the False Creek Flats neighbourhood of Vancouver." The project, the commitment says, was subject to a sale agreement dated February 11, 2022 with Masimo Canada ULC, to complete 60 days after construction was completed or a completion certificate issued to the contractor, whichever came later, per the Shape affidavit, Ex. "D", ss. 6–7.

The borrower and Masimo agreed to terminate that agreement effective January 3, 2025, with Shape's consent. A supplement to the commitment dated February 18, 2025 recites that the lender "provided the Loan under the Commitment, in part, based on the existence of the Project PSA." It cut the facility to $65,000,000, raised the interest rate to the greater of 8.70% and 3.50% over TD Bank prime, and required $20,000,000 of additional equity from the borrower: $10,000,000 in cash against principal, including $3,696,155 of termination proceeds the supplement acknowledges had been paid to the lender, and $10,000,000 more through monthly work-in-place costs, per the Shape affidavit, Ex. "E" (Supplement, Feb. 18, 2025), recitals A–D, ss. 2(a), 2(c), 3(a).

Shape's account of the defaults

The affidavit says that in or around February 2025 Shape found the borrower in default, including for failing to pay the $10,000,000 initial equity requirement within 30 days of the lender's consent to the termination, and sent a notice of default on February 7. Shape sent demands on May 26, forbore under an interim agreement from June 2 to July 4, and forbore day to day after that. The affidavit says the general contractor, Syncra Construction Corporation, with a June draw of $2,148,892.57 left unpaid, gave an August 15 notice of default warning that it would suspend work. On August 18 Shape advanced $2,520,968.47 as protective disbursements to pay the June draw and the $372,075.90 owed to BC Hydro for work to provide permanent power to the project, per the Shape affidavit, paras. 23–24, 27–31, 33(b)–36. No response from the borrower to that account is in the record.

The affidavit puts the debt at $61,905,222.01 as at August 25, 2025, plus interest and costs, secured by, among other things, a mortgage over the Prior Street land, security agreements from the borrower and the nominee and, from May 2025, a mortgage over four parcels in Richmond. Seven companies, among them the nominee, and two individuals gave guarantees, per the Shape affidavit, paras. 13–16.

On September 5, 2025, in Vancouver Registry No. H-250991, Justice Coval appointed FTI under s. 243(1) of the BIA and s. 39 of the Law and Equity Act as receiver and manager, without security, of the land and of the partnership's, the general partner's and the nominee's property related to it. The order authorizes the receiver to borrow up to $35,000,000 in outstanding principal against a Receiver's Borrowings Charge ranking ahead of all other security interests but behind the Receiver's Charge and certain BIA charges, per the Receivership Order, Sept. 5, 2025, paras. 1, 23. The receiver's notice to creditors listed approximately $4,284,563 owed to unsecured creditors as at September 8, $3,706,634 of it to Syncra, per the Notice to creditors, Sept. 11, 2025, Sched. A.

Finishing the building

The receiver kept Syncra on and decided, in consultation with Shape, to fund approximately $1.4 million owed to it and approximately $113,000 owed to project consultants from before the receivership "in order to avoid further disruption and delays in the completion of the Project," per the First Report, Feb. 5, 2026, paras. 4, 14(f). Shape funded approximately $2.9 million to the contractors' holdback account through a Receiver's Certificate on September 18, 2025, the receiver reports. By November 2, 2026 the receiver had borrowed approximately $18.9 million from Shape under 14 certificates, all under Shape's pre-existing facility with Keltic; it had paid Syncra approximately $11.3 million on progress billings and released $6.2 million more from the holdback account as certain contractors reached substantial-completion milestones. It then held approximately $1.1 million in its estate trust accounts and $44,000 in its segregated holdback account, per the Second Report, paras. 36(b), 36(e), 37.

Units, then leases

After consulting Shape, FTI chose Avison Young as exclusive broker on October 14, 2025. AY, Keltic's listing agent before the receivership, began marketing in February 2026, offering individual strata units and the whole building side by side, per the Second Report, paras. 19–20 and the First Report, para. 22(d). On February 23, 2026, Justice Stephens authorized sales of strata units, once stratified, without further court approval at no less than the bottom of each unit's price range in a confidential supplement to the receiver's first report, per the Order, Feb. 23, 2026, paras. 1–2. The supplement holds the price range, the receiver's listing agreement with AY and an appraisal, and the receiver asked that it be sealed until 90 days after its discharge, per the Notice of Application, Feb. 5, 2026, Part 1, para. 3, Part 3, para. 40. When it reported on November 5, the receiver had not sold any unit, under that order or otherwise, per the Second Report, para. 8.