#603 Increased borrowing costs...how much will pass on to taxpayers?

Ottawa has no case I could find where a big institutional owner handed back a mostly full, recently built tower, as Brookfield did with the Beaudry. There are several smaller cases that share the same debt problem.

ReStays tower (hotel, retail and condos). This is the closest parallel. The tower emerged from receivership after a $65 million loan default, and CLV Group bought it in a court-ordered sale that leaves the lender with a shortfall. The receiver estimated about $59.2 million was still owed to CMLS Financial. As with Beaudry, the lender took the loss and a new owner took the building.

495 Richmond Road (office-to-residential conversion). 

The seven-storey building was placed into receivership on September 17, 2026, on application by lender Addenda Capital. The loan matured in December 2024 and was extended several times, most recently to September 7, 2026, to give the owner time to refinance. About $25.64 million of principal remained outstanding in March. 

The case differs from Beaudry's: Addenda says the owner began converting the building to rental housing around October 2025 without its consent. The refinancing wall is still the common thread.

Evoke tower, 1546 Scott Street. 

This was a planned 25-storey, 230-unit project. It was placed under receivership in 2024 after a lender's application. It was never built.

Onassa lots. 

Developer Onassa, which owned 26 vacant residential lots, was placed into receivership in June 2026 over unpaid secured debt. This is a land case, not a tower.

Beaudry in Los Angeles is an unusual case because it is about 95% occupied yet still being given up, which points to the debt rather than demand. 

The Ottawa cases are smaller and mostly involve local developers rather than a global manager like Brookfield. 

Quieter handbacks MAY not havebeen reported.

what the receivers plan for 495 Richmond.

495 Richmond Road: The Office Conversion That Hit a Wall

By Peter Karwacki

Ottawa has been held up as a leader in turning empty office space into housing. CBRE’s Q4 2025 report put the city second in Canada for conversion projects, behind Calgary. One of those projects, in Westboro, is now in court.

The plan

In November 2025, Regional Group filed a site plan control application (D07-12-25-0146) to convert the seven-storey office building at 495 Richmond Road into 143 residential units. The building sits between Broadview and Golden avenues. It was fully vacant, and the application proposed no change to the footprint. It looked like the kind of project conversion advocates point to: an underused building near the river, a transit corridor and Westboro’s main street.

What happened

An October 9 Storeys report, drawing on Ontario Superior Court filings, shows the project in a very different place. The owner is DOV Capital, which bought the building from Artis REIT in 2019 for $39 million. Its lender, Addenda Capital, put the property into receivership on September 17. According to the filings, the conversion began without the lender’s consent.

The timeline from those filings:

• The original $30.9 million mortgage matured in December 2024. It was extended several times, finally to September 7, 2026, to give the owner time to refinance.
• DOV missed interest payments in June, July and August 2026.
• Addenda demanded roughly $25.8 million on June 12.
• A consultant inspecting the building found the interior “substantially altered and demolished,” with mainly the concrete structure and envelope left.
• The consultant also found that the demolition contractor and other trades had not been fully paid.

Addenda’s concern is that its collateral was an office building and is now a partly gutted construction site. It also says it asked repeatedly for financial information, including CMHC underwriting and the redevelopment and financing plan, and did not get enough to judge whether the project was viable.

Who is who

Regional Group filed the city application, but the court filings do not show it holding an ownership interest. It is described as a manager of the property. The owner is DOV Capital. That distinction matters when we ask who was responsible for what.

Questions worth asking

I’m raising these as questions. The public record I’ve found doesn’t answer them.

1. What approvals were in place when demolition started? The city file showed as “File Pending” in January 2026. What permits, if any, covered the interior work?
2. Was the CMHC financing real? The lender says it never saw underwriting details. Was there a financing commitment behind this conversion?
3. What happens to the building now? It is likely headed for a court-supervised sale. A buyer might use the demolition work already done, but it’s unclear whether the building could go back to office use.
4. What does this say about conversions generally? Avison Young counts six Ottawa conversions totalling nearly 750,000 sq ft, with more pending. Some projects elsewhere are stalling or reverting to office use. Conversions take careful financing, and 495 Richmond looks like a case where the physical work got ahead of the money and the approvals.

Why it matters

Conversions are an important tool for housing supply, and they get public attention and policy support. That makes projects that stall worth following. A gutted, vacant building on Richmond Road helps nobody, and 143 units that don’t get built are 143 units the city is still short.

I’ll keep following the receivership and the site plan file, and will update this post when there’s a sale process or a city decision.

---

References

1. Chai, Howard. “How An Ottawa Office Conversion Ended Up In Receivership.” Storeys, October 9, 2026. https://storeys.com/495-richmond-road-ottawa-receivership/ Source for the receivership, the loan timeline, the missed payments, the $25.8M demand, the consultant’s findings, and Regional Group’s role.
2. City of Ottawa. Development Application D07-12-25-0146, 495 Richmond Road (site plan control, filed November 26, 2025). https://devapps.ottawa.ca/en/applications/D07-12-25-0146/details Source for the application and its status.
3. OttWatch. Development application D07-12-25-0146. https://ottwatch.ca/devapp/D07-12-25-0146 Source for the application dates (“File Pending” as of January 19, 2026).
4. CBRE. Ottawa Office Figures Q4 2025. https://mktgdocs.cbre.com/2299/36415e7e-4c8e-4718-9250-6b9024ee0421-591633999/Ottawa_Office_Figures_Q4_2025.pdf Source for the confirmed conversion, the 143 units, the former CIHI use, and Ottawa ranking second in Canada for conversion projects.
5. “Westboro office tower proposed for conversion into 143 housing units.” Kitchissippi Times. https://kitchissippi.com/westboro-office-tower-proposed-for-conversion-into-143-housing-units/ Source for the initial proposal.
6. “Office at 495 Richmond to be converted to housing.” Ottawa Business Journal. https://obj.ca/office-495-richmond-converted-housing-regional-group/ Source for the site description and the unchanged footprint.
7. Avison Young. “Conversions help reshape Ottawa’s downtown office landscape.” https://www.avisonyoung.ca/w/conversions-help-reshape-ottawa-s-downtown-office-landscape Source for the six-conversion, roughly 750,000 sq ft figure.