A 130-townhome development in Burnaby has been placed under creditor protection after one of its lenders claimed it is owed more than $59 million. KingSett Mortgage Corp. filed a petition in B.C. Supreme Court on June 1 under the federal Companies' Creditors Arrangement Act, seeking an initial order to stabilize the faltering project.
Project Details and Financial Troubles
The project, known as Moonlight Sonata, is located on Wayburne Drive in Burnaby. KingSett provided credit facilities starting in September 2024 totaling approximately $95.3 million. According to the petition, payments were missed, construction has stalled, and builders' liens exceeding $2.3 million have been registered against the property. Additionally, Symphony Homes Ltd., the developer, failed to inject $10 million in additional equity to cover cost overruns beyond the original budget, as required by the loan agreement.
Court-Appointed Monitor and Interim Financing
The court appointed KSV Restructuring as monitor to oversee the project. KingSett will provide interim financing of $27.9 million to allow construction to continue and address site maintenance and safety concerns. The petition stated that KingSett has lost confidence in the debtors' management, noting that the project is overseen by a construction manager affiliated with the debtors, raising concerns about their ability to address risks and preserve value.
Project Scope and Market Context
Moonlight Sonata includes a mix of 90 townhome strata units, with 28 subject to pre-sale purchase agreements, and 40 rental units. The wood-frame project features three- and four-bedroom ground-level garden units ranging from 1,200 to 1,600 square feet. Vancouver real estate agent Oleg Galyuk described this type of development as the "missing middle," appealing to families seeking ground-level living.
In May, Rennie Intelligence released a report titled "Homes of Tomorrow," which surveyed 1,400 renters and buyers. Over half identified townhomes as their preferred choice, with the ideal being a three-bedroom family townhome with ground-level living. Galyuk noted that seeing a project like Moonlight Sonata encounter difficulties is especially disheartening given the high demand for such housing.
