Peterson & Create Properties At Odds, Facing $207M Debt On Burnaby Lake Village

The Burnaby Lake Village project, a significant real estate development in Burnaby, British Columbia, is facing financial challenges due to a $207 million debt. The project is a collaboration between Peterson Group and Create Properties, who acquired the 18.81-acre site at 6800 Lougheed Highway in 2018. The site, formerly a Saputo milk plant, is adjacent to the Sperling-Burnaby Lake SkyTrain station.

The developers plathe area into a master-planned community featuring over 4,000 homes across 14 mixed-use buildings, ranging from 12 to 25 storeys. The City of Burnaby had approved the master plan rezoning application, with various phases receiving subsequent approvals.

Financing for the d through a syndicate of lenders, including RBC, TD Bank, BMO, and Scotiabank, with RBC acting as the lead arranger. The loan, initiated in February 2022 and amended in February 2024, totaled $210 million, comprising a $160 million land loan and a $50 million pre-development loan. The loan matured on September 1, 2024, but the developers failed to repay it, leading to financial complications.

Disputes between PCreate Properties have arisen over the past year, causing delays in the project's progress. These disagreements have led to mediation and arbitration proceedings, resulting in a standstill that has hindered the project's advancement and the partnership's ability to meet financial obligations.

Peterson Group, ids the majority owner and sole guarantor of the loan, stated its capability and intention to repay the debt in full. However, they claim that Create Properties has refused to consent to the repayment or to seek a loan extension, exacerbating the financial predicament.

As a result of thenternal disputes, RBC has placed the Burnaby Lake Village project under creditor protection, marking it as the largest real estate insolvency by debt amount in Metro Vancouver over the past two years. The future of the development remains uncertain as stakeholders work to resolve the financial and managerial conflicts.