- What A purchaser was not found for the distressed The One development in Toronto
- Why No qualified offers came in after a $1.2bn minimum bid price was set in May
- What next A development proposal is under consideration
Toronto’s most high-profile distressed development does not have a buyer, but a lead bidder looking to take on the development of the project has been selected.
A court-ordered sales process for The One, the under-construction, 91-storey skyscraper at 1 Bloor Street West, resulted in no qualified acquisition offers, receiver Alvarez & Marsal said Friday. JLL listed the project in June with a $1.2bn minimum aggregate purchase price. A bid deadline was set for July 30.
While no qualified transaction proposals were received for either acquisition of or investment in The One, developers put forward a number of proposals to complete the project. A second phase to evaluate those offers wrapped up on Sept. 24, and a lead bidder has been identified. The receiver, JLL and the project’s senior lenders are working to finalize the terms of the proposal.
Alvarez & Marsal has extended the initial Oct. 14 deadline to an unspecified date to allow the parties to work out the terms.
Development proposal bids were required to prove a bidder’s experience with the development of mixed-use, high-rise buildings in urban centres and needed to include a business plan for the 138-room hotel on floors five through 16, as well as the food and beverage components.
Construction management already transitioned once this year. In March, The One co-owner Sam Mizrahi’s Mizrahi Inc. was taken off the project and builder Skygrid was brought on. Alvarez & Marsal picked Skygrid in part because its fees were significantly lower than Mizrahi Inc.’s. A report in March described Mizrahi Inc.’s 5% fee as “above comparable market rates,” with Skygrid charging 3.2%.
With no sale taking place, the senior secured lenders, KEB Hana Bank and IGIS Global Private Placement Real Estate Fund, are expected to facilitate the remaining construction and, upon completion, seek to recover their respective portions of the more than $1.5bn of defaulted loans owed by Mizrahi and co-owner Jenny Coco on the project.
