- What Sphere Developments has secured a $92.6m construction loan
- Why Sphere is building 248 townhouse units in St. Catharines, Ont.
- What next The loan was arranged with no rental achievement holdback
Sphere Developments has secured a $92.6m construction loan for its stacked townhome project in St. Catherines, Ont., Green Street News can reveal.
Institutional Mortgage Capital was the lender, and Oakbank acted as the mortgage broker for the Canada Mortgage and Housing Corp. MLI Select loan, which funded on May 1. The loan-to-cost ratio for the debt was 94%.
The stacked townhouses are being built at 455 Welland Avenue. The project comprises 248 units in eight three-storey buildings.
The loan was arranged with no rental achievement holdback — a clause whereby CMHC advances only a lower loan amount during construction, generally 75% LTC, and releases the balance after construction and once the property is leased up.
This kind of clause can pose an issue for developers, as they have to come up with the difference in equity as an interim measure and negates the whole value proposition of CMHC financing. Having the clause waived, however, allows developers full access to the loan during construction.
455 Welland Avenue is a kilometre to the nearest on-ramp to Queen Elizabeth Way and 2km to downtown St. Catharines and the Outlet Collection at the Niagara mall.
Correction: This article was revised with the correct rendering of the project.
