A sprawling real estate investment enterprise in Northern Ontario run by a former child actor has filed for creditor protection as it struggles to pay off debts of $144-million, largely from hundreds of individual private lenders including some who used retirement funds.
Court records show that Robert “Robby” Clark – a U.S.-born actor who as a 13-year-old starred in YTV’s The Zack Files between 2000-02 – used a network of companies with names such as Balboa Inc., Happy Gilmore Inc., Horses In The Back Inc., Joint Captain Real Estate Inc. and The Pink Flamingo Inc. to build up a rapidly expanding real estate portfolio beginning in 2020. The enterprise owns 405 rental properties in Northern Ontario cities and towns such as Sudbury, Sault Ste. Marie, and Timmins.
Mr. Clark recently applied to Ontario’s Superior Court for protection under the Companies’ Creditors Arrangement Act. The application says the companies are facing “a severe liquidity crisis, have less than $100,000 of cash on hand, are in default of substantially all of” its loans.
A Superior Court judge issued an interim order on Jan. 23 that provided a stay of proceedings and also appointed KSV Consulting Inc. as a monitor to explore ways to refinance or reorganize the companies.
Mr. Clark and his legal counsel did not respond to requests for comment.
The enterprise’s financial troubles have tied up millions of dollars loaned by hundreds of private lenders and prompted concerns that a rapid sell-off of Mr. Clark’s holdings could unleash chaos on the rental and resale markets in the small cities where he operates.
In an affidavit filed with court, Mr. Clark describes the companies as “specializing in the acquisition, renovation and leasing of distressed residential real estate in undervalued markets throughout Ontario.” Court documents claim that the companies purchased and sold more than 800 properties, many of them single-family homes. The enterprise’s current portfolio includes 631 individual rental units, 424 of which are rented.
Mr. Clark services all of the properties and collects fees using companies operating under the names SID Development, SID Renos and SID Management, court records show. Three other people are listed in the filing and corporate records as key owners and directors of the holding companies: real estate agent Thomas Dylan Paul Suitor, who is with Keller Williams Signature Brokerage in Oakville; Aruba Butt; and Ryan Molony.
Mr. Suitor, Ms. Butt and Mr. Molony did not respond to requests for comment.
To finance these purchases, the companies obtained more than 390 mortgages worth $89-million; 120 second mortgages worth $8-million; and 802 unsecured promissory notes worth $54-million.
The interest rates on these loans and promissory notes vary between 8 per cent and 20 per cent.
The majority of the lending was brokered by one company – Hamilton-based Windrose Capital — that paired many of the more than 300 private lenders with Mr. Clark’s companies. Windrose Capital’s principal broker, Claire Drage, did not respond to a request for comment.
One private lender who spoke to The Globe said she feels misled and she wasn’t kept in the loop on the scale of the operation she was lending to.
“At no time were we told that they are part of this conglomerate of all these companies … we would never have done that,” said Cathy Hugh, 57, a retired bank employee living near Ottawa.
Ms. Hugh loaned $184,000 at 8 per cent interest in 2022 to what she believed was a sole-operator to purchase a single-family home in Sault Ste. Marie. “I only wanted to do individuals, I felt more protected because I could have gone in for a repossession.”
However, the stay of proceedings issued as part of the creditor protection process means lenders cannot turn to repossession, or power of sale, to recoup their money.
The stay period was set to last until Feb. 2, but has been extended to Feb. 16.
Some of the affected lenders extended mortgages for as little as $65,000 or as much as $600,000, describing in court documents that they used retirement funds to do so. There are so many claimants that the court appointed Chaitons LLP as representative counsel to lenders to help co-ordinate the welter of claims and demands.
The quickest way to pay back lenders in such a situation is typically to sell the properties. But according to a KSV report to creditors, the scale of the real estate portfolio suggests a “sale of the properties will result in depressed recoveries for Investors and/or will take several years to complete as a result of current depressed market conditions.”
For example, the report cites data from Canadian Real Estate Association that in December, Timmins had 285 active listings and only 39 sales, Sault Ste. Marie had 125 sales on 425 active listings. Mr. Clark’s companies own 199 rental properties in Timmins. If they were all liquidated at once it would increase available inventory by 70 per cent, which in turn could both depress sale prices and cause the sales to take longer. The report estimates a “controlled” sale process where 15 per cent of the properties were listed at a time would take 49 months to complete in Timmins, and 23 months in Sault Ste. Marie (where the companies own 152 properties).
The companies do collect significant revenue from rents: the report contains an updated cashflow estimate filed with the court for Jan. 27 to March 28 shows rental collections of $1.062-million and operating costs of $959,000. However, the net loss is projected to be $8.87-million with $3-million being spent on renovations, $2.2-million being paid to property tax arrears and $2-million for “professional fees” related to the insolvency which include fees to the monitor, lawyers and a financial adviser that’s been hired for $75,000 a month.
Mr. Clark’s business model of buying and renting mainly single-family homes bears resemblance to one employed by Toronto-based Core Development Group Ltd., which has promoted plans – in the face of significant controversy – to spend $1-billion buying single-family homes for the rental market. According to Mr. Clark’s affidavit, his network of companies offloaded 223 of his rental properties to Core in 2022, which represents about half of Core’s current portfolio of more than 550 homes.
Core’s CEO, Corey Hawtin, said his company may explore options to buy some or all of the Balboa/Happy Gilmore properties out of the receivership.
“We hope to be part of the solution, we hope we can acquire the portfolio and keep the tenants in place,” Mr. Hawtin said in an interview. Mr. Hawtin noted that when Core purchased the group of homes from Mr. Clark’s companies in 2022, it paid off the mortgage lenders.
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
