Romspen Investment Corp.’s flagship real estate fund is struggling to recover money lent to several “large, complex” projects, according to a newly formed investor advisory committee, shedding light on the three-year crisis that has prevented investors from getting their money back.
Three of Toronto-based Romspen’s troubled projects are located in Canada and two are in the United States, according to a memo sent to clients on Dec. 23. They are: The Ellie condominium project in Toronto; the redevelopment of Woodbine Mall in Toronto; the Atmosphere mixed-use project in Richmond, B.C.; the redevelopment of a Motorola office complex in Austin, Tex.; and the Via Mizner hotel and club in Boca Raton, Fla.
All five developments are either in receivership or have restructured under creditor protection, according to a Globe and Mail analysis, and each of the five projects has borrowed more than $100-million from Romspen. Some, like the Ellie condo project, were getting close to completion before going into receivership, while others, like the Atmosphere project in B.C., are in their early stages.
Investors in Romspen’s $2.7-billion Mortgage Investment Fund have been trapped since November, 2022, when Romspen froze investor redemptions owing to troubles with loan repayment. Since then, the fund manager has provided quarterly updates and held calls with investors. After the third quarter of 2025, for instance, Romspen reported that 55 per cent of its loans were under review, compared with 39 per cent a year ago, reflecting “the continued slowdown and price uncertainty in real estate markets.”
Some loan details have been reported in the media, including a Globe and Mail report about troubles at Woodbine Mall, which is Romspen’s largest borrower, but it can be challenging to piece together all of the information. Romspen has 97 mortgages and investments, 47 per cent of which are in Canada and 53 per cent of which are in the U.S.
As the redemption crisis dragged on, some clients pressed for more details, so Romspen set up the investor advisory committee last summer to represent an independent voice to management. Two of the three committee members specifically advocate on behalf of unitholders.
In a detailed memo to clients, sent on Dec. 23, the committee described Romspen’s troubled projects as “large, complex loan exposures and assets” and listed them with brief descriptions. The memo also said Romspen has hired a third-party adviser to conduct an analysis of its loan portfolio.
The unnamed adviser was slated to complete its work by the end of 2025, and Romspen is expected to conduct a roadshow in the first quarter of 2026 to “gauge buyer interest and establish pricing and other terms,” according to the memo. Funds from any sales could be used to provide investors with liquidity.
In an e-mail to The Globe, Romspen managing partner Derek Jenkin said there have been no material developments to this timeline since the memo went out.
Many commercial real estate developments have struggled since interest rates started rising in 2022. In Canada, multiple private fund managers have had to fully or partially “gate” their funds and halt or limit investor redemptions as they navigated receiverships and restructurings. Many have also cut their monthly or quarterly distributions to conserve cash.
Beyond Romspen, affected portfolios include Nicola Wealth Management’s two real estate funds, Centurion Apartment REIT’s $7.9-billion private fund and Hazelview Investments’ Four Quadrant fund.
In some cases, fund managers have tried to offer investors liquidity, but it is tough to do when new client money stops coming in. In Centurion’s case, the company gave clients the option to switch their money into a newly created note that paid back a total $20-million a month. However, the new note would pay investors a lower interest rate than the fund – 2.57 per cent annually versus 4.12 per cent – and cannot be held in tax-sheltered accounts, such as RRSPs and TFSAs.
For investors, management fees have been another frustration. Clients remain trapped in these funds, which means they can’t sell and earn better returns elsewhere, yet they are required to keep paying annual management fees. Over the first nine months of 2025, Romspen’s mortgage fund returned negative 1.2 per cent, while the S&P/TSX Composite Index was up 23.9 per cent.
Romspen’s investor committee raised this issue with management, and the fund manager said “material fee cuts could negatively impact operations and turnaround planning,” according to the client memo. Management also noted its fees, which are currently 1 per cent annually, “are at or near the lower end versus peers.”