A rendering of the Dixie Outlet Mall and the three-tower condo development planned by Slate Asset Management.Giannone Petricone Associates
Most of the real estate insolvencies that have occurred in Canada have been development land where projects could not get off the ground and are not producing income. The recent insolvency of the Dixie Outlet Mall in Mississauga stands out because it is 91-per-cent leased to around 120 tenants, according to court documents, and thus is a large income-producing property.
The 35-acre Dixie Outlet Mall is owned by Toronto-based Slate Asset Management. That’s also unusual, because most of the insolvencies that have occurred recently have been with inexperienced developers. Slate has a great deal of experience, with more than $12.8-billion in assets under management across North America and Europe.
So what happened?
Pair of Toronto office towers signals demand for AAA buildings
The receivership was initiated on Feb. 20 by National Bank, acting as the administrative agent on behalf of a lender syndicate comprised of National Bank, Meridian Credit Union, Laurentian Bank and Bank of Montreal. In an affidavit, a National Bank representative pointed to the property value, saying the value increased from 2019 to 2022 before steadily declining thereafter.
“The apparent declining value of the real property is of considerable concern … given that the collateral security for the loans is substantially comprised of the value of the mall,” a National Bank representative said.
At issue is the loan-to-value (LTV) ratio, a measure of the equity a property owner has and the amount of risk to the lender. Calculated by dividing the loan amount by the property value (then multiplied by 100 to be expressed as a percentage), a ratio above 80 per cent means the owner has 20-per-cent equity – generally considered risky for lenders.
Assuming the loan amount stays the same, the LTV ratio and risk for the lender increases as the property value decreases. That is what happened with Dixie Outlet Mall, according to National Bank. Making matters worse, however, is that the loan amount was not staying flat, but actually increasing.
“The decline in market value is compounded by an increase in the amount outstanding on the loans, as significant interest continues to accrue on the loans, and the credit parties have been unable to service such interest in full as it becomes due,” National Bank said.
AI adoption in commercial real estate still in early stages, expert says
According to National Bank, the average interest cost in 2025 was $975,000 a month, but the borrower was paying just $320,000 a month, meaning the outstanding debt was increasing by around $655,000 per month. The total amount owed as of early February was around $157-million.
“The total interest costs in 2025 were approximately $11.7-million, which, if paid in full, would have resulted in the borrower generating a negative net cash flow of negative $7.8-million and having insufficient funds to cover all of its obligations,” the bank said.
In common parlance, Dixie Outlet Mall was underwater.
Slate acquired the mall in 2018 as part of its purchase of 97 properties from Cominar REIT. The mall was owned through the Slate Canadian Real Estate Opportunity Fund I LP under SCREO I Dixie Outlet Mall Inc., which entered into a credit agreement with the lenders in December, 2018, for a term loan facility of $111-million and a revolving loan facility of $31-million. National Bank said the loan was to “refinance the acquisition” and “access additional liquidity to operate the mall.”
After acquiring the mall, Slate later unveiled a plan to redevelop a portion of the mall into three mixed-use condo towers with more than 1,200 residential units to be constructed in three phases. With redevelopment in mind, the tenancies had also been structured on a short-term basis, with 26.4 per cent of the net rentable area leased on a month-to-month basis. The project did not progress to construction, and the market environment has gotten more challenging since then, as is made clear by declining property values.
“At the time, all signs pointed to that being the best and highest use for the site, and the property’s valuation was based on its residential development potential,” Slate said in a statement provided to The Globe and Mail. “Since that time, the residential development market across the GTA has softened dramatically, and the resulting decline in value of Dixie Outlet Mall reflects the unfortunate and challenging realities of the residential market today, which is affecting numerous projects throughout the region.”
Former Winnipeg industrial site reimagined as mixed-use community
The credit agreement had a maturity date of December, 2021, which was later extended to September, 2023. When the time came, Slate did not repay the loan and defaulted on the mortgage, but the lenders ultimately agreed to delay enforcement three times. The property was listed for sale in 2023, according to court documents, and a buyer was found in August, 2024. However, the transaction dragged on into 2025 before being terminated in October, 2025.
The forbearance period ended, the lenders lost confidence that Slate could complete a sale, adding that they were “exceedingly patient” but “unwilling to acquiesce to the years it would take for a redevelopment strategy to repay the loan.” The receivership application was granted on March 2 and Dixie Outlet Mall will now go through a court-ordered sales process.
Also going through a court-ordered sales process right now is a 40-storey office tower in downtown Calgary that was also acquired in 2018 by Slate, which then renovated and rebranded it as Stephen Avenue Place.
The property was placed under receivership in 2023 under similar circumstances, with the lender – Timbercreek Financial – saying that “the total 2023 assessment value for the land is only $98,280,000, which is well below the current indebtedness owed under the mortgages of over $135-million.”
Where to find opportunities in commercial REITs
“Timbercreek is now the primary economic stakeholder of the property, and there is no equity in the property.”
Insolvencies pertaining to properties that are midconstruction, recently completed or already income-producing are becoming increasingly common across the country.
Last summer, the Edmonton City Centre mall owned by LaSalle Investment Management and its partners was placed under receivership. More recently, individual insolvency proceedings were initiated against The Fifteen and Chroma in Vancouver, two mixed-use residential projects by Wave Developments completed in 2024 and 2025. Earlier this month, QuadReal Property Group initiated foreclosure against Keltic Development and the Brighouse West Business Park in Richmond, B.C., a 27-acre commercial property that is 100-per-cent leased to 78 tenants and generating a net operating income of more than $11-million a year.
Editor’s note: This article was updated to correct the author byline.