A major office-to-residential conversion project in Ottawa has landed in receivership after a developer commenced extensive demolition work without lender approval, highlighting the risks and complexities of converting aging office stock into housing.
The 106,195 sq. ft., seven-storey building at 495 Richmond Road was purchased by Toronto-based DOV Capital in 2019 for $39 million and financed with a $30.9 million mortgage from Addenda Capital. When the borrower defaulted on loan payments in June 2026 and proceeded with unauthorized interior demolition, the lender moved quickly to appoint a receiver.
The receivership reveals a critical tension in Canada’s office conversion wave: while 750,000 sq. ft of Ottawa office space is being converted to residential, creating 1,400+ housing units, projects that lose financing can become half-demolished shells with significant contractor liens.
For GTA investors watching similar conversion opportunities, the 495 Richmond case underscores the importance of lender coordination and securing CMHC financing before major construction begins. The property’s future remains uncertain—it may be completed as residential, reverted to office, or liquidated to recover the lender’s security.
Read the full analysis on Storeys for court filing details and market implications.
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