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Eron Lenders
Subject: 570 Dunsmuir Street
Lender update
21 September 1998
Further to our letter dated April 15, 1998 we are writing to update you on the status of the above noted mortgage.
Project Status
The construction of the building was substantially completed in mid-August. At present PCI Realty Corp. (ìPCIî), the property development company retained by the Judicial Trustee, is working with the building contractor and subcontractors to ensure that all construction deficiencies are addressed prior to final payments being made.
The principal tenant of the building, LSC Language Studies Canada, has moved into the building and occupies floors two, three and four of the seven office floors. The other four office floors are presently unoccupied, however a lease agreement with Vancouver Career College for the sixth floor is close to being finalised. Lease agreements have been executed with the following first floor retail tenants: Quiznoís Canada, Hammonds ESL Books Ltd. and NextWAVE Wireless Solutions Inc. which collectively represent approximately 2,641 square feet of retail space This leaves three retail units, totalling 2,778 square feet, and the basement left to lease.
The Judicial Trustee retained CB Commercial (ìCBî) as the Leasing Agent. CB is currently marketing the building to potential tenants and reports that a number of parties have shown interest in leasing some of the vacant space. It is of the opinion of CB that it will take at least until the end of the year to substantially lease the entire building.
In order to achieve the highest possible sales price for the building, we do not intend to advertise it for sale until it is substantially leased. The sales process itself is expected to take around five months to complete, therefore we do not anticipate receiving any funds from the sale of the building until May or June of 1999 at the earliest. Consequently, the Judicial Trustee is in the process of negotiating refinancing from the CIBC which will enable us to remain as owners of the building until the sale is complete. We have also retained PCI as Property Manager and as such they will be responsible for running the building and collecting the rents on our behalf.
Lender Communications
We have established a web site at http://www.eron-pwl.com. On this site you will find project specific updates as well as related court orders. We will continue to communicate directly with all lenders. We urge you to take advantage of the web site so that you can receive first hand current information from PwC Inc. in the most cost-effective manner we have available.
We will issue another letter as soon as we have significant new information to report. In the meantime, if you have any specific questions or information concerning the project please contact us in writing at the Price Waterhouse Centre, 601 West Hastings Street, Vancouver, BC, V6B 5A5 or by fax at (604) 688-6128 marked to the attention of 570 Dunsmuir Street - Project Lead.
Yours truly
Judicial Trustee
PricewaterhouseCoopers is a Canadian member firm of PricewaterhouseCoopers International Limited, an English company limited by guarantee.
PricewaterhouseCoopers Inc.
601 West Hastings Street
Suite 1400
Vancouver, BC
Canada V6B 5A5
Telephone +1 (604) 682 4711
Facsimile +1 (604) 662 5300
Direct phone (604) 669-5087, Ext. 416
Direct fax (604) 688-6128
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