District REIT Properties in Ontario and New Brunswick Enter Receivership Amid Financial Struggles

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District REIT's portfolio of rental properties in Ontario and New Brunswick has been placed under receivership following financial difficulties and defaults on loan agreements.

A portfolio of rental buildings managed by District REIT, a privately-held real estate investment trust, has recently been placed under receivership as per filings in the Ontario Superior Court. Founded by Richard Hall and Carmen Campagnaro, who are also behind the Burlington-based developer Valour Group, District REIT's troubles come on the heels of a similar situation faced by Valour Group, which had a 1,500-unit development in Ajax enter receivership earlier this year. District REIT's corporate website outlines its strategy of acquiring income-generating properties across Canada, with a strong focus on Southwestern Ontario. Their expansion into New Brunswick is part of a long-term plan to diversify geographically and tap into high-potential markets across the country. The company claims to strategically select assets that align with their growth objectives, catering to urban centers like Toronto as well as smaller communities such as Ayr and Saint John. Currently, District REIT's portfolio comprises 29 properties, predominantly multi-family units, including apartment buildings and townhouse communities, alongside some industrial properties.
The properties under receivership include eight rental buildings located in Ontario and New Brunswick, totaling 307 units, of which 209 are currently leased, resulting in an occupancy rate of 68%. The gross rental income from these properties amounts to $306,271.51. The first seven properties are owned by District REIT Limited Partnership, while the eighth property is owned by East Park Limited Partnership, both held through individual holding companies.
The receivership was initiated by CMLS Financial, a non-bank lender established in Vancouver in 1974, which was acquired by Montreal-based digital mortgage lender Nesto in 2024. CMLS Financial had provided first-ranking mortgages for each of the eight properties, with amounts ranging from $5 million to $18 million, issued between February 2022 and December 2024. The lender has reported multiple defaults on various loan agreements, beginning in April 2026, when District REIT ceased making required monthly payments. CMLS also noted that the owners failed to provide necessary energy efficiency attestations and did not pay property taxes.
Following a formal demand for payment issued by CMLS on June 2, District REIT proposed a stabilization plan that included the sale of some properties while retaining others. However, this plan was rejected by CMLS, which cited a $4.4 million operating shortfall and projected that the properties would not be cash flow positive until February 2027. In a receivership application dated October 2, CMLS stated that the stabilization plan was unacceptable, and subsequent proposals from the owners were also rejected. As of October 5, CMLS Financial was owed over $78.8 million, with interest accruing, leading to the Ontario Superior Court granting the receivership on October 28.
In a court response opposing the receivership application, Richard Hall disclosed details about District REIT in an affidavit dated October 13. He mentioned that the eight properties are beneficially owned by District REIT Limited Partnership, which is primarily funded by retail investors. Hall stated that most equity in District REIT is held by local investors who support Valour Group's mission to enhance housing options in Ontario's secondary markets. He revealed that District REIT has about 850 unique investors and that its portfolio of 28 properties was appraised at $218.36 million as of December 31, 2025. Despite an initial investment of approximately $86 million from these investors, Hall estimated the current equity value to be between $25 million and $30 million based on market conditions.
Hall attributed the REIT's liquidity issues to various factors, including market conditions, interest rates, and tariffs. He indicated that the company was in the process of selling properties, with anticipated sale prices expected to cover CMLS's projected shortfalls. Hall stressed that the receivership would exacerbate the financial situation by imposing additional costs and discounts on property sales, which would ultimately diminish investors' equity.
CMLS Financial noted that the owners are facing significant cash flow challenges that may reflect broader organizational issues affecting Hall and Campagnaro's various businesses. This includes two other properties, 27 Bold Street in Hamilton and 2158 Lilnan Court in Burlington, which have also been placed under receivership. The 32-unit rental building at 27 Bold Street was previously highlighted in a CBC News story due to tenant complaints regarding lack of utilities. The lender for this property is Tandia Financial Credit Union, while Royal Bank of Canada initiated receivership for the 7-unit building at 2158 Lilnan Court.
CMLS reported that District REIT has laid off a significant portion of its workforce in an effort to manage cash constraints. Richard Hall and Carmen Campagnaro are also facing bankruptcy applications against them personally. In the court response, Hall acknowledged the layoffs but insisted they have not hindered property management. Nevertheless, the eight properties remain under receivership, and the court-appointed receiver has published an FAQ for District REIT unitholders.

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