Olympia & York rose from a Toronto floor-tile business into the largest commercial property developer in the world. Run by the Reichmann family with a reputation for paying debts to the penny, by the late 1980s it controlled roughly forty-five million square feet of prime office space: First Canadian Place in Toronto, the eight-million-square-foot World Financial Center that made it Manhattan’s biggest private landlord, and the vast Canary Wharf scheme meant to drag London’s financial district east. Banks lent to it almost without question, because its name was a guarantee.
It died of the confidence that built it. O&Y had borrowed enormously against buildings whose tenants had not yet arrived — and when the property market turned at the start of the 1990s, the empty floors could not service the debt. One Canada Square opened in 1991 barely a fifth occupied; in May 1992 the company sought protection with liabilities above eighteen billion dollars, the largest business failure Canada had ever seen. Creditors carved the empire into pieces — Canary Wharf to administrators, the New York towers eventually to Brookfield — and the unified firm never traded again. The Reichmanns returned later with new ventures under recycled names, but the company that had been the biggest builder on earth was gone, undone by towers it filled with debt before it could fill them with tenants.
Worth remembering
- One Canada Square — then the tallest building in Britain — was opened with ceremony in August 1991; nine months later its developer was bankrupt and the tower stood barely a fifth let.
- The 1992 collapse, with debts above US$18.5 billion, was the largest business failure in Canadian history; the Reichmann brothers, worth an estimated US$9 billion in 1988, lost most of it in under four years.
Sources
- Olympia & York filed for bankruptcy protection in May 1992 with debts in excess of US$18.5 billion, the largest bankruptcy in Canadian history at the time The Baltimore Sun
- The original Olympia & York Developments was forced into bankruptcy in 1992 and its assets broken up and sold; the 1997 O&Y Properties was a new entity formed by the next generation of Reichmanns and was itself sold in 2005 The Globe and Mail
- When Olympia & York declared bankruptcy in May 1992, Ernst & Young was appointed administrator of Canary Wharf and construction work stopped immediately Building
A graveyard tradition: leave a stone to show you came, and remembered.