Cracks are appearing among Canada's non-bank real estate lenders as the coronavirus threatens to paralyze construction and development across the country.

Vancouver-based Trez Capital, a provider of non-bank mortgages for commercial developments, froze redemptions on more than $3-billion worth of investor funds.

"We have to protect everything," Trez chairman and chief executive officer Morley Greene said in an interview with BNN Bloomberg. He said that there have been no defaults in Trez's portfolio, but there's also "no timeline" to allow investors to cash out.

Canada has seen growth in one segment of the real estate lending market, the "alternative" providers of mortgages for riskier borrowers.

Alternative players held one per cent of Canadian mortgages last year, according to a Canada Mortgage and Housing Corporation.  There were 200 to 300 of the lenders active in Canada, holding $13 billion to $14 billion of outstanding Canadian mortgages. That's up from  $8 billion to $10 billion in 2016.

Toronto-based Morrison Financial Mortgage Corp., which manages assets worth about $60-million, has suspended dividends, redemptions and new purchases.

"The real estate market is at a total, or near-total, shutdown," said David Morrison, a principal at Morrison Financial. "Many larger companies of the same ilk are in the same boat and have been forced to take, or are in the process of considering similar action."

At times of financial stress, real estate is plagued with a lack of liquidity. In other words, even valuable assets can't be sold off promptly to return cash to investors, and such redemption freezes in funds are common during financial downturns.

A week ago, Canada Life Assurance Co. temporarily halted all investor activity on its Canadian real estate funds, saying it was "in the best interest" of investors to place a temporary suspension on contributions, transfers and redemptions.

The Financial Times said at least seven British real estate funds have halted trading, trapping more than 12.5 billion British pounds ($22 billion) of investor money.

 The U.K.-based newspaper warned that "investors will now have no choice but to sit tight in their property fund investments during a very uncertain time for the global economy."