My client is a highly experience commercial real estate developer in British Columbia, with a history of building big box stores for Walmart, Home Depot, etc.
His last portfolio was sold for 100+ Million, and he has now organized a Canadian publicly listed Fund which is open for Accredited Investors seeking a long-term, excellent ROI as he builds retail power centers, industrial parks, suburban office parks etc. First project land is under contract.
Accredited investors only—CDN $250,000 minimum investment
This documentation is prepared solely for the purpose of providing information about XXXXXX Capital Projects Inc. and its existing and proposed limited partnerships. It has been compiled in good faith; however, no representation is made as to the completeness or accuracy of the information it contains. This information may contain errors or have become out of date. The financial forecasts above are for illustrative purposes only and are based in part on assumptions. Actual results achieved may vary significantly; there is no assurance that the results described above will be achieved.
Why We Are Different
In the real estate market today, investors generally have a choice of several typical offerings: JVs, REITs, and MICs. With these products, you buy yield and maybe some capital appreciation on the back end. None of these products gives investors a real stake in the developer’s profit.
Most importantly, with these types of offerings, either the project itself or the entirety of your position must be sold in order to realize a return of capital.
The limited partnerships are different in that we don’t need to sell the projects in order for investors to crystallize their returns. As an investor, you have two options for recapturing your initial investment:
1. Sell some of your units. Because you participate in the development profit, you benefit from three times capital appreciation in the development cycle. You do not need permission from Sponsor or the other partners in order to sell some or all of your units at any time.
2. Hold all your units. With our high-yield funds, a return of your capital through distributions takes only eight to twelve years from your initial investment.
Once the return of capital has occurred, the return you receive through distributions going forward is infinite. You have all your money back and still own the equity in projects that pay out 90% of their distributable income through a tax-efficient structure.
The Financial Forecast on the last page of the Executive Summary illustrates the projected returns over the development and management phases:
1. No distributions during the first three to four years while the buildings are under construction.
2. Projected capital appreciation over the development phase of 15% compounded annually, excluding distributions. This is what you get paid to wait for distributions to begin.
3. Payouts during the management phase of over 20% per year on your initial investment for the life of the buildings. This is what you get paid to hold your units.
As we buy back debt after the development period, and as rental income increases upon renewals, distributions grow organically over time. The distributions have no correlation to the cap rate, which is used only to determine the asset value if you do want to sell your units.
Although the Alberta economy is in turmoil today, it takes us three years to build and lease the properties. With a three-year head start on the next cycle, we have the advantage of purchasing materials and engaging trades during the downturn, as well as securing prime locations without being outbid by competing developers.
As long as 20% of a building is leased, the operational costs (common area maintenance and taxes) are covered. Regardless of fluctuations in the stock market, economic slowdown, or recession, the rent is always paid, with the same income month after month— the very definition of uncorrelated investments. Investors must simply have the patience to wait several years for these secure, stable returns to begin. This stability is the reason why all the pension funds buy real estate.
Please contact me directly.