Market Updates & Insights

Chairman’s Open Letter to Investors

October 13, 2022

Trez Capital's Chairman & Chief Executive Officer, Morley Greene, wrote an Open Letter to Investors, to provide insight into how our 25-year-old firm continues to grow and serve our investors.

If I were to sum up this past year, I would put it into one word: challenging. Even through market uncertainty, Trez Capital continues to deliver positive results.  Overall, our business continues to operate successfully, our investments are strong, and I believe the future is bright.  

Many of you recently attended our first post-pandemic Investor Roadshow in Montreal, Toronto, Calgary, and Vancouver.  We cherished the opportunity to reconnect and showcase our people, strategy, outlook and how we plan to continue to execute to deliver returns for our investors.

Over the 25 years of its existence, Trez Capital has gained the knowledge and expertise to successfully navigate times like these.  Our executive leadership team has 160 years of combined experience in real estate and financial services, backed by an additional 20+ person leadership team. Our leaders have successfully navigated through many economic cycles including the 1990 and 2000 recessions, the 2007-2009 Global Financial Crisis and most recently the 2020 Covid-19 recession.  We understand real estate investing, how to optimize returns and preserve our investors’ capital through the economic cycles.  We continue to demonstrate the ability to understand the impact of changes in the market and to utilize strategies that ultimately reward our investors.  

Despite the recent headlines on real estate markets, Trez Capital is seeing excellent opportunities across North America.  We have boots-on-the-ground in the right markets – the growth markets.  With dedicated offices in Toronto, Vancouver, Dallas, Palm Beach and Seattle, Trez Capital’s origination thesis remains the same – population growth paired with employment growth equals great opportunities.  In the United States, nearly 70% of the net projected population growth from 2021 to 2026 is expected to occur in the States that we originate in.  The Canadian cities in which we originate comprised approximately 64% of population growth over the last five years, and the population growth paired with government calls to build more housing presents promising opportunities in Canada.  Supply chain issues and construction cost pressures that were key concerns earlier this year are now showing signs of subsiding, providing developers with more certainty regarding their proformas and schedules allowing them to move forward with new projects.  We are confident that the markets we invest in will continue to outperform throughout the next several years.

Our industry-leading Bridge Financing team, located in our New York and Los Angeles offices, is providing short-term loans to sponsors with existing multi-family cash-flowing properties that are looking to increase property values through capital improvements.  We also work with sponsors that are looking to refinance existing construction loans on fully completed projects that are in lease-up stages. In the first year of operation, we successfully provided loans totalling approximately $1 billion USD, primarily in the high-growth Sunbelt region of the U.S.

On our Equity side of the business, the Trez Capital Private Real Estate Fund Trust (TPREF) has now been around for a year! This long-term, evergreen development fund has been a great addition to our equity platform and a natural complement to our Trez Opportunity Fund (TOF) private equity fund series.  TPREF has shown impressive growth over its first year, with the fund’s net asset value (NAV) increasing every month for a total gain of over 15%. The portfolio includes investments in a diverse set of projects that are forecasted to be worth over $2 billion USD once completed. 

We continue to deliver results in our shorter-term, close-ended TOF series.  We are in the final stages of selling a 350-unit, class-A, garden-style, multi-family development in the Round Rock market of Austin, Texas, for approximately ~$295K per unit which is an important sale for our investors and showcases the viability of our equity platform.  Interestingly, the price offered for the property was around ~$100K per unit over our original proforma. In addition, we have received an unsolicited offer for another project we are building a few miles from the Round Rock project. There has been no shortage of growth in the Austin market which is home to industry-leading employers and has fast become the tech hub of Texas. In addition to this news, we have just made a series of sales including two sales to premiere retail and entertainment businesses, Bass Pro Shops and Andretti Indoor Karting in the central part of the Dallas-Fort Worth metroplex.

Overall, we continue to forge excellent relationships with developers in key regions in the Sunbelt states and cultivate an exciting and robust equity pipeline. We are excited to be launching the sixth TOF fund in Q4 2022.  It will focus on the ground-up development of nearly 600 units of multi-family rental housing in the Texas market.

We are proud of our institutional-grade risk management process and teams which serve to protect our business and ensure our investors receive stable and reliable returns.  We continually conduct extensive stress tests to manage our portfolios through any market cycle.  We remain confident in the strength of our existing portfolios.

On a personal note, I am in the rare and fortunate position to be able to leverage my own experience during the early 1980’s. Those were, like today, times of soaring inflation and rising rates. One big difference – those times were preceded by loose lending and developers developing more product than was required. Times are different now – we are not experiencing overbuilding and the lending community has not overlent. Today there continues to be a need for housing, either rental or ownership.  In my experience, I remember that those who were cautious were rewarded, and this is the same philosophy Trez Capital follows today. This is not the time to take risks or be exploratory. This is the time to work closer with top borrowers, concentrating on the strongest markets, and keeping loan amounts within acceptable guidelines.

All in all, I am looking forward to what the rest of this year and next year has in store for us.  We are fortunate that a vast majority of our loans are floating rates. Therefore, the increase in interest rates have had a positive effect on returns for our debt funds.  As we look forward and analyze our projected returns through 2023, we believe our rates in our open-ended debt funds will continue to trend upwards as follows:

• Trez Capital Prime Trust to 6.5%
• Trez Capital Yield Trust to 8.0%
• Trez Capital Yield Trust U.S. (CAD) series to 9.0%
• Trez Capital Yield Trust U.S. (USD) series to 9.0%

Despite the market uncertainty, our team is dedicated to sourcing opportunities that fit our investment thesis which will continue to result in strong returns for our investors.  Echoing feedback, I received from an investor who attended our roadshow, “I’m thrilled to see that Trez Capital is doing exactly what you should be doing, and more.”  I agree with this sentiment – we have an incredibly strong and experienced team, and we will continue to always do what is right for you, our investor.


Morley Greene  

Chairman & Chief Executive Officer  


These materials are not to be distributed, reproduced, or communicated to a third party without the express written consent of Trez Capital Fund Management Limited Partnership. These materials should be read in conjunction with fund Offering Memorandums including the risk factors identified therein. These materials are for informational purposes only and do not constitute an offer to sell or a solicitation to buy securities. Past results are not indicative of future performance.


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