April 11, 2023
$21-million-dollar fund will provide Canadian investors access to U.S. equity developments
Vancouver, BC- CNW– April 11, 2023 – Trez Capital, one of North America’s leading non-bank commercial real estate lenders and alternative investment asset managers, is proud to announce the successful close of the Trez Capital US Opportunity Fund #6 Limited Partnership (TOF#6, or the Fund), which raised over USD $21 million for opportunistic equity investments in ground-up construction of multi-family residential assets in Texas.
This is Trez Capital’s sixth US Opportunity Fund since 2015. The Class A and Class F investments in the Fund were brokered by Richardson Wealth Limited (Richardson Wealth).
“Trez Capital is one of the largest private commercial real estate financiers in Canada and the United States and offers private and institutional investors strategies to invest in a variety of mortgage funds, syndication offerings and real estate joint-venture investments,” said Sandra Ferenz, Managing Director, Portfolio Manager & Product Strategy, Trez Capital. “The TOF#6 offering focuses on multi-family equity assets that can be stabilized and sold by the third year to return our investors capital and share of profits.”
The Fund offers a focused strategy with a successful joint-venture partnership in Texas. The multi-family market in Texas shows strong year-over-year (YOY) rental growth and continues to generate attractive appreciation within the asset class, outpacing recent increases in construction costs. The Fund’s plan is to hold projects that can be sold in three years.
John Hutchinson, Vice-Chairman & Global Head of Origination, Trez Capital, said “Trez Capital has partnered with trusted and experienced developers in the U.S. to establish numerous joint-venture development projects with proforma pre-tax internal rate of returns (IRRs) of approximately 15%-30% to our investors via our Build-to-Sell strategy. Since 2013, we have proven our ability to source well-established developers, while applying a rigorous due diligence and monitoring process protecting our investors, leading to completed projects delivering above-market pre-tax IRRs.”
The concentrated strategy with Thompson Realty Capital and their expertise has resulted in a projected stabilized yield-on-cost that is at least 100 basis points (bps) higher than the stabilized market cap rate. Thompson Realty Capital and Trez Capital have a successful track record of delivering projects with over 20% pre-tax IRRs to investors with the Fund targeting between an 18% to 22% pre-tax IRR. Together with Richardson Wealth, Trez Capital has brought this U.S. investment opportunity to Canadian investors.
“Through the difficult market landscape of 2022, because of Trez Capital’s expertise, we were able to structure a unique, value-added real estate investment opportunity in a highly sought-after geographical area for our high-net-worth (HNW) clients. This investment opportunity was very well received, and we look forward to developing more unique commercial real estate opportunities for our clients with the help of Trez Capital.” said Romain Marguet, Director, Alternative Investments at Richardson Wealth.
For more than 25 years, Trez Capital has built a reputation for providing innovative financing for commercial properties in major centres throughout Canada and the U.S. and providing exceptional returns to its investors.
About Trez Capital
Founded in 1997, Trez Capital is a diversified real estate investment firm and preeminent provider of commercial real estate debt and equity financing solutions in Canada and the United States. Trez Capital offers private and institutional investors strategies to invest in a variety of opportunistic, fully secured mortgage investment funds, syndication offerings and real estate joint-venture investments; and provides property developers with quick approvals on flexible short- to mid-term financing.
With offices across North America, Trez Corporate Group has over $5.5* billion CAD in assets under management and has funded over 1,700 transactions totalling more than $17 billion CAD since inception. For more information, visit www.trezcapital.com. (*Trez Corporate Group AUM includes assets held by all Trez-related entities as well as $3.0 billion Manager AUM (Trez Capital Fund Management Limited Partnership)).
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. Forward-looking statements are included. Actual results, performance and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained above. Examples of such forward-looking statements include, but are not limited to: the target IRR of the Fund, the nature of the Fund and its affairs. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect including, but not limited to: the ability of the Fund to acquire and maintain a portfolio of mortgages capable of generating the necessary annual yield or returns to enable the Fund to achieve their investment objectives, the ability of the Fund to establish and maintain relationships and agreements with key financial partners, the maintenance of prevailing interest rates at favorable levels, the ability of borrowers to service their obligations under the mortgages, the ability of Trez Capital Fund Management Limited Partnership (the Manager) to effectively perform its obligations to the Fund, anticipated costs and expenses, competition, and changes in general economic conditions. While the Fund anticipates that subsequent events and developments may cause its views to change, the Manager specifically disclaims any obligation to update these forward-looking statements, except as required by applicable law.
These materials should be read in conjunction with the Confidential Memorandum relating to the Fund dated October 11, 2022, including the risk factors identified therein. There can be no assurance that forward-looking statements will materialize or that actual returns or results will not be materially different from those described in the present material. Views expressed in this material and forward-looking statements are as of the date indicated, based on the information available at that time and may change based on market and other conditions.