PV, Mit & Jeff
Yesterday we announced Development Fund II: Wellington Towers. A 25 storey, 432 unit, $100M purpose built rental tower. If you missed the full breakdown, book a call and we will walk you through the details
Canada does not have a housing problem. It has a workforce housing problem. Luxury condos are not the answer. The tradesperson, the nurse, and the teacher need a place to live, and nobody is building it fast enough.
Today we want to zoom out. Because the question we keep hearing is not "What are the numbers?" It is "Why are you building right now?" The answer starts with a number that most investors do not realize exists.
That is the number of homes Canada needs to build by 2030 just to restore affordability, according to CMHC. We are not on pace. Current housing starts are running at roughly 240,000 per year nationally. At that rate, the gap gets wider every single quarter. The shortage is not a projection. It is math.
Not all housing is created equal, and neither is the shortage. Canada does not have a luxury condo shortage. If you are looking for a one bedroom at $3,200 per month in a glass tower with a rooftop pool, the market has options for you.
The gap is in core workforce housing. The $1,200 to $1,800 per month apartment. The unit that a nurse, a tradesperson, a teacher, or a new Canadian family needs and cannot find. In Southwestern Ontario, vacancy rates in this segment are running near 1%. That is not tight. That is functionally zero.
When vacancy is that low, two things happen. Rents hold steady even when the broader economy slows. And buildings stay full, which means the income your investment generates does not depend on one or two large tenants. It depends on hundreds of families who need a place to live and have no alternative.
25 Storey Purpose Built Rental · Southwestern Ontario
$100K Minimum · Accredited / Existing FC Investors
Targeted Return: 20% to 24% Annualized
Most Canadian developers build luxury condos because the margin per unit looks higher on paper. Sell a condo at $800,000, pocket the development profit, move on to the next site. That model works in a rising market with cheap financing and eager buyers.
It stops working when rates are high, buyers hesitate, and absorption slows. That is the current environment. Unsold condo inventory across the GTA is at multi year highs. The developers who bet on luxury are now sitting on product they cannot move.
Workforce purpose built rental is the opposite. You are not trying to sell 432 individual units to 432 individual buyers. You are leasing to a demand pool that is already waiting. The tradesperson commuting to the job site. The hospital worker picking up extra shifts. The young family that cannot afford to buy and does not want to live with roommates.
These tenants are not discretionary. They need housing. And in a market where vacancy is near zero, absorption at stabilization happens fast. That is the thesis behind Wellington Towers, and it is the same thesis behind every building in the FCPRET portfolio.
Apartment buildings backed by workforce rental demand are the most recession resistant real asset class in the country. People do not stop needing a place to live when the economy slows. They do not cancel their lease because the TSX dropped 10%.
That is what makes the FCPRET portfolio structurally different from stocks, bonds, or even commercial real estate. Our 350+ units across Southwestern Ontario are full. They were full last quarter, and the quarter before that. The income is driven by rent cheques, not market sentiment.
The supply gap is also what makes this the right time to build. Wellington Towers adds 432 workforce rental units to a market that desperately needs them. You have two positions available: FCPRET for monthly income from existing cash flowing buildings, and Development Fund II for equity creation from new construction. Two different tools built on the same thesis: workforce housing in a market where supply cannot keep up with demand.
Cash Flowing Apartment Buildings · Southwestern Ontario
$10K Minimum · RRSP / TFSA / RESP / LIRA Eligible
Distributions: 7% Annualized, Paid Monthly
"I was skeptical. I had seen a lot of investment opportunities that did not hold up to scrutiny. So I spent about a month reviewing the offering documents, the portfolio, the regulatory structure. Everything checked out. The team answered every question without pressure. A year in, the distributions have been consistent and the reporting is exactly what they promised."
Hit reply with any question about FCPRET, Wellington Towers, the housing market, or how we run things behind the scenes. The best ones get answered in next Thursday's Investor Q&A.
The housing supply gap is not a headline. It is the structural condition that underpins everything we do. Whether you are building wealth through monthly distributions in FCPRET or through equity creation in Wellington Towers, the thesis is the same: workforce housing in a market that cannot build fast enough.
To your success,
PV, Mit & Jeff
P.S. Wellington Towers materials are going out this week. If you want the full investor deck, capital stack breakdown, and architect's renderings before the public release, reply with "Fund II" and we will send everything directly. For FCPRET, the April 30 closing window is 13 days away.
