Every real Fund III question we heard on investor calls this week, answered straight. No marketing polish. This is the letter for anyone who has been quietly holding a question that is stopping them from booking the call.
PV, Mit & Jeff
Seven questions on every call. Real answers, no marketing polish. If any of these is the reason you have been holding, this is the letter to read all the way through.
Foundation Development Fund III Tranche 1 has been open to our investor community for a couple of weeks. In that window we have run a lot of calls, and we have heard the same seven questions repeatedly. Today's letter answers each of them directly.
If one of these is the reason you have been quietly holding off, read to the bottom. Tomorrow's letter is the companion to this one: every objection we have heard from people who chose not to invest, answered honestly.
Fund III is structured to target 20% to 24% compounded annually over an approximately four year hold, in line with what Foundation Development Fund II Tranche 1 was structured at when it closed fully subscribed. Compounded over the projected four year life of the fund, that math works out to roughly 2.07x to 2.36x your capital at project exit, a total return in the range of 107% to 136% over the life of Fund III.
Full waterfall, fee structure, and all specifics live inside the offering docs. Book the call, we send them within 24 hours.
You are accredited if any one of the following is true. Individual income over $200,000 in each of the last two years, or combined household income over $300,000. Net financial assets (cash, securities, insurance policies) over $1,000,000. Or net assets of $5,000,000 (any combination, including real estate). More Canadians qualify under one of these tests than they realize. If you are unsure, book the call. Our team can walk you through it in five minutes.
This is a private real estate development, not a public REIT. There is no daily trading window. Capital is committed for the life of the project, which is projected to run through Q3 2030. Between now and then, the project moves through the standard Foundation Capital development timeline: entitlement and council approval, construction financing close, construction, occupancy, and lease up to stabilization. Investor capital and returns are distributed at project end, with the eventual asset sale or refinance as the exit event. Full waterfall is inside the offering docs.
Because of how the raise is structured. Fund III's total capital raise is $6 million. Tranche 1 is $1.5 million, and that is what your investor community is being offered right now at the targeted 20% to 24% compounded return. Tranche 2 is the remaining $4.5 million, and that tranche is structured to be filled by government and not for profit capital as those partnerships close over the next few months.
Here is what that means for a private LP writing a cheque today. Tranche 1 is the only tranche in Fund III where private accredited capital participates at the targeted return. Once Tranche 1 fills, the private investor window on Fund III is closed. Government and not for profit capital fills the remainder on different terms, which is exactly the outcome we want because it deepens the affordable share of the project without diluting the private LP economics.
In other words, the affordability and the private return move in the same direction, not opposite directions. More affordable units means more public capital in the stack later, which means the private LP position in Tranche 1 gets stronger, not weaker. If you want the 20% to 24% target on Fund III, Tranche 1 is the only door. It closes in weeks.
500 Units · Southern Ontario Transit Corridor · Workforce Rent
$1.5M Tranche 1 · Closing in weeks · Accredited investors and existing FC investors only.
First, Fund III is a different site than Wellington. The two projects are not the same council file. That said, on Wellington itself, we are confident in the approval outcome regardless of which of three paths it takes.
Council yes in September (Path A). Settlement negotiation with the City in October if council delays (Path B). Ontario Land Tribunal hearing as the final backstop (Path C). We underwrite for all three.
The reason for the confidence starts with the operator running the file. Michael Nemanic is both our planning lawyer and our development manager on this project. That is a rare combination: senior planning counsel and top tier development executive in the same operator. Michael previously spearheaded the $2 billion Sheridan Mall redevelopment in Toronto, one of the largest mixed use transformations ever built in the country. He knows exactly how to write, argue, and win a planning file. If Wellington ends up in front of the OLT, Michael's track record is the reason we sleep well at that prospect.
On the merits themselves, the site sits directly on the Wellington BRT corridor, which the province has invested roughly half a billion dollars into to spur transit oriented density. Wellington Towers is exactly the kind of purpose built rental at scale that the BRT investment was designed to enable. A tribunal denying purpose built workforce rental on the corridor the province just funded is not a case a rational decision maker makes.
The project is not a single vote bet. It is a well structured planning file, on the right site, with the right operating team, on the right corridor for the province.
FCPRET is our Apartment Building REIT. Buys and operates existing multi family buildings across Southern Ontario. $10K minimum, RRSP eligible, monthly cash distribution. Fund III is a development fund. Builds new purpose built rental at scale on a Southern Ontario transit corridor. $100K minimum, cash only, accredited investors, targeted development returns paid at project milestones. Same operating team, different vehicles for different investor profiles.
Book a 30 minute call with our team. We walk you through the offering docs, the Tranche 1 mechanics, and the projected use of capital. From that call, if it lines up for you, we can move to subscription in days.
If your question got answered above, the fastest path is a 30 minute call with our team. From that call, offering docs and subscription in days.
If you still have a question we did not answer here, reply to this letter with it. We will answer directly, and if it comes up more than once, it goes in tomorrow's follow up letter.
The three trustees on the road from 2023 launch to $10M raised, the rent model evolution, and the road to $20M and beyond.
$10K Minimum · RRSP / TFSA / RESP / LIRA Eligible · Also Cash
Targeted: 15% Annualized (7% cash monthly + 8% appreciation)
If Fund III is not the right fit, FCPRET is the workforce housing thesis on a $10K minimum, on registered accounts, with a monthly cash distribution.
Talk soon,
PV, Mit & Jeff
P.S. If we did not answer your specific question, reply to this letter with it. We answer every one personally. Tomorrow's letter is the follow up: every objection we have heard from people who chose not to move forward, answered honestly.
