Foundation Development Fund III Tranche 1 closes this Friday, August 21st. After that, the private LP window on the fund is closed. Here is what that actually means and what the last three days look like.
PV, Mit & Jeff
$1.5 million. Twenty percent compounded target. Four year hold. 600 units on the London Bus Rapid Transit corridor. After Friday the private LP window is closed and public capital fills the rest.
Short letter today. If you have been following the Fund III raise through Mit's webinar on Sunday and the letters that have gone out these last two weeks, you know the shape of the deal. This is the letter that tells you what happens in the next three days and why the timing matters.
Tranche 1 closes this Friday, August 21st. That is not a soft close. That is the last day private accredited capital can subscribe to Fund III at Tranche 1 terms. What follows is Tranche 2, which is structured for government and NPO capital on different economics. Once Tranche 1 fills, the private LP door on Fund III is closed for the life of the fund.
If you have not yet seen Mit's Sunday walkthrough of the entire FC universe including Fund III mechanics in detail, the full 45 minute replay is right here. Best single source for context before the call.
FCPRET, all three development funds, and the affordable housing side in one sitting. Market split, strategy pivot, approval status, and Fund III mechanics in depth.
You get a partnership unit in Foundation Development Fund III. The fund is structured to build 600 units of purpose built rental housing on the Wellington Bus Rapid Transit corridor in London, Ontario. Mostly bachelors and one beds. Rented $980 to $1,500 depending on whether the unit sits in the market rate or CMHC affordable band.
The return target is 20 percent compounded annually over an approximately four year hold. Distributed at project end from the eventual asset sale or refinance. Minimum cheque is $100,000. Cash and non registered accounts only. Accredited investors or existing FC investors, or friends and family of the founders under the FF&BA exemption.
A development return in this range is the product of three stacked value creation steps, not one lucky bet.
Land uplift on entitlement.
Fund III is buying land at raw or lightly zoned value. Once municipal approval lands and the site is entitled for full purpose built rental density, the land itself is worth materially more than what we paid for it. That uplift rolls into the eventual exit value.
Construction margin.
The spread between all in cost to build (land, hard costs, soft costs, financing) and appraised value at completion. In workforce purpose built rental in Southern Ontario right now that spread is meaningfully positive because rents are strong and appraisals are grounded in a CMHC eligible income stream. This is where the majority of the projected LP return is created.
Stabilization and exit.
Once the building is built and fully leased at stabilized income, the exit is either an asset sale to a long term owner (a pension plan, an institutional investor, an aggregating REIT) or a permanent refinance out. That is the return event and the point at which projected profit is distributed to Tranche 1 investors.
Two reasons the timeline is real. First, Fund III has properties actively closing on the assembly, which means capital is being deployed on a fixed calendar, not a marketing calendar. Second, our conversations with government agencies and NPO partners for Tranche 2 are advancing in parallel. When those close, Tranche 2 fills with public capital and the private LP window is closed regardless of whether Tranche 1 is fully subscribed.
In plain English, Friday is not an arbitrary deadline. It is when the door structurally closes.
If Fund III is a fit and you have not yet booked a call, book one today. From the call, offering docs land in your inbox within 24 hours, sub-docs the day after, funds wired by Friday. That is the actual runway.
If you have questions that are keeping you from booking, reply to this letter with them. We will answer directly by end of day and, if the question is a common one, it goes in tomorrow's follow up. Everything we have heard so far, from targeted returns math to accredited eligibility to how the NPO partnerships change the return, has been covered in the letters from the last two weeks. Read those and Mit's webinar recap if you want the depth before the call.
600 Units · 76-84 High St · Wellington BRT Corridor
Targeted: 20% compounded annually (4 year hold)
$100K minimum · $1.5M Tranche 1 closes Friday, August 21st · Accredited or existing FC investors only.
$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 for a $100K cheque this week, 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 you have already had the call and are still deciding, this letter is your final signal. Reply with a yes and we get you into sub-docs the same day.
