A 25 storey purpose built rental tower in London, ON. Priced below the local market on purpose. Today, the math walked through end to end.
PV, Mit & Jeff
Most development letters tell you a story. Today we walk through the actual structure of a build, the rent stack, the lease up logic, and the exit math behind the 24% net annualized targeted return.
Wellington Towers is the equity engine of Foundation Capital. A 25 storey purpose built rental tower in downtown London, Ontario, with 432 units, designed and financed to come online into the exact decade that Canada cannot build its way out of a 3.5 million unit housing shortage.
Tranche 1 of the Wellington raise has been extended for accredited investors with a 24% net annualized targeted return. Most letters about development funds end the conversation at the headline number. Today we walk through how the building gets built, why the rent stack is structured the way it is, what makes the lease up fast, and how the exit math actually works.
A London one bedroom rents for roughly $1,800 at the market today. Wellington Towers is being built to come in below market on purpose, across the entire rent stack. The structure looks like this:
· 90% of units priced at approximately $1,500 per door. About 17% below the local market comp on day one.
· 10% of units priced at approximately $980 per door, structured as deeply affordable units, typically through partnership with a non-profit or government agency that subsidizes the rent on behalf of a transitioning tenant.
The point of pricing the whole building below the local comp is not generosity. It is the lease up. A 432 unit tower priced 17% under the local market will lease up faster than any comparable building in the city, which is the single most important variable in the development return.
Mit and Jeff sit down with Canadian real estate investors on what is actually breaking the market right now, and how disciplined operators are positioning around it.
Site plan, design, permitting, and capital stack work through 2026 and 2027. The plan is to take the building through the financing and permitting milestones during the pre-construction window so that the build can launch from a fully de-risked starting point. Underwriting work happens before the shovels do.
Construction kicks off in 2028 and delivers in 2030. Lease up begins ahead of delivery to compress the time from completion to stabilized cash flow. Because the building is priced 17% below the local market, the lease up is fast. Brand new, downtown London, 25 storeys, $1,500 a door. The renter pool that has been priced out of Toronto and the renter pool that has been priced out of London single family ownership both arrive at the same lease up office.
Once the building is fully leased and the NOI is stabilized, the exit goes to one of the institutional buyers who are already telegraphing their need for purpose built rental product. CPP Investments sold its own office last week. Concert and Brookfield wrote a $1B cheque into Canadian real estate two weeks ago. The buyer pool for a stabilized, sub-market priced, 432 unit purpose built rental tower is structurally short product. That is the exit we are building into.
Wellington Towers is an accredited investor only opportunity, offered under prospectus exemptions available only to accredited investors and existing Foundation Capital investors. Minimum subscription is $100,000 cash. It is not RRSP, TFSA, or registered account eligible. It is the equity engine of the FC platform, paired with FCPRET as the income engine.
If you want to walk through the full Tranche 1 extension term sheet and the underwriting model behind the 24% net annualized targeted return, the easiest 30 minute call you will have this month is one with us.
432 Units · 25 Storey Purpose Built Rental · London, ON
$100K Min · Cash Only · Accredited / Existing FC Investors
Tranche 1 Extension: 24% Net Annualized Targeted Return
$10K Minimum · RRSP / TFSA / RESP / LIRA Eligible
Targeted: 15% Annualized (7% cash monthly + 8% appreciation)
Subscribe by Canada Day for +2% bonus units (14 days left)
Talk soon,
PV, Mit & Jeff
P.S. Reply Wellington if you are accredited and want to walk through the Tranche 1 extension term sheet and the underwriting model. Wellington Towers is not registered account eligible. If you are looking for monthly cash distributions inside an RRSP, TFSA, RESP, or LIRA, FCPRET is the income engine of the platform, and the Canada Day 2% bonus runs for another 14 days.
