PV, Mit & Jeff
Yesterday we wrote you about oil hitting $120. Today, WTI is sitting around $89 after G7 finance ministers announced they're "standing ready" to release strategic reserves but haven't pulled the trigger yet. Markets calmed down. Headlines moved on. But the second-order effects? Those are just getting started. Here's what we're watching
The headline moved on. The housing supply problem just got worse.
Even if oil settles in the $85 to $95 range, the damage is already done. Developers across Canada were already pulling back before this crisis. CMHC's latest numbers show housing starts trending below 250,000 units, well short of the pace needed to close a deficit measured in millions. Now add tariff uncertainty, volatile input costs, and tighter lending conditions. The result? More projects get shelved. Fewer shovels in the ground. And the supply gap that was already widening just got wider. For existing rental portfolios, that's fewer units competing for the same tenants. FCPRET investors will collect their March distribution on the 15th. As always.
Last Night's FCPRET Webinar
We went live last night to walk through how FCPRET is positioned heading into this market. If you missed it, the full replay is available now.
Cash-Flowing Apartment Buildings · Southwestern Ontario
Targeted Total Return: ~15%
Distributions: 7% Annualized, Paid Monthly
The headline says oil is down. What the headline doesn't say is that the Strait of Hormuz is still effectively closed, 20% of the world's oil trade is still disrupted, and G7 energy ministers are meeting this morning to decide whether 300 to 400 million barrels of strategic reserves need to be released. That's not stability. That's a pause.
For Canadian real estate, the story isn't the price of oil today. It's what sustained uncertainty does to the pipeline of new housing over the next 12 to 24 months. Developers were already hesitating before the crisis. Now, with volatile energy prices layered on top of existing tariffs and tighter lending conditions, more projects will be delayed or shelved entirely. Every project that doesn't break ground is housing that won't hit the market for years. And Canada is already short by millions of units.
That's why our thesis hasn't changed. FCPRET owns apartment buildings that are already built, already occupied, and already producing income. Every month that new supply gets harder to build is a month that existing portfolios get more valuable. And for investors looking at equity creation, Wellington Tower is an $84 million purpose-built rental project structured with CMHC financing and government grants, targeting 24% to 27% annualized returns. Built to weather exactly this kind of environment.
Purpose-Built Rentals · Build-to-Core, 4-Year Horizon
CMHC Financing + Government Grants (De-Risked)
Targeted Returns: 24% to 27% Annualized
G7 energy ministers are meeting this morning to decide on a coordinated strategic reserve release of up to 400 million barrels. Whether they act or hold, the downstream impact on Canadian construction activity and housing supply is the story we're tracking. More on this in tomorrow's note.
Oil is volatile. Headlines come and go. But the structural advantage of owning essential housing in a supply-constrained market doesn't change with the news cycle. Two vehicles. One thesis. Monthly income from cash-flowing apartments through FCPRET, or equity creation through ground-up development with Wellington Tower.
Yesterday's crisis is today's correction. But the opportunity in Canadian rental housing? That's been here for years, and it's only getting stronger.
To your success,
PV, Mit & Jeff
P.S. Oil went from $64 to $120 and back to $89 in less than two weeks. That's the world equity investors live in. Our investors? Same 7% distribution. Same monthly deposit. Same tenants paying rent. If you're tired of watching your portfolio react to every headline, this is the alternative. Just reply to this email and say "interested" and we'll set everything up for you.
By the Numbers
