Compounded at the 20% to 24% targeted return on Development Fund II. The real estate equity play of this cycle, because we are building purpose built rental at developer cost, not buying it at retail.
PV, Mit & Jeff
Purpose built rental, built at developer cost, exited at institutional cap rates. The math on a $200,000 cheque versus every other place you could put it.
For most of the last two decades, the default real estate equity move for a Canadian investor with a $200,000 cheque was a pre construction condo. That trade is broken. Prices are flat to negative, the assignment market is bleeding, and the carry on a $1M unit is around $5,000 a month out of pocket.
The replacement is hiding in plain sight. Purpose built rental, built from the ground up at developer cost, with a CMHC subsidized capital stack, and an institutional exit waiting at stabilization. That is the equity play of this cycle, and Wellington Towers is how you access it.
Here is what that does to the math.
A $200,000 allocation in Wellington Towers, compounded at the targeted return range over a four year build and stabilize horizon:
Now compare that to where else a $200,000 cheque could go right now.
All comparisons are illustrative only. Targeted returns are not guaranteed. Public market and competitor figures are based on long run historical averages and current posted rates, not forward looking promises.
The condo math broke for a reason. Retail buyers stopped showing up because the carrying cost on a $1M unit no longer pencils against the rent it commands. The asset class did not change. The capital stack did.
Purpose built rental sits on the opposite side of that exact same shift, and the federal government has put its full weight behind it.
CMHC is funding new purpose built rental at up to 95% loan to cost with interest rates priced inside any other development debt in the country. That subsidy does not exist for condos.
The institutional bid for stabilized purpose built rental is large and active. Pension funds, insurance companies, and sovereign wealth are buying hundreds of millions of this product right now. They set the exit cap rate.
The demand side is structural. Sub 2% vacancy in our submarket, immigration driving net new tenant demand, and home ownership pricing out an entire generation. Rents are not a guess.
We are building at developer cost, not buying at retail. The entire 20% to 24% targeted return lives in the spread between our build basis and the cap rate the institutional market is paying. That spread does not exist for a retail condo buyer.
432 Units · 25 Storey Purpose Built Rental · London, ON
$100K Minimum · Cash Only · Accredited / Existing FC Investors
Targeted Return: 20% to 24% Annualized
Status: Active. Dev Fund I closed to new capital in April after hitting its raise target. Dev Fund II is the next vehicle, and the equity book is open.
Minimum cheque: $100,000, cash or non registered only. Dev Fund II is not registered plan eligible. FCPRET remains the registered plan option for RRSP, TFSA, RESP, and LIRA.
Eligibility: Open to accredited investors and existing Foundation Capital investors under prospectus exemptions.
The economics are at a peak. Every 25 basis point move in the policy rate from here changes the build math. We are locking the capital stack against today's terms.
The asset is finite. Two specific buildings on one specific site. The equity book has a hard ceiling. No second tranche of the same project later.
Existing investors get first look. Allocations are filled in the order calls are taken. Dev Fund I filled this way, and investors who waited to confirm ended up on the wait list instead of in the fund.
The math is not getting better from here. The asset is not getting larger. The room in the equity book is one of the most finite things we will ever offer.
Q1. Why a $100K minimum?
Dev Fund II raises under prospectus exemptions reserved for accredited investors and our existing investor base. The higher minimum reflects the offering structure, not a barrier we invented. FCPRET remains the $10K entry point for everyone else.
Q2. Why cash only, no registered plans?
Development equity does not pay cash distributions. The return is built and crystalized on exit. That cash flow profile does not pair with the mechanics of a registered plan. FCPRET pairs with registered plans because it pays monthly cash distributions.
Q3. How does the exit actually work?
Build, stabilize, refinance or sell. Institutional buyers of stabilized rental in Ontario are active and well capitalized. FCPRET is also a potential internal acquirer for mature purpose built rental that fits our hold criteria. Either path is priced at the same stabilized cap rate.
Site is under our control. Precast strategy is locked. We covered the engineering rationale in our April 16 development update.
Planning approvals are progressing. Municipal file is in active review with no flagged issues.
CMHC financing structure is being assembled. Purpose built rental files in 2026 are pricing inside any other development debt in the country.
Our build cost basis is tracking below comparable Toronto purpose built rental on a per door basis. That is the entire reason the math works.
Tuesday we go deep on the cap rate math behind Wellington Towers. Wednesday we take you inside the FCPRET portfolio with a live update from one of our London buildings. Thursday is Q&A. Friday is the thesis read.
If a Wellington Towers allocation is on your radar, do not wait for Friday to book. PV, Mit, and Jeff are taking development calls directly this week, and slots are filling.
8 Stabilized Apartment Buildings · Southwestern Ontario
$10K Minimum · RRSP / TFSA / RESP / LIRA Eligible
Targeted Return: 15% Annualized (7% cash + 8% appreciation)
Have a strong week,
PV, Mit & Jeff
P.S. The $414K to $472K number on a $200K cheque is not a marketing flourish. It is the simple math of compounding at the targeted return range over a four year horizon. The reason it works is structural. We are building purpose built rental at developer cost, with a CMHC financed capital stack, in a city with sub 2% vacancy, and exiting to an institutional buyer pool that is actively writing $300M plus cheques for stabilized product. If that thesis lines up with your portfolio, book a call this week.
