Tranche 1 closes at midnight at a 24% net annualized targeted return. After tonight, the next tranche prices at 20%. On a $200,000 investment over four years, that gap is over $59,000.
PV, Mit & Jeff
Tranche 1 closes at midnight. Before you decide either way, watch PV and Jeff walk you through the entire trade. 16 minutes worth more than anything in this email.
16 minutes · PV & Jeff · Full Wellington Towers deck walkthrough, the capital stack, the exit math, and the tranche close decision side by side.
This is the day. Tranche 1 of Development Fund II: Wellington Towers closes at midnight at a 24% net annualized targeted return. After tonight the next tranche prices at 20% and does not close until late 2027.
The Montreal fund news this week made the trade obvious. Institutional money is quietly pivoting out of condos and into purpose built rental. We are on the build side of that trade, and tonight is the last chance to be on the cap table at the better number.
A Montreal based fund just quietly took down hundreds of unsold Toronto pre construction condos at wholesale to convert into rentals. That is not a marketing line. That is a real fund, with real capital, making the exact pivot we have been writing about for months. The condo trade is dead. The rental trade is alive. The institutional players are already executing. The retail headlines will arrive a year late, as they always do.
We are coming online at $980 to $1,500 a month in a London market where comparable purpose built rental is already asking $1,800. That is not a guess at where rents will be. That is our intentional positioning. Below market rent is the cleanest lease up insurance you can underwrite into a 432 unit building. By the time we stabilize, the comparable rent has moved further away from us, the spread has widened, and the institutional acquirer sees a building leased at affordable rents with rent roll upside still on the table.
Our buyer can acquire Wellington Towers using CMHC insured financing at 5% down on the entire $100M asset. The same MLI Select program that supports the build supports the acquisition. That is what widens the buyer pool from just pension funds to mid sized REITs, family offices, and private institutional capital. They underwrite at sub 4% cap rates. We build at 5.5%. That spread is the trade. The exit does not depend on retail sentiment changing. It depends on a building with a rent roll. We are building that building tonight.
Dean Hanlon from HFA Construction is leading the build. Michael Nemanic is leading the development management and legal side. We are adding one more senior operator that we will introduce shortly. You are not just funding the principals on this newsletter. You are funding the operating bench behind the build. The video walks through who they are.
432 Units · 25 Storey Purpose Built Rental · London, ON
$100K Minimum · Cash Only · Accredited / Existing FC Investors
Tranche 1 Tonight: 24% Net Annualized (drops to 20% after midnight)
1. If you are ready to commit: reply to this email with the word Wellington. We will send the subscription package and walk it through with you tonight.
2. If you want to reserve your spot without committing yet: book a 30 minute call. We will hold your allocation at the 24% Tranche 1 price through the call so you do not get pushed into Tranche 2 while you are still deciding.
FCPRET is open continuously at a $10,000 minimum, eligible for RRSP, TFSA, RESP, LIRA, and cash. 7% targeted distributions paid monthly, 15% targeted total return. If you want apartment income without the development lockup, FCPRET is how.
Stabilized Multi Family Buildings · Southwestern Ontario
$10K Minimum · RRSP / TFSA / RESP / LIRA Eligible
Targeted Return: 15% Annualized (7% cash + 8% appreciation)
To your success,
PV, Mit & Jeff
P.S. Two things to make tonight easy. First, if you are even 70% in, book the call and let us hold your spot at the 24% Tranche 1 price. We can finish the diligence on the call. Second, if you have unanswered questions, watch the 16 minute walkthrough with PV and Jeff above before you decide. The full deck is on screen. The exit math is on screen. The buyer pool is on screen. After midnight, the next tranche prices at 20% and does not close until late 2027. Reply Wellington to lock in tonight.
