Wellington goes to council tomorrow. This letter is not another countdown. It is the entire case, in one place, for the last time before the vote. The city's case, the province's case, the LP case. Read on for why the three genuinely align.
PV, Mit & Jeff
Not selling. Not pitching. Just walking through the argument tightly, for the last time before the vote, so no one has to reread six weeks of letters to know where we stand and why.
The Wellington land assembly file goes to City of London council tomorrow. We have written six weeks of letters building up to this moment. This one is different. This is not a countdown. It is not a market signal recap. It is the case for the file, laid out one last time in one place, for anyone who wants the whole argument without having to scroll through six weeks of prior letters.
Three cases. The city's case. The province's case. The LP case. Each one stands independently. The reason we sleep well before tomorrow's vote is not that we think council will vote yes. The reason we sleep well is that the three cases genuinely align, and any body that looks honestly at the file arrives at approval.
Pre-read note for anyone new here. Mit's Sunday universe webinar is the best single source of context on Foundation Capital's full picture. Card below.
FCPRET, all three development funds, and the affordable side in one sitting. Best single source of context before the call.
London has a workforce housing gap that is not going to be closed by luxury development. The tenant London depends on to run its hospitals, its factories, its service economy, its public sector, is currently getting priced out of the city by new supply that is targeted at rents that population cannot pay. Nobody debates the gap. What is debated is who fills it.
The Wellington file is a purpose built rental development priced explicitly for the workforce band. Bachelors and one bedrooms. Rents in the range London's shift workers, nurses, tradespeople, daycare staff, and shop supervisors can actually pay. Built on land already zoned for the density the site plan requires, on the Bus Rapid Transit corridor the province has spent nearly half a billion dollars building because it wants transit-oriented residential density along that corridor.
The city gets new supply. In the specific rent band that its workforce needs. On the exact corridor that its own infrastructure investment was designed to enable. Built by an operator that plans to build repeatedly in Southern Ontario, not one that closes a single project and disappears.
The province did not spend half a billion dollars on the Wellington Bus Rapid Transit corridor to see it lined with strip malls and surface parking. That infrastructure investment was made explicitly to enable transit-oriented residential intensification, at the scale the corridor was engineered for. The Wellington file is exactly that. Purpose built rental at scale, on the corridor, in the density band the province's own upzoning framework was built to unlock.
Under CMHC MLI Select, the province gets a project financed at 95 percent loan to cost through federal insurance, at construction rates roughly 150 basis points below conventional debt, on a permanent mortgage amortized over fifty years. Meaning the workforce rents this project needs to charge are supportable inside the actual construction math, without further government funding. The province gets scale density on its transit corridor from private capital. That is genuinely as good as the deal gets for a provincial housing file.
A retail LP writing a cheque into Foundation Development Fund III Tranche 1 is entering the workforce multi-family reprice that six separate industry voices have called in the last seven weeks. Colliers Q1 GTA print at +228 percent. H&R REIT / GO REIT at $6.7 billion. RENX / First National on Southern Ontario tilting to multi-family. Altus H1 at +244 percent multi-family. Benjamin Tal at the Canadian Apartment Investment Conference. Valent Advisory on foreign capital taking 43.9 percent of Q2. The LP writes the cheque today at the entitlement stage, before the reprice is fully priced into land and construction, and exits in roughly four years into the market those six voices are describing.
Fund III is structured with three ranked exits: sale to institutional buyer, sale internally to FCPRET at fair market, or refinance and hold on CMHC permanent debt. LP capital comes back under any of the three. Targeted return is 20 percent compounded annually on the four year hold. That number is not a promise. It is the entry premium for being on the operator side of the trade before the exit market fully arrives.
950 Units · Wellington BRT Corridor · Workforce Rent
Targeted: 20% compounded annually (4 year hold)
The file goes to council tomorrow. $100K minimum. Accredited investors, existing FC investors, or FF&BA exemption.
Most municipal planning files ask the reader to choose between competing constituencies. Development versus community. Density versus liveability. Private return versus public benefit. Those files are hard to approve because someone gets less of what they wanted.
Wellington is not that kind of file. The city gets the workforce housing gap addressed. The province gets its half billion dollar transit corridor validated with transit-oriented density. The LP gets a targeted return on a workforce rental development structured with three ranked exits. The tenant who eventually moves into the building gets an affordable, well built, transit-accessible home in a city they cannot currently afford. And Foundation Capital gets to continue building the workforce housing product it has been quietly refining for a decade.
There is no constituency in this file that loses. There is only the question of whether the process approves the file on its own terms tomorrow, or after a settlement negotiation with staff in the weeks that follow, or after an OLT hearing several months out. Under each of those three paths, the underlying merits of the file do not change. The city still needs the units. The province still funded the corridor. The LP still enters the reprice at Tranche 1 pricing.
The Wellington file is called at City of London council tomorrow, September 29. Whatever the outcome, this letter will be the one we point back to as the summary of what we believed going into the vote and why. If you are an accredited investor or an existing FC investor and you have been waiting to make a decision before writing a cheque, today is the last day the pre-vote window is fully open. Tomorrow the file starts writing its own next chapter, and Fund III moves into whatever path the process actually delivers.
If any of the case above lands for you, book the call. Otherwise, we will see you back here tomorrow with the actual vote result.
$10K Minimum · RRSP / TFSA / RESP / LIRA Eligible · Also Cash
Targeted: 15% Annualized (7% cash monthly + 8% appreciation)
The existing FCPRET portfolio already owns exactly the workforce band Wellington is being built to add to. $10K entry.
Talk soon,
PV, Mit & Jeff
P.S. This letter is meant to be the one you forward to your accountant, your business partner, your friend who has been curious about what we do. If the case landed for you, forward it. That is the highest signal we can get from you right now.
