The Mod'rn Residences

Offering Description

A contemporary, four-storey mid-rise residential development with 78 units located in Burlington, Ontario. This is a syndicated mortgage investment opportunity.

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Project Overview

The Mod'rn Residences

The Mod'rn Residences is a unique opportunity for investor-lenders to participate in the returns available on this $22 million four-storey, contemporary, mid-rise development located at 1284 Guelph Line in Burlington, Ontario. This sleek 4 storey condominium is home to smartly designed 1 bedrooms, 1 bedroom + dens and 2 bedroom suites with superb modern finishing details including 9’ & 10’ ceilings. The Mod'rn has a total of 78 units, with sizes ranging from 750 to 906 square feet. The project is designed by ICON Architects and the developer is Adi Developments.

Key Region and Project Fundamentals:

• Sustainable economic growth and strong population growth
• Located in a burgeoning residential neighbourhood with convenient access to the QEW (Queen Elizabeth Highway) and HWY 407
• Suites range in size from 750 to 906 square feet

Key Underwriting Parameters:

The following pro-active measures are applied to seek to reduce financial risk during the development process:
• Canadian real estate focus
• Conventional mortgage structures
• Short to Mid-term development mortgages - opportunity to reassess risk frequently
• Solid underwriting - rigorous analysis, visit each property, know each borrower
• Diversified portfolio - by size, borrower, geography and property type
• Borrower has equity in the project
• Well developed exit strategy - clear path to repayment
• Extensive project monitoring

Project Milestones

August 2012
• Adi submits their Zoning Application to the City of Burlington

February 2013
• Project has sold 95% of the suites on opening weekend

September 2013
• Project nominated in the ‘Most Outstanding Midrise’ category by the 2013 Ontario Builders’ Association

December 2013
• Construction financing secured, site-servicing work and excavation has commenced

October 2014
• Exterior structure complete

November 2015
• Final touches on the development have been completed, including landscaping and exterior maintenance

January 2016
• Registration of units with the municipality leads to exit and successful return of investor principal
• Exit was completed by: COMPLETION

How Do I Exit?

A project exit can be realized in 3 ways:

  1. COMPLETION: The project is constructed and the proceeds from the sale of units is used to pay off any land, construction and syndicate loans. Investors exit.
  2. REFINANCE: The project has increased in value, through development, market conditions or work in place and a new loan is sought to replace the syndicate loan. Investors exit.
  3. SALE: Rather than individual units the entire project (or significant portion) is sold (at any time) and the cash from the sale pays off the syndicate loan. Investors exit.

The return of capital can be any combination of principal, interest, fees and/or profit sharing of funds.

Risk Factors

• Investments in syndicated mortgages are speculative and involve a high degree of risk. Investors should be aware that this investment has the usual risks associated with financing real estate and risk associated with syndication.
• There is no market for the syndicated mortgage nor there any assurance that a market will develop.
• There is no liquidity for the duration of the term for this project. Investors may not be able to liquidate their investment on a timely basis and participations may not be readily accepted as collateral for a loan. Investment in participations should only be considered by those investors who are able to make a long-term investment and bear the economic risk of a complete loss of the investment.
• The ability of the Borrower to repay the amounts outstanding under the syndicated mortgage, and the payment of the deferred lender fee, in particular, is dependent on the ability of the Borrower to arrange construction financing to develop the project and on the subsequent development and sale of the project. All real estate developments are subject to risk. Such developments are affected by general economic conditions (such as changes in interest rates and the availability of mortgage funds), and local conditions (such as supply and demand for property and competition from other available developments).
• The development of a project may not generate sales of units as rapidly as anticipated, or for the sale prices anticipated. The redesign of a project may result in a material change which may result in cancellation of some or all of the existing presales.
• Purchasers to date may elect to terminate their agreements and the sale of their unit may not occur as rapidly as anticipated.
• There is a risk that cost overruns may occur and decrease anticipated profits to the Borrower.
• The Borrower’s debt service obligations may rise with increases in interest rates. In particular, the cost of the construction financing mortgages will increase with any increase in interest rates.
• The development of a project may not be completed within the anticipated time frame, or at all, which in turn could delay payment to participants or put repayment at risk.

For a full discussion of Risk Factors, please refer to the subscription agreement.

$3,950,000CAD

Raised of $3,950,000CAD Goal

Days 0
Hours 0
Mins 0
Investment complete
 
Debt Percent Offer. Structure
43 months Term
27.9% Est. Return
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Call +1.416.639.2020 ext 4