Private Equity Lending In Ontario
Developers require private equity lenders to finance their projects (i.e. multi-family, commercial, etc.). This form of financing is different from 'debt financing' where an amount is borrowed at a set interest rate, defined term and with specific rights. Private Equity lending is essentially a 'joint venture partnership' with the developer. This form of lending entitles the lender to 'ownership rights' which not only includes a return of capital but also a share of the profits (ie. preferred shares).
Contact us if you are interested in providing private equity for development projects.
Private Equity Participation Partnership Opportunities
Proposal: 50/50 Joint Venture Opportunity
Financing required to: acquire and develop land (to be sold) for a 139 unit Townhome community
Amount Required: $3M
Geographical Areas: (Financing partner’s Choices)
- Golden Horseshoe
- Waterfront cottage country
Exit Strategies: Sell to builder (via assignment, back-to-back closing or close & sell)
Land Uses: Residential, retirement or recreational uses.
(Townhomes, Bungalow, Retirement Homes, Retirement Homes, High Rise Residential, Mid Rise Residential, Student Housing)
Developer Responsibilities: Locate and acquire land, due diligence, find market opportunity, plan community, engage conservation authorities, prepare proformas, find buyers(builder), apply for zoning approval, execute exit strategy, facilitate closing, day to day management, expertise, infrastructure, planning and design services, (defer 40% of their management fee).
Investor Responsibilities: Responsible for providing all of the cash required for the deal.
Project : Condo development on a large University campus. This building will be Phase 6. The other 5 phases sold out prior to completion
Investment: $3.5M CDN
Timeline: 20 Months
Risk: Very low risk as all University condo projects pre-sell prior to completion. Some even prior to construction start
Developer: Large developer with many successful projects. Currently have over 500 units under construction
The investor funds 20% of the project costs as equity, in return for 25% of the profits. The construction financing is 80% of costs and is guaranteed by Developer. The investor takes no risk in the construction financing.
|Private Equity Lenders are required for various other projects in Ontario|