|By Marketwired .||
|May 15, 2014 12:23 PM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 05/15/14 -- Retail investors of the Fortress Real Capital syndicate mortgage product successfully exited a mixed use development project in Pickering yesterday.
The mixed use project on 13 acres located at Brock Road and Kingston Road in Pickering is planned for 30 townhouses, 12 live work units and a three storey commercial building. The site's prime location, access to major transit and highway and major community amenities including a local mosque make it a high demand project.
"All of the units are spoken for and we have a growing waiting list. This project will take a plot of unused land and turn it into something the entire community will enjoy" said Fortress CEO Jawad Rathore.
The project was originally led by a small local builder who had completed similar sized projects throughout the 905. When pre-development took longer than anticipated, they started relying more on the Fortress development team to assist in the process.
"Our team has managed this site all the way through to the doorstep of site plan approval. In doing so, we have dramatically increased the value of the property and made it very attractive to lenders" remarked Frank Margani, EVP at Fortress Real Developments and a licensed mortgage agent with Centro Mortgage Inc. "By creating this extra value, syndicate mortgage investors didn't have to wait for the project to be built in order to exit... enough value was created to pay them out now."
Investors were rewarded with 22% total returns in only 33 months. Margani reflected on the creation of value from the work done by the Fortress team. "It's pretty remarkable to generate and realize those types of returns in such a short period of time. Several clients have expressed how pleased they have been with the performance of their investments in Fortress projects in comparison to other products in their portfolio that aren't generating the same yield or liquidity as quickly."
When the Fortress Stakeholder Management stepped in to manage the day to day operations of the project, they were able to rapidly right the ship and start moving forward. Led by Fortress Director of Stakeholder Management Nick Circosta, an industry veteran with over 40 years of development and construction experience, plans were revised and the reins were taken over to obtain the final site plan approval and related permits.
"The real nadir was when they had used the initial budget of monies provided by investors but hadn't yet achieved all of their development milestones", explained Vince Petrozza, Fortress COO and a licensed mortgage broker. "We run very tight costing allowances and when we saw that more capital was needed, we chose to not go to investors for more capital but rather to fund the extra monies needed ourselves."
"I can say without reservation that without the dedicated efforts of Nick and his team that this project would not be worth anywhere near as much as it is now. That's what we do, we engineer and create value for investors in our projects," remarked Petrozza. "At the end of day, it's all about putting the investor first. All projects have their challenges and investors want to see that you have the experience, confidence and financial resources to step up and take care of them."
"In the case of this project, we were ready to exit the investors in February but faced resistance from the original borrower who wanted to try and keep the project for themselves. We made it very clear to them that protecting the investors was paramount and we weren't interested in anything that further delayed their exit," stated Petrozza. "Things started moving fast once we involved our corporate counsel to advocate for the investors. I guess that's the benefit of having one of the world's biggest law firms on your side."
Fortress congratulates all the investors who exited from this project with 22% returns and is now focused on generating a vibrant mixed-use community in Pickering. The plan is to move ahead with the construction and completion of the project. Building contracts are being finalized with a well-known builder from York region and will be announced in a few weeks followed by construction to begin this fall.
About the Companies
Fortress Real Developments Inc. - Fortress Real Developments Inc. is a Canadian real estate development company that seeks out and analyzes investment opportunities in major Canadian markets. The company is focused on quality projects with recognizable alpha in residential low-rise, high-rise, commercial and industrial market segments. For more information visit: http://fortressrealdevelopments.com.
Centro Mortgage Inc. - Centro Mortgage Inc., established in 2007, is a premier mortgage brokerage licenced in Ontario, Nova Scotia, Alberta & Saskatchewan. Centro's closes all Fortress Real Capital transactions, an RSP eligible syndicate mortgage product that allows a consumer to invest directly into the proven market of Canadian real estate by becoming a mortgage lender. For more information visit: http://fortressrealcapital.com
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