Early Exit With 8% Returns for Syndicate Mortgage Lenders in Markham Low-Rise Development
TORONTO, Aug. 21, 2017 /CNW/ - Building and Development Mortgages Canada Inc. (BDMC) announced today and early exit for lenders in a syndicate mortgage that funded part of the York Downs development by Sunrise Homes and Fortress Real Developments Inc. (Fortress). Lenders received their principal back in full and an average annualized return of 8.81%*.
Lenders were paid out through the sale of the townhouse project, located in York Downs/Angus Glen area, north of 16th Avenue, in the City of Markham. The approximately two acre luxury residential housing development was planned for 50 homes, split between traditional townhouses with 15' feet of lot frontage and back-to-back townhouses with 21' feet of frontage.
After closing on the property in August of 2016, new low-rise house prices in the Greater Toronto Area have skyrocketed in value, rising approximately 40% per Altus Group Data. Fortress and Sunrise indicated that offers to purchase the property began to come in almost immediately, as developers looked to capitalize on strong market conditions.
"Markham is one of the most desirable locations for new housing in the Greater Toronto Area," said Jawad Rathore, the CEO of Fortress. "At Fortress, we create value after we acquire lands, either through zoning, sales or construction. At the York Downs site, value was immediately realized by the intelligent assembly we executed with our partners at Sunrise Homes. We were also fortunate to take advantage of the significant increase in the low rise home market, and were able to achieve our value objective in a much shorter period than originally projected."
The exit comes more than two years ahead of the loan term. BDMC principal broker Ildina Galati explained, "Lenders are seeing healthy returns on these early exits and this is a direct testament to the borrowers we work with, their experience, the strong due diligence they do in terms of understanding the market and the value they create for all stakeholders involved in the projects."
This latest project is the 6th that has exited in 2017 and to date over $100 Million of lender principal has been paid back; average estimated annualized returns in the 23 exited projects is 9.27%**. Projects have exited through a variety of mechanisms available to the development partnerships including, completion of the build-out with delivery of more than 1700 units, sale of the development site and refinancing of the project.
BDMC has closed over 14,000 lenders into syndicate mortgages in 80 projects across Canada. The projects range from high-rise residential to condo commercial projects offering a variety of tenures and built forms for them to choose from. Through BDMC, over $920 million has been funded into development projects to date with the projects having a built out value of $6 billion.
About the Companies
Building & Development Mortgages Canada Inc. - established in 2007, is a premier mortgage brokerage licensed in Ontario, Nova Scotia, Alberta, Manitoba, British Columbia and Saskatchewan. BDMC closes all of the syndicate mortgage transactions that fund Fortress projects. For more information visit: https://bdmc.ca
Fortress Real Developments Inc. is a Canadian real estate development company that seeks out and analyzes 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. https://fortressrealdevelopments.com
*SOURCE Building & Development Mortgages Canada Inc.
**non weighted project average
SOURCE Building and Development Mortgages Canada Inc. (BDMC)
Media Contact: Jenni Byrne, Bayfield Strategy Inc., [email protected], (647) 477-3576
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