Trez Capital continues to see demand for both debt and equity investment products
Q1 2023 Highlights
- $5.4 CAD billion assets under management (AUM).
- Distribution increase for all debt funds, effective January 2023.
- A dual equity project sale to a single purchaser exceeds investor return expectations.
VANCOUVER, BC, May 18, 2023 /CNW/ - Trez Capital, one of North America's leading non-bank commercial real estate lenders and asset managers, is proud to announce a successful first quarter of 2023. Trez Capital continues to expand its business and has reached over $5.4 billion CAD in assets under management (AUM).
"We expect the demand for housing in North America to continue to rise, which will continue to open opportunities for Trez Capital to provide financing to experienced developers. Trez Capital is well positioned to increase lending volume and to provide our investors with consistent and reliable returns," said Dean Kirkham, Co-Chief Executive Officer & President, Trez Capital.
Trez Capital's Debt Funds Update
Trez Capital's floating-rate mortgage portfolio returns have benefited from interest rate increases in Canada and the United States to date. As a result, the open-ended debt funds had an additional increase announced in December. Effective January 31, 2023, the annual distribution yield for each fund is as follows: Trez Capital Prime Trust at 6.12%, Trez Capital Yield Trust at 7.20%, Trez Capital Yield Trust U.S. (CAD) at 7.80%, and Trez Capital Yield Trust U.S. (USD) at 7.80%.
Trez Capital remains committed to providing investors with strong, reliable, and uncorrelated returns while exercising cautious lending parameters to mitigate risk.
"In 2022, we paid out over $165 million in distributions to our 32,000 investors around the world and we have already seen a distribution increase for our investors in 2023," said John Maragliano, Chief Financial Officer & Chief Operating Officer, Trez Capital. "With largely variable rate mortgage exposure, our debt funds are well positioned to benefit from further interest rate increases in the U.S. and in Canada."
Trez Capital's Equity Program Update
Trez Capital's Equity Investment Program partners with experienced developers in markets with strong population, employment and gross domestic product (GDP) growth to benefit investors. Thus far in 2023, the program has exceeded expectations for investor returns with a dual project sale to a single purchaser. Also, during the first quarter of 2023, Trez Capital offered two new Trez Opportunity Funds (TOFs), the sixth and seventh in the series since 2015.
Portfolio sale of two major projects in Texas
Two major equity projects sold in January 2023: The Dalton and The Beacon in the Austin region of Texas. This dual sale is one of the largest in Trez Capital's history, with the two exited projects selling for just over $170 million USD to a single purchaser. Both projects are in Trez Opportunity Funds (TOFs), TOF#4 and TOF#5. After the sale of the remaining investments held by each TOF#4 and TOF#5, the internal rate of return (IRR) on these funds are projected between 30 per cent and 40 per cent, which is well in excess of the projected IRRs of approximately 15 per cent at the time of underwriting. There are several remaining projects still performing in these TOFs, which will provide additional income to investors upon sale.
Trez Capital offered their sixth and seventh Opportunity Funds in the last quarter of 2022 and the first quarter of 2023.
The Trez US Opportunity Fund #6 Limited Partnership (TOF#6) has a focused strategy with a successful joint-venture partnership in Texas. The other fund, Trez US Opportunity Fund #7 Limited Partnership (TOF#7), is a diversified residential strategy that invests in quality development opportunities in regions with long-term undersupply fundamentals.
About Trez Capital
Founded in 1997, Trez Capital is a diversified real estate investment firm and preeminent provider of commercial real estate debt and equity financing solutions in Canada and the United States. Trez Capital offers private and institutional investors strategies to invest in a variety of opportunistic, fully secured mortgage investment funds, syndication offerings and real estate joint-venture investments; and provides property developers with quick approvals on flexible short- to mid-term financing.
With offices across North America, Trez Corporate Group has over $5.4* billion CAD in assets under management and has funded over 1,700 transactions totalling more than $17 billion CAD since inception. For more information, visit www.trezcapital.com. (*Trez Corporate Group AUM includes assets held by all Trez-related entities as well as $3.0 billion Manager AUM (Trez Capital Fund Management Limited Partnership)).
These materials are for informational purposes only and do not constitute an offer to sell or a solicitation to buy securities. Past results are not indicative of future performance. Forward-looking statements are included. Actual results, performance and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained above. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect including, but not limited to: the ability of the Funds to acquire and maintain a portfolio of mortgages capable of generating the necessary annual yield or returns to enable the Funds to achieve their investment objectives, the ability of the Funds to establish and maintain relationships and agreements with key financial partners, the maintenance of prevailing interest rates at favorable levels, the ability of borrowers to service their obligations under the mortgages, the ability of the Manager to effectively perform its obligations to the Funds, anticipated costs and expenses, competition, and changes in general economic conditions. While the Funds anticipate that subsequent events and developments may cause its views to change, the Manager specifically disclaims any obligation to update these forward-looking statements, except as required by applicable law.
SOURCE Trez Capital
Trez Capital Media Contact, Sarah Haney, 647.460.2029, [email protected]
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