Investment Update.

C reating an investment opportunity, that not only sells during pre-construction, but also makes a phenomenal return for our investor purchasers doesn’t generally come about by luck. It comes down to meticulous planning from our in-house team members, as well as a number of outside consulting firms, that work on the high-level market feasibility reports that filter 100+ project launches to just a handful for us to actively participate and invest in as partners. It’s a meticulous, 7-day a week schedule, with uphill negotiating strategies with Canada’s largest and most successful real estate development families and private equity funds, so that we can find the hidden gems that we bring forward to our clients. The end result of these efforts brings us very impressive double digit annual returns, based on leveraged down payment structures that continue to outperform the industry.

For example, the five projects illustrated below, all completed in 2019/2020, exemplify why we are the recognized leader and acknowledged industry pioneers. These ROIs are in-line with many of our past project exits and are part of our internal mindset to continue generating exceptional returns for our boutique, yet growing, investor client base.

There is no question that 2020 was a year like no other, but history has proven that the market will surge once again, and that uncertain economic times leads to greater investment opportunities. As long as investors are able and willing to block out the noise and rely on fundamentals and longer-term trends. The current fad with day-trading type expectations will most likely be unsuccessful for inexperienced investors who are looking for daily or weekly 40% returns.

As we look forward, into 2021 and beyond, our long-term goals remain the same. As interest rates continue to drop and other key factors allow for rapid growth opportunities, such as increased immigration programs that continue to create the need for even more housing supply, it results in each of our clients benefitting from even more favourable terms and higher yielding opportunities that are not available on the open market through the typical real estate channels.

Location, location, location is the real estate investors mantra, but even the most sought-after address will not guarantee a rush of sales if the product is wrong. TCS’s integrated approach helps investors to purchase the most desirable units, while maximizing returns.

Given the broad demographic of Toronto’s condo buyers, we understand that today’s high-net-worth individuals and families are more discerning than ever and tend to see weekly, if not daily, emails and outreach campaigns from real estate brokers who are looking to sell them investments in every single project that hits the open market. This is the exact opposite approach that we take, and this is one of the reasons that our ROIs surpass other firms that claim to be doing what we do.

For example, when evaluating the value proposition, so far, from our sold-out and under construction Waterside Villas project in south Whitby (pictured), we noticed several similar new developments launching across Durham region, including Pickering, Ajax and North Oshawa. These competing developments, all in less desirable locations, with higher pricing per sq. ft., deposits structures that are up to double what we negotiated and last but not least – a lower level of fixtures and finishes. These developments are all selling at profusely fast rates even during the current pandemic. We are extremely pleased to announce that the current pricing model for this project, if launched today, would be approximately $150,000 to $200,000 higher and as such, we are anticipating an even more aggressive ROI than we had originally mapped out less than one year ago when we presented the project to our clients.

Again, generating wealth for our clients remains paramount, and we are happy that this project is well on its way to providing further validation to our core strength of creating real estate millionaires, one client at a time.

Another impressive project that we would like to update you on is Stockyards District Residences that is now almost two years from date of offering. For our clients that participated, you may recall that we had the pleasure of Canadian entrepreneur and TV personality, Bruce Croxon from the hit CBC series, Dragons Den, appear and discuss the merits of real estate investing and the value that TCS was bringing to retail investors who sought leveraged real estate opportunities in up-and-coming neighbourhoods.

Our forte, for clients who have been investing with us for the past two decades, has always relied on finding niche neighbourhoods that have the potential to explode into blossoming communities. Needless to say, we were first in line at Concord CityPlace that still retains the title of largest master planned community in North America with over 25 towers spanning the downtown core in the Spadina and Lakeshore area. We followed that up with over-subscribed projects in Liberty Village which now, like CityPlace, is a city amongst a city with over 20 towers and burgeoning retail and commercial sector that is still under construction and growing annually at levels that are truly incredible. The story continues with our dominance in making investment forays into the Distillery District, Junction and Stockyards where development growth is still ongoing and will be for a decade or so still.

TCS prides itself on talking about the facts, with the appropriate level of context, all with honest sensibility to the question at hand as it relates to buying pre-construction real estate in today’s marketplace. Our belief and ecosystem driven focus is that we have not had such an incredible time to invest in pre-construction as we have today. The last time we had such an opportunity was during the global recession of 2008. All the media reports at that time, about the housing market’s outlook were negative and caused the majority of Canadians to take those negative snippets and headlines to heart, burying their heads in the sand and adopting the negativity that the reporting created.

It was a difficult time to try to inform and educate investor confidence as the headlines were daily and well-orchestrated to crash the market. Luckily for our entire country and economy, the real estate market continued to be strong as the demand was real and warranted. For the large number of Canadians that dropped out of the real estate market during the 2008 recession, they most likely walked away from their most profitable investment opportunity from that point to now.

The incredible rental occupancy rate of 99.2% pre-covid and the current 98% rate has been a focus of concern in the press, much more than it has for qualified investors. With our strong conviction to social awareness and justice, and fair and equal opportunities for our countrymen and women, it’s fair to state the majority of our investors, who are front line medical professionals, providing a small discount on rents, and being socially aware, was not a heavy burden for them to bear but rather a uniformed mindset to help their tenants cope and to pay it forward.

At TCS, we encouraged this approach and adhered to it for our own tenants and continue to do so as we know how blessed we all are with our lifestyle and investments to date; leaving a few hundred dollars a month on the table to help our tenants is truly not even a rounding error when the capital appreciation on these investments ranges in the hundreds of thousands of dollars per unit.

It was an interesting, roller-coaster of a year, and we are whole-heartedly looking forward to 2021 where we will continue seeking out the best opportunities for our clients.

Investment Update.

STOCKYARD RESIDENCES

WATERSIDE VILLAS

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