Overview

Why Findev?

Findev is a real estate financing company that lends money to real estate projects that are identified as uniquely positioned to generate above average returns in a two to three-year timeframe.Findev focuses on lending to residential and retail development projects within the Greater Toronto Area. Findev provides public market participants an opportunity to invest in an asset class that is typically available only to institutional and high net worth investors who qualify as accredited investors.

The Corporation is focused on creating long-term capital appreciation for its shareholders in conjunction with providing an attractive yield, paid out quarterly. This provides shareholders with immediate cash flow while management works to create long-term capital appreciation. The Corporation has paid consecutive quarterly dividends since it changed the nature of its business in September 2016.

The Corporation targets real estate projects that include condominiums, purpose-built rentals, townhouses, low-rise/subdivisions, and retail developments. It makes debt-investments which provide attractive returns while mitigating down-side risk via maintaining a conservative loan-to-asset ratios.

The Corporation’s loans are generally for a period of one to three years, bridging projects through their development cycle. In some cases, as projects progress, land loans will be subordinated to construction financing. The mortgage and loan investments are secured by mortgages registered on title and/or other forms of security, including, but not limited to, floating charge debentures, general security agreements, postponement of specific claims and joint and several guarantees.

 

Market Advantage

The Corporation leverages the collective experience of its directors and management team to access a variety of financing opportunities within the real estate market including land development, joint ventures, takeovers of at-risk and distressed developments, and construction projects. This provides the Corporation with preferential and unique opportunities to build value for shareholders while establishing stronger mutually beneficial relationships with other lenders, equity sources, and real estate developers.

Findev’s unique market advantages include its expertise in real estate development and access to its development partners. This provides Findev with a strategic advantage in lending to developers engaged in higher risk projects. Many existing real estate financiers lack the development expertise to take over an incomplete project from a borrower in default. With access to development partners, Findev can assume greater execution risk when lending to developers, resulting in higher “developer-like” returns should a lender default. In addition, Findev’s subordinated participation in the capital structure enables senior lenders to provide the appropriate amount of senior financing to the developer at cost efficient rates and with preferential terms given the added level of security which Findev brings.

 

Landscape Forecast

  • Management believes that the housing market in the GTA has insufficient supply (new starts combined with resale) to meet demand from purchasers. The following factors support this thesis:
  • Population in the GTA continues to grow as immigration levels from other countries and net positive migration levels from Canada’s weaker economic areas remain steady
  • The GTA continues to have a strong labour market with low unemployment levels
  • Interest rates remain low making home-buying accessible
  • A weak Canadian dollar drives demand for real estate from both domestic and foreign investors

While prices have risen dramatically in recent years, management believes that there will be continued upward pressure despite the recent legislative measures that the Ontario provincial government has taken. The increase on housing prices is due to a decrease in the supply of housing for the following reasons:

  • Scarcity of land resulting from Ontario green belt legislation as well as development over the past 20 years has led to significant reductions in low-rise development across the GTA
  • Despite the large number of new condos completed over the past several years, vacancy rental rates have remained under 2%.

 

Plaza

In addition to being a non-bank lender and an alternative source of capital, Findev is strongly aligned with Plazacorp Investments Limited (“Plazacorp”), one of Toronto’s most prominent real estate developers. Plazacorp is a significant shareholder in Findev. Plazacorp has completed 34 condominium projects throughout the City of Toronto, representing total revenues in excess of $2 billion. In addition, it has 12 projects under development, representing approximately 4,400 units, expected to generate additional revenue in excess of $1.4 billion.

Findev’s relationship with Plazacorp provides it with access to a pool of real estate and investment talent. This strategic relationship brings invaluable connections and deep industry experience to all of Findev’s projects, enabling a more successful and profitable outcome for all project stakeholders.