WAIS Canada 2019

Tuesday, October 29th

Fund Manager Showcase

INVESTING IN REAL ESTATE DEVELOPMENT IN ONTARIO

CRANSON CAPITAL

Exempt Market Dealer specializing in Canadian private market

real estate investment opportunities.

Income producing real estate assets (MICs, rental, etc.)

Land for future development

Real estate development

Niche real estate assets (seniors housing, student housing, etc.)

2019

CRANSON CAPITAL EXPERIENCE

Strong underwriting , capital raising and investing track record

Over $230M in 20 projects across Canada

Residential Real Estate Developments, Land Acquisitions, Income-producing, Seniors, Student

Target: 15-20% IRR’s for equity investment, and 8-12% yields for real estate secured debt

Strong investment opportunities across a variety of asset classes and geographies in Canada

➢ $50M Fund

➢ 6-10 investments

➢ Minimum of $4M for any single

transaction, Maximum of $12M

➢ Prioritize investments in residential

development

➢ Diversify by investing in senior’s,

commercial, industrial, and special

situations (<40%)

➢ Ontario focus

➢ Target Fund IRR of 16.6% net of fees

REAL ESTATE OPPORTUNITIES FUND

INVESTMENT STRATEGY

OBJECTIVE: Capitalize on opportunistic real estate development opportunities

Investment Time Horizon of 5-7 years

Focused on Development Opportunities

Diversity of Asset Classes and Regions

Thorough Due Diligence Process

Generate Above Average Returns

Strong Corporate Governance and Monitoring

Source: Toronto Real Estate Board

Supply Issues

- Land Scarcity

- Low Housing

Availability

- No Vacancy

Housing

Values

Demand Factors

- Population Growth

- Economic

Conditions

- Market Trends

TORONTO HOUSING MARKET

2019 $913,096

2004 $408,441

124% over 15 years

SUPPLY ISSUES

Scarcity of Land

Low Housing

Availability

No Vacancy

• Greenbelt

• Provincial mandate for density

• Cost of land has increased

• Servicing

• Time to get zoning and site plan

• Increase build times for tight sights

• Hard costs rising faster that rate of inflation

• Vacancy at 0.8% in the GTA

• 3150 purpose-built rental units added

• Starts of purpose built rental dropped 47% in

2019

STRONG DEMAND

Population

Growth

Economic

Conditions

Market Trends▪ Increased immigration▪ Migration▪ Housing formation

▪ Strong economy▪ Low unemployment, tech jobs ▪ Low interest rates

▪ Growth in urban areas▪ Condos used for rental

INVESTMENT CRITERIA

Desirable Locations transit oriented and

high demand areas

Market Need demand not met by

current supply

Management Experience

developers with a track

record of execution

Oversight corporate governance

in place to protect

investment

Risk/Return Profile

invest where returns

are commensurate

with risk

• Founded Cranson Capital in 2006, boutique

investment bank

• Founder /Trustee of Central Condominium

REIT

• Board of Directors - Alberta based Senior’s

Housing business

• General Partner/Trustee for 6 developments

across the GTA

• General Partner/Trustee for 4 Real Estate

Funds

• Director of Findev Inc. (TSX.V: FDI)

DEVON CRANSON, CMA, CPA ANTHONY HELLER

• Founder and President of Plazacorp, one of

Toronto’s top developers

• Has over 40 years of experience in real estate

development

• Over $7 billion of developments and 10,000

units completed or under construction

• Trustee of Firm Capital Mortgage

Investment Corporation (TSX: FC)

• Director of Findev Inc. (TSX.V: FDI)

EXPERIENCED MANAGEMENT TEAM

FUND DETAILS

Expected Returns~90.9% Total Return

~16.6% IRR

Investor Priority Hurdle 8%

Investor Profit Split 85%

Carried Interest to GP 15%

Drawdown Period 2 years

Investment Period 5 years

Extensions2 1-year extension

options

Asset Management Fee2% of contributed

capital paid annually

APPENDIX

PAST PROJECTS: PLAZACORP - ONE YORKVILLE

Plaza is one of Toronto’s most experienced residential condominium

construction and development organizations generating strong returns for

investors since 1982.

One Yorkville

- Invested $28 million in equity

- Partnership between Bazis and Plaza to

develop a 58 storey condominium tower

- Projected return of 156% for investors, with

additional upside potential

- Desirable, high-end area close to exclusive

shops, restaurants and transit

PAST PROJECTS: PLAZA-WIDMER LP

Plaza is one of Toronto’s most experienced residential condominium

construction and development organizations generating strong returns

for investors since 1982.

Theatre District Condos

- Invested $14.5 million in equity

- 2-tower project with hotel in Entertainment

District of Toronto

- Agreement with Riu Hotels to build 28-storey

hotel with 20 floors of condo above

- Projected return of 300% for investors

(original projections were 120%)

PAST PROJECTS: PODIUM DEVELOPMENTS

Podium Developments is a Toronto based developer founded in 2004. Podium

Developments specializes in low-rise and mid-rise developments in the Golden Horseshoe

region. Podium Development’s latest project, Ironwood In North Oshawa, is a 125 unit

townhome development located near Ontario Tech University in North Oshawa.

Ironwood in North Oshawa

- Invested $5.2 million in equity

- Development of 125 freehold townhouses

- Expected profit of $9+ million

- Target 75% return for investors, 19.1% IRR

PAST PROJECTS: V!VA RETIREMENT COMMUNITIES

V!VA owns and manages retirement homes in Mississauga, Ottawa, Aurora, Pickering

and Thornhill, with current developments in Oakville and Whitby.

Viva West Rouge (South Scarborough)

- $10M invested for 30% stake in project

- Intend to build 270-suite retirement living

community including both independent and

assisted living suites

- Expecting 8% annual cash on cash return

after 5 years

- 10 year investment horizon with a target

14.5% IRR