Cranson Capital Real Estate Development Fund Invests $7.5M in Plazacorp Low-rise Project in Markham

TORONTO, November 29th, 2022 – The Cranson Capital Real Estate Development Fund (“The Fund”), which was created for the purpose of investing in a diversified pool of residential real estate developments in the Greater Toronto Area has completed its first investment. The Fund has invested $7.5M into a joint venture project where Plazacorp is the developer of a low-rise project in Markham, Ontario.

The development is located in the Upper Markham Village, with close proximity to two Go Train stations and lots of shopping amenities nearby. The development received zoning approval in March 2022 for 218 units comprised of 113 detached homes and 105 townhomes. As of September 2022, the project has received draft plan approval from the Town of Markham. The timeline involves launching sales in or around summer 2023 with the intention of beginning construction in spring of 2024. It is anticipated that the project would be complete by June 2025.

The investment is structured to mitigate risks for the Fund with a waterfall that entitles the Fund to a higher percentage of the initial profit. The target return for the Fund is 107%, with a projected IRR of 19.9%.

Since the launch of the Fund in Q2 2022, the real estate development market has changed, mainly due to the rise in interest rates. Many developers have been putting pre-construction projects on hold, which will reduce future supply. The few projects that are going to launch now are performing well. While increasing interest rates does have a direct impact on house prices, it doesn’t do anything to alleviate the current supply and demand imbalance. With the lack of new project launches in the second half of 2022, the supply side of the equation is only going to get tighter.

Meanwhile the Federal government, recognizing that we have a labour shortage, has increased the immigration targets going forward. With more people immigrating to Canada, and less homes being built, housing supply will continue to be a challenge. While affordability is a challenge, people will continue to require housing– whether that’s to rent or buy. In the long term, continued increases in demand for housing will become such that prices should be greater than the cost of supplying that housing.

“Demand for housing in Ontario, driven by population growth, will continue, while supply of new housing continues to be challenged.” Devon Cranson, President of Cranson Capital, explains. “Adding all types of new housing units, including low-rise which are well suited for families, is imperative to addressing the need for additional housing.”

Anthony Heller, President & CEO of Plazacorp, added that “This joint venture will allow us to provide additional housing options to an underserved market, while simultaneously allowing the Fund to experience a strong return on its investment.”

The Cranson Capital Real Estate Development Fund continues to raise capital with its next closing in mid-December 2022. The Fund anticipates making additional investments in a diversified pool of projects in 2023.

Investors interested in learning more about the Cranson Capital Real Estate Development Fund are invited to join us for a Webinar on Tuesday December 13th at 2pm – please click here to register for the webinar

About Cranson Capital

Cranson Capital is a boutique investment banking firm which focuses on providing financial and advisory services to small to medium sized growth businesses. The business consists of two divisions; Cranson Capital Securities and Cranson Capital Solutions, both of which offer unique services to support investors and entrepreneurs. Cranson Capital Securities is an Exempt Market Dealer that specializes in raising capital through private placements in real estate, growth companies and financial services. Cranson Capital Solutions is a corporate finance advisory firm which focuses on finding the right financing solutions for entrepreneurs. For more information visit: www.cransoncapital.com.

Disclaimers

This press release contains "forward-looking statements" including statements with respect to the Cranson Capital Real Estate Development Fund, potential returns and appreciation of land values. All forward-looking statements are based on current beliefs as well as various assumptions. By their very nature, forward-looking statements involve inherent risks and uncertainties. Readers should not rely on these forward-looking statements, as a number of important factors could cause the actual outcomes to differ materially. Neither The Real Estate Opportunities Fund nor Cranson Capital undertakes to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf The Real Estate Development Fund except as may be required by law. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of The Cranson Capital Real Estate Development Fund.