affordable rental homes

Investors exit syndicate mortgage for SoBa condo

Tuesday, August 11, 2015

Centro Mortgage Inc., a leader in syndicate mortgage offerings, recently announced the exit of investors in a syndicate mortgage for a Fortress Real Developments Inc. project in Ottawa called SoBa Condominium.

Fortress and Lamb Development Corporation (LDC) partnered on a 23-storey, 240-suite condo project in downtown Ottawa set to enter construction this year. The project was designed by Core Architects, with interiors by II BY IV Design and unit sales by Brad J Lamb Realty. Its seven-storey podium will feature about 7,500 square feet of retail space.

“We love the location, the numbers look great and the design is top notch. Even with changes in the market, investors in the syndicate mortgage that funded SoBa exited prior to completion and still were rewarded with an eight-per-cent annualized return and a full repayment of principal,” said Vince Petrozza, a mortgage broker with Centro Mortgage, in a press release.

“Real estate offers tremendous flexibility, with opportunities to exit a development at several stages. We could sell the land, refinance the project at any phase of development like we have with SoBa, or remain in until the development is built and sold,” said Frank Margani, executive vice president at Fortress, in a press release. “Fortress and our partners are continuously creating value in our projects by achieving appropriate approvals, selling or leasing space and building desirable real estate.”

SoBa is currently more than 70-per-cent sold, with occupancy slated to begin in 2017. Purchasers have recently begun to occupy Gotham condominium, another joint effort between Fortress and LDC in Ottawa.

“The massive boom in Ottawa’s new condo market several years ago enticed several new high-rise builders to launch projects, which flooded the market. Unlike Toronto where the increase in high-rise activity was offset by a decline in low-rise activity, there were too many projects chasing too few buyers,” said Ben Myers, senior vice president of market research and analytics at Fortress, in a press release. “In 2014, new condominium apartment completions set a new record high, 65 per cent greater than the previous peak. Private landlords have held off buying additional units as supply and demand rebalance, which it will, as just three new condominium apartment sites launched in 2014 in the Ottawa area.”

“We think Brad’s high-style Lamb Standard will also attract renters. The third Fortress and LDC partnership in Ottawa, a project called Bronson, was originally envisioned as a condo,” said Jawad Rathore, CEO of Fortress, in a press release. “We have now sold our interest in that building off to Lamb, who is proceeding with it as a potential rental site. Vacancy rates are low in Ottawa, so we believe the project will lease up quickly.”

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