Member Profile | Fortress Real Capital
Recent turbulence in the capital markets have investors seeking new opportunities that rely less on public equities and have different diversification strategies. Alternative investments are not tied to the equity marketplace; instead they are used as an investment tool to reduce an investor's overall portfolio risk through exposure to multiple asset classes. The Fortress Real Capital product enters the market to do just that – provide an alternative investment option for those looking to diversify into the proven market of Canadian real estate
Fortress Real Capital* is an RSP eligible syndicate mortgage product that allows a consumer to invest directly into established sectors such as development and construction, land servicing and income producing properties. With your principal investment fully secured against the subject property, syndicate mortgages offer steady interest on your funds and at the end of your term, a share in profits via a deferred lender fee of the project.
“The value comes from who you’re actually investing with,” says Jawad Rathore, President and CEO of Fortress. “All of the developers and builders in the Fortress client family are well established and bring decades of experience to the table.”
Each project is carefully scrutinized and evaluated to make sure it meets with Fortress' requirements. Investors are not buying through a blind pool or a fund; instead they can review and select which projects make sense for them and their investment objectives. Fortress projects also have defined terms so investors know exactly when they will receive interest payments. That's the benefit of investing via a syndicate mortgage; you have the benefits and rights of being a lender to protect your position.
In BC, Alberta, Saskatchewan, and Manitoba, certain Fortress projects are available through offering memorandums with approved registrants and dealers. The syndicate mortgage structure offers unique security and direct collateral benefits to Western investors not available to them through traditional offerings such as MICs, REITs and LPs.
Of particular interest will be the new Income Production Series that presents a new way of investing in cash flowing real estate. While invested, investors will receive steady and consistent cash flow from their syndicate mortgage right from day one; a feature not available in some MICs and LPs. Upon stabilization (increase in property value, higher tenancy, etc.), the property can be refinanced and the syndicate mortgage is paid off which returns principal to investors. For most products, that’s the end of the road. With Fortress IPS, investors continue to receive income even after their principal has been returned; they receive a fixed share of net income from the property as long as Fortress continues to hold a stake in the site. If the project gets sold, investors receive a final distribution that is a share of the profit. A product that provides fixed cash flow from day one and allows you to continue to earn even after your principal is paid back to you? Now that’s innovation!