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Lending insights from an uncertain era: rigor, adaptability and speed | RENX


Mixed-use suburban office building, Richmond, British Columbia

The global pandemic has tested the real estate market in ways never before imagined. While conditions in North America’s residential and commercial real estate markets varied widely from the effects of the pandemic, one thing remained common: change at an unprecedented rate.

As the short-term challenges of restrictions and bottlenecks materialized, companies had to react and adapt quickly to be successful – a model that Trez Capital relies on. Trez Capital specializes in providing debt and equity financing solutions for unique real estate projects in Canada and the United States. The organization is dedicated to understanding the details of each real estate project in which it invests or lends. capital for the right project is important.

“When I look back on this unprecedented year, one thing is for sure: what it took to get a deal in the third quarter of 2020 is totally different from what it takes today,” said Eric Horie, vice -President, responsible for origination, Canada at Trez Capitale. “Our business model at Trez Capital was already poised for success, and we were ready to adapt as quickly as the market changed. We are known for our rigorous due diligence process and with our in-depth knowledge of the local market, we have been able to continue to move our business forward in these times of change.

At the heart of the criteria for selecting a loan or investment opportunity, the company focuses on markets with a growing population, above-average GDP and job growth. The pandemic has caused turmoil in those areas, but Trez Capital has not wavered. The pandemic has renewed the organization’s confidence in the markets in which it operates, while opening the door to new areas of opportunity.

“In our 23 year history, we have funded more than 1,500 transactions for more than $ 12 billion. In 2020, we made new loan commitments of approximately $ 1.3 billion and received new requests daily, which allows us to keep our portfolio of opportunities full, ”said Horie. “As we look to the future and assess future development projects, we will continue to approach each of them as a true partnership with our borrowers. We will continue to tailor loan agreements to the unique characteristics of the project and to launch our clients’ projects quickly.

In the United States, Trez Capital has traditionally focused on fast-growing markets like Texas, Florida and the Pacific Northwest where GDP growth is above average, wages continue to rise and Demand for single and multi-family homes remains strong, in part due to population growth.

In Canada, Horie sees similar growth patterns in certain markets and a shift towards certain asset classes that are attractive to a lender, such as:

Growing demand for mixed-use industries. With work-from-home assignments and many Canadian companies assessing space requirements and postponing new rental plans, the demand for office space has declined in 2020. However, the continued demand for industrial space is very mixed, in part. due to the growth in online sales over the past year. In Surrey, British Columbia, Trez Capital recently funded a 16-unit multi-tenant project with a unique mix of industrial and office space, meeting the needs of growing businesses during and after the pandemic. Another recent project reveals a similar trend: A suburban office building project in Richmond, B.C. will see its excess parking lot transformed into industrial infill space, giving tenants the flexibility to tailor their space based on preferences. changes in employees and customers. The proximity of the two projects to Vancouver is ideal for businesses that need to expand.

Growing demand for single family homes in key markets. The United States is seeing a rapid migration to warmer climates, not only because of the pandemic, but because many of these southern locations offer a lower state income tax for large businesses and for the details. While this trend is not as prevalent in the Canadian market, a soon-to-be-funded single-family home development by Trez Capital in Langford, British Columbia, a suburban Vancouver Island community, suggests Canadian workers are also looking for alternatives to large cities. living and relocating to communities for lifestyle and lower cost of living considerations as working from home has presented attractive new options.

Development of condos in secondary markets. The residential condominium market may have cooled off at the start of the pandemic, but it is heating up again, especially in markets outside of city centers. Before the pandemic, a commute of almost two hours didn’t make sense for most, but with more flexibility for working from home, there is an appetite for multi-family residences in markets previously considered to be communities of bedrooms to large urban centers which are now theirs. For example, Trez Capital is looking for multi-family construction loan opportunities in cities further north and west of Toronto, Ontario than it previously would have considered.

“There is no one-size-fits-all approach to our business and the opportunities are different in each geographic location where we operate,” Horie said. “The pandemic has changed the dynamics of the market, but the one thing that has remained constant is how we apply our rigorous risk management approach to provide our clients with a safe and consistent borrowing experience, while providing peace of mind. of mind during this uncertain time. Building trust is at the center of everything we do at Trez Capital, and we look forward to continuing to build that trust with current and future investors. “