What is the REALnorth Opportunities Fund?

REALnorth Opportunities Fund ("REALnorth") focuses exclusively on Western Canada’s North, a region bolstered by rich resources and large projects, to invest on an opportunistic basis in revenue producing real estate assets and development properties which management believes will provide attractive return potential. These properties may include industrial and commercial as well as multi-family and other residential real estate opportunities.

Why focus on Western Canada’s North?

REALnorth believes that Western Canada’s North provides favourable circumstances to invest on an opportunistic basis in revenue producing real estate assets and development properties which management believes will provide attractive return potential.  This view is based on a number of factors including the following:

  • Western Canada, and the Northern region in particular, is expected to be a key driver of national GDP growth due to the vast number of demand generators connected in part to large reserves of natural gas and oil, resources including timber and base metals, major infrastructure projects, positive migration trends along with a growing tourism industry.

  • The natural resource sector is a major part of the Canadian economy and contributed 20% to the Nominal GDP in 2014 (National Resources Canada).  

  • Many cities in Western Canada’s North have favourable demographics and are expected to continue to experience strong population growth in the future which management believes will support rising real estate values. For example, according to Urban Systems, Fort St. John’s population under a low population growth scenario should be 46,000 by 2065. The medium growth scenario would bring the population to 62,000, while the accelerated scenario calls for a population of 85,000 in the same year.  The City of Fort St. John estimates its current population at approximately 22,000.

  • Management believes a younger population base is important as it leads to a more robust economy, including a more active housing market and a stronger tax base through higher employment and consumer spending.  The median age is approximately 32.0 years in Fort St. John and 39.0 years in Prince George.

Does REALnorth own a portfolio of properties?

Yes, REALnorth has acquired four properties for its portfolio.
The Carter Industrial Property was acquired in September 2014. It is approximately 10.1 acres, zoned industrial and located in central Prince George, BC. This property has been leased to Transforce Inc., the largest trucking company in Canada.  The property was sold in August 2018.
The Garrison Landing Residential Property was acquired in May 2015. It is approximately 29 acres, zoned residential and located in northwest Fort St. John, BC. This property was acquired with an intention to subdivide and develop into approximately 153 building lots.
The FSJ Industrial Property was acquired in September 2015. It is approximately 17 acres, zoned industrial and is located in northeast Fort St. John, BC, near the regional airport. This property was acquired on a joint venture basis with an intention to sell to end users or build to suit. It is comprised of four separate lots, with each lot accessible by rail and City servicing readily available.
The Aurora Acreage Property was acquired in October 2015. It is approximately 144 acres of vacant land in the City of Fort St. John.  This property was acquired on a joint venture basis with the intention to develop over time. 

When are unitholders entitled to distributions?

REALnorth intends to declare distributions on a periodic basis once the net proceeds from its private and public offerings are allocated to the purchase of real properties. Unitholders of REALnorth are entitled to a minimum non-compounded annual return of 7% on the net equity then outstanding and a return of capital before any amount is paid to the master general partner, REALnorth Opportunities Inc.

What is the time frame of the investment in REALnorth?

There is no maximum time period for the REALnorth investment.  Timing of the investment will depend upon management’s identification of real properties meeting their criteria for acquisition. However, management expects that the term of investment in respect of REALnorth's investment properties and development properties will be approximately five to seven years.

What is the target return on the REALnorth investment?

Target returns on invested capital per annum:

  • Investment properties: upon purchase, in excess of 15%, but not less than 10%
  • Development properties: upon completion of its development, in excess of 18%, but not less than 14%

How do investors find out more about REALnorth?

Please contact your financial advisor for information about REALnorth and visit www.sedar.com for a list of all of our public filings.