We are pleased to provide you with the official completion report for development portion of our West Side Living project in Edmonton! Our endeavor together has achieved a major milestone and we want to take this time to provide you with the details of the significant pieces of the project that has come together. Your trust and patience was appreciated as you allowed us to focus on the operations to ensure its success.
Project Overview
From the outset, our goal was to create an investment opportunity that is not only profitable for our investors through the uplift in value that was created but also secure in its strategy as a purpose built rental asset in a growing market. We have also been able to provide homes to address the need for housing as well as enhancing the local landscape with our development.
With that vision, we planned and executed each phase of the project from site selection to regulatory approvals, financing, construction, leasing and finally asset management. We completed it on budget and only 1 month after the initial projected completion date.
Through equity ownership, our investors have shared the potential risks inherent in a development project but also on the upside we’ve been able to achieve, albeit on paper at the moment. We received a third party independent appraisal that supports a valuation of over $2.4M but even the more conservative property assessment value provided by the City of Edmonton of $2.265M, it is well above our project cost of under $1.8M. Although that difference can’t be realized without a refinance or a sale, it’s safe to say that our investors can feel secure in the value of their investment.
Construction Milestones
We initiated the process by applying for the parallel land rezoning and development permit in September 2022. Subsequently, we obtained approval from the city in December of the same year and moved ahead with the site preparation. We first had the existing property remediated for asbestos and awaited favorable weather conditions before proceeding with the demolition of the existing property and excavation of the lot. Once the groundwork was laid, we poured the footings and foundation, marking the commencement of the construction phase.
In February 2023, our dedicated building team began the framing stage of the house, always a remarkable sight even for us, as it is the structural skeleton that lays the foundation for our building’s support. It was swiftly followed by the installation of plumbing and electrical groundwork.
By April, significant progress was made as we reached the lock-up stage. With the installation of shingles, windows, and doors, the exterior of the structure is secure and effectively sealed off from the elements. This stage signifies a milestone in the construction timeline and also enables subsequent work on the interior to proceed efficiently and effectively such as the HVAC, electrical, and plumbing rough-ins which were then approved by the city in May.
This allowed us to move forward with the insulation and drywall stage. In July, once the team was finished with the mudding and taping of the drywall, texturizing the ceilings, they were able to diligently move onto the interior trims and doors.
It was during the finishing phase that followed where the project underwent a significant transformation. Every detail received meticulous attention, starting with the precise painting of walls and trims, followed by the installation of luxurious vinyl plank flooring. Next came the fitting of cabinets, seamlessly followed by the addition of quartz countertops, tiles, and hardware, each element carefully selected to ensure a modern, clean aesthetic that resonates with our target demographic, without compromising on durability or cost-effectiveness.
From inception to the final touches, every milestone was achieved through careful project management and close collaboration with our dedicated building team.
In summary, the regulatory approval process spanned 5 months, followed by an 11-month construction period, resulting in a total timeline of 16 months. This timeframe, notably concise for a development project, stands as a testament to our efficiency and effectiveness, particularly when compared with similar endeavors in other provinces. Shortening the timeline not only accelerates the project’s realization but also mitigates the risk of deviation from current projections, underscoring yet another advantage Alberta advantage.
Rental Success
Following completion, our focus shifted to the rental aspect of the property. Through targeted marketing efforts and leasing activities, we were successful in attracting tenants and filling all 8 of the units within two months. A lot of effort and time from the team was required to do so. Edmonton is a more balanced market as compared to Calgary so those renting in Edmonton have more options to choose from. We found that although we received a good amount of interest, we had to reject a number of applicants to ensure the successful applicants pass each of our requirements from verified income, percentage of rent to income, verified employment and previous landlord references, social media check and our internal team gut check before we were comfortable approving them to live and care for their new home. With that, we are pleased to say it is now operating as fully occupied rental property.
Photos of the Development
Enclosed below with this report, you will find photographs showcasing the completed West Side Living project as well as those during construction. These images offer a glimpse of the stages of the development that the project progressed through. It also offers a factual representation of the craftsmanship and attention to detail invested in the project.
Financing
The financing of a project like this involves a number of steps throughout the stages of the project and each step had to be carefully timed such that any subsequent stage of the project would not be hindered or delayed due to funds. This took a significant amount of time to manage but ultimately, we realized the financing strategy to acquire CMHC approval for our project. Despite the extended wait, we were able to achieve beneficial terms for the project, securing a rate that was 200 points less than what would be available on a single family home and a much longer amortization period which is another reason why this investment strategy makes a lot of sense.
Return of Capital
We are proud to report that we are in a position to provide a partial return of capital to you, as had initially communicated. You will be receiving 35% of your initial investment back in the form of an automatic deposit. This return is net of the acquisition costs and reserve for the operations of the property which is prudent in operating a rental property. Please provide a void cheque or PAD form to finance@trucapitalrealestate.com of the account you’d like it to go to in the coming week.
As with any project that is future based, there are a number of factors and unknowns, however experience and an expert team that was carefully curated has allowed us to meet our goals for the project and for our investors. This milestone underscores our commitment to delivering tangible results and value to you. Your trust and support have been instrumental in achieving this outcome, and we are grateful for your continued partnership.
Future Opportunities
Looking forward, TruCapital will be concluding our other development projects in Edmonton this year. We are also moving forward with two Calgary projects, one of which was temporarily halted during the pandemic until the economics made sense again, and with the other waiting for regulatory approval.
Throughout this period, we continued to maintain a vigilant watch over the market, staying abreast of all regulatory adjustments, including forthcoming by-law modifications for Edmonton, Calgary as well as Canmore.
Our strategy is to diversify and capitalize on the market opportunities in Calgary and Canmore in the coming year and we are actively identifying potential land acquisitions for our next venture. We will continue in our niche of purpose-built rental infill developments as well as expanding our short term rental in Canmore. These opportunities offer equity ownership, secured by the asset with a short to medium investment horizon.
With our established experience and track record, we are poised to capitalize on promising opportunities within this dynamic market and we can’t be more excited about what the future holds.
Join us in the Next Project
We invite you to join us on another collaboration and continue to grow with us. Our success is your success. Nothing makes us more proud than for you to continue to put your trust in us to help you reach not only your financial goals but in turn, your life goals.
If you are interested in any of these opportunities or wish to extend them to your family and friends, please let us know so we can ensure we reserve a place for our returning investors and your referrals, further solidifying our partnership.
In Summary
In conclusion, I want to again extend my sincere appreciation to you for your confidence and support throughout this project. Together, we have achieved a significant milestone, and I am excited about the prospect of future collaborations. Should you have any questions or require further information, please do not hesitate to contact us. Thank you for your continued trust and partnership!
Warm regards,
