Everybody knows that commercial real estate represents an outstanding investment opportunity. But until now, it's been primarily reserved for big-ticket investors.
That's all changed, thanks to the savvy professionals heading up the Canvest Capital II Limited Partnership, a trouble-free way for just-plain-folks AND bigger players to realize superior rates of return on commercial investments by means of distributions, capital appreciation and RRSP tax benefits.
This is a proven business model, based on the purchase of high quality commercial and industrial real estate in stable Canadian markets.
The management team, led by president Arthur M. Szabo, Q.C., and Don Rumpel, VP of Business Development, boasts an enviable track record.
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| Reap the rewards of commercial real estate with Canvest Capital |
And this proposition is affordable, appealing to eligible Albertans with as little as $5,000 to invest.
"The person who's investing $10,000 wants the same safety net, the same security and the same kind of returns as the person with $100,000," says Szabo.
"We cover the gamut in terms of investors, from fairly small to quite large. By creating this particular limited partnership, we're simply making this excellent product available to a wider range of people."
The idea is to pool investors' funds and allow them to participate in the acquisition, management and ownership of office buildings, strip mall shopping centres and industrial properties.
And it has never made more sense to invest in commercial real estate, particularly in one of Canada's hottest markets.
As Szabo points out, it's still cheaper to buy, manage and operate a building in such established Calgary neighbourhoods as the Beltline than it is to build new ones.
"What it boils down to is this: There's no new commercial product coming on market in the Beltline," he explains. "And yet there is a shortage of supply. There are businesses moving into the Beltline so, inevitably, lease rates are going up."
Canvest Management Corp., the general partner that evaluates and chooses properties for purchase on behalf of the limited partnership, typically targets investments in the $2-million to $10-million range. And there are a number of sound reasons why it makes sense to get involved.
Right off the top, the limited partnership is interested only in hard assets, not "paper" purchases. As Business Development VP Don Rumpel puts it, it's a terrific opportunity to preserve your capital.
Meantime, your shared commercial property is doing business on a daily basis, collecting lease payments and earning revenue for you and the partnership pool.
"It's like this. We want an opportunity to deliver capital gains to our investors because of the positive way capital gains are treated from a tax perspective, while at the same time enjoying an income stream," Rumpel adds.
"But while we're waiting for that capital gain, we are simultaneously collecting income, and making a 10% preferred annual distribution, paid quarterly. These buildings offer immediate cash flow from their current operations."
After buying target properties (always purchased by means of an extremely conservative financing structure), the management group is ready to consider strategies to increase revenue. Perhaps renovations are in order to make the building more attractive to prospective tenants. Or perhaps existing leases need to be renegotiated, to more accurately reflect current market trends.
In any case, members of the limited partnership reap the rewards of ownership without fretting over day-to-day operations. The general partner is responsible for all the hands-on chores, such as collecting rent, painting offices and general maintenance.
"There's no question, from our members' point of view, this is a trouble-free and worry-free investment. And the only way they can achieve it is to join with other investors and pool their resources," says Szabo.
A Calgary lawyer with 20 years experience in corporate finance, tax planning and commercial real estate, Szabo assures investors that potential properties are carefully evaluated before the general partner moves to purchase.
"Once we've decided that a property is properly priced, we'll undertake an exhaustive financial review, including an analysis of leases, to ensure the revenue stream is precisely what we understand it to be, says Szabo.
"Our experts then examine the physical structure up close, from the roof to the boilers. We look at heating, ventilation, air conditioning to make sure it's right up to standard."
Preferred properties share several important characteristics, including outstanding location and the ability to maintain and attract a strong tenant base.
One last reminder: This investment is RRSP eligible, allowing investors to source funds from their plan in order to participate as well as being able to flow income from their investment right back into their RRSP. So why waste time?
For information, contact the Canvest Management Corp. by phone (403.245.2355) or e-mail: investor@canvestcapital.com.
