David N.H. Bell and Jonah Brown closed more than $1.5 billion in commercial mortgage transactions for a major Canadian firm last year. After hearing suggestions from several clients to start their own business, they’ll launch Oakbank Capital Group on Feb. 1.
“We loved working at Canada ICI,” Bell told RENX of their previous employer. “It’s an absolutely great company. We just wanted to go in a little bit different direction.”
Bell focused on industrial and apartment financing while Brown specialized in construction and land financing. They worked closely with Lindy Masson and Aaron Sun in Canada ICI’s Toronto office. It made sense, then, to bring them along to Oakbank as partners.
The four partners collectively have more than 25 years of experience in the commercial mortgage industry and have executed more than $6 billion worth of transactions. This has enabled them to build solid relationships with lending institutions across Canada.
Bell and Brown are both managing partners of Oakbank, while Masson will lead much of the operational side of things and Sun will oversee underwriting. The plan is to build a team of close to 10 people over the coming months.
Bell and Brown are both originally from Winnipeg and named Oakbank after a small municipality just east of the Manitoba capital. The firm has its office at the corner of Yonge Street and St. Clair Avenue in Toronto.
Oakbank Capital’s plans and strategies
Oakbank’s goal is to have a debt advisory company providing custom financing solutions for developers and real estate investors in the form of construction, bridge, mezzanine and term loans for all asset classes across Canada. It will also offer underwriting and research functions.
Oakbank will also have a direct equity investment platform which can do joint ventures with clients and partners.
“We can be a one-stop shop for our clients,” Brown told RENX, “where we’re the ones providing equity for their deals and also maintaining oversight on a project for our equity investors by doing the debt advisory for the client and arranging the full gamut of the capital stack.”
For the debt part of the business, Oakbank’s lenders will include foreign and domestic banks, life insurance companies, pension funds, credit unions, private equity firms and private mortgage investment corporations.
“On the debt side, although we haven’t launched, we’re currently working on over 75 transactions for clients across the country,” said Bell. “We’re mandated on over $1 billion of financing so far in 2022, which is pretty exciting considering that we haven’t launched our company yet.
“We obviously have a strong following from our previous lives, so we think that this year doing over $2 billion in mortgage financing is totally obtainable.”
“We’re asset class and market-agnostic but, that said, what we’re seeing the most of right now would be land and construction financing for condos and industrial projects,” said Brown. “We’re also seeing a lot of term financing for multifamily residential, either on the conventional financing side or with CMHC, and also a lot of term financing for industrial.”
Oakbank represents approximately 100 developers, family offices, building owners, pension funds and others. Among its clients are ELAD Canada, Rosefellow, MOD Developments and Constantine Enterprises.
Direct equity investment platform will grow
“On the equity side, the capital as of now comes from ourselves and high-net-worth families that we bring opportunities to,” said Bell. “In the next 24 months, we plan on raising a vehicle at scale where we can deploy larger amounts of capital into clients’ projects.”
Oakbank made one small equity investment late last year that the co-founders won’t speak about yet. They plan to announce two more equity investments this summer.
“We’re incredibly great debt advisors and we always want to maintain that practice to support our clients, but I think the evolution of Oakbank over a five- to 10-year period would be involved on the equity side doing joint ventures with clients, institutions and our own capital,” said Bell.
“We’re advisors to clients. We’re not looking to create products or buy apartment buildings or industrial buildings on our own. What we want to do is go out to the financial markets and create solutions that further our clients’ interests.
“Jonah and I have always wanted to develop long-term relationships with clients. Although this is a transactional business, we have really strong relationships with clients.
“We want to help them. If we can help them and help us at the same time to grow our businesses, everyone’s happy and everyone wins.”