The myriad of logistics that are part of developing real estate can seem endless. Difficult decisions must be made and challenges can arise almost anywhere. Securing financing shouldn’t be one of those challenges. While the allure of securing financing by giving up a bit of equity might seem attractive, project developers need to look at the long-term cost of that dilution when determining what is going to be more profitable. And debt financing most often offers the better results.
Trez Capital is the funding partner of choice for leading commercial real estate developers and owners in Canada and the United States who are seeking short to mid-term financing on a diverse range of development projects. The firm separates itself from other lenders with a client-first mentality in structuring flexible financing, including first and second mortgages. Its loans range from $5-100 million for terms ranging from six to 36 months.
“No developer should be looking at diluting their equity at the front-end of a project,” said Greg Vorwaller, President, Trez Capital. “In fact, bridge financing is the first step to get things moving quickly and terms can be tailored to align with the planned milestones of the project.”
Private debt financing gives developers more flexibility and access to funds at a quicker rate, without having to give up equity in their projects. If an issue arises early in a project, equity financing could put the whole project at risk if the lender backs out. Debt financing addresses that issue head on because at no point is the final project at risk.
“We see it a lot – in the early stages of any project, so many potential issues can come up that require putting substantial equity at risk,” Vorwaller said. “This is where companies like Trez can make all the difference. And in fact, in the U.S. the interest on the debt can be tax-deductible, so there are truly countless benefits.”
Trez Capital has been financing developers and builders in Canada and the U.S. since 1997. Over the years, the firm has become preeminent for several reasons.
Firstly, Trez Capital sees itself as a partner, not just a lender. With a goal that each borrower should succeed, Trez tailors each loan agreement to the unique nature of each project. A provider of bridge financing, Trez works with clients to get their projects up and running quickly.
Secondly, the organization’s boots-on-the-ground experience in the market and rigorous due diligence process to determine partners – is a big plus for borrowers.
“We do not and will not cut corners to secure a deal,” said Vorwaller. “In fact, we filter through thousands of opportunities to result in the 120+ financings we close each year. Our consistent strategy and on-the-ground presence in high-growth markets in Canada and the United States ensures that our in-house team can leverage local networks and engineer deal structures that are highly competitive in the market. We pride ourselves on delivering to the terms outlined in each letter of intent rather than changing our risk appetite based on market whims. Moreover, rigorous risk management gives our borrowers safety, consistency and peace of mind.”
Due diligence is a major priority and clients see the benefit. The Trez Capital approach involves ensuring borrowers have strong character and the experience to be successful. This is followed by a careful evaluation of each project to measure the demand for the finished product. With residential, Trez looks for great locations, affordable price points and quality planning, as well as market fundamentals. These include markets with above average GDP growth, rapidly growing populations and rising employment levels. All of these things give Trez’ borrowers more confidence in their projects.
“We also believe that a strong lender brings more to the table than just capital. At Trez, we have enjoyed repeat business with many borrowers for decades. We believe in investing in local market knowledge and in using our experience from past relationships to the benefit of future projects,” said Vorwaller.
Over the years, Trez has been the bridge finance partner for a range of projects including multi-residential condominium and purpose-built rental, commercial and industrial real estate, commercial to residential conversions and in the U.S., lot development projects. With over $3.5 billion in assets under management, Trez Capital has funded more than 1,400 transactions totaling in excess of $9.4 billion since the firm’s inception in 1997.
“With our deep domain expertise in real estate, we know that capital velocity matters, projects move quickly, and each project’s financing needs are unique. With over 20 years of success behind us, we have the capital and liquidity to help you bring your project to life,” said Vorwaller.