Friday, 15 November 2013

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Fortress Real Capital Investors Exit Markham | Fortress Real Developments CEO Jawad Rathore and Flato Developments President Shakir Rehmatullah

Two years ago, Fortress Real Developments CEO Jawad Rathore and Flato Developments President Shakir Rehmatullah struck a deal to complete the servicing of residential lots in a prestigious South Unionville neighbourhood. Today, investors in that deal, through the Fortress Real Capital syndicate mortgage product, were rewarded with a complete exit and an additional deferred lender fee that boosted annualized returns to over 11% for many.

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The funding provided by the investors catalysed over 1000 front feet on a scenic cul-de-sac, creating 48 new townhouses and single family residences. This $12 million prime in-fill project expects to see occupancies later this year. Investors in the syndicate mortgage exited from the sale of the serviced lots to builders.

Flato Developments has performed exceptionally in Markham for years and has now branched out across the 905 area into several new deals. Their track record of success is what precipitated the initial partnership and their consistent performance has Fortress now involved in four more Flato sites in Brampton (Countryside Crossing and three Mayfield phases).

"What we saw in Flato two years ago was a savvy developer with a very strong planning background. When my team and I signed off on the Helen Avenue deal, we knew it was a very desirable parcel and we really focused on timely and efficient execution during the servicing phase", said Vince Petrozza, COO of Fortress Real Developments and a mortgage broker with Centro Mortgage, the brokerage responsible for closing investor monies.

 "We look to reduce and mitigate risk wherever we can. A significant factor for our underwriting team was that all the lots were already pre-sold to builders before investors put in a dollar. That's the type of value we look for and seek out."
The intelligent design of the capital stack used by Fortress has helped fill an important need in the construction banking sector when equity requirements changed in the wake of the 2008 global financial crisis. Banks now require that developers diversify and bolster their equity funding into deals and Fortress has now become a national leader in this space.

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