Construction is Moving Quickly at Five Bridges/Five Crossings
In just 2 months since our last update, excellent progress has been made at the site of Five Crossings. This extremely successful residential project was funded by our Five Bridges Development Project investment and sold out during its launch weekend in May 2023. Follow the progress on the work site with the Construction Tracker.
Revo Kelowna, the latest Millennial Developments Smart Community™ funded by NAHF’s Collinson Rise Development Project opened sales this fall to become the fastest selling new development in Kelowna for 2023. Congratulations to all the LP investors that took advantage of their priority purchase opportunity to select a home in this high demand project, prior to sales opening to the public.
As we move into the festive season, the team at North America Home Finance would like to wish the best of the season to you, your family and loved ones. 2023 has been an incredible year of growth and success and we look forward to sharing exciting new investment offerings with you in January 2024.
Sincerely,
The North America Home Finance Team
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Five Bridges January 2022 Investor Progress Update
Momentum is building for the Five Bridges Development Project, as demand continues to remain strong, and comparable prices for similar-sized existing suites continue to appreciate. The appraiser that completed the report, being used for construction financing, placed the land value allocation at $8 million upon final development approval. For context – that is over $2 million more than the combined purchase prices for the six individual properties assembled for the project. In addition to the increase in value for the land, the total projected revenue valued by the appraiser for the project also increased above that of our proforma.
As previously announced, the window of opportunity to participate at the 9.6% preferred return rate is soon closing. This rate will no longer be available to new investors once the 4th and final reading has been approved by the City of Kelowna (the preferred rate after that will be offered at 8.4%). This works well for anyone looking to take advantage of the RRSP eligibility for the project as the contribution deadline for the 2021 tax year is March 1st, which still provides time to invest with RRSPs prior to the council meeting in March.
The Presentation Centre and demonstration smart suite are scheduled to open for in-person and virtual tours following our final Meet the CEO Zoom event. We’ll be offering a sneak preview during our Meet the CEO webinar on February 24th at 5pm and 6:30pm PST. At that time one of our panel will be broadcasting live from the show suite and we look forward to highlighting the incredible features, lifestyle, and value that this development will provide its residents.
The team at ACE Project Marketing is gearing up to launch sales in Spring 2022 and are preparing to contact all investors who have reserved under the investor purchase program as well as those who’ve expressed an interest in preferred access for purchasing a unit.
We have updated the construction budget and have finalized the project forecast along with completing the construction loan package, which is now going out to lenders. We are looking forward to sharing the updated budget following the 4th reading and are looking forward to a good news update in March.
Lastly, as those investors and potential new homeowners in Kelowna have noticed, real work is happening now on site as the demolition of the existing houses has started. The goal is for demolition to complete in March on all the houses after the last of the tenants have vacated. Then, with the pre-sales launch underway at the nearby Presentation Centre, the site excavation will begin. Once the big machines get moving on site, our quarterly updates will then include site construction progress photos and video clips, which we know everyone enjoys seeing.
We look forward to working with everyone who are looking to get their subscriptions in prior to the close out of the 9.6% preferred return offering. Please let us know if you are interested or still have questions, so that we’re able to respond promptly to ensure you don’t miss the last of the available equity for investment.
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Millennial Developments is Bringing Budget-Friendly Condos to Kelowna
Housing costs are a common and sometimes controversial topic of conversation in Kelowna these days, as the real estate market that continues to boom. According to the Okanagan Real Estate Board, the benchmark price for single-family homes in October was $961,600, representing an almost 30% increase over October 2020, and condominiums reached an average sales price of $477,700, up 22.5% over the previous year.
However, Kelowna wages aren’t on track with sky-high housing prices, even with the city’s active economy and low unemployment rates. Statistics Canada reports that the median income in Kelowna is just over $45,000 per year, so real estate costs in Kelowna have effectively placed many buyers out of the market, particularly young and first-time homeowners. Renters face an equally difficult challenge, with Zumper.com reporting the average rent for a one-bedroom apartment at $1644 per month in October, a 7% year over year increase, making it one of the most expensive rental markets in Canada.
With the common financial recommendation that no more than 30% of one’s gross monthly income should be spent on housing, many young Kelowna residents struggle to manage monthly rental payments and have limited opportunity to purchase a property of their own. But Millennial Developments is changing the outlook on real estate for many Kelowna residents with the Five Crossings project.
Centrally located in the Capri-Landmark district, this studio, one and two-bedroom condo development will offer prices starting in the mid-$200,000s, a price tag that is generating a lot of interest from first time homeowners looking for an opportunity to get a foothold into the booming local real estate market.
Five Crossings, which focuses on smaller space living with a wide variety of communal spaces that encourage living beyond one’s four walls, including a recreational space with a pool table, golf simulator, a stage for karaoke nights, a projection television for screening movies or sports events, and a communal kitchen and bar, as well as a large co-workspace and tech-friendly features, a cutting-edge gym with Peloton equipment, community garden and park space, and a rooftop lounge with covered atrium, outdoor barbeque center, and yoga platform.
The project is slated for sales launch in Spring 2022 and open for investment through the Five Bridges Development Project with North America Home Finance.
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Five Bridges Development Project Investor Update November 23rd, 2021
We are very excited to provide this major update to all our investment partners in the Five Bridges Development Project.
We have achieved three significant milestones over the last two weeks and congratulate the development team on the excellent progress to date.
Milestone #1: Completion of the property assembly acquisitions
On Monday, November 22, 2021, the final two properties which make up the six-lot land assembly, were acquired into the development limited partnership. This marked the final step in gaining control over the land to be developed, after successfully organizing the equity capital raise and financing requirements needed to fund the purchase.
As background, the properties were negotiated for purchase in January of 2021 with conditions and closing dates scheduled throughout the year. The properties were acquired at a total purchase price of $5,916,000 exclusive of closing costs, and all six lots were appraised mid-year at a combined value of $7,000,000 prior to receiving zoning approvals.
Milestone #2: First reading for rezoning and development permit successfully passed
On Monday November 15, 2021, the mayor and councilors in the City of Kelowna council chambers reviewed and passed the first step of the application for rezoning and development permit for the Five Bridges project. The previous week, a neighborhood consultation meeting that was hosted by the development team, and the mayor, council, and city staff were very decisive in their unanimous vote of approval for first reading on the project which can now proceed to second and third readings.
Based on the timeline that was scheduled for the city approval process, and having received the first reading on the 15th, the next hearing for the Five Bridges Development Project has been set for the end of November. We look forward to providing another update following the next council meeting when the project will be put up for both the second and third reading approvals.
Milestone #3: 50 confirmed condo reservations and 10 back up list reservations
As many of you know, an option was offered for investors to reserve a spot on the condo pre-sale list to lock in their position to choose a unit before public sales launch. This was an opportunity for people who wanted to not only invest in the development of the building but also purchase a condo unit for resale or rental purposes.
We opened 50 spots and are pleased to announce all 50 reservations have now been confirmed with investors who have invested at least $30,000 in the project, and that interest levels were so high that we have also created a waiting list, in the case of any reservation becoming free.
This is significant for two reasons. The first is it demonstrates the value of the real estate that we are offering, as people understand the appeal of the price point in the market and the advantage of the site’s location. The second reason is that once those 50 reservations turn into sales, we will have pre-sold one-fourth of the building without any advertising and prior to the public launch. Both statements are strong arguments for the strength and attractiveness of this project in the Kelowna market.
Going Forward and the New Year
We are looking forward to our next progress update early next month and we have our next Meet the CEO webinar scheduled for December 9th before the holiday season begins. At that Zoom event we will be introducing a new alliance with Stact Financial that will contribute to investor’s ability to finance their real estate investments. It’s an exciting new relationship and you’ll want to stay tuned for more information.
We are now into the final offering of 9.6% preferred return units. Upon either the final forth reading approval for development permit or the completion of $5.5 million of investment received, we will change the preferred return from 9.6% to 8.4% for the last round of investment before construction commences. We are happy to speak with you and provide more details or answer any questions that you may have if you have been considering an investment but haven’t decided yet, as now is the most advantageous time prior to preferred return rates decreasing.
Thank you to everyone who has participated thus far in the Five Bridges Development Project. We are very pleased to be able to say that everything is on track and on time.
The summer market in Kelowna continued to sizzle in Kelowna this July, with average housing prices continuing to show double digit increases over July 2020. While we did see a decrease in total sales from last summer, that number is more reflective of the lack of available inventory rather than lack of buyer interest, which is highlighted by how quickly homes are selling.
Here is a quick breakdown of the numbers for real estate sales in July 2021 in Kelowna, British Columbia.
SINGLE-FAMILY HOMES
Sales: 236 ( -28.9%)
Average Price: $933,600 (+31.5%)
Days on Market: 30 (-53.3%)
Inventory: 485 ( -54.0%)
TOWNHOMES
Sales: 100 ( -18.75)
Average Price: $642,600 (+27.6)
Days on Market: 41 ( -69.5%)
Inventory: 137 ( -64.2%)
CONDOS
Sales: 177 (+18.0%)
Average Price: $552,900 (+21.2%)
Days on Market: 36 ( -56.1%)
Inventory: 274 ( -61.2%)
As seen, the condo and townhome categories are currently underserved in on the Kelowna real estate market, showing the largest percentage decreases in selling time and in inventory levels when comparing July 2021 to July 2021.
Source: Association of Interior Realtors, www.interiorrealtors.ca.
