Deal of the Week #24 – $31.18M Conversion Construction Loan – Guelph, ON
In July 2024, Cameron Stephens Mortgage Capital (CSMC) successfully concluded its 1st mortgage construction loan for the Alice Block project, with the loan being fully repaid. This marks a significant milestone for this historic residential loft conversion. Located just minutes from Downtown Guelph, the Alice Block project involved transforming a 4-storey industrial building into a 5-storey residential condominium, showcasing the grit and determination of our borrowers, Kelly Postma and Marc Koenig.
The project achieved an impressive performance with less than 1% default rate from purchasers at closing, reflecting strong demand and confidence in the property. The units were sold at attractive price points, making them appealing investments for both investors and end-users, while delivering excellent returns.
In June 2021, CSMC committed a $31,180,000 loan facility for the construction of this conversion project, which funded in March 2022. Despite challenging post-COVID circumstances, the project adhered to its timeline, demonstrating CSMC’s effective project management and adaptability.
CSMC’s expertise in loan structuring enabled the borrower to secure 74% loan-to-cost financing with a low cash equity requirement, allowing the project to move forward efficiently and successfully.
WHY THIS DEAL MATTERS:
✅ Pioneering Industrial-to-Residential Conversion:
This project marks the first industrial-to-residential conversion financed by CSMC, setting a precedent for future redevelopment opportunities in urban centers. It demonstrates CSMC’s capability to support innovative projects that add value to communities and adapt to evolving market demands.
✅ Low Borrower Equity Requirement (<10%):
The loan structure, requiring less than 10% borrower equity, exemplifies CSMC’s commitment to supporting entrepreneurial developers with creative financing solutions. This approach enables developers to preserve cash while delivering high-quality projects.
✅ Successful Execution in Challenging Market Conditions:
The project’s adherence to timeline and budget, despite the complexities of the post-COVID environment, highlights CSMC’s robust risk management and support for borrowers. It underscores the firm’s ability to navigate and overcome market challenges to deliver successful outcomes.
✅ Demonstrating Commitment to Community Growth:
By facilitating the transformation of underutilized industrial spaces into vibrant residential communities, Cameron Stephens contributes to the revitalization of urban areas, supporting sustainable development and economic growth.
This structure and additional content strengthen the business case by emphasizing the strategic importance of the project to Cameron Stephens, highlighting its innovative financing approach and impact on community development.
Ontario Brokerage License # 10769
- Kevin Marthinsen, Senior Director, Mortgage Origination, Agent Level 2
