Engagement type: Advisory
Location: Okanagan, BC
Total loan size: $40,035,000
CMHC program: Standard Rental
Amortization: 40 years
Rate: 5yr CMBs + 0.41%
Term: Five years
Recourse: Corporate guarantee only (no personal guarantees)
Lender: Chartered bank
Lakepoint Capital was engaged to help secure multiple CMHC Certificates of Insurance ("COIs") covering 400+ units of purpose-built rental in Kelowna, BC.
Typically, we are arranging debt capital for clients, but this scenario was a little different: the client already had an outstanding financing offer on the table, but the lender's internal policies prohibited them from assisting with the COI. Lacking the in-house experience to do so themselves, the client approached Lakepoint to underwrite the application to CMHC.
The first COI was successfully delivered, and by engaging Lakepoint Capital, the client was able to save several hundred thousand dollars in interest costs compared to the next best offer they had in front of them. And, if you consider our success fee as the initial investment in this scenario, that is how this client generated a 426.9% IRR over a five year period.
Stay tuned for Part II!
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