1st Quarter Newsletter * April 2017
We are excited to share the first quarter edition of The Centurion for 2017. In this issue, Mr. Greg Romundt talks about rent controls, including housing policy changes recently announced by Ontario Premier Kathleen Wynne. We are also delighted to share the premiere episode of Perpetual Media Group's #reflections featuring our very own President and CEO.

We also share information about our latest acquisition in Saskatchewan, quarterly fund updates, senior appointments, as well as Mr. Romundt's participation in a panel discussion during the Canada East Institutional Real Estate Investor Forum held last April 5th in Toronto. Like previous issues, we've included quick links to our portfolio and contact information of our investment sales team for your convenience.
 
We hope you'll enjoy this issue of our newsletter and we look forward to sharing more exciting news in upcoming issues.
Apartment Market Update
By: Mr. Greg Romundt
On April 20th, the government announced 16 measures designed to cool the market as part of their " Fair Housing Plan ".  Among them, the most significant, are rent controls on post-1991 constructed apartment buildings, a 15% tax on foreign investors, and a $25 million per year over five years to fund new apartment construction through development charge rebates.

In line with the foregoing changes, Centurion President and CEO Greg Romundt provides updates on the apartment market including potential unintended consequences if the legislation is passed. He also shares other related problems that give rise to the housing availability and affordability crisis in the GTA and proposes possible solutions to these problems.  View Mr. Romundt's article here.
IN THE NEWS
Centurion President and CEO Greg Romundt on the Premiere Episode of #reflections
We are excited to share the premiere episode of Perpetual Media Group's (PMG) new production - #reflections - featuring our very own President and CEO Greg Romundt.  This new mini-series provides an inside look into the lives and professional milestones of Canada's leading real estate executives.

In the series, Mr. Romundt shares his inspiring journey to becoming one of Canada's trusted asset manager ─ from being an interest rate derivatives trader for Citibank in Singapore, to moving back to Toronto to setup his own real estate investment company, Centurion Asset Management, in 2003.

We invite you to watch PMG's two-minute video here.
PROPERTY NEWS
Centurion Acquires 60% Stake in an Apartment Complex in Regina, Saskatchewan
5501 Prefontaine Ave
Regina, Saskatchewan

We are pleased to announce the purchase of a 60% interest in 5501 Prefontaine Avenue in Regina, Saskatchewan. Known as Harbour View Estates, the complex is currently being managed by a third party property manager.

This newly built apartment complex comprises four 4 - storey buildings, with a total of 208 units combined. It features a mix of 1 and 2 bedroom suites with open concept kitchens, spacious living and dining areas, and exterior patios/balconies. All suites are equipped with in-suite central heat and air conditioning, as well as a stacked washer/dryer closet.
 
Harbour View Estates is located within the developing residential neighborhood of Harbour Landing in southwest Regina, about 5 km south of downtown. It is close to the Regina International Airport and the University of Regina, with quick access to TransCanada Highway. The complex is close to Tutor Park and is a few minutes away from commercial amenities and schools. Click here for more information about the property.
FUND UPDATES
REIT
  • The REIT is enjoying robust deal flow; but in most cases, at very stretched valuations, which precluded the fund from taking an equity position in all but one property in the first quarter of 2017.
  • Vacancy rates in several rental markets remain at historic lows, with the GTA at around 1%. Coincidentally, Centurion receives greater than 100 inquiries on some properties for every vacant unit for rent.
  • The fund currently sees the greatest opportunity for growth in commercial real estate lending through its holdings in the REOT.
  REOT
  • REOT has approximately $300-million in its loan book at an average weighted interest rate of 10.4%. It issued commitments of $90 million in Q1.
  • The REOT is a leading financier of student housing projects in Canada as well as being very active with multi-family rental and condo projects.
CFiT
  • The fund closed its first commercial financing in January 2017.
  • This financing was as $5-million tranche of an overall $70-million 3-year demand loan at 12.2% plus a $1 million investment in warrants of a fast growing U.S. healthcare organization involved in acquiring medical practices and clinics in the southern U.S.
  • The fund is currently approved at 12 IIROC, MFDA, and EMD dealerships.
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Click below for full size
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CORPORATE NEWS
Centurion President and CEO Greg Romundt at the Canada East Institutional Real Estate Investor Forum
On April 5th, 2017, Centurion President and CEO Greg Romundt participated in a panel discussion entitled "Institutional Overview: Examining the Role of Real Estate in a Diversified Portfolio" at the Canada East Institutional Real Estate Investor Forum. 

Held at the St. Andrew's Club and Conference Centre in downtown Toronto, the event was well attended by over 100 attendees including institutional investors such as Canada Pension Plan, Ontario Teachers' Pension Plan, and University of Toronto Asset Management.
 
The topics discussed during the conference ranged from grocery-anchored real estate opportunities in Germany and the growth of creative office development in Brooklyn N.Y., to the disruptive effects of demographics in the real estate sector in general. One predominant  theme that emerged was the growth opportunities in rental properties both in Canada and in the United States.
 
Most participants agreed that while the real estate sector was fully valued in general, there still remained opportunities in selective markets and sectors.
SENIOR APPOINTMENTS
David MacKinnon
Director, Mortgage Investments and Joint Ventures

Mr. MacKinnon has nearly 12 years of experience in real estate lending with a national focus on all asset classes. He was a key contributor to Equitable Bank's Commercial Finance Group, where he managed broker and partner relationships across Canada, originating nearly $450 million in new loans in 2016 that consists primarily of construction and short-term bridge opportunities. Before joining Centurion, Mr. MacKinnon worked in the Canadian CMBS market with Merrill Lynch Canada and Institutional Mortgage Capital as a Senior Underwriter, responsible for analyzing, structuring, and completing due diligence on new loan opportunities through loan origination and closing. Mr. MacKinnon had a short stint at RioCan REIT as a member of the company's Investment Team.
OUR PORTFOLIO
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