(Image via Yorkton Equity Group.)
Could the COVID-19 pandemic provide tremendous real estate investment opportunities?
Yorkton Equity Group (TSX-V: YEG, Forum)’s leadership team believes so, and the real estate investment company has a fresh offering on the Stockhouse Deal Room.
- Low interest rate environment (Currently 1.5% vs. +3.0% prior to Covid-19)
- Increased supply of multifamily residential rental properties for sale
- Expected mass immigration into Canada post COVID-19 lockdowns
- Favorable Bank of Canada monetary policy may further amplify real estate asset valuations
The Opportunity:
YEG is focused on the accretive acquisition of multifamily rental properties in growing markets across Canada, under a risk averse business model, with an initial focus in primary and secondary markets in BC.
Many regions around the country can expect significant growth, especially as surging real estate prices in high growth cities continue to drive our diverse population into the residential rental market.
The Deal:
To advance its real estate acquisitions, YEG launched a new non-brokered private placement, seeking up to $2 million (CDN) with an offering Price at $0.30 per share. Each unit contains a full warrant exercisable at $0.45 for 24 months, subject to an acceleration clause.
Yorkton Equity Group intends to use the proceeds from this Private Placement towards the purchase of the Langford, Victoria 16-unit apartment building, upgrades to the 62-unit Riviera Gardens in Edmonton, general working capital, and for future multifamily rental acquisitions.
Private Placement Background
This is YEG’s third private placement, the first was over-subscribed by 300%, the second was oversubscribed by over 40%, and closed at the end of May 2021.
YEG Stock Price
Based on the current stock price, clients who subscribed to our first private placement would realize over 70% ROI upon disposition. And the stock price growth is just starting, as the Net Asset Value (NAV) of YEG continues to increase with each new acquisition.
The Portfolio:
In the past 7 months, since its inception in November 2020, the company’s net asset value has grown to reach $24 million, and the appraised value at $58 million. And the portfolio continues to expand. Currently, the YEG portfolio includes:
- The Pacific Mall covered two storied shopping mall in Edmonton, AB. City Centre area.
- The 16-unit Langford, Victoria acquisition, BC
- The 19-unit Larson Place Luxury Town House Complex in Kelowna, BC.
- 25% interest in the Yorkton 108 Project: Purpose-Built Rental Project, Surrey, City Centre, BC.
- The 62 Riviera Gardens strata titled residential condominium complex, in Edmonton, AB.
(Yorkton Equity Group stock chart – March 2021 to June 2021. Click to enlarge.)
Why invest with the Yorkton Equity Group?
- Exponential increase in property values as mortgages are paid down by tenants resulting in growing Net Asset Values (NAV)
- Leveraging in real estate – with a 25% down payment, a mere 25% increase in property value results in a 100% ROI
- Efficient business growth model: over time, take-out equity TAX FREE and re-invest to buy additional rental properties
- Hassle-free investment, experienced management team with over 30 years of experience in real estate (Yorkton Group purchased its first apartment building in the mid 1980’s)
- Solid business model: accommodation is a basic life necessity; also, a hedge against Inflation as currencies devaluate
- Diversified portfolio both geographically and by product mix (townhouses, apartment with various suite mix)
- Invest in cities with diversified economies and strong population in-migration, and job market growth
- YEG is operationally as well as financially backed by the Yorkton Group of companies to fuel its growth
- Transparency: audited financial statements, and quarterly reporting as required by securities regulations
- We are not a REIT, so we have the full flexibility to reinvest profits to grow the portfolio
- Rezone to higher densities on select properties to generate additional revenue upon disposition to grow the multifamily portfolio
- We have only just begun to “scratch the surface” of the opportunities that await us in the multifamily rental space, especially in secondary markets across Canada, and in smaller complexes which are typically ignored by the larger players in the marketplace; and we achieve operational efficiencies by purchasing “clusters” of buildings in each respective city and centralizing the property management function.
FULL DISCLOSURE: Yorkton Equity Groupis a paid client of Stockhouse Publishing. Stockhouse Publishing Ltd. (Stockhouse) is not registered as a broker, dealer, exempt market dealer, or any other registrant in any securities regulatory jurisdiction and will not be performing any registerable activity as defined by the applicable regulatory bodies. This deal room is for informational purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees, and expenses. The information contained in this deal room is selective and does not purport to contain all the information relating to Yorkton Equity Group.
In all cases, parties should conduct their own investigation and due diligence, not rely solely on the data provided herein and are encouraged to consult with a financial adviser, lawyer, accountant, and any other professional that can help to understand and assess the risks associated with any investment opportunity.