Trez Capital, a leading commercial real estate financier in Canada, is expanding its U.S. footprint.iStockPhoto / Getty Images
It can take years to create an overnight success. That old adage is certainly true of Trez Capital.
In 1997, Trez Capital founder and chief executive officer Morley Greene recognized that large financial institutions weren’t meeting the needs of commercial property owners and developers for access to shorter-term financing.
“The key to our success has always been the way we look after our investors’ money,” said Mr. Greene. “Over the years we have earned the trust of our partners with our demonstrated experience and track record.” And, as Mr. Greene will point out, his first borrower is still a borrower and his first investor is still an investor today.
The Vancouver-based company has emerged as a powerhouse commercial real estate financier. In fact, it’s one of the largest non-bank commercial mortgage lenders in Canada and has become a trusted source of financing for U.S. developers and owners.
For 22 years, Trez has been providing debt and equity financing solutions that benefit property owners and investors alike. Today, the firm is fast approaching $4-billion in assets under management and has funded over 1,450 transactions worth in excess of $10-billion.
Now the company is stepping up its expansion into the U.S. market. A key move was bringing Dave Bloom on board in the summer of 2019. The industry veteran founded the commercial real estate group for a major asset management company, which he led for 17 years. Mr. Bloom has worked in the U.S. and internationally and been involved in more than $25-billion in debt and equity transactions during his 32-year career.
As chief investment officer, Mr. Bloom is helping to accelerate the U.S. charge. He says that Trez is already well positioned in the world’s largest real estate market. “There is an enormously strong base, a long history and a phenomenal infrastructure already in place,” Bloom says. As a member of the executive committee, Bloom is assisting with the expansion of the Trez platform to include differentiated and scalable debt and equity investment opportunities.
Trez’s growth has come from a steady approach. The company delivers solid, risk-adjusted returns to its investors by providing fully secured mortgages to developers and owners. Consistent and durable returns are key to the popularity of Trez’s diversified investment funds, explains chief financial officer Sandy Manson.
“We’re not shooting for the moon. We’re trying to hit singles and doubles if you will,” Mr. Manson says. “We want a strong return for our investors, but we aren’t willing to take outsized risks with investors’ money. We are fiduciaries and stewards of capital first and foremost and we deliver returns to our investors while preserving the capital entrusted to us.”
He says the key to the company’s success is a meticulous process for evaluating investments, and a strict adherence to the lending standards it has put in place for itself.
Trez applies prudent risk management and rigorous institutional-grade underwriting and lends to seasoned developers and owners with solid track records of finishing projects on-time and on-budget. This strategy enables Trez to deliver solid and predictable returns for investors.
The company invests capital that comes from a network of more than 1,000 investment advisors from most of Canada’s brokerage houses, along with large institutional investors such as pension and endowment funds.
Typical mortgage investments range from six to 36 months and are between $15-million and $150-million.
For the first decade of its existence, Trez focused exclusively on bridge financing in Canada in virtually all commercial real estate asset classes (residential, office, retail and industrial). “We were all-Canadian to begin with but following the recession of 2008-2009, we recognized the opportunity the U.S. market represented for our business,” says Mr. Manson.
Trez started small with a few financings in Texas but accelerated quickly by strategically adding key talent in their chosen markets. Beyond its Vancouver headquarters and a Toronto office, Trez has offices in Dallas, Palm Beach and Atlanta. Today, more than 60 per cent of its diversified loan portfolio is invested in U.S. real estate.
In Canada, a flagship project for Trez was its participation in the Edmonton ICE District, one of North America’s largest mixed-use sports and entertainment projects. In the U.S., recent Trez successes include the joint venture development and sale of the 314-unit Winding Creek residential project in Dallas, and a $115-million financing for a large mixed-use development in Greenville, S.C.
Trez targets markets with growing populations, above average employment growth and above average GDP growth. Trez has boots on the ground and local expertise in the areas where it invests, to ensure deep knowledge of the risks and the rewards of all its projects.
The company seeks opportunities that address specific needs of each market. That includes affordable housing for the growing population in markets where employment is being added, and commercial and industrial projects in markets with a rising GDP and booming economic activity.
Trez provides customized financing solutions to its borrowers and has positioned itself as a faster, more focused and specialized source of debt financing to the real estate industry.
“A key thing that developers and owners are looking for, that banks are not able to match, is our speed of execution,” says Dean Kirkham, Trez’s chief credit officer.
Kirkham has spent most of his career within the North American banking sector. He has headed efforts to marry the best of the banking sector’s discipline and rigour to the entrepreneurial spirit of Trez.
“We are very strategic at how we look at deals,” Mr. Kirkham says. “By being methodical and clear as to our expectations, both internally and with our borrowers, we have created a much more efficient process. As a result, we deliver much faster than the banks, which is a differentiating factor that gives us a clear market advantage.”
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