[Issuer] REIF Q2 2022 Update

Real World Assets Pools
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REIF Q2 Update

Q2 was a volatile time for most risk markets. The crypto market lost significant market capitalization and large public growth equities retreated from pandemic highs. REIF Pool proved its diversification benefits by continuing to grow and earn consistently during the period.

At the end of Q2 REIF had $9.25M DAI lent across four different commercial real estate properties. All four of the properties are being developed by Forge & Foster. Most of these properties have undergone significant development work and are in the process of being tenanted. Once the properties are fully leased at new and higher rental rates they become significantly more valuable. This allows Forge & Foster to sell the properties at a gain or to hold the properties and refinance debt at a lower loan-to-value (LTV) ratio, making them eligible for lower interest rates. Forge & Foster generally prefer to hold onto their developed properties long-term and earn rental income.

Summary of Properties being Developed

[150 Chatham Street, Hamilton, Ontario] - 2nd position financing to prepare two new tenant units:

  1. 4,800 sq ft medical office and rehabilitation center. The unit is completed and the tenant has moved in.

  2. 16,500 sq ft tech company. The unit is under construction with an expected completion date of October 1, 2022.

[70 Frid Street, Hamilton, Ontario] - 2nd position financing to prepare four new tenant units:

  1. 4,800 sq ft fitness company. The unit construction is completed and the tenant has moved in.

  2. 18,000 sq ft traffic management company. The unit construction is completed and the tenant has moved in.

  3. 2,500 sq ft fitness company. The unit construction is completed and the tenant has moved in.

  4. 3,000 sq ft technology distribution company. The unit construction is completed, and the tenant is moving in on August 1, 2022.

[635 Cheticamp Island Rd, Cheticamp Island, Nova Scotia] - 2nd position acquisition financing.

The real estate manager acquired the 67-acre property with 2,500 sq ft of beachfront in April 2022. With a going-in cap rate of 11%, the real estate manager has managed to increase revenues and corresponding NOI by ~15% through better transient rental marketing (Airbnb, VRBO, etc.) and an increase in seasonal renters.

The real estate manager expects a new 1st position mortgage to take out the 1st position VTB and REIF’s 2nd position financing at the end of summer 2023.

[111 Sherwood Dr., Hamilton, Ontario] – 2nd position financing to prepare two new tenant units:

  1. 4780 sq ft boutique bridal company. Tenant fit-out is still in the permitting process.
  2. 20,903 sq ft church. Permit process completed and construction is underway.
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