Toronto The One | 328.4m | 91s | Mizrahi Developments | Foster + Partners

raptor said:
You claimed to know how sales were going. Please state the number of units sold and source. For all we know, sales have been strong and close to selling out.
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Man think about what you are spewing here. Firm Capital is lender of last resort. They PAY DIVIDENDS of 7% annually to their investors. It is a guarantee that the $67M loan is higher than 9% interest.
If this project was even remotely successful then Mizrahi wouldnt be borrowing from the sharks.
 
A short video showing how The One should look when completed:

 
You understand that the first mortgage is held by Firm as well as the subordinated bridge correct? Really the debt is broken up into a couple of tranches but it's all through Firm. I haven't talked to them specifically about this piece of debt (though I know that they are comfortable with it and happy) but I suspect that this will be taken out by a more conventional bank led construction financing now that there is measurable construction movement. Firm isn't the lender of last resort but they certainly are happy to go further up the risk spectrum than a traditional Big 5 bank. They have to be compensated for that risk.

But the fact that they have both pieces means there isn't a scenario where the first gets all the cash and the second is left holding the bag. It's one entity and all of this debt is through one fund.
 
I want this to happen as much as the next person but the bridge loan is an interesting twist. When married to the fact that there were significant issues behind the scenes with the two now-completed Davenport projects (that were only resolved successfully because the scale was small enough to keep things under control), there's a lot more going on here than some are allowing for.
 
jje1000 said:
Can you do a version without the One so we can start preparing for the worst-case scenario?
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Y'all gotta chill. There's about a dozen buildings in there that have a lesser chance of being built than the one that is literally under-construction right now.
 
jje1000 said:
Can you do a version without the One so we can start preparing for the worst-case scenario?
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lol

No thanks... only if the worst actually does happen. I'm on the optimists side on this issue.
 
Today.
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Mithras said:
You understand that the first mortgage is held by Firm as well as the subordinated bridge correct? Really the debt is broken up into a couple of tranches but it's all through Firm. I haven't talked to them specifically about this piece of debt (though I know that they are comfortable with it and happy) but I suspect that this will be taken out by a more conventional bank led construction financing now that there is measurable construction movement. Firm isn't the lender of last resort but they certainly are happy to go further up the risk spectrum than a traditional Big 5 bank. They have to be compensated for that risk.

But the fact that they have both pieces means there isn't a scenario where the first gets all the cash and the second is left holding the bag. It's one entity and all of this debt is through one fund.
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I'm just throwing out an alternative theory here but isn't it possible that he went this way for financing because traditional bank loans would have delayed start of construction (by at least a year if not more?) There is tons of speculation here that Apple is lined up to take up significant retail space in the podium which will also attract many other retailers. Maybe... just maybe he wanted to get this going sooner and calculated that the higher interest rates from a boutique lender were worth the 1+ year gain in time. Once sales reach a higher threshold, the entire project financing can likely be swung over to a traditional bank and the interest paid to Firm becomes a mere line item in the construction budget.
 
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Kingscourt said:
Because you don’t go out and get a subordinated bridge loan at sky high interest rates if “sales have been strong and close to selling out”.
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Why not? Deposits sit in a trust account and cannot be touched by the developer. Sales are purchase orders and just like with manufacturing a purchase order only have value if the product is delivered.

AdamS said:
Man think about what you are spewing here. Firm Capital is lender of last resort. They PAY DIVIDENDS of 7% annually to their investors. It is a guarantee that the $67M loan is higher than 9% interest.
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8% isn't unusual for a commercial loan. Well below startup territory.

That said, the 7% dividend is based on the Firm Capital valuation which isn't directly related to the loan or loan rate. A ~5% mortgage can pay a 7% dividend provided Firm Capital is using leveraged funds; the 7% is from their own contribution and not whatever they borrow from 3rd parties at a rate below 5%. I don't know anything about Firm Capital specifically; just that investment banks rarely rely wholly on investor capital.
 
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Some movement regarding the building permit for the tower portion from the Open Data Portal:

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Application Acceptable:
Application has met the submission requirement; however the intake has not been accepted yet because of the required initial permit fee.

On Hold:
The Application has been received but it is on hold because of missing information.
 
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