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The information here is not to be taken as financial advice, it is for information purposes only.

https://www.yorktonequitygroup.com

BLOG – Investing in Land Development – August 15, 2021

Why do Equity Groups Invest in Land Development?
Equity groups are a pool of investors banding together to provide funding for multiple projects as partial investors. Some of these project types may include residential buildings, commercial real estate, such as office towers and shopping centres, as well as other raw land that will turn into improved land, e.g., property designation updated/re-zoned for different commercial or residential usages. Since this is set up as an equity fund instead of direct purchases of real estate land, the investor actually is investing in the equity group instead of a specific property and they are part of a group that owns the investment. Usually, funds are pooled together and purchases are made of land or property, and that is managed by the equity group (for example, one individual may invest $200,000 as part of a $20 million equity fund). Real estate developers may identify specific land or projects that the group may purchase (with the investors providing most of the capital).

One of the options for investing is to purchase lots of land that could be developed in the future. Since the equity group is purchasing land at a lower cost (usually land designated for agriculture or limited purposes, that will eventually be re-zoned for higher density use, or land with structures that can be improved and resold for additional capital). The equity group does a lot of research on trends and population sprawl, and purchases land based on current trends. Buying the right land at a lower cost in specific communities or areas outside of a major region that is planning to expand, usually means the potential for returns is there.

How Do They Make Money?
Investors look for land that can go up in value, whether that is through current developments, or re-zoning by a city or community. When a property is re-zoned for a larger development, this typically increases the land value, and developers who would like to complete a project on the land will generally pay the increased land value cost; and this results in the investors receiving a positive return. Sometimes these property value increases can take months, years or even decades (depending on the land type, development opportunities, current zoning restrictions and other activities and challenges). Ultimately, investors looking to make a gain are generally focused on longer-term investments with a stable turnaround on land value.

 

Where do we fit?
Yorkton Equity Group Inc. (YEG) follows a risk-averse business model, focused on multi-family investment properties in Alberta and B.C. through its venture capital on the Toronto Stock Exchange (TSX.V: YEG). YEG has portfolio in Langford, Surrey, Kelowna and Edmonton regions, owning multi-family condominiums and land zoned for tower developments. The group offers private placement opportunities; investors may also purchase stock directly through their preferred brokerage. YEG has a solid investment strategy backed by real estate, including luxury condominiums such as Bentley Luxury Condos in Windsor Park, Edmonton. It is stress-free investing in real estate development. Get in touch if you’re interested in exclusive investment opportunities with YEG. Please note: past performance history is not a guarantee of future results.

https://www.yorktonequitygroup.com
https://www.bentleyluxurycondos.ca

 

TSX.V: YEG

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