The purpose of this section is to assist you in making an informed decision about your investment. Key questions you will want to ask yourself:
1. Why invest in a land syndication?
When investing in private real estate syndications, individuals are pooling their capital together for the purpose of investing in larger and more lucrative real estate projects. Real estate syndications own residential and/or commercial real estate and are secured by title to the land through a Limited Partner structure, in turn, providing added security for the investment.
Land syndication offers an investor, with limited investment capital the opportunity to get involved and be party to the benefits of owning real estate. Through this investment opportunity, individuals can completely remove themselves from the tasks of locating, analyzing, purchasing, and managing their real estate investment.
2. How does UrbanStar choose land projects?
The land development process is continually evolving. UrbanStar responds to fluctuating market trends and decreased land availability trends. UrbanStar stays abreast of social, economic, legal and design factors. Typical indicators of a sustainable land development include:
- Proximity to a large or growing population
- Opportunities for future growth
- Land use constraints and availability of current or potential future services
- Economic circumstances and demographics of the community
- Political climate regarding development
The property is taken through a due diligence process and must be approved by UrbanStar’s land acquisition division, prior to being purchased.
3. How does UrbanStar assess raw land as an investment?
Land has historically been one of the safest investments. The rationale for investing at the raw land stage is the scarcity of desirable available lands for development. By investing the same way as larger real estate developers, investors position themselves to profit from the change in entitlements such as use and density as development nears.
4. Why invest in a land development project by UrbanStar?
UrbanStar’s goal is to identify land projects that can increase significantly in value, passing this value onto our investors. Land development involves buying strategic specific geographic land holdings to either develop the land or to increase its value by obtaining rezoning of the land to a better and higher use. This is an active process with numerous 3rd party stakeholders involved in the planning and development process. Through this process the value increases leaving only the length of time investors hold the property as their major risk. Investing in land for future development involves substantial capital. UrbanStar’s investors buy in at low rates with other investors, which allows UrbanStar to purchase larger acreages, which benefits the whole group. Investing in land for future development requires specialized, seasoned professionals that manage different aspects of the project that include:
- Market Analysis
- Financing Strategies
- Site selection and analysis
- Master plan conceptualization
- Environmental regulations
- Site engineering and storm water management
- Coordination with affected municipalities
UrbanStar’s Land Development model features a syndication fee that is attached to the syndication and is fully disclosed to the investors. UrbanStar would receive up to 25% of the net profits after investors have been paid back their initial investment aligning interests with its shareholders and profiting when investors do, only after investors initial investment is paid back in full. This model allows for a true-cost investment and alignment between UrbanStar; true cost reflected by current land entitlement, with better and higher use land uses as an upside to the investment.
5. How to create value and the value cycle of land?
The value of your land investment varies as it goes through the development cycle, starting as raw land through to zoned, serviced land. Value is determined and dependent on size, topography, zoning, utilities, and proximity to services, as well as market supply and demand for land.
6. What will be the return on my investment?
There is no standard answer to this question as each land offering has unique characteristics that will ultimately yield a different return to the investor. An Offering Memorandum is available to qualified investors for each individual project, which describes each project in detail.
7. What makes UrbanStar a good choice for investors in the market place?
UrbanStar has the foresight to buy raw land located within proximity of one of the top 25 fastest growing communities in Canada (Cochrane, Alberta) and located less than 30 minutes away from the 4th highest population growth rate in Canada as of January 2021 (Calgary, Alberta). This foresight enables UrbanStar to obtain redesignation of raw land, turning the raw land into prime real estate, allowing our investors to make a tangible profit.
Investors initial investment will be paid back prior to any profit distribution. UrbanStar provides full disclosure through an Offering Memorandum, Term Sheet and Subscription Agreement in Alberta. UrbanStar is regulated by the Alberta Securities Commission, providing further security to investors.
8. How does UrbanStar make a profit from these land projects?
UrbanStar charges an upfront fee for acquiring the land, marketing the land and managing the land through to an exit strategy. UrbanStar also maintains a backend participation on each project. Backend participation is success-based, ensuring all stakeholder interests are aligned throughout the project. Exit strategies will differ from investment to investment and may include the sale of all the lands or portions thereof to third party purchasers.
9. What is the timeframe of your investment?
Parcels are targeted for an exit strategy within 5-8 years.
10. Who are the principals of the company?
Asking this question is also important as the company or investment is only as good as its management. The track record of the principals speaks to a long history of honesty and integrity in the business community.