How Does Seller Financing Transaction work? STB: Seller take back mortgage or better known as a VTB I'm going to show a breakdown but let's start with a few upfront assumptions. 1. I am not an accountant 2. This is for illustration only to show how the numbers work, this is not advice. 3. This is general advice and should not be considered specific, basically go get a tax plan if you're a seller. Assumptions: Let's call this an example I've worked on in the past where an older fellow (His name is Pietro) ran a construction business out of an industrial building. The industrial building has now had a land use change to "Mixed-Use" and can be used to build a 12 storey building. A. The sale is $11,000,000 B. Pietro bought the property for $650,000 in 2002 C. Pietro is taking back a mortgage of $7,150,000 (65/35 LTV) for 3 years at 0% interest D. The Property is owned corporately C. There is no "recapture tax" E. The property is bein sold as the only asset in the company and the capital gain is the only income of the company F. Pietro is an old school man at heart, he doesn't really need any money right away from the sale he's just planning so if he passed away his kids wouldn't sell immediately G. The company owned by Pietro outright has never had a capital gain in the history Capital Gain Calculation: Capital gain expected: $10,330,000 (keep in mind commissions, legals and accounting work on closing can be used as a way to reduce the gain) Taxable Capital Gain (50% of the gain): $5,165,000 Taxation Calculation: Corporate Tax on the sale is 50.17% of taxable gain: $2,591,280 Due to the VTB Pietro can partially defer the gain for future years. This is the advantage if used efficiently that is very helpful to sellers. Timing of taxes payable: Also important depending on timing, 3 year Year 1 Gain: $5,165,000 Reserve: $3,357,250 Taxable: $1,807,750 Taxes at 50.17% of gain: $906,948 Year 2 Gain: $3,357,250 Reserve: $3,099,000 Taxable: $258,250 Taxes at 50.17% of gain: $129,564 Year 3 Gain: $3,099,000 Reserve: $2,066,000 Taxable: $1,033,000 Taxes at 50.17%: $518,256 Year 4 Gain: $2,066,000 Reserve: - Taxable: $2,066,000 Taxes at 50.17% of gain: $1,036,512 Total Taxes paid: $2,591,280 So you see, there are two good options here to understand. Pietro can defer how much taxes he pays up front. If Pietro is smart he can take the cash he receives and put this cash into say an investment which returns him 10% per year. Thereby creating a return off the taxes not paid yet. Pietro is happier for taking a Seller take back mortgage.

This is a first for me. The building I was mandated to sell burned down. Built in 1889 as an industrial jam and marmalade factory. 16,000 square feet of brick and beam. A piece of Toronto’s industrial history. Truly sad to see it go. A big thank you to Toronto Fire and Police for their work. For clarity: this was never a development site. The Official Plan did not permit residential. It was an adaptive reuse project, pure and simple. In this business, we prepare extensively. We know the building, the zoning, the buyers, the market. We do the work. And then, sometimes, something completely outside our control happens. Never a dull moment in private capital. How we respond is what matters.

Last quarter, 45% of GTHA condo sales came from bulk buyers 339 units That’s 50% higher sales than the same period last year Average price: $763 PSF That’s a 40% discount to market Bulk buyers are taking a much larger share of the market, and they’re receiving a significantly greater discount to do it

25 years ago today, the privatization of Oxford Properties closed. A few weeks later came the merger with OMERS and @JonLoveKingSett departure. Jon Love the founder of Kingsett the largest CRE private equity firm in Canada posted and I wanted to share the story on X . Jon’s father founded Oxford in 1960. Jon became CEO in 1992, having already lived through the booming 1980s, the early-1990s collapse, and the recovery that followed. Oxford went public in 1995 at a $100 million market cap, completed roughly $6 billion in acquisitions with partners, and sold to OMERS in 2001 for $4 billion. OMERS has since built Oxford into the global platform it is today.

The vacancy rate in Toronto for AAA office is 2.2% That is 20 million SF New deals are getting written at $100 PSF gross + Tale of two markets from AAA class to C class office.

Became an uncle for the first time this week. The baby was small and warm in my hands, soft hair and tiny ears. Life started again for our family. Third generation, maybe a fourth remembering my grandparents. You hold a baby like that for a minute and, for a brief second, the whole picture of life becomes very clear.

Sad state of affairs where people are ripping down @BradMBradford mayoral campaign signs. This is happening in multiple locations told verbally to me by supporters of Brad. Sad state of Toronto where those against Brad can’t allow citizens to exercise their right to vote?

This tweet aged well

“Long term, because we have more and more democracies in the world, we’re going to have more and more inflation. Politicians who are willing to spend too much are the ones who get re-elected.”   Sir John Templeton

Toronto kid Ashlin Barry wins the U23 Cycling World Championships in Montreal! Sadly, Canada didn’t have the resources to support the dual-nationality athlete, so he wins with the USA team. I truly hope Canada can prioritize supporting sport in the future.

Underrated value of a crashed market: Every smart family office is doing estate freezes right now. Lowest values in two decades for certain asset classes. Lock in your values now around a bottom

The irony that Morgan Stanley, a U.S. bank was hired to sell off Canadian airports in the middle gonna trade war with the U.S. is not lost on me. CIBC was hired as well at least…

Bringing a 107,000 SF vacant YMCA to market. Interesting building in and close to downtown St Catherine’s. Original a development site with multi-phased potential, now a large functional building that can be used for various uses.

The state of street front retail in Toronto Area + Hamilton: Why have sales gone from 3-4% caps to 5.5-7.5% caps? If you look a financial model and all of the return comes from the sale price then that investment is pretty speculative. Reason: From land assembly potential, to purely yield play. The math has to work.

Nobody cares. Work harder.

It’s all connected: The food is more expensive Because The lease is more expensive Because The developer is delayed by the city Because A retail developer in BC is being delayed on rezoning by 6 months because the province is asking for a study on a 500 year storm He asked where he should find data on 500 years before the foundation of Canada 😅

So maybe what I’m seeing isn’t so anecdotal. Canada inflation rate 2.8% Canada GDP growth on track for 3.4% - based on May. Let’s keep going!

Single Family Home sales are up 200% year over year 👀 (GTA)