Where developers get into trouble (and how we avoid it)

Hi,

There’s a stage in every development cycle where most mistakes are made.

It’s not during land acquisition.
It’s not at launch.
It’s not even during construction.

It’s the stretch between approvals and execution when drawings are being finalized, budgets are being built, trades are pricing, financing is being negotiated, and timelines feel fluid.

This is where discipline matters most.

The quiet danger zone

Right now, we’re in that stage across several projects.

At Pacific (2 x 8 Unit Buildings), drawings are largely coordinated and we’re assembling our Class A budgets with our QS team while gathering trade pricing.

This is the point where many developers convince themselves the numbers “will work.”

We don’t.

We assume today’s rents, not last year’s.
We stress test construction costs.
We build contingencies in early, not late.

Because once you pour concrete, optimism doesn’t protect capital, structure does.

Friction is part of the business

We attended our first OLT hearing in early February for our Hamilton five-unit project.

It was time-intensive. Expensive. Bureaucratic. And to be honest, a complete waste of taxpayers dollars, but that's a topic for another day. 

But here’s the reality: friction in urban infill is normal. Teams that expect smooth sailing either overpay for certainty or underestimate complexity.

Patience and process aren’t glamorous, but they are protective.

Construction tells the truth

On the execution side:

• Highland is back on track and moving forward after a small soil delay.

• The laneway suite at Dovercourt is now in showings with prospective tenants.

• Costa Rica is in its final pre-construction stages. Fully permitted, team in place and awaiting final financing before breaking ground.

Construction progress is the most honest indicator of health in this business. When projects keep moving, capital stays productive.

Why this cycle rewards discipline

In tighter environments:

• Land prices adjust.

• Speculators step back. 

• Financing becomes selective.

What remains are operators who can budget properly, structure capital carefully, and stay patient when timing shifts.

This isn’t the loud part of the cycle.

It’s the part where long-term positions are built.

A quick note on Pacific

We have one remaining $100,000 equity position available in the Pacific project. This position is eligible for registered funds.

The project is advancing through permitting, budgets are being finalized, and we’re positioning it conservatively before construction begins.

If you’re interested in reviewing the structure and seeing whether it fits, simply reply to this email and I’ll share the details.

Thanks for reading,
Darren