The commercial real estate landscape in Western Canada received a significant injection this week as Vancouver-based Trez Capital announced the launch of a $70 million high-yield mortgage fund. This strategic move comes at a pivotal moment when traditional lenders continue their retreat from the market, creating both challenges and opportunities for investors willing to navigate the shifting terrain.
“We’re seeing an unprecedented flight to credit quality in commercial real estate,” explains Dean Kirkham, President and COO of Trez Capital. “Banks have significantly tightened their lending criteria, creating a substantial financing gap that alternative lenders like us are positioned to fill.”
The new fund, officially named Trez Capital Yield Trust U.S. (Canadian $), targets annual returns between 8% and 10% for investors—figures that stand out dramatically against today’s uncertain economic backdrop. It’s structured specifically to capitalize on the growing disconnect between property values and available financing options across Western Canadian markets and key U.S. regions.
This development represents more than just another investment vehicle. It signals a fundamental shift in how commercial real estate projects will secure funding in the coming years. With major banks implementing stricter requirements on loan-to-value ratios and demanding higher debt service coverage, developers increasingly find themselves caught in a financial squeeze.
Industry analysts note that the timing couldn’t be more strategic. Property valuations across multiple sectors have experienced downward pressure due to higher interest rates and evolving post-pandemic usage patterns. For many property owners, this creates a perfect storm: declining asset values combined with the need to refinance existing loans under much tighter conditions.
“The opportunity in today’s market is twofold,” notes Michael Markidis, real estate analyst with Desjardins Capital Markets. “Alternative lenders can not only command premium rates but also secure better quality assets and stronger covenant structures than were available during the easy money era.”
Trez Capital’s approach focuses primarily on residential and industrial developments—sectors showing continued resilience despite broader market volatility. Their existing portfolio already manages approximately $5.3 billion in assets, suggesting both the scale of their operations and investor confidence in their underwriting approach.
What sets this fund apart from similar offerings is its unique cross-border strategy. By maintaining flexibility to deploy capital in both Canadian and U.S. markets, the fund creates natural hedges against regional downturns while allowing investors to capitalize on the strongest opportunities regardless of geography.
For investors concerned about risk factors, Trez emphasizes their conservative approach. Loans are typically secured by first mortgages with loan-to-value ratios capped at 75%, creating significant equity buffers against potential market fluctuations. Additionally, their focus remains on metropolitan areas with strong population and economic growth trends—fundamentals that tend to provide stability even during broader market corrections.
As commercial real estate continues its adjustment to higher interest rates and changing demand patterns, this new fund represents more than just a financial opportunity—it’s a barometer for how capital will flow into development projects across Western Canada in the coming years.
The question now facing the market isn’t merely which projects will secure funding, but how this evolving financial landscape will reshape the very nature of commercial development throughout the region.
