Commercial mortgage broker and capital advisory firm Oakbank Capital Group was instrumental in arranging a $148.8-million construction loan from KingSett Capital to Brixen Developments to push forward a new Mississauga condominium development.

“A lot of the conventional lenders, being the big banks, have de-risked in a certain sense in that they're not offering clients the same types of financing or the same structure of financing they would have historically,” Oakbank managing partner Jonah Brown told RENX.

“That has been a big catalyst for our business, in that everyone is looking for more unique structures or quicker funding timelines.”

Brown said Oakbank has funded around $1.4 billion so far this year and has around $700 million of commitments signed that it will close out before the end of the year.

That being said, Oakbank has also become more selective. It isn’t looking to be involved with any agreements that don’t have a high degree of certainty to produce positive outcomes for the company and its clients.

“As a result, we're doing a lot more legwork up front to ensure the deals we take are high-calibre,” Brown said.

Brixen’s Exhale development

Brown said most institutional lenders cap their loans in the $50-million to $60-million range, so Brixen found the opportunity to work with a single lender for Exhale Residences very attractive.

“We do a lot of business with KingSett and we have nothing but good things to say about them, their platform and their capacity to execute,” Brown said, “and they came through and did the whole load.” 

The project involved, known as Exhale, will be an 11-storey, 284-unit condo at 1381 Lakeshore Rd. E. Its amenities will include: a furnished lobby with an adjoining work lounge; indoor and outdoor gyms; a children’s playroom; a party room that includes a full kitchen and private dining room for 10 people; a rooftop terrace with barbecues and views of Lake Ontario; and a co-working space.

Ground was officially broken at the site in August. Occupancy is expected in the fall of 2026.

Brixen didn't reply to requests to be interviewed for this article before it was written.

Residential, industrial asset classes are most active

Toronto-based Oakbank was launched in February 2022 and has arranged more than $3 billion in loans across Canada since then. Its core offerings include construction, bridge, mezzanine, Canada Mortgage and Housing Corporation (CMHC), and term loans. It customizes financing for properties ranging from $5 million to $450 million.

“CMHC has become and has continued to be a large part of our business,” Brown explained. “I think as the condo market has slowed down, a lot of developers are looking to build rental. Some are building conventionally and some went right to CMHC at the outset. Both are options in the market.”

Industrial, purpose-built rental and condominium residential are the most active asset classes that Oakbank is involved with financing, while it has also been involved with some office property transactions.

Brown cited a $62-million bridge loan it arranged in May involving two office buildings at 45 and 47 Sheppard Ave. E. in Toronto. The purchaser viewed it as a redevelopment play, thus it was seen more as a land loan with holding income rather than a traditional office transaction.

More options than just the major banks

Expert advice and advisory services become increasingly valuable as the commercial real estate market becomes more challenged, according to Brown, as companies are forced to look for a larger variety of capital sources.

“When people think of financing, I think the intuitive thought is you think the big five banks, when the reality is there are 70-plus lenders across Canada looking to invest in commercial mortgages,” Brown said, offering a snapshot of the current lending situation. 

“Everyone has different risk appetites, everyone has different snack brackets, and our job is to keep a pulse on that market and know who's looking to invest in what at any given point in time. 

“And even though a project may not be a fit for the big five banks, we can almost always find someone that does have that risk appetite and pair the right capital.”