Duglen International

Redev FAQ

Q1.     When was Redev properties formed?

Richard Crenian and Howard Manley first started developing property in 1981 as Anaheim Property Developers.  Between 1981 and 2000 Anaheim developed over 11,000 units including duplex houses, high rise condominiums and commercial properties.

In 2001 Richard and Howard changed the business model to the one which is used today whereby existing shopping malls are purchased and then syndicated among individual investors and later, where possible, redeveloped, i.e. extended or refurbished and leases improved.  The brand name “Redev” came into existence in 2001.  First Canadian Properties.  Also owned by Richard Crenian, became the purchasing arm that first acquires the properties.

Q2.     How secure is my investment?

Your investment is very secure.  You become one of the actual owners of the Plaza.  The debt to equity ratio (mortgage) is on average 50% for each project.  (Most homes have a 75% ratio.)

Q3.     Can I sell my Partnership Unit?

Yes.  Since you are an actual owner, you can sell to anyone at anytime.  It’s suggested a minimum hold of 12 months. The general procedure is to first offer the stake to the current investor pool. If the bid does not meet the sellers required reserve bid, it may be offered to new customers.

Q4.     Are there any extra fees for investors of $25,000 or higher?

Only the CAD$500 legal fee.  All other fees and costs are included.  Redev is paid a 2% portion of the rental income to cover its costs.  And the accountants are also paid out of the rental pool which is 2.5%.  The returns mentioned in the marketing material are net of these.

Q5.     How long will the Plaza be held?

After five years a vote will be held; if 2/3 of the partners decide to sell, the plaza will be sold.

Q6.     What is the risk in this investment?

The risk is that the Edmonton economy would weaken so much that businesses would start to close and move out of the plaza.  However, this is a true “meat and potatoes” type of plaza, with stores that would weather the storm better than most malls.  As the mortgage is non-recourse, your risk is limited to your investment.

Q7.     Why is this investment a good one at this time?

The combination of safety and high after tax paid returns makes this investment one of the best on the market at this time, which has been proven by the recent global economic downturn.  It stands strong in comparison with any other investment on the market today.

Q8.     How does the structure of ownership work?

Investors’ stakes are undivided interests (UDI) which is a legal way to syndicate the ownership of a property under Canadian law.  An investor’s stake or percentage ownership is clearly stipulated in the agreement of purchase and sale (APS) and in a declaration of trust which clearly shows the individual investor as the beneficial owner with the equivalent percentage stake in the property.

For overseas investors, First Canadian Properties, the purchasing arm of the Redev group, holds the name of title in trust only.  The investor is the beneficial owner and the direct owner, states clearly in the legal documentation, with voting rights amongst other the investors in the co-op.  This is done so under strict Canadian Law.

A co-operation agreement between investors determines these rights and how the individual owners work together.  There is a joint venture agreement between the overseas investors and the local resident Canadian investors.  (Resident Canadian individual owner invest through a Limited Partnership structure.)  Again all this is done under strict Canadian Law.

Q9.     Who is First Canadian Properties?

First Canadian Properties handles purchasing and acquisition of all of Redev’s properties.

Q10.  What’s the relationship of First Canadian Properties with Redev?

Redev Properties is the marketing arm of Redev properties.  First Canadian Properties Corporation appears in all the agreement and purchase and sales documents as the investors purchased their stake from First Canadian Properties Corporation.