Investment

Our limited partnership model provides an easy way to access commercial real estate through targeted long-term appreciation and cash flow.

Financial Features

The Millennium III Group’s projects provide investors with a number of financial benefits. Investors receive a substantial tax write-off in the first year of the partnership. Subsequently, most of the income from the property is used to pay down the mortgage, which increases investors’ equity. The net proceeds from the property are distributed to investors year after year, providing a long-term income stream. After debt is retired, the income from the property available to investors increases substantially.

As well as providing a growing source of income, the value of the investment increases as the property appreciates. Millennium III’s strategy is to hold the property long-term, as leases typically provide ongoing, increasing revenue.

Optional

Equity Loan Program

Millennium III offers an Optional Equity Loan Program, enabling investors to adjust the cost of their limited partnership investment over several installment payments. The loan program is arranged through an arm’s length financial institution, subject to approval*.

A partnership unit can be purchased with a down payment of $5,500 and a $19,200 loan in the investor’s name. Interest charged on the loan is also a tax-deductible expense. Many investors choose to purchase partnership units in this way, to take advantage of the additional tax write-offs the loan provides.

*Investors must qualify.

Interest on money borrowed to invest may also be written off.

Tax Advantages

Our projects are structured to deliver significant tax advantages to investors. Approximately half the cost of the investment may be deducted from pre-tax income in the first year, with additional, lesser write-offs in subsequent years.

Costs associated with syndication and upgrading of the property flow through to the investors as a 100% tax write-off. Capital Cost Allowance (CCA) may also be claimed to reduce or eliminate taxable income from the project.

Investments in limited partnership units can also be used to facilitate:

Significant tax relief for high income earners.
Opportunities for income splitting.
An excellent vehicle for intergenerational wealth transfer.
Favourable tax treatment in comparison with RRSPs

Taxes Matter: Investing in Limited Partnerships

RRSP

Limited Partnership Unit

Interest on money borrowed to invest in RRSPs is not tax deductible.

Capital gains and dividends lose their special treatment when held inside an RRSP, and are subject to taxation on the full value when the proceeds are withdrawn.

RRSPs must be converted at age 71 to RRIFs.

RRIFs require a maximum annual withdrawal. Capital eventually depletes.

100% taxable.

The entire principal invested in an RRSP or RRIF is considered as income and subject to income tax in the year of the holder’s death (except where the RRSP or RRIF is transferred to a partner or spouse)

Interest on money borrowed to invest in limited partnership units is tax deductible.

Capital gains have preferential tax treatment – taxes only apply if the property is sold or otherwise disposed, and are applied to only 50% of the increase in value since the property was purchased.

Real estate ownership has no time limit.

Income from ownership in a property typically increases over time, often ahead of inflation. No depletion of capital – the underlying value of real estate grows.

50% taxable.

Only 50% of the difference between fair market value and the adjusted cost base is taxable as a capital gain upon death. This may be avoided if the unit is transferred to a partner or spouse.

Limited Partnership

A limited partnership is essentially a cooperative of investors, who are equity holders, as well as a general partner who is responsible for the operations and financial reporting. Limited partners contribute capital by purchasing a partnership unit. They are not directly involved in management of the day-to-day operation of the business, and their liability is limited to the amount of their investment.

The Millennium III Group of Companies includes the general partners of more than 50 active limited partnerships in Saskatchewan and Alberta. Millennium III is responsible for the operation of each partnership, providing investors with a worry-free, armchair investment in real estate.

The directors and officers of Millennium III personally commit to our limited partnerships by purchasing investment units in every project we syndicate.

Investment Growth

In order to maximize income potential, the Millennium III investment strategy is to locate good quality but undervalued commercial properties in growth areas. A property with scope for improvement, professionally managed, will see substantial appreciation in value.

The expertise of Fortress Properties Inc., the property management division of Millennium III, is key to the success of our projects.

A vested interest in each project ensures that we always act in the best interest of our investors because we are owners, too.

Millennium III’s properties grow in value over time because:

Renegotiation of existing leases to reflect current market rates for the refurbished space, as well as securing new tenants, contributes to the increasing value of the property.
Commercial rents tend to move up, generally ahead of inflation, increasing revenue.
Reduction of debt results in both growth of equity and more surplus cash available to investors.
50% debt leveraging potentially amplifies the return.

Profit Through Partnership

Removing the many barriers to entry in commercial real estate and providing investors the ability to participate in a limited partnership to own commercial real estate.

The General Partner Provides:

As Limited Partners, Investors:

Commercial real estate expertise
Initial capital, interim financing, and cash flow coverage
Professional management of the property
Distribution of profits and annual reporting to investors
Expertise in financial reporting, securities and partnership law, and commercial landlord-tenant law through long-standing professional relationships with legal and accounting experts

Participate fully in the profits of the property
Risk only their initial investment capital, which is underwritten by the inherent value of the real estate
Are protected from recourse by mortgagees
Benefit from the tax advantages of a partnership, as start-up costs flow through directly to limited partners and can be written off against other income

Participation

Allows smaller investors to buy in as partners and participate in commercial real estate ownership.

Limited Risk

Limited partnership means limited risk - no recourse to investors, no liability.

Aligned Interests

The Principals and Officers of Millennium III purchase units in every partnership.

Revenue Share

Limited partners share the revenue produced by the property.

Ownership Share

Partners share ownership of the property.

Long-Term

The long-term success of our projects is as important to us as it is to our investors.

Building Wealth Through Real Estate

The volatility of stock markets combined with global financial turmoil has caused many individuals to rethink their investment strategies. One of the best alternatives to market-traded equities is commercial real estate, which has traditionally been resistant to the volatility inherent in stocks, commodities, and mutual funds. Many financial planners recommend a significant portion of an investment portfolio be comprised of real estate assets.

Investors often consider residential real estate as a means to build their portfolios. However, becoming a landlord is an enormous undertaking that requires market experience, contacts, knowledge, and a large capital investment. The physical presence of the landlord is often required in order to maintain the property, as well as negotiate any tenant disagreements that arise. Loss of a tenant in a residential property means no income, and the landlord must assume the entire cost of maintenance, taxes, insurance, utilities, and debt service until another tenant is found.

In contrast, an investment in professionally managed commercial property has many advantages over venturing privately into residential real estate.

Stable investment with considerable returns
Tenants sign long-term net rent leases and also pay all occupancy costs (property tax, insurance, utilities, cost of maintenance, and cost of management)
Vacancy risk is greatly reduced in multi-tenant properties
Landlords have greater powers of legal recourse if commercial tenants default on a lease than is the case with residential tenants
Management company negotiates leases, takes care of property maintenance, resolves disputes and collects rents, releasing owners from concern for day-to-day management of the property

Advantages of Commercial Property Investment
The value of commercial property is largely derived from the income the property produces, so it is less subject to market fluctuations than residential real estate. Commercial leases are long-term, typically three, five or ten years, which means the income and value are sustained over short-term economic slowdowns.

Why Invest?

Tax Advantages
Income Producing Asset
Western Canadian Economy
Inflation Hedge Potential