Danielle was a guest with Jim Goddard on Talk Digital Network, talking about recent developments in the world economy and markets. You can listen to an audio clip of the segment here.
Further to the discussion of retail investors getting smoked in funds that hold illiquid concepts and securities, see Property sharing investment firm Willow latest to get hit by rising interest rates. More of these to come:
A commercial property-sharing startup aimed at retail investors is the latest real estate venture to face trouble amid higher borrowing costs.
Willow LP, which was acquired by an online rental-services company in late 2023, was part of a new wave of property investing called “fractional investing or prop sharing” that became popular when the pandemic’s spike in property prices enticed more Canadians to invest in real estate.
Unlike real estate investment trusts, in which investors purchase units in an entity that owns a large portfolio of properties, fractional-investing companies give individual investors a chance to own a piece of a commercial property, such as a retail building or office tower. Fractional investing became especially attractive for younger investors.
Willow charged $36.06 to buy one unit of a retail and residential property in a popular shopping area on Queen St. West in Toronto in 2022, according to legal documents it provided to investors.
But now with higher interest rates, hundreds of small investors have seen the value of their investment decline between 50 and 60 per cent, according to a December e-mail sent to Willow investors from the company’s new owner, Montreal-based Solutions Guiker Inc.
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