Factors Affecting Land Investment

Risk Factors

Investors considering an investment in land equity or LEIT® should carefully consider the risks. Although some of these risks are listed here as a courtesy, the information provided herein relates to general product concepts that we design or structure and does not include any actual explanation of the property or financial products or terms of conditions of the investments and their related risks. If the risks are actualized, the value that investors get from their investment in Canadian land equity or financial instruments may be below the amount originally invested.

The information provided is neither an investment advice nor solicitation of any investment, and it is not legal, tax, real estate or any other manner of advice, and should not be relied upon as such. Always seek independent advice from an appropriately qualified professional and obtain and examine appropriate information on specific investments (including risk factors) from an appropriately registered Financial Instruments Business Operator or other licensed business operator before making any investment decision.

(If you have not already done so, please carefully read the legal notice on our Terms of Use page).

 

Geographic and other risks.

The value of land depends on numerous factors and is subject to various economic, demographic, regulatory, and other risks. Economic, demographic, regulatory, or other changes in the region where the land or real estate investment is located can detrimentally affect any land investment and may result in materially lower land values, an inability to sell the land, or an inability to sell the land at a favorable time or price.

 

Foreign exchange risk.

An investment held in a foreign currency, including an investment in land in a foreign jurisdiction, is subject to foreign exchange risk. Any depreciation in the value of the foreign currency in relation to your native currency will detrimentally affect the investment.

 

Regulatory risk.

A government or a governmental body may make changes to tax laws, zoning laws, or other laws or regulations, or may make findings, decisions, or determinations, which may detrimentally affect the investment.  If an investment depends on obtaining a rezoning approval, a negative determination by the relevant government body may result in a delay or effectively an inability to exit the investment.

 

Term and liquidity.

There is no liquid secondary market for TSI land investments.

 

Risks related to bank deposits and other fixed income products.

Fixed income products are subject to credit risks of the bank or issuer, in addition to market risk, liquidity risk, foreign exchange risk and various other risks. Fixed income products are not guaranteed products and potentially may reduce in value.

 

Risks related to the operator of the land property and the trustees.

Any deterioration in the performance or credit of the operator (or nominee) of the land or the relevant trustee may detrimentally affect the investment.