Investment: $200,000 (Investment minimum: $15,000)

Use of Proceeds
Final project development expenses. Overall, all Bond Series A to H are to finance construction and development of 42 Carden Shared Space. . 

Investment Structure
42 Carden is offering two (2) series of Community Bonds, G & H, which rank pari passu to each other. Series H is unsecured, interest-accruing and compounding, and junior to a first mortgage on the property, followed by Series A to F bondholders. Series G is secured to the property. 

Investment Opportunity
Series H Community Bonds have a term of five (5) years. Interest will compound and accrue through the life of the bond, which will be paid along with principal at maturity. Series H has an investment minimum which allows for greater civic participation from various interested individuals, within the Guelph community and beyond.

Please note that this is not a complete investment summary. Investors should read all associated documentation including the investor package and associated securities agreements before considering or making any investment. Please contact us via email at info@svx.ca or fill in the Ask a Question box for more information.

10C:

10 Carden (10C) is the hub for community activators and changemakers in Guelph. It offers local not-for-profit groups, socially focused businesses, and individuals affordable co-working and event spaces based on their needs. 10C’s services enables innovators across many sectors to connect, collaborate, brainstorm and solve challenges in the local community. Now in its 8th year of operations, 10C continues to undergo significant growth and its continual development is being realized through the 42 Carden expansion

Chalmers:

Established in 1997, Chalmers is a social benefit organization whose mandate is “Striving to serve those in need without prejudice; all are welcome.” Some services include offering food, clothing and other support to those in need at no cost, as well as micro-lending services of low-interest loans under $4,000 built on manageable terms to the individual. Currently located in two separate locations in Guelph, Chalmers sees 490 monthly visits on average and strives to support and refer individuals to social support services.

42 Carden Shared Space: The building

42 Carden is located in central downtown Guelph that provides triple the amount of affordable space to support local arts, cultural and educational events and organizations than the original 10C location. The former Acker Furniture Building is now fully renovated and operates as a multi-tenant facility with enough private space for 30 – 50 full time employees and 400 – 600 visitors per week, four times the amount of the original 10C location. It is a fully accessible space, offering dynamic and affordable space for social benefit organizations and general public programming.

42 Carden fosters social change in the Guelph community by providing high impact local organizations a place to work and operate that is affordable and vibrant. 42 Carden will also act as a general space for community members in the Guelph and Wellington area to congregate, collaborate, and exchange ideas.

The 42 Carden building will provide, encourage, and support the following:

• Accessible space for Chalmers Community Services
• High visibility for the Guelph Arts Council
• “Out on the Shelf” community library - a NFP offering services to LGBTQ+ community also including monthly programming and resource center
• Accessibility and environmental features (currently engaging in LEED certification process)
• Offices for community benefit organizations
• Community event venues

There is no other hub like it in Guelph, offering its richness in infrastructure and features and with the mission to support social-purpose organizations.

10C is working towards tracking the following metrics:

• Education – access to information, quality education, capacity building
• Community well-being – Community development, equality and empowerment, gender equality
• Sustainability – sustainable land use, energy and fuel efficiency, water resources management
• Economic – employment generation, income/productivity and growth

10C is also spearheading a partnership with its 100+ organizational and individual members, an evaluation capacity and framework for its network organizations to track and use in order to show collective impacts.

Industry

According to the Waterloo Region office of the CBRE, the Southwestern Ontario market (including Guelph) ranks in the top three of Canada's metropolitan areas in terms of unemployment, participation and employment rates. Specifically for Guelph, it ranked among the highest in the province in terms of economic growth at 3.6% real GDP growth for 2017, which is tops in the province of Ontario, along with Toronto and Oshawa. This showcases the tremendous potential the community of Guelph has in terms of enabling social change and economic innovation.

Competitor

The only “competitor” to 42 Carden would be its original space at 10 Carden Shared Space, which will continue to operate as is. However, the 10 Carden location is a fifth of the size in square footage and cannot support the services or scale of 42 Carden. It also focuses on co-working and event space only (no private offices). Further, seeing as both locations have full tenancy for the upcoming 2018-2019 year, there is evidently ample market demand for re-imagined, multi-disciplinary, multi-use space for the NFP and social innovation sector such as those provided by 10C/42C.

42 Carden has a robust tenancy rate despite 2018 being its first year of opening its doors, built upon the success of 10C and both partner organizations’ longstanding reputation within the community. Private space is fully subscribed on 2-5 year leases, with future vacancy allowance modeled at 5%. Under these assumptions, and with some inflow from the original 10 Carden operations in years 2019-2022, the project is well-padded to service its annual debt obligations with additional cash on reserve.

All private securities listed through online investment platforms and Exempt Market Dealers (EMDs) like SVX are likely to carry more risk than those available on the public markets. Our goal is to make you aware of those risks before making an investment. The following risks have been identified for investors:

Liquidity: This is an illiquid private debt offering with no interim interest payments. Interest compounds and accrues through the life of the bond and is paid along with principal at maturity (5 years). There is no secondary market with which to exit out of the bonds earlier than maturity.

Underlying asset: The G & H bonds are unsecured and pose substantial risk in terms of lack of underlying asset or security. It is also the most junior debt tranche of the organization, third after its debt obligations to VCIB and subsequently to Series A to F bondholders. In the event of operational failure or liquidation for distressed purposes, it is unlikely G & H bondholders would see much, if any, principal or interest returned.

Leverage: Assuming G & H are fully subscribed, 42 Carden will be ~104% leveraged against its property value. Should the real estate market experience downward fluctuations, this rate will increase. Should 42 Carden need to liquidate and sell the property in a worse case scenario, it would currently not be able to fully cover all G & H bond holders.

Economy: 42 Carden’s aggregate annual debt servicing payments amount to ~75% of total revenues. Revenues are largely comprised of commercial rent and other space rentals. Should there be a significant and/or prolonged downturn in local economy fundamentals, lease income could be materially impacted, and could endanger 42 Carden’s ability to honour its debt obligations.