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Investment firm purchases historic Coach Inn – Owen Sound Sun Times

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A Mississauga-based real estate investment company has purchased the landmark Coach Inn building, which contains emergency accommodations for people experiencing homelessness as well as multiple affordable residential units.

BG Wealth Properties, which says on its website that its investment strategy allows the company to renovate properties and increase rents to create “attractive cash distributions and substantial increases in the after-repair value of our buildings,” made the announcement Monday.

The news ignited concerns in the community that the company would renovate the rooms at the Coach Inn and then increase the rent, as it has done with its other properties in Owen Sound, leaving the units out of reach financially for tenants in need of affordable options and further compounding the lack of rental housing in the city.

But officials with BG Wealth said Tuesday the company views the Coach Inn, which has 44 residential units, differently than the other properties it has acquired, which are long-term rentals and required improvements.

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“When we look at the Coach Inn, the Coach Inn is serving a different purpose – it’s short-term rentals for individuals who need affordable housing and we recognize that as a need in the town,” CEO Craig Dunkerley said in an interview.

Asked if he sees the building remaining as an affordable housing option for people in the long-term, he said that will come down to what the city requires as it goes through its revitalization of the downtown.

“It will come through communication with the city as to what is required in the future,” he said.

Jakob Harvey, director of acquisitions and business growth, said, in the short-term, the company plans to improve the living accommodations for those at the Coach Inn by refurbishing the floors and updating the fixtures.

“In the near future, we do not have plans to substantially increase the rents because we recognize it’s a different group of people in the Coach and it’s really serving the community of Owen Sound. So, no, we have no immediate plans for a rent increase,” he said.

Again, in the long-term, he said any decisions will be made in consultation with city officials and the community.

The property at 1005 2nd Ave. E., historically known as Seldon House, was listed for $2.75 million by Sotheby’s International Realty Canada. The online listing says the “investment property” has an English pub leasing the main level, while the upper floors contain hotel rooms that are leased monthly and are “fully occupied with a waiting list.”

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Joan Chamney, program co-ordinator with YMCA Housing, said for many years, owners of the building have been “very welcoming to a large, diverse group of people” who have been in need of an affordable place to stay in Owen Sound.

The organization uses several main-floor rooms as emergency/transitional accommodations.

“For people that have nothing tonight, we can call them and they reserve a few rooms for us – for our use, for Safe ‘n Sound’s use and for the police to use. So should somebody be found to be homeless at 10 o’clock at night, they can be taken there,” she said.

YMCA Housing also refers people who are struggling to find affordable housing to rent the upstairs rooms at the Coach Inn.

It would be a “huge loss” to lose that kind of rooming, she said.

Toni McGregor Callaghan, executive director of Safe ‘n Sound, said the homelessness prevention organization frequently refers people to the emergency beds in the Coach Inn.

It’s nearly impossible, she said, to find the kind of affordable rooms available at the Coach Inn elsewhere in Owen Sound.

Some of the rooms are occupied by couples, she said, and some people have lived there for many years.

She said she is deeply concerned about what the people who live in the rooms would do if they no longer had that option for accommodations.

Grey County council heard last month that 560 county residents are on waiting list for affordable housing, while vacancy rates in the county are at historical lows and there have been “substantial increases” in rental rates throughout Grey.

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The listing for the building also says the units in the Coach Inn fall under the Innkeepers Act.

Seana Moorhead, executive director/lawyer at the Grey Bruce Community Legal Clinic, said that’s been a subject of dispute, with the clinic taking the position that the Residential Tenancies Act may apply to tenants who reside in the building.

Some tenants have challenged previous owners’ positions that the act doesn’t apply, she said, and, to the best of her knowledge, those claims have been settled out of court.

The RTA provides protection for tenants, including a process that landlords must follow before an eviction can occur, while the Innkeepers Act does not.

The 15,500-square-foot Coach Inn, located at the 10th Street and 2nd Avenue East intersection, was built in 1887 as a hotel with 44 rooms, three parlours, a bar, dining room and sample rooms.

From 1904 to 1937, it operated as a temperance hotel by the daughters of Mary Doyle, founder of the Women’s Christian Temperance Union in Owen Sound, the first organization of its kind in Ontario.

In 1984, the entire exterior facade, lobby and main staircase was designated under the Ontario Heritage Act by Owen Sound. Seldon House is also listed on the city’s register of properties of cultural heritage value or interest.

The building was sold in 2018 by then-owner Jason Queenen, who had the property listed for sale for $1.95 million.

In September 2019, new owner Jeff Mundle applied to city hall for a double facade grant to improve the exterior.

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BG Wealth Properties has a website dedicated to Owen Sound, which says the city “is a hidden gem with immense opportunity for development” and the “opportunity aligns with BG Wealth Group’s vision and value-investing philosophy to develop undervalued properties in areas with high-growth potential.”

A timeline on the website says the company acquired in March 2019 buildings at 261-281 9th St. E., which contain nine residential and six commercial units. It notes the monthly rents upon acquisition ranged from $550 to $750 for one-bedroom units and $950 for two-bedroom units.

“BG Wealth Properties Inc. renovated two one-bedroom units thereby increasing rents for the two units to $1,100 per month each and the one two-bedroom, which the rent was increased to $1,400 per month,” the website says.

The company then acquired in June 2020 buildings in the 900 block of 2nd Avenue East, which contain 13 residential and two commercial units, the website says. Rents averaged $750 a month, which offered “immense opportunity to rehab units and substantially increase rents and buildings value,” it says.

In August 2020, the company “secured a new tenant for another of the one-bedroom units at $1,300 per month. This unit was previously being rented at $650 per month. This increase from the $1,100 we could get last year to $1,300 this year shows there is even stronger demand and more growth possible,” the website says.

Dunkerley said he came across Owen Sound about three years ago while looking for an Ontario community where BG Wealth could invest and be a part of rebuilding the community.

“I saw coming into that there was a lot of effort being made by the Downtown Improvement Association and the business and economic development committee to make improvements. And the province bringing in money to redo the waterfront and the city looking to revitalize and maintain their heritage, it just seemed like an area that we really wanted to be a part of and see how we could help and bring more to the area as well, whether that be helping the residents or bringing in business that are desirable in a downtown core,” he said.

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Wealthsimple hits $4 billion valuation on funding from Ryan Reynolds, Drake

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Wealthsimple

(Reuters) -Wealthsimple said on Monday it has raised C$750 million ($610.40 million) in its latest funding round, which more than doubled the Canadian fintech company‘s valuation to C$5 billion.

The latest funding round included participation from celebrities Drake, Michael Fox and Ryan Reynolds, according to the company.

The Toronto-based company that has helped make stock trading, peer-to-peer money transfers and tax filing easily accessible, said it will use the amount raised to further expand its market position, product suite and team.

The latest funding round, led by venture capital firms Meritech and Greylock, also includes investments from iNovia, Sagard, TSV and Redpoint.

The funding consists of C$250 million primary fundraising by Wealthsimple and a C$500 million secondary offering by holding company Power Corp of Canada, its largest shareholder.

Wealthsimple said it has seen rapid growth in the past 14 months as Canadians took an interest in stock trading during the COVID-19 pandemic.

Earlier this year, the company said it plans to grow revenue by adding premium features for its clients.

($1 = 1.2288 Canadian dollars)

(Reporting by Eva Mathews and Tiyashi Datta in Bengaluru; Editing by Shailesh Kuber and Shounak Dasgupta)

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Ethereum breaks past $3,000 to quadruple in value in 2021

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SINGAPORE (Reuters) –Cryptocurrency ether broke past $3,000 on Monday to set a new record high in a dazzling rally that has outshone the bigger bitcoin, as investors bet that ether will be of ever greater use in a decentralised future financial system.

Ether, the token transacted on the ethereum blockchain, rose 3% on the Bitstamp exchange to $3,051.99 by lunchtime in Asia. It is up more than 300% for the year so far, easily outpacing a 95% rise in the more popular bitcoin.

In part, the big rally is a catch-up to late 2020 gains in bitcoin, said James Quinn, managing director at Q9 Capital, a Hong Kong cryptocurrency private wealth manager.

It also reflects improvements to the ethereum blockchain, he said, and a growing shift towards “DeFi”, or decentralised finance, which refers to transactions outside traditional banking for which the ethereum blockchain is a crucial platform.

“At first, the rally was really led by bitcoin because as a lot of the institutional investors came into the space, that would be their natural first port of call,” Quinn said.

“But as the rally has matured over the last six months, you have DeFi and a lot of DeFi is built on ethereum.”

The launch of ether exchange-traded funds in Canada and surging demand for ether wallets to transact non-fungible tokens such as digital art have also pushed up the price.

The ether/bitcoin cross rate has soared more than 100% this year and hit a 2.5-year high on Sunday, pointing to a degree of rotation into the second-biggest cryptocurrency as investors diversify their exposure.

“Surging DeFi volumes continue to push ethereum prices higher as investors gain confidence in crypto and see ethereum as a safe second-place asset,” said Jehan Chu, managing partner at Hong Kong blockchain venture capital firm Kenetic Capital.

Illustrating the momentum for such new transactions, Bloomberg reported last week that the European Investment Bank plans on issuing a digital bond over the Ethereum blockchain, while JP Morgan plans a managed bitcoin fund.

Bitcoin, the world’s biggest crypto asset with more than $1 trillion in market capitalisation, regained the $50,000 mark last week and hovered around $58,000 on Monday, up about 3% but well below its record high at $64,895.22.

The U.S. dollar was broadly steady. [FRX/]

(Reporting by Tom Westbrook and Vidya Ranganathan; Editing by Himani Sarkar & Shri Navaratnam)

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Warren Buffett’s Berkshire Hathaway

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By John McCrank and Jonathan Stempel

NEW YORK (Reuters) – Some Berkshire Hathaway shareholders are grappling with how Warren Buffett’s conglomerate will handle a thicket of post-pandemic challenges, including looming inflation, a dearth of acquisitions and demands for more environmental and social disclosures.

Making money at Berkshire used to be like “shooting fish in a barrel, but that’s gotten harder,” Buffett’s long-time business partner Charlie Munger said at the conglomerate’s annual meeting on Saturday.

Investors have long been happy to bet on Buffett outperforming markets, and many remain confident Berkshire’s growth will pick up if the U.S. economy continues roaring back from its pandemic-induced slump. Still, some worry the last year may have exacerbated Berkshire’s difficulties delivering faster growth.

“We have been reducing our position in Berkshire for a number of years because it appears that we can make more money than he can,” said Bill Smead, whose firm, Seattle-based Smead Capital Management has reduced its Berkshire holdings to about 2.2% of its $2.5 billion portfolio, from 5% a decade ago.

With unprecedented government stimulus and rock bottom interest rates threatening to lift inflation, Berkshire may be too big to pivot heavily to companies that could benefit from rising consumer prices, Smead said.

Several Berkshire shareholders expressed frustration that Buffett did not snap up more shares of companies at the beginning of the pandemic, a missed opportunity given the S&P 500’s nearly 90% surge from last year’s low.

Steve Haberstroh, a partner at Berkshire shareholder CastleKeep Investment Advisors, said it was “frustrating” Berkshire didn’t swoop in to buy distressed companies sooner.

Yet, he was gratified when the company announced share buybacks and new stakes in Verizon Communications Inc and Chevron Corp .

Another issue hampering Berkshire’s ability to generate money is historically low interest rates, which the Federal Reserve has pledged to leave at near-zero for years.

Berkshire now earns about $20 million annually on its more than $100 billion in Treasury bills, compared with about $1.5 billion before the pandemic, Buffett said.

“Imagine your wage is going from $15 an hour to $0.20 an hour,” Buffett said.

Still, Berkshire has outperformed the S&P 500 year to date, gaining 18.6% versus the index’s 11.84% gain. But it has trailed over the past decade, returning nearly 236% compared with just over 277% for the index.

As the economy improves, Berkshire is poised to benefit, said James Shanahan, an analyst at Edward Jones & Co.

“If it has a challenge, it relates to capital deployment,” he said. Berkshire’s $145.4 billion cash hoard could swell by $25 billion by year end, he said.

Buffett said he would like to put $70 billion to $80 billion to work through acquisitions.

But the growth of special purpose acquisintion companies, which take private companies public, has made buying whole companies pricey for Berkshire, Buffett said.

EYE ON SUCCESSION

As in previous years, investors have also been focused on Berkshire’s guidance regarding succession.

Among the biggest reasons for Berkshire’s success is the relationship between Buffett, 90, and Munger, 97, and the business culture they cultivate.

Both expressed confidence in Berkshire’s ability to stay on course once they’re gone, and had possible Buffett successors, Vice Chairmen Greg Abel and Ajit Jain, join them on stage at the annual meeting.

“This decentralization won’t work unless you have the right kind of culture accompanying it,” Buffett said about Berkshire.

“Greg will keep the culture,” Munger said of Abel.

Robert Miles, a shareholder who teaches a class on Buffett and Berkshire at The University of Nebraska, called Abel and Jain’s presence “a real value-add,” in that they fielded several questions and were more visible than in most prior years.

Jain said he and Abel talk every quarter about businesses they oversee.

Abel addressed Berkshire’s efforts around environmental, social and governance (ESG) issues topics that were on the meeting’s agenda, with two shareholder proposals asking the company’s board to publish annual reports on how each of its units addressed them.

Berkshire opposed the proposals, citing its decentralized business model.

Both proposals were rejected, but received support from around one quarter of the votes cast, suggesting greater discontent than Berkshire shareholders historically have demonstrated.

“These are complex topics that warrant ongoing dialogue,” said Caitlin McSherry, Director of Investment Stewardship at Neuberger Berman, a Berkshire shareholder that backed the proposals.

Smead, of Smead Capital Management, looks forward to when Berkshire will again become a frequent buyer of choice for companies looking to sell.

“We would (add) where they are back to shooting fish in a barrel,” he said.

 

(Reporting by John McCrank and Jonathan Stempel; additional reporting by Megan Davies; Editing by Ira Iosebashvili and Diane Craft)

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