A focus on Quebec-only lending has paid off for commercial mortgage broker VA Capital with a record 2024 that saw the firm arrange $2.25 billion in commercial loans for clients, president Jeffrey Soliman says.
“$2.25 billion is a huge number in this market,” says Soliman, noting VA Capital has become a leading commercial mortgage firm in Quebec, having exceeded $6 billion in originated loans over the past six years.
Soliman, who is also a commercial mortgage broker, notes there is a high barrier to entry in Quebec, whether it’s the language or understanding the market.
Concentrating on Quebec “gives us that leading edge to dominate the market as much as we can and to build an expertise as much as we can.” Developers, he says, “really want to work with someone they trust and that they know what they’re doing, so that the results are there.”
Quebec keeps VA Capital busy, he says, and the firm will consider expanding to other provinces “much more down the line.” VA currently has 17 professionals in departments that include origination, underwriting, risk and funding, accounting and social impact.
The scope of financing deals is growing
Loan sizes in Quebec have grown rapidly in the last few years, says Soliman, noting VA worked on about 10 loans of more than $100 million last year. While large borrower status once began at $50 or $75 million for banks and the CMHC, “now we can take $100 million by ourselves (and) we don’t have to syndicate with other lenders.”
At the other end of the spectrum, VA Capital has a team that focuses on loans of $15 million and under that did more than 150 transactions last year.
“Borrowers that play in that space, particularly $5 million and over, are under-serviced by the banks,” he says, noting it can take the same amount of time and energy to work on a $5 million loan as a $50 million loan.
Last year, 65.7 per cent of the loans ($1.48 billion) that VA Capital obtained for clients were from the CMHC, while term loans (22.9 per cent) and bridge loans (11.4 per cent) made up the rest. Most loans were for multifamily (66.2 per cent), with industrial (14 per cent) lagging as the second most-funded asset class.
Developers Mondev and Brasswater have been clients since VA Capital was founded. Other clients include Jadco, Plan A and Fonds FTQ.
Lower CMHC loan volume in 2025?
Among the loans VA Capital obtained for clients last year were a $112.65 million CMHC construction loan to Jadco for Le Lévesque, a 275-unit multifamily building in Laval, and a $90 million CMHC MLI term loan to Mondev for Milhaus, a 244-unit multifamily building in Outremont.
Soliman expects VA Capital’s loan volume to increase in 2025 but doesn’t see CMHC being the major driver for multifamily loans that it was in 2024.
CMHC programs offer up to 95 per cent leverage and 50-year amortizations and are “some of the best financing conditions in history,” he says, “but I do find that they’ve over-exposed themselves.”
He predicts CMHC will pull back in 2025 and commercial loans will move more toward conventional financing. Conventional funders that have “been able to think outside of the box, with creative financial solutions,” will take the lead this year.
VA Capital to launch first debt fund
VA Capital plans to go to market in the coming weeks on its first debt fund, which aims to raise $250 million in capital. “It’s a question of leveraging our momentum and the credibility we’ve built in the city.”
The debt fund will do minimum loans of $3 million and will mostly finance multifamily and industrial, along with well-anchored retail and office in the Montreal area.
He expects the debt fund to attract capital from a few institutional investors and high-net-worth families who should expect annual returns of 10 to 12 per cent over a three-to-five-year period
Although the office market remains hit or miss, Soliman is “a huge office fan. I do believe there’s a strong push toward working full-time at the office,” citing U.S. President Donald Trump’s move to force federal workers to work five days a week at the office.
“I expect that to influence decision-makers on our side of the border.”
Office market “will bounce back”
Adds Soliman: “Just as retail was once an underdog, I think the office market is going to bounce back and become a desirable necessity in commercial real estate for investors, tenants and lenders.”
Lower interest rates this year and next and encouragement from municipalities in the face of a shortage of supply “will definitely stimulate” loan volumes in multifamily. Soliman also expects the condo development market to pick up significantly as interest rates drop.
Lenders also have solid appetites for industrial and retail, assets that have “reached a point of stabilization” for which “the underwriting assumptions are fairly reliable.”
While Soliman is strictly focused on his lending business in Quebec, he maintains real estate assets in South Florida under his Soliman Corp., in particular an 11-storey office building with 112,000 square feet of gross leasable area in Hallandale Beach that he acquired in 2021.
1250 E. Hallandale, “a very tired asset when we bought it,” has been repositioned after substantial capex work and rents have almost doubled. He’s looking to densify the Hallandale site which “is good for about 250 doors for development.”
