Key Terms

Unit

A portion into which an asset is divided, similar to a share. Each Willow asset is divided into 100,000 units.

Residential Property

• Single-family: A building designed for one family to live in.
• Duplex: A building designed for two families to live in, with a single wall separating the two units.
• Multiplex: A building designed for multiple families to live in, with each dwelling having its own entrance within the larger building.

Commercial Property

• Office: A building that has an area that allows for business activities to take place.
• Retail: A building that has an area for a retailer to establish a shop and conduct their business from.
• Industrial: All land and buildings that accommodate industrial activities, including production, manufacturing, assembly, warehousing, research, storage, and distribution.

Net income yield

The relationship between the amount of regular income distributed to unitholders and the price of the unit. For example, a unit that costs $100 and distributes $2 to unitholders throughout the year will have a net income yield of 2%. Netincome yield does not account for any changes in the property value or reductions to the mortgage balance.

Internal rate of return (IRR)

A metric used in financial analysis to estimate the profitability of potential investments, expressed as an average annual rate of return over the life of the investment.

Return on investment (ROI)

A metric used in financial analysis to estimate the profitability of potential investments, calculated by dividing the total profit by the total investment and expressed as a single percentage. For example, if you invest $100 into a unit and your investment is worth $200 after five years, your return on investment would be 100%.

Cap rate

The relationship between the amount of income a property generates with the cost of the property. For example, if a property costs $1 million and generates $50 thousand in annual income after deducting expenses, the cap rate is 5%.
*This excludes Willow's management fee and property management fee.

Closing date

The last day that purchases of a primary offering are accepted, provided the required funds have not already been received.

Distribution/Dividend

The money dispersed to unitholders who own a particular property, generated by the income that property produced in a certain period. The timing and amount of the payments will vary based on expenses (property tax, management costs, etc).

Primary offering

A primary offering is the first sale of units for a particular property.

Secondary offering

Once the primary offering has taken place, the units may be bought and sold from existing unitholders as part of a secondary offering.

Reserve

The funds maintained for a particular asset to cover capital improvements or unforeseen expenses.

Exempt market security

The exempt market describes a section of Canada’s capital markets where securities can be sold without the protections associated with a prospectus. Exempt market securities must qualify for distribution by using prospectus exemptions, such as the offering memorandum exemption.

Prospectus

A prospectus is a formal document filed with security regulators that provides details about an investment offering to the public.

Offering memorandum

An offering memorandum is a legal document that states the objectives, risks, and terms of an investment involved with an exempt market security.

Asset

Property owned by a person or company, regarded as having value.

Ticker

A unique short-code identifier for a specific property.

Portfolio

A range of investments held by a person or organization.

Wallet

The cash holdings of a client.

Lease

A contract by which one party conveys land or property to another party for a specified time in return for a periodic payment.

Mortgage

A legal agreement by which a bank or other creditor lends money at a specified rate of interest to a borrower for the purposes of acquiring real estate.

Loan to Value (LTV)

This is the relationship between the mortgage on the property and the value of the property. When the LTV increase the risk associated with borrowing increase.