This review includes all projects that have exited from the Fortress portfolio, including any challenged projects that have only partially repaid principal. The table of projects is sorted by date of exit and includes information including valuation method, project administrator, disclosure generation and Fortress’ role.
Table of Exits
Also highlighted in the table of exits are the 8 projects that have a completed Specified Audit Procedures Report (SAP Report), prepared by Deloitte for the borrower brokerage. This report involves examining a sample of lender/investors, verifying the amounts loaned, amounts received and amount of interest paid between the borrower and lender/investors within the syndicated mortgage. The report also provides an internal rate of return for the project.
Finding From Review of Exits
The findings show that the completion of a project and a successful exit is not dependent on the generation of the disclosure or the type of valuation used.
Prior to regulatory changes, media speculation and shuttering of brokerages, Fortress and its partners delivered 2,922 residential units. The combined residential, commercial and retail space brought to market totals more than 3.5 million square feet. This was a real business with tangible results achieved through the merits of the individual projects.
As rules and regulations changed over time, including multiple reviews by FSCO, 30 projects successfully exited with similar disclosures made and valuations metrics employed. Upon implementation of new regulations in February 2018, without a ‘grandfathering’ provision for existing contracts and their terms, all projects began to suffer varied levels of distress as they were no longer sufficiently funded. The preceding analysis shows a correlation between successful exits, positive returns and the breadth and scope of disclosures made and risks acknowledged.
An Exculpatory Look at Syndicate Mortgage Investments 