What are Sunstone Opportunity Funds?
Sunstone Opportunity Funds are investment offerings that acquire revenue-producing commercial and residential real estate. These funds are nationally syndicated full prospectus offerings that allow investors to participate in cash flowing real estate opportunities in the same manner that large institutions invest. For funds after 2006, Sunstone's unique tax effective investment structure combines a Realty Trust Unit component and a Debenture Fund or Mortgage Fund Unit, both of which are RRSP and RRIF eligible, into one partnership investment that acquires revenue-producing properties.
Sunstone offers both Canadian Opportunity Funds and US Opportunity Funds. The US Opportunities focus on American sunbelt region properties including mult-unit rental apartments and hotels.
Why do Sunstone Opportunity Funds include a portfolio of properties?
Targeting a portfolio of quality commercial revenue-producing assets gives investors a more conservative investment, diversified by location and asset class, while providing a solid annual cash flow yield. The following pie charts are a summary of properties acquired by Sunstone to date.
Sunstone Properties by Asset Class
Sunstone Canadian Properties by Location
Sunstone American Properties by Location
What is the advantage to investing with Sunstone?
Sunstone is able to offer investors 42 years of experience and a multiple asset portfolio that is diversified by location and asset class, and inspected, appraised, analyzed and managed by Sunstone's team of real estate industry professionals.
How are investors able to use their RRSP funds?
Sunstone strategically structures its prospectus offerings to allow investors to utilize their RRSP to invest in real estate. To satisfy the RRSP eligibility requirements for Sunstone funds after 2006, Sunstone has divided the investment equity into two components: 80% as an RRSP eligible Debenture Fund or Mortgage Fund Unit that earns 8% per annum and 20% as an RRSP eligible Realty Trust Unit. Please note that Sunstone Opportunity Fund (2004) Limited Partnership units and Sunstone Opportunity Fund (2005) Limited Partnership units are not RRSP eligible. All Sunstone US Opportunities are RRSP and TFSA eligible.
What is the advantage to holding the Realty Trust Unit outside of a registered account?
Since 2006, Sunstone has structured its Canadian offerings with 20% of the equity invested as a Realty Trust Unit and 80% as a Debenture Fund or Mortgage Fund unit. By structuring the offerings with 20% of the equity invested as a Realty Trust Unit, Sunstone Funds provide the investors with the flexibility to choose to invest the Realty Trust component outside their RRSP to maximize tax efficiencies; when investment properties are sold, any capital gains flow to the Realty Trust Unit, thereby ensuring maximum tax efficiency with favourable capital gains treatment.
Sunstone's US Opportunity Funds are structured as single investment unit offerings, in US dollars. Our US Opportunity Funds, structured as Canadian realty trusts, enable Canadian investors to invest in US commercial real estate without the need to file annual American tax returns on a regular basis (However, US tax returns are required for the tax years in which properties are divested.) Sunstone investors who hold their US Opportunity Fund units outside of an RRSP also receive favourable capital gains treatment on the proceeds of investment property sales.
Are real estate investments too risky for an RRSP?
Professionally managed, cash flowing real estate is one of the most conservative and stable asset classes available to investors. Life insurance companies, pension plans, endowments and large institutions all hold significant portions of their portfolios in cash flowing real estate due to its conservative nature. With the advice of a financial planner, real estate investments can also help add diversification to an individual's portfolio.
When are distributions made?
Sunstone Opportunity Fund distributions are issued on a quarterly basis, on the 15th day of the month following the end of a quarter.
How do investors find out more about Sunstone?
For further information, please contact your financial advisor for information about current Sunstone offerings or visit www.sedar.com for a list of all of our public filings.