Here’s what I love about financing investment properties in Fredericton and Moncton.
Last year, a client from Toronto called. He’d been trying to buy rental apartments in his market where buildings trade at 3% cap rates and need $2 million minimum investment.
“Jeremy, I found a 12-unit apartment building in Moncton. It’s 95% occupied, well-maintained, in a good area. Listed at $1.4 million with a 6.2% cap rate. Is this real?”
“It’s real,” I said. “Welcome to Atlantic Canada.”
That’s these markets. Real opportunities at prices that make sense.
Understanding Moncton
The Hub City (Metro population ~170,000)
Moncton is Atlantic Canada’s fastest-growing city.
Why it matters:
- Transportation hub (highway, rail, air)
- Call center and service industry employment
- Bilingual workforce
- Growing population (immigration, interprovincial migration)
- Affordable cost of living attracting young families
Commercial Market:
- Office: $16-24/sq ft
- Retail: neighborhood centers stable
- Industrial: logistics and distribution growing
- Multifamily: vacancy 2-4%, strong demand
Why lenders like Moncton:
- Steady economic growth
- Diversified employment
- Population growth
- Affordable real estate (less speculative risk)
Understanding Fredericton
The Capital City (Metro population ~100,000)
Fredericton offers stability:
- Provincial government employment (largest employer)
- University of New Brunswick (10,000+ students)
- Healthcare sector
- Professional services
- Limited but stable commercial market
Commercial Market:
- Office: $14-22/sq ft (government tenants valued)
- Retail: small market, stable fundamentals
- Student housing: steady demand
- Multifamily: vacancy 3-5%
Why lenders like Fredericton:
- Government employment stability
- University provides consistent student housing demand
- Low economic volatility
Property Types and Financing
Multifamily (Rental Apartments)
Both cities have strong rental fundamentals.
Moncton:
- Growing population driving demand
- Immigration settlement city
- Young families relocating from expensive markets
- Purpose-built rental: 5-6.5% cap rates
- Older buildings: 6-7.5% cap rates
Fredericton:
- Student housing near UNB
- Government employee rentals
- More stable, less growth than Moncton
- Cap rates: 5.5-7%
Financing:
- CMHC insurance available (up to 85% LTV for 5+ units)
- Conventional: 30-35% down
- Rates: banks 5.89-6.39%
Office Properties
Moncton:
- Growing office market
- Call centers, professional services
- Downtown and suburban locations
- Rates: $16-24/sq ft
- Vacancy: 8-12%
Fredericton:
- Government-dominated
- Professional services
- Limited inventory
- Rates: $14-22/sq ft
- Government tenants highly valued
Financing:
- 35-40% down typical
- Government tenants can reduce to 30-35%
Retail Properties
Both cities:
- Neighborhood shopping centers
- Strip malls
- Main street retail (limited)
- Grocery-anchored centers most stable
Financing:
- 30-35% down
- Cap rates: 6-8%
Industrial Properties
Moncton:
- Logistics hub potential
- Warehouse demand growing
- Flex space popular
- Rates: $8-14/sq ft
Fredericton:
- Smaller industrial market
- Limited inventory
Financing:
- 25-30% down for quality properties
Who’s Lending
The Big Banks (RBC, TD, BMO, Scotia)
Active in both cities for:
- Clean commercial deals
- Strong tenancy
- Experienced borrowers
Rates: 5.89-6.39% (5-year fixed)
Credit Unions (UNI Financial Cooperation)
Major presence in New Brunswick.
Benefits:
- Local decision-making
- Relationship banking
- Understanding of local markets
- Competitive rates
Often more flexible than banks.
CMHC (for multifamily)
Up to 85% LTV with insurance.
Best financing for apartments.
Alternative Lenders
For deals not fitting bank criteria:
- 30% down vs. 40%
- Credit challenges
- Faster closings
Rates: 7.25-8.50%
Private Lenders
Available for:
- Properties with issues
- Bridge financing
- Credit problems
Rates: 8.5-11%
Down Payment Requirements
Multifamily:
- CMHC insured: 15-25%
- Conventional: 30-35%
Office:
- 35-40% typical
- Government tenants: 30-35%
Retail:
- 30-35%
Industrial:
- 25-30%
The Application Process
Standard 8-12 week process:
Week 1-2: Pre-qualification Week 2-3: Offer and due diligence Week 3-5: Full application Week 4-6: Appraisal ($2,000-$4,000) Week 6-8: Underwriting Week 8-10: Closing
Closing costs:
- Legal: $1,800-$3,500
- Title insurance: $1,000-$2,000
- Appraisal: $2,000-$4,000
- Land transfer tax: lower than major cities
- Other: $1,500-$3,000
Why These Markets?
Affordability:
You can buy meaningful properties for $500,000-$2 million.
Accessible for individual investors.
Cash Flow:
Cap rates 5-7.5% mean properties often cash flow from day one.
Rare in Toronto, Vancouver, even Calgary.
Stability:
No boom-bust cycles. Steady, predictable growth.
Lenders like this.
Growth Potential:
Both cities growing. Moncton particularly strong.
Immigration, interprovincial migration, economic development.
Common Mistakes
Mistake #1: Expecting Toronto/Vancouver Appreciation
These markets grow 2-4% annually, not 8-12%.
Buy for cash flow, not speculation.
Mistake #2: Underestimating Property Management
You likely don’t live in Moncton or Fredericton.
Need good property management. Budget 8-10% of gross income.
Mistake #3: Ignoring Bilingual Requirements
Particularly in Moncton, bilingual property management helps.
Mistake #4: Skipping Due Diligence
Small markets mean fewer comparable sales.
Get thorough appraisal, property inspection, market analysis.
Why Creek Road Financial Inc.?
We’ve financed properties in both cities:
- Multifamily buildings
- Commercial properties
- Mixed-use buildings
We understand these markets and which lenders are comfortable here.
We can tell you within 48 hours which lenders will consider your deal.
The Path Forward
Step 1: Clarify strategy (cash flow vs. appreciation) Step 2: Organize finances Step 3: Get pre-qualified Step 4: Work with local realtor Step 5: Plan for property management Step 6: Thorough due diligence Step 7: Work with us for financing
Final Thoughts
Fredericton and Moncton offer something rare in Canadian real estate: affordable properties that cash flow from day one in stable, growing markets.
If you’re tired of compressed cap rates and speculative pricing in major markets, look here.
Reach out to Creek Road Financial Inc.. Let’s build a financing plan that works.
Let’s make it happen.