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ingSett Capital Inc., one of Canada's most experienced commercial real estate investors, has suspended redemptions and distributions from its flagship Canadian fund due to industry challenges. The company informed investors in the $1.9-billion Canadian Real Estate Income Fund about the changes earlier this month, citing difficulties in navigating a market with persistent woes. Investors will not be able to cash out or receive a distribution for the next year.
KingSett aims to pay down debt and has attempted to sell assets to generate cash, but large investors have shown little interest in office towers and industrial properties. The company's chief executive, Rob Kumer, confirmed the changes in an email statement, adding that distributions will resume on December 15, 2025. KingSett's decision echoes similar moves by other private real estate investors, including Romspen Investment Corp. and Hazelview Investments.
KingSett's reputation and client base set it apart from other companies making similar decisions. Founded by Jon Love, the company has an elite reputation and attracts big-name investors on Bay Street as well as family offices and institutions. Its Canadian Real Estate Income Fund largely owns cash-generating assets like office towers, whereas Romspen and Hazelview often lend to development projects.
The commercial real estate industry has faced difficulties since the COVID-19 pandemic, with remote work reducing demand for office space and lockdowns limiting retail store visits. The rapid rise in interest rates has also increased borrowing costs, making it harder for the industry to operate. KingSett's CEO said the company's buildings are full and tenants are paying rent, but acknowledged downward pressure on property values and illiquidity in the market.
KingSett initially limited redemptions from its Canadian Real Estate Income Fund LP (CREIF) and reduced distributions in early 2023, citing a new formula that linked distribution to cash flows. The company has since used about half of the capital commitments raised from investors but warned in the second quarter that it needed to reassess redemptions and distributions.
