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How does the secondary market work?
The Parvis secondary market allows you to trade your private real estate investments during semi-annual events. Providing this level of liquidity is in stark contrast to the standard 5-10 year hold periods which make traditional private real estate investments notoriously illiquid.
Assets become eligible for trading after the fund is fully allocated and a complete valuation of assets is set. Parvis reserves the right to change details about timing of events and eligibility of funds.
Market Mechanics
Trade matches and pricing are determined by the buyers and sellers. Both can initiate orders that express non-binding interest in a share lot. After expressing interest, the buyer and seller will determine the final sale price via a private chat on the Parvis platform.
When an agreement is reached, both parties will sign a Transfer of Ownership Agreement. At this time the buyer funds their purchase within 5 business days. Parvis will provide instructions to fund the purchase via wire transfer from a Canadian bank account.
Once funds are received in the account, Parvis will process the trade by 1) transfering the proceeds net of fees to the seller and 2) releasing the share lot to the buyer's account to update the portfolio.
Example
A seller invested in a 10 year project wants to liquidate their holdings. The recent Unit Price of the fund they own is $10.50, the seller owns 10,000 units. The predefined range in which they can sell their units is set to 20%, allowing them to place a sell order between $8.40 - $12.60. The seller selects an ask price of $11.00 and places a sell order for the full 10,000 units.
During the secondary market event, two offers are made for the 10,000 unit share lot. One buy order wants to purchase 5,000 units at $10.90 and the second wishes to buy the whole 10,000 units at $10.75. The seller makes the final decision and accepts the lower of the two in order to liquidate their entire holdings.
Fees
Only sellers pay a fee equal to 1% of the gross transaction amount. This is deducted from the sale amount and proceeds are delivered net of fees. There is no purchase fee for the buyer.