Asset vehicle isolation

Each Direct-Hold Solution — Canada and the United States as limited partnerships, Spain as a SOCIMI, and Mexico as a FIBRA — is its own separate legal entity holding its own asset. In Canada and the United States, that separation is a structural consequence of limited partnership personhood: each LP is a distinct legal entity with its own creditors, its own equity register, and its own balance sheet. An obligation incurred at one vehicle does not become an obligation of any other vehicle, regardless of common beneficial ownership at a higher level in the corporate structure. This isolation is the primary mechanism by which the direct-hold framework protects unit holders from cross-vehicle contagion. The sections that follow describe the limited-partnership-form mechanics first. They then describe how the planned Spain SOCIMI and Mexico FIBRA are intended to reach the same asset-level separation through their own jurisdictions' corporate and trust law, rather than through partnership form.

Key takeaways

Each limited-partnership-form direct-hold vehicle holds its asset in a separate legal entity; the creditors of that entity — mortgage lenders, trade creditors, counterparties — have no recourse to the assets of any other direct-hold vehicle in the holding structure.
The general partner's fiduciary obligations run separately to the limited partners of each LP; no management decision made at one LP vehicle can bind or obligate a separate LP.
For lenders providing commercial mortgage financing to a direct-hold LP, the loan is secured against the specific property in that LP, and the lender's recourse on default is limited to that property and any other collateral specifically pledged — not to the broader portfolio.
The planned Spain and Mexico vehicles are intended to reach the same separation through different legal forms — a corporation in Spain, a trust in Mexico.

Legal separation

A limited partnership in Canada is a legal entity distinct from its partners. The LP can own property, incur debt, enter contracts, and be a party to litigation in its own name. This legal personhood means the assets of the LP belong to the LP, not to its partners. Conversely, the creditors of the LP have recourse to the LP's assets — not to the personal assets of the limited partners (whose liability is capped at their invested capital), and not to the assets of other vehicles that share the same general partner or beneficial owner.

The direct-hold structure exploits this separation deliberately. By holding each asset in a separate legal entity, the default of any single asset — a lender calling a loan, a judgment creditor obtaining a charge — is contained within the entity holding that asset. The remaining assets in the portfolio are unaffected because they are held in separate legal entities.

Mortgage financing

Commercial mortgages on direct-hold assets are secured against the specific property held in the relevant LP. The mortgage lender has a first charge on the property and the LP's other assets; it does not have recourse to properties held in other vehicles, to equity held at the parent company level, or to cash held in the portfolios of other investors.

Income tax isolation

Because each LP is a separate entity for Canadian income tax purposes, the income and losses of each partnership are computed separately. A loss in one LP cannot be used to offset income in a different LP at the entity level; such losses flow through to the partners, and the tax treatment available to a given partner depends on that partner's own circumstances and is a matter for qualified tax counsel.

This separation prevents a cross-subsidisation of tax positions between assets: each LP's tax position is determined by the operating results of its own asset.

Unit register isolation

The unit register — the authoritative record of who holds equity in each direct-hold vehicle — is maintained separately for each vehicle. An investor's ownership in one vehicle does not appear on the register of another, even if the investor holds units in both. This register isolation means that an encumbrance against one investor's holding in one vehicle cannot affect their holding in another through the equity record.

Separation in the Spain and Mexico vehicles

A holder in the planned Spain or Mexico vehicle is intended to be protected on the same terms as a limited partner. A creditor of one vehicle reaches that vehicle's assets and no others. Neither jurisdiction delivers that result through partnership form. Spain relies on the separate legal personality of a stock corporation; Mexico relies on a trust patrimony, with a further barrier one layer below it. In both, the separation follows from the legal form itself, not from any agreement between the vehicles.

Spain — separation by corporate personality. Professional Centres Spain SOCIMI is planned to be formed in Madrid as a Sociedad Anónima Cotizada de Inversión en el Mercado Inmobiliario — a Spanish stock corporation carrying real-estate tax status. Under Spanish company law, a stock corporation is a legal person distinct from its shareholders: it owns its own assets, incurs its own obligations, and answers to its own creditors, and a shareholder's exposure is limited to the capital that shareholder subscribed. Its share register is intended to settle through Iberclear, Spain's central securities depositary, and its governing entity is its own — Woodfine Professional Centres 3 S.A. is planned to serve as Administrator, a role that binds no other vehicle. Legal title to property sits one layer lower: the Spain vehicle is intended to hold each property through its own Titleco nominee company, on the same basis as the other three vehicles.

Mexico — separation by trust patrimony and site-level subsidiary. Professional Centres Mexico FIBRA is planned to be constituted as a fideicomiso — a Mexican trust — rather than a company, with a licensed banking institution required by law to act as fiduciary. Assets placed in the trust form a patrimony held by the fiduciary for the beneficiaries, separate from the fiduciary's own estate; CBFI holders hold the beneficial and economic interest, without direct title to the real property. Below the trust, the planned Subsidiary Silo model adds a second barrier: each development site is intended to sit inside its own Sociedad de Responsabilidad Limitada, a Mexican limited-liability company holding the deed to that one site and nothing else, with legal title to that company's shares held by the bank as fiduciary. A liability event at one site is intended to stop inside that company, reaching neither the trust nor any other site. Governance follows the same lines: a Technical Committee is intended to instruct the bank on that trust's development, leasing, and fee decisions, and its instructions bind that trust and no other vehicle.

Each Direct-Hold Solution keeps its own creditors, its own register, its own audited accounts, and its own governing instrument — a partnership agreement in Canada and the United States, corporate bylaws in Spain, a trust agreement in Mexico. Neither vehicle is yet formed; until each is constituted and registered in its jurisdiction, every mechanism in this section is an intended design, not an operating fact.

Parent company oversight

The parent holding company — as the ultimate beneficial owner of each vehicle's governing entity — can receive consolidated information about all asset vehicles through normal holding company governance. The parent does not, however, hold the individual assets on its own balance sheet. The financial statements of the parent and the financial statements of each direct-hold vehicle are separate documents with separate audits.

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