Once upon a time, if you were ill or required a physical check-up, you likely paid a visit to your primary care physician. That doctor might have had his or her office on a hospital campus, or in a nearby medical office building; in fact, that hospital could have owned that building.
* Update September 2018: Realized has established its Secondary Market and has completed its first Secondary Market transaction.
Delaware Statutory Trusts, or DSTs, are an alternative for 1031 exchange investors seeking replacement properties, offering the potential for monthly income and diversification without any on-going landlord duties.1 Since 2004, when the IRS approved the Delaware Statutory Trust for 1031 exchange-qualified co-ownership, investors have purchased approximately $20 billion worth of real estate/replacement properties.2
Partnerships can be an ideal legal structure for investors interested in acquiring, owning and operating real estate. A partnership consisting of two or more people can help boost capital availability and operational experience, while providing liability protection and tax pass-through treatment on your income tax return.
We hear it all the time, real estate is an illiquid asset. Commonly used in the context of risk, investopedia defines illiquidity as “the state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value1.” Opposite to securities that are traded at high volumes, such as stocks and treasury bonds, illiquid assets include private securities and hard assets that are not traded as frequently.
There is no surprise that the DST market is heating up. As more and more quality deals become available, investors are looking for ways to defer their capital gains, while benefiting from the passive nature of DSTs. As noted by FactRight, equity sales in 2017 of DST offerings were nearly $2 billion, a 10-year high1.
As we discussed in a previous blog, understanding of personal return objectives and investment constraints is often overlooked in real estate investing, although the same principles should apply as with any financial investment. In that blog, we focused on return objectives, what they are, and how they might impact your decision-making when it comes to investments. Also discussed was risk tolerance, which, when paired with return objectives, are used to determine the best investment “fit” for an investor.
As we mentioned in Part 1 of this series, e-commerce is changing the way we do business. From the way we communicate to the way we transfer products and services, these changes have a dramatic impact on the real estate industry, especially affecting the productivity and value of retail property types. Although one may believe that this particular sector of real estate is stable, looking to increasing values since the Great Recession, a recent shift in returns has shown evidence of a distressed market, that has been significantly impacted by how the sector has been conducting business, and how consumers are reacting.
If you’ve ever met with a financial advisor to discuss your investment portfolio, you’ve likely heard the terms “return objectives and investment constraints”. This seems fairly straightforward. You certainly want to know what kind of returns you might receive from certain types of investments. And, it’s a good idea to understand what might be standing in the way of those returns.
In a previous blog, we noted that 1031 Exchange rules can be challenging. That article focused on three Internal Revenue Service (IRS) rules when it came to identifying the replacement property or properties for a successful exchange.
When it comes to a commercial property acquisition, the typical investor generally spends time performing due diligence. He or she will study the property’s tenants, net operating income, age, location and other information, to make the best investment decision possible.