Salt Lake City, April 25, 2022 – RealSource Properties, a leading real estate investment and management firm with nearly $1 billion in commercial multifamily acquisition history, today announced the launch of its Real Estate Investment Trust (REIT). For the first time since commencing its investment and management platform two decades ago, the Salt Lake City-based company is now extending an opportunity to accredited investors to join with RealSource in a portfolio of multifamily assets.
"We believe there may be no better time for RealSource to launch a multifamily investment vehicle than now due to the favorable fundamentals currently being experienced in specific markets across the United States. When we apply our local real estate cycle econometrics and knowledge, it is clear to see that demand for shelter is rising and to ascertain which markets are quickly recovering from the pandemic,” said Nate Hanks, CCIM, CEO of RealSource Properties. “This multifamily-focused Fund will bring our company’s track record in value creation to non-institutional investors looking for ways to diversify their portfolio with cash flowing real estate.”
The $390 million RealSource Properties REIT will target multifamily properties, with ten properties already placed in the Fund and more in the pipeline. Utilizing the firm’s vertically integrated business model, assets in the REIT will be managed by the same value-add real estate strategy currently deployed at RealSource multifamily assets nationwide. RealSource’s in-house team of economists, researchers, and acquisition specialists source viable investments; then, its team of asset management professionals manage and operate the assets identified for the Fund.
Commercial real estate investments have emerged as a solution for investors looking for portfolio alternatives, and REIT-structured investments like the one offered by RealSource have historically provided investors with risk mitigation, potential for an attractive and sustainable yield, competitive market performance, streamlined investment management, and potentially significant tax advantages. Additionally, investors will have full transparency into the operation and performance of each asset in the Fund.
The Fairways at Royal Oak, Cincinnati, Ohio
Ten Properties Identified for the RealSource Properties REIT
The ten properties already identified for the RealSource Properties REIT include 2,897 apartment units in Ohio, Texas, North Carolina, and Colorado. The acquisition process for these properties relied on an econometric model that evaluates nearly 40 different market sub-categories, factoring such things as market, migration, income, social indicators, GDP of states and MSAs, growth, and more. The development of this unique set of parameters over time allows for in-depth comparison over broad periods and markets, submarkets, and regions.
Hanks explained, “In 2022, depending on the market and whether multifamily had a dip to recover from, and if that location has recovered, we anticipate continued strength for the rental product since demand outweighs supply. To be sure, the pandemic caused dramatic demographic shifts, which pose some lesser known threats that are beginning to evolve in the industry. Yet we believe there are opportunities to trade in and out MSA's when savvy investors bring the right business model and execute it correctly. Timing the local real estate cycle correctly can create higher returns in times of bigger upward swings in what is often called the absorption cycle.”
In addition to deep market research, each asset purchased by the REIT is evaluated to align with its value-add strategy. The REIT looks to source assets acquired at meaningful discount to replacement cost – and assets that are determined to benefit from operational efficiencies and improvement through asset management initiatives, property improvement plans, and a series of other contributing variables. For RealSource Properties investors, the REIT’s structure allows the potential for accretive improvements of its value-add strategy results to enhance performance in the long term, as compared to individual property improvements.
Hanks concludes, “The axiom, everyone needs a place to live, has never rung truer than during the pandemic. Effectively located apartment homes in booming U.S. metros can be more undervalued than many deep inside the real estate industry realize. Rising costs of living, coupled with rising replacement costs to build new housing, have resulted in a giant macro increase to multifamily values in most markets at the close of 2021. An important market cycle has surfaced: rising single-family prices are causing more people to rent for longer, affecting demand for already near-full apartment inventory. Consequentially, multifamily vacancies in many metros is near-term low levels and naturally pushing rent rates upward in many of the largest 50 metros.”
Learn more at www.realsourceproperties.com/realsource-properties-reit
About RealSource Properties
RealSource Properties is a national, vertically integrated commercial real estate investment manager whose executive team brings over 100 years of combined multifamily management experience to prospective investors. Since launching in 2002, the company has acquired 46 properties for an aggregate purchase price of nearly $1 Billion. Headquartered in Salt Lake City, Utah, its nationwide portfolio of multifamily assets is managed by an in-house team of professionals with expertise in market economics and research, acquisitions, asset management, development, and property management. For additional information, please visit www.RealSourceProperties.com.
Accredited investors and financial professionals are invited to contact the investor services group for a Private Placement Memorandum (PPM) at info@realsourceproperties.com. Risk factors detailed in the PPM should be reviewed before considering an investment.
Real Estate Investment Risk Disclosure
Real estate investments have the potential to lose value. The income stream and depreciation schedule may affect your income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Financed real estate investments have potential for foreclosure. These are illiquid securities. There is no secondary market. If a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits. Tax benefits are not guaranteed and are subject to changes in the tax code.
Offering Disclosure
The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by the issuer, or any affiliate, or partner thereof ("Issuer"). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. There is no assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some, or all of the principal invested. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified. Past performance is no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Issuer does not warrant the accuracy or completeness of the information contained herein.
Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.
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Contact:
Matt Bullock
RealSource Properties
RealSource Management
Vice President of Marketing
matt@realsource.net