Reits And Other Alternatives
REITire.com is designed to educate qualified and accredited investors about current Real Estate based investment offerings, as well as other non-traded alternative investment opportunities.
Non-Traded Real Estate Investment Trusts (REITS) and other Alternative Investment Offerings can be purchased and held in a qualified (retirement) or non-qualified (taxable) account. Our Investment Specialists will help determine which is more suitable depending on your investor profile, including current income, tax rate, age, assets, liquidity needs, and risk/reward profile, as well as any tax advantages associated with the investment(s).
Alternative investments could help to further diversify your investment portfolio beyond the traditional stock and bond markets. Our goal is to identify unique opportunities managed by experienced and seasoned professionals with reputable track records.
Why Non-Traded Alternative Investments?
In the past, private (non-traded) investment companies have principally been enjoyed by a select group of ultra-high net worth individuals and institutional investors. That paradigm has been shifting. For years, our private wealth management group has been providing access to private company investments with lower minimum entry, shortened anticipated lock-up and hold periods, potential for capital appreciation and income generation (often paid monthly).
It is interesting to review the asset allocations of the major university endowment funds – for example – Yale, Harvard, and Stanford. Going back 30 years, the Yale Endowment Allocation has continued to increase the Alternative allocation while decreasing the Traditional investments of Stocks and Bonds. Please visit any of the Yale Endowment Annual Reports for more detailed information. They are easily searchable and listed publicly online. Yale Endowment Reports
This reference to the university endowments is not meant to portray that their annual returns can be replicated by investing in alternative investments. It is simply interesting to review the portfolio compositions of traditional investments (stocks & bonds) relative to non-traditional, alternative investments. Please also note that endowments have a long-term investment horizon and low liquidity provisions, and you should ensure your investment goals match those of endowments. Past performance of endowment funds (such as the “Yale Endowment Fund”) are not indicative of future results for any entity.
REITs offers ownership in a diversified portfolio of real estate of professionally selected and managed properties with the objective of delivering monthly distributions. A REIT is a company dedicated to owning and, in most cases, operating income-producing real estate. REITs also engage in financing and debt structure. Most importantly, to qualify as a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year.
With the volatility experienced in the publicly traded markets, investors may be searching for investments that are not correlated to the traditional stock and bond markets. An alternative solution could be the non-traded investments. Direct Investments offer diversification from traditional stocks and bonds, and a non-correlated allocation to an overall portfolio. [Please be aware that despite the absence of a daily bid/offer on direct investments, the underlying valuation of the assets get re-priced at specified intervals and may still fluctuate based on determined valuations. Non-traded investments often have limited liquidity and lack of price transparency. As always, it is important to consider the investment objectives, costs and expenses, liquidity, safety, guarantees or insurance, risk and fluctuation of principal or return, and tax features when evaluating any specific investment.]
As we have all seen, the price of publicly traded companies can move around far more than is comfortable or tolerable when the price goes down, concluding that the publicly-traded markets are not as efficient as we would hope. They provide a means for owning a diversified basket of real estate, professionally purchased and managed.
With many non-traded REITs available, not all REITs are created equal. There are REIT wreck stories and REIT success stories. Just like any business, expenses need to be managed while generating sources of revenue. With real estate, there are critical factors; timing, location, sector, demand, vacancy, and management, expenses and track record are all important to consider in the due diligence process.
To determine which products are selected for this website or considered for client portfolios, Newbridge Securities performs their own due diligence review, engaging the services of a professional due diligence company for a third party evaluation. With the menu of firm-approved alternative investment options, our team then performs an evaluation to determine what might best serve our clientele. When an investment company is profiled on this site, and offered to our valued clients and prospects, it has been reviewed by third party due diligence. The programs have also been vetted by Newbridge Securities Alternative Investment Committee and our team of investment professionals at Gold Coast Financial Group. Although the future is always unknown, we make every effort to only present responsible investment products and strategies to our clients and prospective clients. As a reminder, all investments carry some degree of risk and there is no guarantee against loss. FINRA’s reminder of risk
The material contained within does not constitute an offer to sell or a solicitation to buy any securities. Offers are made only by prospectus or other offering materials. A full prospectus or private placement memorandum will be provided to each potential investor who completes our investor questionnaire and meets the suitability standards required by law. Partnership offerings require a pre-established relationship. It is important to carefully consider all information in your due diligence of any one product – investment objectives, risks, charges, expenses, disclaimers, and risk factors regarding any product listed within this site. Distributions can be derived from a variety of sources. Each investment product should be reviewed for its distinctive features related to, but not limited to, costs and expenses, distribution sources, liquidity options, safety components, guarantees or insurance, fluctuation of principal or returns, and tax features.
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Debt & Financing
A Debt REIT originates loans, invests in and manages a diversified portfolio of commercial real estate debt. When traditional lending sources are unable to make loans or they must restrict their debt to equity ratios, alternative lending becomes an option for many businesses. The Alternative Investment arena offers a variety of Debt and Bond type Alternatives. A Debt REIT may lend on Commercial Real Estate, secured by the property in senior or subordinated/mezzanine levels. Debt REITs may lend to commercial home builders to finance the construction of homes, secured by the properties. For more information, visit REIT.com – A guide to mortgage REITs.
Business Development Corporation: Business Development Companies (BDCs) make loans to private companies, often at the senior secured or second senior level. In 1980, the U.S. Congress created a class of corporation called a business development company (BDC) to encourage the flow of public equity capital to private businesses. BDCs make loans to small and mid-sized companies. To qualify, a BDC must invest at least 70% of its assets in private or thinly traded, public U.S. corporations, and must distribute at least 90% of its taxable income to shareholders in the form of dividends. They frequently take ownership positions (equity interest) in their client companies. For more information, please visit Investopedia.com – Business Development Company
There are a variety of debt alternatives available to investors.