Your Guide to Successful Real Estate Investing—Stax Capital

Firm up your portfolio

Stax Capital offers Direct Participation Programs including Delaware Statutory Trusts, Opportunistic & Value Add Funds, Real Estate Development and Qualified Opportunity Zone Funds to accredited investors.
Potential to:

• Add diversification - Real estate investing is not directly correlated to traditional investments like stocks and bonds. Real estate has historically minimized exposure to negative market events.
• Cash flow distributions - Real estate assets can produce positive cash flow that may under some circumstances, outstrip the cash flow benefits of traditional investments.
• Mitigate volatility - Direct Participation Programs can mitigate recessionary and other market based volatility. This potential benefit, may not occur with publicly traded real estate such as REIT's.

The Power of Diversification

Enhanced risk adjusted returns

Sources: Morningstar®, NCREIF Property Index (NPI) (“Commercial Real Estate”) (provides returns for institutional grade commercial real estate held in a fiduciary environment in the U.S.), Bloomberg Barclays U.S. Aggregate Bond Index (“Bonds”), S&P 500 or Standard & Poor’s 500 Index (“Stocks”). Stocks and bonds are typically more liquid than direct investments in real estate. Tax efficiencies of investments in stocks and bonds may vary from those related to investments in real estate depending on the unique circumstances of the assets in the portfolio, portfolio management decisions, the tax status of the structure in which assets are held, and the tax status of the investor. Direct investments in real estate and bonds tend to have less volatility than investments in stocks due to general and industry-related market fluctuations, but the vehicle in which those assets are owned can also have a material impact upon that volatility. Expenses related to an investment in a professionally managed non-traded REIT that has a daily NAV may be higher than the expenses associated with an investment in a publicly traded stock or bond. The risks associated with an investment in real estate may materially differ from an investment in a publicly traded stock or bond and one should therefore review risk factors prior to making any such investment. Past performance is no guarantee of future results. The charts depicted herein are for illustrative purposes only and not indicative of any specific investment. An investment cannot be made directly in an index. There is no assurance that real estate investments will achieve capital appreciation or provide regular, stable distributions.

Income and Capital Appreciation

Commercial real estate has outperformed

Sources: MorningStar®, NCREIF Property Index (NPI) (“Commercial Real Estate”) (provides returns for institutional grade real estate held in a fiduciary environment in the U.S.), Bloomberg Barclays U.S. Aggregate Bond Index (“Bonds”), S&P 500 or Standard & Poor’s 500 Index (“Stocks”). Data as of December 31, 1998 to December 31, 2018. Past performance is no guarantee of future results. The charts depicted herein are for illustrative purposes only and not indicative of any specific investment. An investment cannot be made directly in an index. Stocks and bonds are typically more liquid than direct investments in real estate. Tax efficiencies of investments in stocks and bonds may vary from those related to investments in real estate depending on the unique circumstances of the assets in the portfolio, portfolio management decisions, the tax status of the structure in which assets are held, and the tax status of the investor. Direct investments in real estate and bonds tend to have less volatility than investments in stocks due to general and industry-related market fluctuations, but the vehicle in which those assets are owned can also have a material impact upon that volatility. Expenses related to an investment in a professionally managed non-traded REIT that has a daily NAV may be higher than the expenses associated with an investment in a publicly traded stock or bond. The risks associated with an investment in real estate may materially differ from an investment in a publicly traded stock or bond and one should therefore review risk factors prior to making any such investment. Past performance is no guarantee of future results. The charts depicted herein are for illustrative purposes only and not indicative of any specific investment. There is no assurance that real estate investments will achieve capital appreciation or provide regular, stable distributions.

Growth in Net Operating Income Has historically Outpaced Inflation

10-year Average Annual Growth Rates (March 31, 2009 - March 31, 2019)

Every investment carries risk, real estate is not immune

Every investment carries risk, and real estate investing properties are not immune. Although Stax conducts multiple levels of due diligence, investors must rely on their own due diligence along with that of their own tax, legal and financial advisors.

• Illiquidity - Real estate investing properties are highly illiquid due to their typical long-term nature and holding periods of 5 to 10 years.
• Market risk - Real estate is subject to market risk, which includes employment factors, competing properties and location economic variables.
• Property risk - Real estate can require significant capital for costs such as tenant improvements, leasing commissions and upgrades.
• Financing - Properties using financing must service ongoing debt and if sufficient income is not generated, the property itself can be at risk of foreclosure.
• Occupancy - Fluctuations in occupancy occur when tenants are gained and lost over time, which impacts cash flow positively and negatively over time. Monitoring tenant retention is a useful real estate investing tip for maintaining consistent cash flow.

We don't have a crystal ball, But we try to look into every corner

We've refined our approach over two decades including developing a proprietary due diligence process designed to help mitigate risk in your investments.

• Proprietary diligence - Stax Capital has developed a thorough and comprehensive due diligence process that encompasses issuer and product due diligence, alongside industry and sector analysis.
• Physical inspections - Stax will often tour properties before recommending an investment, incorporating real-world intelligence into the due diligence process. We also enjoy hosting property tours for our clients, a hands-on part of our real estate investing guide.
• Executive interviews - Stax interviews executive teams at their corporate headquarters to gain insight into their backgrounds, experience, and track records, which could shift the needle during the due diligence process. This is an important element in mastering real estate investing basics.
• Third party reviews - Stax engages independent third parties for legal, structural and financial reviews, plus background checks on managers and issuers. We cross reference our work against other industry professionals.
• Stress testing - Stax specialists undertake detailed fund analysis and financial modelling evaluation, interrogating inputs and assumptions used to build financial models.
• Market analysis - Stax analyzes investment inputs and variables against third party data from analysts like REIS and Moody's to verify financial model assumptions.