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Real Estate Investing

Written by Quinn Morimoto

Firm up your portfolio

Stax Capital offers Direct Participation Programs including Delaware State 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

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 investment is highly illiquid due to its 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.

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 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.
  • 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.
  • 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.

 

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DISCLOSURE

This website is for informational purposes only. This website does not provide investment advice or recommendations, nor is it an offer or solicitation of any kind to buy or sell any investment products. Securities offered through Stax Capital, Member FINRA & SIPC. Stax Capital is located at 7960 Entrada Lazanja, San Diego, CA 92127. Contact us toll free at 844-427-1031. Private Placements and Direct Participation Programs are speculative investments and involve a high degree of risk. An investor could lose all or a substantial portion of his/her investment. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment in Private Placements and Direct Participation Programs. Private Placements and Direct Participation Program offering materials are not reviewed or approved by federal or state regulators. Investors should not place undue reliance on hypothetical or pro forma performance summaries. Investors must conduct their own due diligence and should rely on the advice of their own financial, tax and legal advisors prior to making any investment decisions.

The contents of this website are neither an offer to sell nor a solicitation of an offer to buy any security which can only be made by prospectus. Investing in real estate and 1031 exchange replacement properties may not be suitable for all investors and may involve significant risks. These risks include, but are not limited to, lack of liquidity, limited transferability, conflicts of interest and real estate fluctuations based upon a number of factors, which may include changes in interest rates, laws, operating expenses, insurance costs and tenant turnover. Investors should also understand all fees associated with a particular investment and how those fees could affect the overall performance of the investment. Neither Stax Capital nor any of its representatives provide tax or legal advice, as such advice can only be provided by a qualified tax or legal professional, who all investors should consult prior to making any investment decision. Pursuant to SEC rule 501 of Regulation D, prior to engaging in substantive discussions regarding DST specific investments, investors must first be qualified as an accredited investor, by way of meeting certain income or net worth requirements.

Past performance is not an indication of future returns.

This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of Stax Capital or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

There are substantial risks in the DST Investment program. This type of investment is speculative, is illiquid, and carries a high degree of risk – including the potential loss of the entire investment. See the “risk factors” in the Private Placement Memorandum for a complete discussion of the risks relevant to DST offerings. Investors have no control over management of the Trust or the property. There is no guarantee that investors will receive any return. Distributions may be derived from sources other than earnings. The property will be subject to a Master Lease with an Affiliate of the Sponsor. The property will be subject to the risks generally associated with the acquisition, ownership and operation of real estate including, without limitation, environmental concerns, competition, occupancy, easements and restrictions and other real estate related risks. The properties may be leveraged. The Manager, the Master Tenant and their Affiliates will receive substantial compensation in connection with the Offering and in connection with the ongoing management and operation of the property. The Manager, the Trust, the Master Tenant and their Affiliates will be subject to certain conflicts of interest. An investment in the Interests involves certain tax risks.

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