Determining the right investment(s) for property transition sale proceeds is not a simple task. There are numerous providers, brokers, and agents who present one or two viable options, while dismissing all others they are not familiar with, are not properly licensed to provide, or do not receive compensation for recommending.
At Real Estate Transition Solutions, LLC we regularly evaluate all options available to our clients so that they are presented with a comprehensive and balanced list of reinvestment options. We guide our clients through the evaluation process, analyzing each investment option to identify their respective strengths, weaknesses, complexity, opportunities, risks, and tax implications. Available options fall within these general categories
For some investors who value outright control of their real estate assets and are not opposed to the effort and time required for active management – fee simple property may be a good fit. While sourcing fee simple property for exchange purposes can be difficult due to the rigid timeline of a tax-deferred exchange, it is possible with proper planning. Fee simple property has a number of strengths and weaknesses that are worthy of consideration to ensure the property profile is consistent with your investment objectives.
Fee-Simple Net Lease Property
For investors who value outright control of their real estate assets but do not want to put forward the effort required for active management – fee simple triple-net lease property may be a good fit. Working with large credit-worthy tenants who are willing to sign long-term leases reduces cashflow risk, however concentration risk is generally present as these properties tend to sell for $1-$15M. Similar to outright fee simple property, one must understand the risks and opportunities inherent in fee simple triple-net lease properties.
Diversified Managed Institutional Real Estate Portfolios
For investors looking for cash flow and diversification while avoiding active management – investing in passive institutional real estate portfolios may be a good fit. There are multiple forms of ownership that can pool investor dollars to facilitate the purchase of large third-party managed properties. These forms of ownership have been approved by the IRS as qualified replacement property for tax-deferred exchanges. Furthermore, depending on the amount of equity within an exchange, a diversified portfolio can be constructed among multiple property types (multi-family, industrial, net-lease retail, medical office, self storage, etc.) and geographic locations.
Liquidity Focused Options
For investors who have a significant amount of their net worth tied up in inherently illiquid real estate, there are multiple strategies that can alleviate the need for cash. Depending on the property and individual's specific circumstances, a refinance in advance of a sale and exchange can be an effective way to alleviate liquidity needs. Furthermore, the tax liability resulting from the sale of a property may be sufficiently low that paying tax on the sale is an option worth considering. We work diligently to understand our client's objectives to present the most effective strategies given their unique situation.
Customized “One-Off” Real Estate Solutions
For investors who have specific ownership preferences, investment objectives and/or significant transaction proceeds to allocate – consider our custom “one-off” real estate solutions. Within these solutions, we work with developers and other real estate firms to structure co-ownership opportunities for value-add, horizontal or vertical development projects. Our network of real estate firms includes many reputable, nationally recognized companies with significant industry experience. All projects are unique in and of themselves and will be considered on an individual basis.
If you believe one or more of the aforementioned investment opportunities could be the right fit for your particular situation and would like to discuss their respective strengths, weaknesses, opportunities and risks – we are available to meet with you or talk over the phone addressing your specific situation and goals.