Advisors often field questions from clients about real estate and those inquiries are likely elevated these days due to the asset class's inflation-fighting reputation.
Further thrusting real estate investing into the spotlight are low interest rates. Years of low rates and easy monetary policy by the Federal Reserve depressed yields on some previously beloved fixed income assets, sending advisors scrambling to compensate. Typically, real estate is vulnerable to Fed tightening, but this time around could well be different because even when the Fed raises rates, they'll remain low in absolute terms.
With the interest rate issue out in the open, advisors can discuss with clients’ strategies for accessing real estate. For decades, that objective has been solved by stocks and funds chock full of real estate trusts or rental properties and/or house flipping.
The latter two scenarios require large amounts of upfront capital and aren't appropriate for all clients on that basis and when factoring in risk. Real estate equities and funds are fine, but prosaic. Fortunately, the real estate offerings advisors can present to clients are evolving for the better. For those looking to access opportunities in distressed and undervalued real estate, Shopoff Realty Investments is the way to go.
Sizing Up Shopoff
Due to any number of house flipping TV shows or more astute real world research, clients know there's plenty of allure with real estate trading at a discount. Accessing it is another matter. That's where Shopoff Realty Investments comes in.
“For more than 30 years, Shopoff Realty Investments has transformed underutilized, undervalued, or mismanaged real estate into more attractive and valuable assets, realizing untapped appreciation and profitability for our investment partners,” according to the company.
Shopoff focuses on repositioning of commercial assets and entitlement and repurposing of land, identifying opportunities where it has the most control and can generate the most upside.
“Shopoff is an attractive real estate alternative for advisors to discuss with clients due to the company's ability to identify discounted properties, employ strategy to enhance those assets, create value and deliver appreciation,” says Douglas Blake, managing director – investment services at Kingswood U.S. "It's hard to find a product sponsor with a track record as impressive as Shopoff. Time and again, they deliver."
In fact, those are the four pillars of the Shopoff approach. Whether it's working with corporations, institutions, organizations, distressed, owners, and others to acquire underappreciated real estate or altering an asset’s current use to better fit current market demands, the company's thoughtful methodology delivers value for investors.
“Repurposing assets include but is not limited to re-entitling or redeveloping raw land or modifying the use of a commercial asset. Repositioning assets involves the changing of the position of the property in the marketplace (e.g. rehabilitate the asset and/or improve operations.) Recapitalizing assets include the refinance of an asset to potentially provide a more favorable capital structure,” adds Shopoff.
Fresh Approach, Opportunities
While Shopoff has been around for three decades, many clients aren't familiar with this approach to accessing real estate. To some, it might qualify as “alternative”, but that status serves to highlight long-term potential.
Additionally, Shopoff offers property-level diversification by providing access to industrial, multi-family, land, office and retail venues.
Bottom line: Shopoff looks to buy low and sell high and that's a strategy advisors and clients can relate to.