Private REITs are quietly making a strong impression on investors who have grown tired of the volatility of public markets, says the chairman and Co-Founder of a thriving West Coast real estate investment firm.
“Private REITs provide investors with a sense of stability and security. When you invest in a private REIT, you’re not running scared every time you read a negative market report in the morning paper,” says Emanuel Arruda of League Assets Corp.
“When clients decide to place their money within a private REIT, they can relax. They don’t have to worry about the stressful negative trends in today’s equities markets,” continues Arruda, adding that private REITs are tax-efficient investment vehicles that are RRSP-eligible.
A specialist in safe, reliable real estate investments based in Victoria, B.C., League Assets Corp. – which now has more than $200 million under administration – manages a private REIT, which is targeted to yield a total return of at least 15 per cent. Distribution is currently 10.05 cents per unit per annum, paid monthly.
Canadian real estate purchases represent more than a defensive strategy for buyers who seek stability while bears feast lavishly on public markets.
Analysts of public REITs compare unit price to the net asset value to decide if the stock is a “buy” or not. In contrast, properties in League’s private REIT are regularly reappraised and the new unit price is set at the net asset value. This means investors never have to worry about timing their investments because of market swings.
Private REITs represent long-term value, secured by physical assets. That’s why Real Estate Investment Trusts have become so popular in recent years.
But exposure to discouraging dips in the market price of public REITs takes the fun out of ownership, causing experienced investors to seek the reassurance and stability of privately held REITs. Once they do, they seldom return to a publicly traded REIT. Investors are bullish on the private model because it offers a number of advantages.
First and foremost, units in a private REIT are offered directly to investors by the issuer. And unlike its public counterpart, a private REIT’s unit price is not tied to the stock markets. It is shielded from market volatility.
League Assets Corp. creates passive investments for each of its member-partners – intelligent, independent investors who wish to buy assets that generate monthly cash flow, equity buildup, capital appreciation, and preferential tax treatment – all with minimal risk and limited debt liability.
It works this way. To finance a real estate acquisition, equity supplied by League’s member-partners is used as the downpayment for purchase of a large residential/commercial property, often an apartment complex or shopping plaza.
Subsequently, Canadian banks supply the remainder of the purchase price by approving mortgage arrangements.
As Emanuel Arruda points out, League has a proven game plan. The company tends to scout for undervalued assets situated in choice markets across Canada. Perhaps they are badly in need of an upgrade. Or maybe they have been poorly managed in the past. So the idea is to acquire these properties at bargain prices and, secondly, to address – and correct – the issues that caused them to decrease in value.
That means renovating, landscaping or upgrading where necessary. It means tightening up the property-management model. And it means bringing in reliable, long-term tenants and maximizing occupancy rates.
“We only look at projects where we can add value,” says company Co-Founder and CEO Adam Gant. “We’re solely interested in properties that we’re convinced will rapidly appreciate in value during our first year of ownership.”
As operators of a high-quality private REIT, League Assets enjoys the luxury of taking the long view. Unlike public companies, it doesn’t have to worry about nervous investors, spooked by restless equities markets. Gant, Arruda and their team are able to plan well ahead, without worrying too much about the next quarterly statement.
“Short-term results don’t necessarily have much impact. We concentrate on the long view and we’ve been extremely successful so far,” adds Gant.
Run by an experienced, principled and ethical management group, League Assets Corp. remains committed to the ideal of Inter-Generational Wealth, a trademarked term for League’s suite of integrated services.
Inter-Generational Wealth refers to the company’s organized system for managing your wealth for years to come – a framework that will continuously protect and maximize your capital through each succeeding generation.
A few more compelling reasons to buy into the League Assets private REIT model:
* No minimum investment required;
* Absolutely transparent governance and operations model;
* Fully liquid investment.
Before you buy, however, see for yourself exactly what you need to know about real estate investing and League’s services.
Download and read The Blue Book of Real Estate Syndication, available via the company website – www.league.ca – and, for more information, call this toll-free number: 1.877.772.8836.