stREITwise1st stREIT Office: Review
Category: Non-accredited investor funds
Honors: Top core-plus fund, best fees
The stREITwise founders' resume looks very impressive. They claim to have collectively underwritten and/or managed the acquisition, ownership and disposition of over $1.7 billion of real estate equity investments valued in excess of $5.4 billion spanning all major property types throughout the US. And they have the experience of investing hundreds of millions of dollars in office buildings, which is the specific focus of this fund.
The fund they created is 1st stREIT Office is a rare, difficult to find conservative, core plus strategy fund. It invests in institutional quality, stabilized office properties throughout the United States. It's a 10% target yield and currently is at $76 million in size.
Leverage is at 55% loan to cost, which is moderately conservative leverage and in-line for core plus strategy. (The fund targets 40 to 60% portfolio wide leverage).
Skin in the game is very high, with the principals putting in a co-invesment of $5mm out of $28mm+ or 17%.
It has some of the best fees in the industry as well. The most important is that there is no performance fee (also called a promote or waterfall). When a fund does well, this is the fee that sucks the most return away from an investor. So that is great to see. All other fees are in line or below average. They are exceptionally good on the acquisition fee, charging none (versus an industry average of 2%). The only place where they are slightly above average is that they charge a 3% fee on deposit (2% average). But this is a minor quibble. Overall the fees are excellent and earns them the "best fees" award for non-accredited investors.
The minimum investment is $1000 which is average for the industry.
Advantages: Very experienced sponsor, lowest fees among nonaccredited investor offerings, high skin in the game.
Disadvantages: No bankruptcy protection
Accolades: Best fees, top core plus fund.
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About Ian Ippolito
Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News, USA Today, Bloomberg News, Realtor.com, CoStar News, Curbed and more.
Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.
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