Streitwise Review 2021 - Real Estate Secondary Market Platform

As we progress into a new decade, the world of real estate investing continues to evolve, presenting a myriad of opportunities for both seasoned and novice investors. If you're contemplating diversifying your investment portfolio, real estate crowdfunding platforms like Streitwise offer a unique avenue for generating passive income. This comprehensive review will delve into Streitwise's operations, investment strategies, and what sets it apart from its competitors, ensuring you have all the information needed to make an informed decision.

With a focus on secondary markets—areas that often provide better returns compared to coastal cities—Streitwise aims to streamline real estate investment by allowing individuals to invest in commercial properties with minimal capital. Let's explore how this platform works, its investment philosophy, and its performance metrics.

Understanding Streitwise: A New Approach to Real Estate Investment

Streitwise is a real estate investment platform that enables both accredited and non-accredited investors to participate in commercial real estate. By pooling funds from various investors, the platform allows individuals to invest in a professionally managed portfolio with a starting amount as low as $5,000.

The company's primary offering is the 1st Streit Office Inc., a public, non-traded Real Estate Investment Trust (REIT) that focuses on acquiring office buildings in Midwestern markets. Notable tenants within these properties include established brands like New Balance, Panera Bread, and Allied Solutions, which contribute to a stable income stream for investors.

Key Features of Streitwise

• Accessibility: Minimum investment starts at just $5,000, making it an attractive option for new investors.
• Transparency: Streitwise emphasizes clear communication regarding fees and investment performance.
• Experienced Management: The platform is backed by Tryperion Partners, which has a solid track record in managing real estate investments.
• Focus on Secondary Markets: By investing in non-gateway cities, Streitwise aims to capture higher returns.

Distinctive Approach: How Streitwise Stands Out

What sets Streitwise apart from other real estate investment platforms is its commitment to controlling the entire investment process in-house. This means that every deal is managed by Tryperion Partners, eliminating the need for third-party technology platforms that often impose high fees.

Since its inception in 2017, Streitwise has consistently delivered strong dividends, averaging between 8% and 10% net of fees. This solid performance is attributed to their conservative underwriting practices and a focus on acquiring high-income-producing properties.

The Stability of Investment Returns

Investors are often concerned about the volatility of returns in real estate. Streitwise has a well-defined dividend history, boasting an average annualized dividend of 9.8% since 2017. Their last reported dividend was 8.4%, showcasing their ability to maintain consistent payouts even during challenging economic climates.

Investment Accessibility for Everyone

Streitwise opens its doors to both accredited and non-accredited investors, allowing a broader range of individuals to participate in real estate investing. The investment minimum is set at $1,000, ensuring that even those with limited capital can begin building their investment portfolios.

Understanding Dividend Structure and Investment Returns

One of the most appealing aspects of Streitwise is its clear dividend structure. Investors can expect:

• Annualized dividends between 8% and 9% based on historical performance.
• Dividends paid quarterly, with distributions net of fees.
• Tax advantages associated with REIT investments, allowing for potential deductions on taxable income.

Moreover, the dividends are distributed through a straightforward 1099 form, simplifying tax filing for investors, as compared to the more complex K-1 forms used by some other investment vehicles.

Leverage and Fee Structure: What to Expect

Streitwise maintains a moderate-to-conservative leverage ratio of approximately 55% Loan-To-Value, aligning with their goal of minimizing risk while maximizing returns. The fee structure is also transparent:

• 3% upfront fee for organizational and offering costs.
• 2% annual management fee deducted prior to dividend distributions.
• No hidden fees such as acquisition or servicing fees.

These measures ensure that investors can understand where their money is going and how it is being utilized to generate returns.

Current Portfolio and Future Expansion Plans

As of now, the 1st Streit Office REIT manages two key properties in St. Louis and Indianapolis:

• Streitwise Plaza, St. Louis: A Class A office park of 290,000 square feet, housing major tenants like Panera Bread and New Balance.
• Allied Solutions Building, Indianapolis: A 142,000 square foot mixed-use property located in a rapidly developing area.

Streitwise is committed to expanding its footprint in secondary markets, actively seeking additional acquisition opportunities in cities like Columbus, Minneapolis, and Kansas City. This strategic expansion aims to build a diversified portfolio of high-quality, suburban office properties.

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Investment Horizon and Liquidity Considerations

Investors in Streitwise should prepare for a longer investment horizon, typically five years or more. The platform has a structured redemption policy that dictates the percentage of net asset value returned to investors based on their holding period:

• 90% of NAV if sold within 1-2 years.
• 95% of NAV if sold between 3-4 years.
• 100% of NAV after five years.

This structure encourages long-term investment, aligning with the nature of real estate as a traditionally illiquid asset class.

Market Insights and Adaptability

Amidst shifts in work culture and the rise of remote work, Streitwise is well-positioned to adapt. The firm focuses on acquiring quality office spaces that are likely to remain in demand, regardless of the evolving needs of businesses. By targeting high-amenity properties, Streitwise believes it can attract tenants even in a changing landscape.

Furthermore, the management team is committed to being proactive. They constantly monitor market trends to ensure that their investment strategies remain relevant and profitable.

Conclusion of the Streitwise Review

In summary, Streitwise presents a compelling option for investors looking to diversify into real estate, particularly in the context of secondary markets. Key positives include:

• High dividend payouts in a challenging economic environment.
• Accessibility for both accredited and non-accredited investors.
• Transparent fee structure.
• Strong management backed by experienced professionals.

However, investors should also consider some of the challenges:

• The 3% upfront fee could be a barrier for some.
• Liquidity is limited in the early years of investment.
• Current property holdings are limited, which may affect diversification.

For more information or to explore investment opportunities, visit the Streitwise website. The platform also offers an investor app, making it easier to track investments on the go. Whether you are a seasoned investor or just starting out, Streitwise might be worth considering as part of your investment strategy.

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