After the real estate industry was turned upside down during the recession in 2008, Jeff Pori reevaluated his position in the real estate, development and investment world and took a step back. When the timing was right, he re-engaged in the industry with the formation of Kingsbarn Realty Capital, an investment house that provides institutional and accredited investors access to an array of alternative investments.
He answered questions from Vegas Inc about Delaware Statutory Trusts (DSTs) and the importance of a diversified portfolio.
Kingsbarn has over $2 billion of assets under management and has acquired over 280 properties throughout the country. It currently has a development pipeline of over $2 billion consisting of multifamily, student housing, industrial, retail and hospitality.
What are DSTs? How do they work?
Diversifying an investment portfolio is an important step in financial planning. While many options exist, one effective strategy in diversification is through the use of Delaware Statutory Trusts (DSTs) and 1031 exchanges, both of which offer unique benefits and opportunities in terms of real estate investment.
DSTs, which are 1031 exchange-eligible, provide real estate investors with a way to invest passively in commercial real estate. Kingsbarn, as a sponsor of DSTs, acquires high-quality commercial income properties, places non-recourse financing on the properties, and then provides oversight through our asset management group to ensure the overall success of the venture and the continuation of distributable income to our clients.
Why is it important for individuals to diversify their financial portfolios, and why DSTs?
Diversification means lowering your risk by spreading your investment across more than one market factor such as location, property type, or business enterprise. It’s one of the best ways to weather the ups and downs of the market and support the sustainability of your investments.
DSTs can be advantageous for investors wanting to diversify into real estate without dealing with direct property management. By joining funds together with other investors, DSTs provide access to larger, institutional-grade properties, such as apartment complexes, student housing, commercial buildings, medical properties and corporate headquarters.
Diversifying through DSTs and using 1031 exchanges can protect a person’s wealth and financial well-being. Because the loans for the properties are already in place, it is easy for an investor to select multiple DST offerings and to close on them simultaneously and simply. An investor could become an owner of a diversified portfolio in less than a week if that was their desire. It makes diversification not only possible, but easy and convenient for each investor.
What noteworthy projects has Kingsbarn spearheaded lately?
Our firm has experienced tremendous growth over the past five years, and we have added several investment vehicles for our clients. Much of our growth has come from the real estate development side of our business, which we allow investors to participate in alongside us. Some of our more noteworthy projects include:
• 39° North Lake Tahoe: This project is currently in the entitlement phase. We intend to complete a Marriott Autograph hotel with a rooftop lounge overlooking the Lake. The project also includes 48 townhomes and 62 workforce-housing apartments.
• We just completed the renovation of Ducks Village, a 650-bed student community serving the University of Oregon in Eugene just northwest of downtown.
• The Marlette: We just completed the ground-up development and construction of this 140-unit multifamily property in Carson City. We are at approximately 80% occupancy and nearing stabilization.
• We are in the midst of developing and constructing 30 Bojangles quick-serve restaurants throughout Las Vegas and Phoenix.
• Two new multifamily projects will be breaking ground later this summer: The Altair, 207 units in Carson City; and Affinity at Three Springs, which will be 162 units in the Durango, Colorado, market.
• Kingsbarn has received full entitlement approval from the City of Buena Park to construct a new Home2 Suites by Hilton hotel within the city’s entertainment corridor. This 140-room, 6-story extended-stay hotel will include flexible suites with separate living and dining areas, multifunctional community spaces, and homelike amenities, such as a pool, fitness center, business center, market pantry and on-site laundry facilities.
• We completed a TA Express travel center in Littlefield, Arizona, late last year, and we are under construction on a TA TravelCenter of America in Ash Fork, Arizona.
• We have nearly 1,500 multifamily units in the entitlement phase of development in Orange County, California.
• We completed the ground-up development of The Cottages at Hooper Hill, a student housing property located at Ole Miss university. This was part of a portfolio of properties that we acquired at Ole Miss that cater to Greek life students.
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