SCOTTSDALE, Ariz.–(BUSINESS WIRE)–Walton Global, a real estate investment and land asset management company, is pleased to announce its new DST Growth offering focused on land-based investments. Walton believes the land-based DST offering is unique due to its 1031 exchange strategy that helps accredited investors defer capital gains taxes and involves top U.S. home builders that are expected to buy land to develop residential communities. Typically, an investment in a DST involves transferring proceeds from the sale of an investment property to another developed investment property, like commercial buildings or multifamily units that provide some income but minimal growth.
Walton’s strategy is focused on all-equity, growth DST’s targeting potentially higher investor returns than traditional DSTs, along with hold periods that are not artificially lengthened due to repayment restrictions applicable to most traditionally financed DSTs.
Walton will use its decades of experience in land acquisition to acquire a continuous pipeline of DST properties in growth regions across the country, hold the properties for growth in value as contemplated by 1031 tax regulations and market the property after the hold period ends to its established network of top U.S. home builders.
The first Walton DST offering, called Georgia Growth 1 DST, is now available for qualifying investors. Additional offerings are expected to launch throughout the year.
“Due to the volatility with cap rates and leverage out there today, we believe there’s going to be a large appetite for an all-equity, growth 1031 exchange from U.S. investors. We truly feel this offering is different than what is available now in the marketplace,” said Todd Woodhead, SVP Capital Markets at Walton Global. “The growth potential alone in the appreciation of land is expected to far exceed what DST investors are accustomed to receiving in a typical income-based 1031 exchange and our targeted hold periods are 3 to 5 years. Our primary target is growth with a short exit strategy versus traditional DSTs that offer small amounts of cash flow with a longer hold period.”
Walton believes there is a potential for traditional appreciation based on market conditions, and the potential increase in value to the land upon entitlement completion by a builder. Once a builder signs a purchase agreement for a land parcel they expect to buy, they begin the entitlement process and eventually purchase the land to build homes. The investment in the land made by the home builder during this process is passed on to DST investors at the time of sale.
“DST investments are projected to remain a popular choice over the coming years,” Woodhead added. “Accredited investors who are looking to diversify their portfolio, defer their capital gains taxes and preserve their capital through a hard asset by using a growth strategy can consider land a solution for their 1031 exchange needs. We also believe our home builder clients could be targeting our DST properties, when they are available for purchase, as they work toward increasing the housing inventory in the U.S, which is highly needed right now with the lack of homes available across the country.”
The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof (“Issuer”). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to any “targeted” goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. These “targeted” factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified. Past performance is no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.
Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.
1031 Risk Disclosure:
- There is no guarantee that any strategy will be successful or achieve investment objectives.
- Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments.
- Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities.
- Potential for foreclosure – All financed real estate investments have potential for foreclosure.
- Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.
- Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions.
- Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits.